Torres v. Northwest Engineering Co.
86 Haw. 383, 949 P.2d 1004 (1998)
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Rule of Law:
Under the Uniform Commercial Code (UCC), a seller's affirmation of fact or description of goods made during the bargaining process is presumed to become part of the basis of the bargain, creating an express warranty without requiring the buyer to prove reliance. In tort actions for personal injury based on a breach of such an express warranty, the plaintiff's recovery is reduced, but not barred, by their own comparative negligence under the doctrine of pure comparative fault.
Facts:
- In November 1972, Wailuku Agribusiness Company (Wailuku) ordered a Model 41 special cane-loader crane from Northwest Engineering Company (Northwest).
- The purchase order and shipping documents specified that the crane was to be equipped with 30-inch-wide steel treads.
- Northwest delivered the crane to Wailuku in April 1973 with 24-inch-wide treads, not the 30-inch treads specified in the contract.
- Wailuku used the crane for sugarcane harvesting for approximately 14 years, and the treads were never replaced during that time.
- On July 2, 1987, Fernando Torres, an employee of Wailuku, was operating this crane on a wet, 12.9-degree downhill slope to harvest sugarcane.
- While Torres was maneuvering a load of sugarcane, the crane tipped up, and after he dropped the load, the crane toppled over.
- Torres fell from the crane's cab and was fatally crushed by the machine.
Procedural Posture:
- Anna and Carol Torres (Plaintiffs) sued Northwest Engineering Company (Northwest) in the Second Circuit Court (trial court) on claims including negligence, strict products liability, and breach of express and implied warranties.
- During trial, the court granted Northwest's motion for a directed verdict on the claims for breach of implied warranty and punitive damages.
- The jury returned a special verdict, finding Northwest liable for breach of express warranty but not for negligence or defective design.
- The jury found Fernando Torres was 85% contributorily negligent and Northwest was 15% at fault, awarding total damages of $865,700.
- Post-verdict, the trial court granted Northwest's motion for Judgment Notwithstanding the Verdict (JNOV), setting aside the jury's verdict on the express warranty claim and reducing the Plaintiffs' award to zero.
- The trial court also denied the Plaintiffs' motion for Partial Judgment Notwithstanding the Verdict (PJNOV).
- Plaintiffs, as Appellants, appealed the JNOV order, the denial of their PJNOV motion, and the directed verdict order to the Intermediate Court of Appeals of Hawai'i.
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Issue:
Does a seller's description of goods in contract documents create an express warranty under the Uniform Commercial Code (UCC) without proof of the buyer's reliance, and if so, is a plaintiff's recovery for personal injuries resulting from the breach of that warranty barred or reduced by the plaintiff's own comparative negligence?
Opinions:
Majority - Watanabe, Judge
Yes, a seller's description of goods becomes part of the basis of the bargain and creates an express warranty without requiring the buyer to prove reliance, and a plaintiff's recovery for injuries from a breach of that warranty is reduced, but not barred, by the plaintiff's comparative negligence. The court held that the UCC's 'basis of the bargain' test replaced the former 'reliance' test. Seller affirmations of fact or descriptions made during a bargain are presumed to be part of the agreement, and the burden shifts to the seller to present clear affirmative proof that they were not. Here, the specification for 30-inch treads in the contract documents created an express warranty that Northwest breached by delivering a crane with 24-inch treads, and Northwest failed to rebut the presumption that this description was part of the bargain. Furthermore, the court extended the principles of pure comparative negligence, previously applied in Hawaii to strict liability and implied warranty claims, to tort actions for breach of express warranty. This approach avoids the harsh 'all or nothing' result of contributory negligence by reducing a plaintiff's award by their percentage of fault, thereby achieving a more equitable outcome. The court also held that wrongful death and NIED claims are derivative, meaning recovery depends on the viability of the decedent's underlying claim and is also subject to reduction for the decedent's comparative fault.
Analysis:
This case is significant for clarifying Hawaii's interpretation of UCC § 2-313, aligning it with a modern, pro-buyer view that eliminates the need for plaintiffs to prove reliance to establish an express warranty. By creating a presumption that a seller's statements are part of the bargain, the decision shifts the evidentiary burden to the seller, making it easier for buyers and third parties to enforce express warranties. Furthermore, the extension of pure comparative negligence to breach of express warranty tort claims solidifies Hawaii's approach of merging tort and warranty principles in personal injury cases. This ruling ensures consistent and equitable apportionment of fault across different product liability theories, preventing a plaintiff's own negligence from acting as a complete bar to recovery.
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