765 S.E.2d 223
W. Va.2014Background
- Appalachian Leasing purchased four 2008 Mack GU-713 coal trucks from Mack and Worldwide, for off-road coal hauling.
- The only express warranty was Mack’s Standard Warranty, limiting repair or replacement of defective parts; disclaimers and invoices also disclaimed implied warranties and consequential damages.
- Appalachian alleged the trucks were defective and failed to perform, with repeated repairs and no replacement vehicles provided, seeking revocation of acceptance, refund, and incidental/consequential damages.
- The circuit court granted summary judgment in favor of Mack and Worldwide, holding warranties satisfied and implied warranties disclaimed.
- On appeal, the West Virginia Supreme Court reversed the summary judgment as to the express warranty, finding genuine issues of material fact, and remanded for Article 2 remedies; implied warranties were properly disclaimed.
- The court explained that if the express warranty fails of its essential purpose, remedies under Article 2 may be pursued, but consequential damages exclusions may be unconscionable and require a separate assessment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the express warranty fail of its essential purpose? | Appalachian argues multiple, persistent defects show the warranty failed to provide a usable product. | Mack/Worldwide contend they complied with the warranty by repairing/replacing defective parts; no failure of essential purpose. | Genuine issues of material fact exist; remand for Article 2 remedies. |
| Are the implied warranties validly disclaimed? | Disclaimers were unconscionable due to unequal bargaining power and lack of notice. | Disclaimers were conspicuous, in writing, and properly agreed; waivers valid. | Disclaimers of merchantability and fitness were valid; implied warranties barred. |
| Can Appalachian recover consequential damages if the express warranty fails of its essential purpose? | Losses beyond repair costs should be recoverable under Article 2. | Consequence damages are precluded by express warranty exclusions unless unconscionable. | Consequential damages may be recoverable only if the exclusion is unconscionable. |
| Was the circuit court's summary judgment proper regarding the express warranty? | There were material facts about breach not resolved, so summary judgment was improper. | Warranties were satisfied; summary judgment appropriate. | Summary judgment on the express warranty was improper; reversed and remanded. |
Key Cases Cited
- Reed v. Sears, Roebuck & Co., 188 W.Va. 747 (1992) (express warranty arises from affirmation that becomes basis of bargain)
- Mountaineer Contractors, Inc. v. Mountain State Mack, Inc., 165 W.Va. 292 (1980) (disclaimer of implied warranties permissible in commercial transactions)
- Reddy v. Community Health Foundation, 171 W.Va. 368 (1982) (readability and assent considerations for warranty disclosures)