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Midland Sup. v. Ehret Plumbing & Heat

OPINION FILED AUGUST 5, 1982.

MIDLAND SUPPLY COMPANY, INC., PLAINTIFF AND COUNTERDEFENDANT-APPELLEE,

v.

EHRET PLUMBING & HEATING COMPANY, DEFENDANT AND COUNTERPLAINTIFF-APPELLANT.



Appeal from the Circuit Court of St. Clair County; the Hon. David W. Costello, Judge, presiding.

PRESIDING JUSTICE KARNS DELIVERED THE OPINION OF THE COURT:

Plaintiff, Midland Supply Company, Inc., brought an action in the circuit court of St. Clair County against defendant, Ehret Plumbing & Heating Co., Inc., seeking to recover the balance due on a contract for the sale of a boiler. Defendant denied liability and filed an amended counterclaim for damages sustained as a result of plaintiff's breach of warranties arising from the sale of two other boilers. After a bench trial, the court entered judgment in favor of plaintiff on the complaint in the amount of $3,304.95 and in favor of plaintiff on defendant's counterclaim. Defendant appeals.

The following issues are raised on appeal: (1) whether there were implied warranties of merchantability and fitness for a particular purpose arising from the sale of the boilers; (2) whether the evidence established that such warranties were breached because of the initial defects in the boilers; (3) whether defendant's labor costs were an element of damages if the warranties were breached; and (4) whether defendant proved that the subsequent failure of one of the boilers was caused by some defect of that boiler.

Plaintiff is a wholesale distributor of heating and plumbing supplies. Among the products that plaintiff sells are boilers manufactured by Weil-McLain, Inc. Defendant is a heating and plumbing contractor. In September 1975, defendant orally ordered from plaintiff a large boiler and a small boiler manufactured by Weil-McLain, Inc. The boilers were to be installed in the church and rectory, respectively, at St. Peter & Paul Church located in Waterloo, Illinois. On October 1, 1975, the boilers were delivered to the jobsite and, thereafter, paid for by defendant.

No disclaimers or limitations of warranties were discussed by the parties at the time defendant ordered the boilers. Witnesses for plaintiff testified that a manufacturer's warranty card along with an instructions manual were delivered to defendant in the crates that contained the boilers. Plaintiff was not aware of these warranty terms. The manufacturer's warranty card contained an express warranty that guaranteed for a period of one year after installation any parts found to be defective in manufacture. It also contained a limitation of remedies provision which excluded claims for labor in replacing defective parts and other claims for consequential damages. Finally, the disclaimer of warranties provision provided the following:

"THIS WARRANTY IS IN LIEU AND INSTEAD OF ANY OTHER WARRANTY, EXPRESSED OR IMPLIED, AND EXCEPT AS ABOVE PROVIDED, THERE ARE NO WARRANTIES OF FITNESS OR MERCHANTABILITY."

In November 1975, defendant installed the small boiler in the rectory and then tested it to determine whether it was in working order. Defendant discovered that the boiler would not hold water because of a hole in one section. Defendant then contacted plaintiff who supplied replacement sections for the boiler without charge. In January 1976, plaintiff again supplied replacement sections for the small boiler. Grant Ehret, defendant's president, testified that John Jay McKinney, president of plaintiff corporation, told him that it would reimburse defendant for the labor costs incurred in replacing the sections. McKinney denied that he made such a statement. The total labor cost in repairing the small boiler was $792; this sum was not paid by plaintiff.

In the fall of 1976, defendant installed the large boiler in the church and tested it to determine whether it functioned properly. Defendant found that two or three sections were leaking and contacted plaintiff to obtain replacements. Ehret testified that the replacement parts were sent by plaintiff without charge and that McKinney again stated that his company would pay for labor. Ehret testified that the labor cost was $1,302.72; this amount was not paid by plaintiff.

In November 1977, the large boiler failed and defendant immediately notified plaintiff. That day, plaintiff delivered an identical boiler to defendant. Thereafter, plaintiff billed defendant for $3,340.95, the purchase price of the replacement boiler, which defendant refused to pay. The labor cost incurred by defendant in replacing the boiler was $3,505.86.

At trial, conflicting evidence was presented as to the cause of the boiler's failure. Ehret testified that it had modified the boiler in that it changed the terminal connections on the low-water cutoff by installing a relay on the side of the boiler. Ehret further testified that the gas valve was defective in that it was stuck in an open position and that the low-water cutoff failed to supply water to the boiler. According to Ehret, the constant supply of heat coupled with the lack of water caused the boiler to overheat and crack. He further stated that the modification was unrelated to the failure and that the same modification was performed on the replacement boiler currently in operation. In his opinion, the defective gas valve was the main cause of the failure.

Thomas Behrmann, owner of R.A. Behrmann & Associates, a manufacturer representative for Weil-McLain, Inc., testified that he examined the large boiler on November 14, 1977. Behrmann testified that although the gas valve stuck, the boiler should not have overheated because other parts of the system should have continued to supply water to the boiler. In Behrmann's opinion, the boiler failed because the relay between the low-water cutoff on the boiler and the pump on the boiler feed unit failed to operate. He further stated that this control was not in accordance with the instructions manual supplied by the manufacturer. Behrmann testified that his company charged plaintiff for the replacement boiler because the failure occurred beyond the warranted time period and was not caused by a manufacture defect.

On appeal, defendant argues that the sale of the two boilers gave rise to implied warranties of merchantability and fitness for a particular purpose under the Uniform Commercial Code. Further, defendant contends that these warranties were not disclaimed by the manufacturer's warranty provisions because the provisions were not submitted to defendant until the delivery of the boilers, and, therefore, were not a part of the sales contract.

At the outset, we note that, there is a distinction between an implied warranty of merchantability and an implied warranty of fitness for a particular purpose and conclude that defendant failed to prove that the latter arose from the parties' conduct.

• 1 Section 2-315 of the Uniform Commercial Code provides that where a seller knows of the particular purpose for which goods are required and the buyer relies on the seller's skill or judgment in selecting the goods, an implied warranty that the goods are fit for such a purpose arises. (Ill. Rev. Stat. 1979, ch. 26, par. 2-315; Siemen v. Alden (1975), 34 Ill. App.3d 961, 341 N.E.2d 713.) In this case, plaintiff knew at the time of contracting that defendant purchased the boilers to be installed as the heating systems for the church and rectory. Defendant did not prove, however, that it relied on the skill and judgment of plaintiff in purchasing the boilers. Defendant told plaintiff that it wanted two gas-fired boilers, one for water and one for steam. It also gave plaintiff the technical specifications which included the radiation of the buildings and the size of the boilers then in operation. Plaintiff related to defendant the various sizes and prices of the boilers that it sold. The record supports the inference that defendant, an experienced heating and ...


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