This is a products liability case. Plaintiff Elite Professionals, Inc., (Elite) a trucking company engaged in the business of interstate transportation of commodities as a common carrier, appeals from the summary judgment entered against it and in favor of defendant Carrier Corporation (Carrier) on Elite’s claim for damages arising out of a truck refrigeration unit malfunction that resulted in the spoilage of a cargo of meat.
Elite seeks to recover for physical damage to property other than the refrigeration unit; compensatory damages are sought for the loss of the meat by spoilage and in the amount of the preincident value of the meat. Recovery is not sought for damage to the refrigeration unit occasioned by its malfunction nor for its
*626
defective condition, that is, its qualitative defect, when sold to Elite. A qualitative defect is a defect that precludes the product from being fit for its intended use or functioning as expected for the purpose it was designed.
Daitom, Inc. v. Pennwalt Corp.,
The refrigeration unit was manufactured by Carrier. It was a new unit when sold to Elite and mounted on an Elite reefer trailer by a Wichita, Kansas, Carrier dealer оn July 22, 1987. The obvious function of a truck refrigeration unit of the sort here involved is to chill a reefer trailer’s -interior and its cargo.
In the trial court, Elite’s asserted theories for recovery were strict liability, negligence, breach of express warranty, and breach of implied warranty. Before us, Elite has abandoned reliance upon implied warranty.
The incident giving rise to Elite’s claim occurred in the course of Elite’s transport of a 23-ton load of frozen hog sides from the consignor Vermont Meat Packers, Inc.’s place of business in Swanton, Vermont, to the consignee Far West Meat Company’s place of business in Highland, California.
Jesse Simpson, Elite’s driver for this particular shipment, picked up the hog sides on September 11, 1987, in Vermont. When loaded aboard the reefer trailer, the meat temperature was zero degrees. The meat was to be kept at that temperature until delivered to Far West in California. To accomplish that, the reefer’s interior temperature needed to be kept at zero degrees.
The possibility of a refrigeration problem was first evident to Simpson at about 2:00 p.m. in the afternoon of Wednеsday, September 16, 1987, when he made a routine stop at Wilson, New Mexico, to check out his truck. Simpson found that the “T-ticker” gauge on the outside of the reefer reported that the temperature inside the reefer was some three to five degrees above zero. Simpson turned the refrigeration unit’s temperature control down. In addition, he telephoned Elite’s headquarters in Strong City, Kansas, to report the situation to Mark Miller, Elite’s president.
Miller told Simpson to proceed onward from Wilson and to call back. In the meantime, Miller would look into the matter of locating a facility to which the truck might be taken for repair of the refrigeration unit or he would make arrangements for a *627 driver switch, with the new driver to take the load on to its California destination.
When Simpson arrived at Gallup, New Mexico, at about 6:00 p.m., the reefer temperature had risen to about 20 degrees. Simpson reported that development to Miller by telephone. Miller instructed Simpson to continue on to Sanders, Arizona, for a driver switch. Simpson’s log book reports that he. arrived at Sanders at about 7:00 p.m. The switch took place that evening аnd the new driver, Cíate Watkins, took the loaded reefer trailer to California. Watkins arrived at Far West’s Highland plant when it opened at 7:30 a.m. the next day, Thursday, September. 17, 1987. When the reefer was opened, it was found that the hog sides had spoiled. The reefer temperature had risen to about 60 degrees: The meat was discolored and malodorous. At the instruction of United States Department of Agriculture inspectors, the meat was not offloaded and delivery of the meat was rejected. The spoiled meat was ultimately taken to ai rendering plant.
In the late afternoon of September 17, the reefer trailer was taken to a Fontana, California, Carrier service facility. There it was found that a defective component of the refrigeration unit, a solenoid valve coil, was the cause of the unit’s malfunction. The coil was replaced that same afternoon at no charge to Elite.
When Elite purchased the refrigeration unit, it was given a printed warranty and disclaimer that, in material part, reads:
“MANUFACTURER’S WARRANTY TRUCK/TRAILER REFRIGERATION UNITS
“Carrier . . . through its dealer organization shall, at their facility, during normal working hours, repair or replace with a new оr remanufactured part, any parts or components of the [refrigeration unit] . . . which . . . malfunction as a result of defects in material or workmanship. . . .
“THE FOREGOING OBLIGATION IS EXPRESSLY GIVEN IN LIEU OF ANY OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE, WHICH EXCEEDS THE RESPONSIBILITIES SET FORTH HEREIN.
