Colonial Dodge, Inc v. Miller
362 N.W.2d 704, 420 Mich. 452 (1985)
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Rule of Law:
Whether a nonconformity in a product substantially impairs its value to the buyer, permitting revocation of acceptance under UCC § 2-608, is determined by a subjective test based on the buyer's particular circumstances and needs, not by an objective standard of the defect's monetary value or ease of repair.
Facts:
- On April 19, 1976, Clarence Miller ordered a 1976 Dodge Royal Monaco station wagon from Colonial Dodge, which included a heavy-duty trailer package with extra wide tires.
- On May 28, 1976, Miller picked up the station wagon.
- Shortly after his wife drove the new vehicle home, she discovered it did not have a spare tire.
- The following morning, Miller informed Colonial Dodge of the missing tire and insisted on receiving one immediately.
- Colonial Dodge informed Miller that no spare tire was available due to a nationwide shortage caused by a labor strike.
- Miller then told the salesman he would stop payment on the purchase checks and that Colonial Dodge could retrieve the vehicle from his home.
- Miller's occupation required him to travel extensively, up to 150 miles per day on Detroit freeways, often in the early morning hours, and he feared being stranded without a spare tire.
Procedural Posture:
- Colonial Dodge, Inc. (plaintiff) sued Clarence Miller (defendant) in a state trial court for the purchase price of the vehicle.
- The trial court entered a judgment for Colonial Dodge, finding that Miller had wrongfully revoked his acceptance of the car.
- Miller, as appellant, appealed to the Michigan Court of Appeals.
- The Court of Appeals initially reversed the trial court's judgment, finding Miller had never accepted the vehicle.
- On rehearing, the Court of Appeals affirmed the trial court's judgment, concluding that Miller had accepted the car and that the missing spare tire did not constitute a substantial impairment in value.
- The Supreme Court of Michigan granted review of the Court of Appeals' decision.
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Issue:
Does the failure to include a spare tire with a new car constitute a substantial impairment of value to the buyer, allowing the buyer to revoke acceptance of the vehicle under UCC § 2-608?
Opinions:
Majority - Kavanagh, J.
Yes. The failure to include a spare tire can constitute a substantial impairment of value to this particular buyer, permitting him to revoke acceptance. The test for substantial impairment under MCL 440.2608 (UCC § 2-608) is subjective, focusing on whether the nonconformity impairs the value 'to him.' The court must evaluate the buyer's unique circumstances and whether their assessment of the defect's impact is factually correct. In this case, Miller's occupation required extensive and late-night travel on dangerous freeways, making his safety concerns about a flat tire without a spare entirely reasonable. Therefore, the missing tire was not a trivial defect but a substantial impairment to him, justifying his revocation of acceptance. The revocation was timely, the defect was difficult to discover before acceptance, and Miller fulfilled his duties by notifying the seller and holding the car for them to pick up.
Dissenting - Ryan, J.
No. The absence of a spare tire does not constitute a substantial impairment of value. While the test is subjective, the impairment must still be 'substantial.' The mere possibility of a flat tire, though real, is unlikely and does not rise to the level of substantially diminishing the value of the automobile for its ordinary use. The missing tire was a temporary deficiency that was easily remedied and did not justify revoking acceptance of the entire vehicle.
Dissenting - Boyle, J.
No. The temporarily missing spare tire did not constitute a substantial impairment in value. The purpose of the substantial impairment requirement is to preclude revocation for trivial defects or those that can be easily corrected. The trial judge's determination that the missing tire was not a substantial impairment under either a subjective or objective test was not clearly erroneous and should have been affirmed.
Analysis:
This case is significant for its strong endorsement of the subjective standard for 'substantial impairment' under UCC § 2-608. It clarifies that the analysis does not hinge on the objective cost to cure the defect or what a 'reasonable person' might think, but on the impact the nonconformity has on the specific buyer's intended use and circumstances. This precedent empowers buyers whose unique, reasonable needs make an otherwise minor defect a major issue for them. It cautions sellers that they cannot dismiss a nonconformity as trivial if it substantially undermines the product's value from the buyer's particular perspective.
