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Bowers Mfg Co. v. Chicago Mach. Tool Co.

OPINION FILED AUGUST 17, 1983.

BOWERS MANUFACTURING COMPANY, INC., PLAINTIFF-APPELLANT,

v.

CHICAGO MACHINE TOOL COMPANY ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County; the Hon. Robert A. Nolan, Judge, presiding.

JUSTICE VAN DEUSEN DELIVERED THE OPINION OF THE COURT:

Plaintiff, Bowers Manufacturing Company, Inc. (Bowers), appeals the dismissal with prejudice of its three-count amended complaint against defendant Chicago Machine Tool Company (CMTC), a division of F.J.M. Corporation; Di-Acro, a division of Houdaille Industries, Inc.; and Matco Leasing, Ltd., an affiliate and wholly owned subsidiary of Chicago Machine Tool Company. On appeal, plaintiff contends that counts I and II of its amended complaint stated a cause of action against CMTC for breach of oral contract and breach of express warranty, that count III stated a cause of action for breach of express and implied warranty, and that the defendants' motion to dismiss did not assert affirmative matter sufficient to permit the dismissing of said complaint. Therefore, according to Bowers, the trial court erred in granting defendants' motion to dismiss.

In the first count of its amended complaint, Bowers alleged that CMTC orally represented to Bowers that a certain turret punch manufactured by Di-Acro would meet all the specifications and requirements as given by Bowers to CMTC; that plaintiff agreed to purchase the machine based upon these oral representations; that CMTC arranged for financing through Matco, which defendant believed to be an affiliate and wholly owned subsidiary of CMTC; that Bowers and Matco executed an "Equipment Lease Purchase Agreement" for the lease and ultimate purchase of the machine, a copy of which agreement was attached to the complaint; that the equipment was delivered to Bowers; that, pursuant to the contract, Bowers caused $94,663 to be paid to Matco, which Bowers alleged to be the purchase price; that defendant knew the intended use and that Bowers relied on their expertise at the time of the negotiation, order and delivery; that Bowers found the equipment to be defective and unsound and not useable for the intended purpose; and that such failure constituted a breach of contract.

Count II made basically the same factual allegations, but concluded that defendants expressly warranted that the machine would meet the specifications and perform the work required and that the failure to do so constituted a breach of section 2-313 of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, par. 2-313). Count III realleged the same facts but concluded that the equipment failed in material respects to conform to the implied warranties of merchantability and of fitness for a particular purpose, in violation of sections 2-314 and 2-315 of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, pars. 2-314, 2-315).

Defendants Chicago Machine Tool Company and Di-Acro brought a motion to dismiss pursuant to section 2-619 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-619), formerly section 48 of the Civil Practice Act (Ill. Rev. Stat. 1981, ch. 110, par. 48). In their motion, defendants asserted that defendants had, as a matter of law, disclaimed all warranties upon which plaintiff relied. They claimed that, in conformity with section 2-316(2) of the Uniform Commercial Code, they expressly excluded the implied warranty of fitness for a particular purpose, the express warranty of fitness for a particular purpose, and the implied warranty of merchantability. Defendants attached to their motion a copy of the Matco-Bowers "Equipment Lease Purchase Agreement" wherein all express and implied warranties of fitness and merchantability were purportedly disclaimed and the lessee was extended the same warranty given by the manufacturer to the lessor; a copy of the written warranty of Di-Acro, the manufacturer, in which, inter alia, all express and implied warranties of fitness and merchantability were also purportedly disclaimed; and a copy of Bowers' sworn answers to interrogatories filed in an earlier suit over the same matter, which had been dismissed for want of prosecution. In those answers to interrogatories, John Bowers, the president of plaintiff, had stated that the warranties under which it was claiming were not oral but were written and furnished by Matco Leasing on April 4, 1980, and Bowers also attached to these answers a copy of the Di-Acro warranty. Lastly, defendants alleged in their motion that section 2-202 of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, par. 2-202) forbids the introduction of parol evidence to contradict a written agreement such as the one under which plaintiff asserted to be claiming.

On August 26, 1982, after hearing argument on defendants' motion, the court ruled that defendants had conspicuously disclaimed the warranties upon which the complaint rested, that the relevant warranty language in the Matco lease and purchase agreement was not fatally ambiguous, that Bowers' characterization of the negotiations leading up to the agreement as constituting an oral agreement was an attempt to avoid the terms of the Matco lease and purchase agreement regarding warranties, and that the terms of the latter, written agreement did comply with the Uniform Commercial Code regarding warranty disclaimers. In response to Bowers' requests for clarification, the court stated that, while count I was framed as a breach of oral contract, such purported oral contract was, in essence, a negotiation or an oral undertaking or discussion between the parties made prior to the execution of the written agreement, and that written agreement was binding between the parties. The court therefore granted defendants' motion to dismiss as to all three counts. Plaintiff appealed.

To defeat a claim or demand, the alleged affirmative matter in a section 2-619 motion (Ill. Rev. Stat. 1981, ch. 110, par. 2-619) must be something more than evidence offered to refute a well-pleaded fact in the complaint, for such well-pleaded facts together with all reasonable inferences must be taken as true for purposes of the motion to dismiss; the alleged affirmative matter must negate the cause of action completely or refute a crucial conclusion of law or conclusions of material facts contained in or inferred from the complaint. (Hayna v. Arby's, Inc. (1981), 99 Ill. App.3d 700, 709-10.) With these principles in mind we have reviewed plaintiff's contentions on appeal.

Two principal issues are present in this appeal: first, whether plaintiff can bring suit for breach of contract or breach of warranty arising out of an alleged oral contract to purchase a turret punch from CMTC or whether such an alleged agreement constituted preliminary matters which were superseded by its written contract with CMTC's wholly owned subsidiary Matco Leasing; and second, whether Matco and Di-Acro effectively disclaimed the warranties of fitness for use for a particular purpose and merchantability.

In making his ruling in favor of defendants, the trial judge recognized that plaintiff had alleged an oral agreement, but he found that there was a written agreement between the parties, the "Equipment Lease Purchase Agreement," attached to and incorporated in the complaint and that, as asserted by defendants in their motion to dismiss, section 2-202 of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, par. 2-202) does not permit evidence of a prior agreement or contemporary oral agreement that would contradict the written agreement to be introduced. The trial judge observed that Bowers was attempting to avoid the tenets of the written agreement by maintaining that the prior negotiations constituted, in and of themselves, an enforceable agreement.

Section 2-202 of the Uniform Commercial Code provides as follows:

"Sec. 202. Final Written Expression: Parol or Extrinsic Evidence. Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented

(a) by course of dealing or usage of trade (Section 1-205) or by course of performance (Section 2-208); and

(b) by evidence or consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement." (Ill. Rev. Stat. 1981, ch. 26, par. 2-202.)

Clearly, if the alleged oral agreement in this case was a prior negotiation that contradicted the written contract, evidence regarding such oral agreement would ...


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