“LIMITATION OF LIABILITY
“Carrier . . . expressly disclaims and denies all liability for SPECIAL, INCIDENTAL,' OR CONSEQUENTIAL DAMAGES or losses of a commercial nature arising out of a malfunctioning product or its parts or com *628 ponents thereof, as a result of defects in material or workmanship. THE OWNER’S SOLE AND EXCLUSIVE REMEDY AND. [CARRIER’S] SOLE AND EXCLUSIVE LIABILITY SHALL, BE LIMITED TO ,THE REPAIR OR REPLACEMENT OF PARTS OR COMPONENTS CONTAINED IN THE [REFRIGERATION UNIT] . . . WHICH . . . MALFUNCTION AS A RESULT OF DEFECTS IN MATERIAL OR WORKMANSHIP IN ACCORDANCE WITH THE APPLICABLE PROVISIONS AND LIMITATIONS STATED ABOVE.”
After discovery was conducted, Carrier filed á motion for summary judgment primarily relying upon its view of the operative effect of the printed warranty and disclaimer. The court granted summary judgment to Carrier. On reasoning that is at some variance from that suggested by either party or' the trial court, we reverse. ' '
When ruling upon the summary judgment motion, the trial court orally stated: '
“The Court- will ’ find' this is a contract' case and' not a'tórt case. . . . [T]here is clear and convincing evidence that the motion for summary judgment should be sustained. [The] Court is going to sustain the motion for summary judgment .... [T]his is strictly under a warranty claim and should not be under a tort claim. . . . [C]ertain steps might have been or should have been taken by [Elite] . . . [w]hich possibly could have resolved these issues . . . [were] not taken and Carrier should not be put in the position of that responsibility. Motion for summary judgment will be sustained.”
Omitting formalities, the journal entry of judgment reporting the trial court’s consideration of Carrier’s motion and its grant of summary judgment to Carrier reads:
“1. On July 24, 1987, Elite Professionals purchased a hew model NDJ425NO-SC-C refrigeration unit manufactured by Carrier Corporation ....
“2. The unit was sold with a Carrier Corporation’s limited warranty which clearly and conspicuously excluded all implied warranties.
“3. The Carrier Corporation’s warranty excluded all special, incidental and consequential damages. '
“4. Given the contract entered into by and between the parties, [Elite’s] claims against [Carrier] were limited to the. contract, and no tort remedies are available to [Elite].
“5. Carrier Corporation’s obligation to Elite Professionals for any defective part was to repair or replace the defective part, and this obligation was fulfilled by Carrier Corporation. ■
“6. There áre no genuine issues of material fact and as a matter of law, Carrier Corporation is entitled to judgment.”
*629 The summary judgment motion hearing transcript and the journal entry of judgment reflect somewhat imperfect compliance with the findings оf fact and conclusions of law requirement of K.S.A. 60-252, Rule 141, (1991 Kan. Ct. R. Annot. 117), and Rule 165 (1991 Kan. Ct. R. Annot. 126). For instance, there is no report of the trial court’s, reasoning that this is a contract case and not a tort case. Nonetheless, we conclude that the trial court granted summary judgment on the . ground that the printed warranty and disclaimer operates to preclude Elite from recovery, under any of its asserted theories for recovery.
The printed warranty and disclaimer may be said, to be in the nature of an exclusive express limited remedy warranty. Carrier promises to repair оr replace any defective parts or components causing malfunction of the refrigeration unit. In the event of refrigeration unit malfunction, Elite’s sole and only remedy is repair or replacement of defective parts or components according to Carrier’s promise as stated in the printed, warranty and disclaimer. There is no backup remedy clause (e.g., repayment of purchase price). Carrier disclaims all liability for damage or loss arising out of refrigeration unit malfunction beyond or other than its express obligation to repair or replace defective parts or components. There is no liquidated damages clause.
Summary judgment is proper where the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. K.S.A. 1991 Supp. 60-256(c);
Patterson v. Brouhard,
*630 The trial court’s orally expressed determination that “there is clear and convincing evidence that the motion . . . should be sustained” was an insufficient determination upon which , to base its grant of summary judgment. The test to. be met was whether Carrier is entitled to judgment as a matter of law and not whether the evidence, although clear аnd convincing to the trial court, probably would produce a judgment in favor of Carrier upon trial of the case on its merits before a jury or other factfinder.
Kansas has adopted the doctrine of strict liability, as set out in Restatement (Second) of Torts § 402A (1965).
Brooks v. Dietz,
“(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
“(a) the seller is engaged in the business of selling such a product, and
“(b) it is expected to and does .reach the user or consumer without, substantial change in the condition in which it is sold.
