162 N.E.3d 518
Ind. Ct. App.2020Background
- Maples Health Care bought a Firestone roof in 2001; Firestone issued two warranties: a 15-year Red Shield Warranty (limited remedy: repair of leaks; excludes consequential damages; permits court action in Hamilton County, IN) and a 20-year Membrane Warranty (limited remedy: replacement membrane; contains an arbitration clause).
- Maples reported repeated leaks from 2006–2015; Firestone generated leak-tracer records and sent contractors who performed spot repairs.
- Dunford Roofing provided a November 2015 estimate to perform a comprehensive repair for $9,500; Maples did not authorize it, believing Firestone should pay.
- Maples sued Firestone one day before the Red Shield Warranty expired, asserting breach of warranty and claiming roughly $308,600 in damages from water damage, lost use, additional labor and a replacement roof.
- After a bench trial the court found Firestone breached warranty and awarded Maples $9,500 but gave no explanatory findings. Maples sought clarification and correction; the trial court said breach applied to all claims in the complaint and that $9,500 was the maximum supported by competent evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of breach: did judgment cover both warranties? | Maples: judgment covered breach of both Red Shield and Membrane warranties and related damages. | Firestone: complaint pleaded and litigated only the Red Shield Warranty; Membrane Warranty requires arbitration. | Court: breach judgment applies only to the Red Shield Warranty; Membrane Warranty claims must be arbitrated. |
| Sufficiency of damages award ($9,500) | Maples: trial evidence (Montgomery) showed $308,600 in foreseeable damages from Firestone’s failure to properly repair; $9,500 is unsupported. | Firestone: proper measure is repair cost; $9,500 estimate is the competent evidence of damages; consequential damages are excluded by the warranty and Rheem. | Court: reversed damage award and remanded for a supplemental hearing—trial court must determine appropriate measure of damages, mitigation, applicability of UCC/Rheem, and issue findings; did not adopt $308,600. |
Key Cases Cited
- Rheem Mfg. Co. v. Phelps Heating & Air Conditioning, Inc., 746 N.E.2d 941 (Ind. 2001) (holding exclusion of incidental/consequential damages in limited warranty remains effective unless unconscionable even if limited remedy fails of its essential purpose).
- Farah, LLC v. Architura Corp., 952 N.E.2d 328 (Ind. Ct. App. 2011) (damage awards must be tied to a defined standard and supported by probative evidence).
- Whitaker v. Brunner, 814 N.E.2d 288 (Ind. Ct. App. 2004) (damages cannot rest on speculation or conjecture; must be supported by evidence).
- Baxendale v. Raich, 878 N.E.2d 1252 (Ind. 2008) (when no special findings are made, an appellate court reviews a general judgment on any theory consistent with the evidence).