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Bell Fuels, Inc. v. Lockheed Elec. Co.

OPINION FILED FEBRUARY 1, 1985.

BELL FUELS, INC., PLAINTIFF-APPELLANT,

v.

LOCKHEED ELECTRONICS COMPANY, INC., ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. Thomas J. O'Brien, Judge, presiding.

JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:

This is an appeal from the trial court's dismissal of plaintiff's verified two-count second amended complaint which sought damages against defendants Lockheed Electronics Company, Inc. (Lockheed), and Don Johns, Inc., caused by the breach of their implied warranty of merchantability on allegedly defective goods that they manufactured and distributed. We affirm, and pertinent to our disposition are the following.

Plaintiff, a distributor of fuel oil to individual and commercial consumers, filed a verified second amended complaint on September 2, 1982, after its prior complaints alleging breaches of various express and implied warranties had been dismissed.

Count I, directed at defendant Lockheed, alleged that metering registers manufactured by Lockheed and purchased by plaintiff from Don Johns, Inc., were defective in their design; that plaintiff had given Don Johns, Inc., due notice of several defects; and that Lockheed knew or should have known of these defects. It further alleged that Lockheed had attempted to disclaim its implied warranty of merchantability in writing through a "warranty." A copy of this "warranty" was attached to the complaint as an exhibit. Its terms provided as follows:

"WARRANTY CERTIFICATE NO.

Lockheed Electronics Company, Inc. (LEC) warrants the Computing Register delivered hereunder (1) will be free from defects in material and workmanship under normal use and service; and (2) will meet applicable specifications and descriptions at the time of delivery to Buyer. For a period of one (1) year from the date of purchase, LEC will replace or repair, for the original Buyer from an authorized Factory Dealer, free of charge, any part or parts returned to said Dealer within such one (1) year period, which are found upon examination by said Dealer to be non-conforming or defective. All transportation costs must be borne by Buyer. The foregoing shall also apply to any repaired, reworked or replaced product, part or component.

Buyer's remedies are expressly limited to LEC's obligation stated above. This warranty extends to said Buyer only. LEC shall in no case be liable to said Buyer or Buyer's customers for any incidental or consequential damages, or loss of use, or other commercial loss, however occasioned.

THIS WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS."

Additionally, it alleged that language was attached to this "warranty" which stated: "This Warranty shall be effective only providing attached card is properly filled out and returned to Lockheed Electronics Company, Inc. at time of purchase"; that plaintiff had not returned the attached card to Lockheed; and that the implied warranty of merchantability was therefore still applicable. Finally, the complaint alleged that Lockheed had breached its implied warranty of merchantability, and plaintiff had been damaged as a result of this breach. Count II realleged and incorporated by reference all allegations made against Lockheed as against Don Johns, Inc.

On September 30, 1982, defendant Lockheed moved to dismiss plaintiff's second amended complaint on the grounds that the implied warranty of merchantability had been effectively disclaimed by Lockheed; that plaintiff's complaint failed to allege breach of an implied warranty of merchantability; that plaintiff's complaint failed to allege any causal relationship between the claimed damages and any defects; and that the complaint failed to allege compliance with certain conditions precedent.

At the hearing on Lockheed's motion to dismiss the second amended complaint, the court considered Lockheed's initial argument on the existence/applicability of the disclaimer. In opposition to Lockheed's motion, plaintiff argued that the disclaimer language included in the "Warranty Certificate" drafted by Lockheed was ambiguous and should be strictly construed against its drafter, Lockheed, as an ineffective disclaimer. Further, plaintiff urged that there was no effective disclaimer of implied warranties because the written "warranty" and its "incorporated" disclaimer were expressly predicated on the return of the card attached to the "Warranty Certificate" and that the condition precedent was never satisfied since plaintiff had never returned the card.

The trial court found that the card attached to the enclosed "Warranty Certificate" was a condition precedent, and that the intent of the parties (seller) was to sell some merchandise at a given price and to afford the purchaser an express warranty within the terms of the agreement with a condition precedent attached to that warranty that the purchaser would have to notify the seller of the date and identity of the buyer. The court found that the disclaimer was effective regardless of notification, and that the disclaimer complied with the terms of the Uniform Commercial Code. It therefore dismissed plaintiff's second amended complaint.

Plaintiff appeals from this ...


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