Carter Enterprises, LLC v. Scott Equipment Co.
91 So. 3d 1134
La. Ct. App.2012Background
- Carter purchased a Volvo-based excavator converted by Scott into a scrap handler for $273,457.87 plus tax; delivery occurred April 10, 2008.
- Carter alleged redhibitory defects making the machine unusable or unfit for its intended purpose, and Scott failed to remedy persistent problems after delivery.
- Trial evidence showed immediate and ongoing defects (instability, broken grapple pins, hydraulic/air conditioning and electrical issues, engine problems, and servicing difficulties) with substantial service calls.
- The trial court ruled the scrap handler had redhibitory defects and rescinded the sale, awarding Carter damages, costs, and attorney fees, offset by Carter’s use value ($17,366).
- Scott was deemed a manufacturer for redhibition purposes due to the conversion and installation of parts, and was liable for attorney fees.
- A post-trial motion granted Carter summary judgment dismissing Scott’s claim for engine-replacement costs, which Scott appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the scrap handler had redhibitory vices warranting rescission | Carter: machine had defects at delivery; Scott knew or should have known; defects persisted despite repairs. | Scott: defects were not redhibitory or were cured; use and modifications insufficient to warrant rescission. | Yes; defects proven; rescission upheld. |
| Whether Carter's use credit should reduce rescission recovery | Credit for use reflects actual utilization; trial court properly offset by use value. | Credit should be greater given actual, longer use and operator conditions. | Credit affirmed as determined by trial court. |
| Whether Scott is liable for attorney fees as a manufacturer in a redhibition action | Scott, as manufacturer, is liable for reasonable attorney fees when vindicating redhibition. | Scott is a seller in good faith, not a manufacturer; fee award excessive. | Affirmed; Scott is deemed a manufacturer and liable for attorney fees. |
| Whether Carter was entitled to summary judgment on engine replacement cost | Engine replacement cost arises from redhibition and related expenses. | Engine failure resulted from negligent turbocharger installation, not preexisting redhibitory defect; disputed whether engine costs are recoverable. | Reversed; summary judgment improper; issues of causation remain for trial. |
Key Cases Cited
- Gaston v. Bobby Johnson Equipment Company, Inc., 771 So.2d 848 (La. App. 2d Cir. 2000) (manufacturer presumed knowledge of redhibitory defect; attorney fees awarded for bad faith seller)
- Ford Motor Credit v. Laing, 705 So.2d 1283 (La. App. 2d Cir. 1998) (manifest error standard; appellate review of fact-findings)
- Rosell v. ESCO, 549 So.2d 840 (La.1989) (manifest error standard; deference to trial court credibility)
- Rodriguez v. Chrysler Group LLC, 76 So.3d 1279 (La. App. 3d Cir. 2011) (two permissible views of evidence; standard of review)
- Credeur v. Champion Homes of Boaz, Inc., 6 So.3d 339 (La. App. 3d Cir. 2009) (installation defect treated under manufacturer standards)
- Tucker v. Petroleum Helicopters, Inc., 9 So.3d 966 (La. App. 4th Cir. 2009) (definition of manufacturer; redhibition scope)
- Miller v. Ford Motor Company, 815 So.2d 997 (La. App. 3d Cir. 2002) (expenses occasioned by sale; preservation costs; redhibition damages)
- Vance v. Emerson, 420 So.2d 1032 (La. App. 5th Cir. 1982) (preservation and related expenses in redhibition)