“(2) The rule stated in Subsection (1) applies although ,
“(a) the seller has exercised all possible care in the preparation and sale of his product, and
“(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.”
Within the § 402A official comments, this appears:
“a. This Section states a special rule applicable to sellers of products. The rule is one of strict liability, making the seller subject to liability to. the user or consumer even though he has exercised all possible care in the preparation and sale of the product. . . . The rule stated here is not exclusive, and does not preclude liability based upon the alternative ground of negligence of the seller, where such negligence can be proved.
“/. . . . The rule stated in this Section applies to any person engaged in the business of selling products for use or consumption. It therefore applies to any manufacturer of siich a product, [and] to any wholesale or retail dealer or distributor ....
“m. ‘Warranty.’ The liability stated in this Section does not rest upon negligence. It is strict liability .... The basis of liability is purеly one of tort.
. . . [The liability] is not subject to the various contract rules which have grown up to surround [sales of goods].
. . . The rule stated in this Section is not governed by the provisions' ... of the Uniform Commercial Code, as to warranties; and it is not *631 affected by limitations on the scope and content of warranties .... The consumer’s cause of action ... is not affected by any disclaimer or other agreement, whether it be between the seller and his immediate buyer, or attached to and accompanying the product into the consumer’s hands. In short, ‘warranty’ must be given a new and different meaning if it is used in connection with this Section. It is much simpler to regard the liability here stated as merely one of strict liability in tort.”
We find that, on the record here, there is no basis for a determination that as a matter of law the printed warranty and disclaimer operates to preclude recovery by Elite on the theory of strict liability in tort.
It has been held that the defense of disclaimer is not available in a suit based upon strict liability in tort
(Pearson v. Franklin Laboratories, Inc.,
Corral v. Rollins Protective Services Co.,
240 Kan, 678,
In Corral, the parties’ agreement provided:
“ ‘[i]f loss or damage should result from the failure of performance or operation ... of the [Rollins] System, that Rollins’ liability, if any, for the loss or damage thus sustained shall be limited to a sum equal to ten (10%) per cent of one year’s service charge, or $250.00, whichever sum is the greater, and that the provisions of this paragraph shall apply if loss or *632 damage, irrespective of cause or origin, results . . . from negligence, active or otherwise, of Hollins, its agents or employees.’ ”240 Kan. at 680-81 .
The Supreme Court affirmed the trial court’s grant of summary judgment for a $250 limited recovery by Corral on the theories of negligence and strict liability.
The now pertinent portion of the
Corral
opinion deals with the liquidated damages clause in the Corral and Rollins agreement.
Meriting attention are two other matters relating to the subject of preclusion from recovery by Elite under the rule of strict liability.
Within the expression of the strict liability rule set forth in § 402A, there is found the element of “unreasonable dangerousness,” that is, the necessity of an “unreasonably dangerous” defective condition. § 402A provides that “[o]ne who sells any product in a defective condition unreasonably dangerous to the . . . [user or consumer’s] property is subject to liability for physical harm thereby caused to the . . . [user or consumer’s] property.” For Elite to recover under the rule of strict liability in the case before us of course requires that Elite prove the requisite dangerousness of the defective refrigeration unit. By relying upon strict liability, Elite has assumed the burden to prove that the refrigeration unit was unreasonably dangerous to property.
Carrier asserts that therе was nothing inherently dangerous about the refrigeration unit here involved. Carrier has not dem *633 onstrated to our satisfaction that on the record before us and as a matter of law the refrigeration unit was not “unreasonably dangerous.” As we see it, whether the refrigeration unit was “unreasonably dangerous” is a fact question for resolution by a factfinder.
Further, threaded through Carrier’s arguments is the assertion that the loss for which Elite seeks recovery is economic loss, or loss “of a commercial nature.” Relying upon that assertion and the principle that recovery for economic loss is not available in an action sounding in tort, Carrier argues that Elite cannot recover for its claimed loss on the theory of strict liability because strict liability sounds in tort.
What sort of losses are economic losses?
Jones & Laughlin Steel v. Johns-Manville Sales,
The harm for which Elite seeks recovery is not of the same genre as those harms encompassed within the foregoing descriptions. The harm for which Elite seeks recovery is harm to property other than the refrigeration unit itself.
Again, we сonclude that the printed warranty and disclaimer here does not preclude recovery by Elite on the theory of strict liability. Recovery under strict liability is not precluded by disclaimer. Recovery is not sought for economic loss or for damage to the product, the refrigeration unit itself.
Carrier’s defense of the trial court’s grant of summary judgment as to Elite’s claim of negligence reveals at least two contentions.
One is that there can be no recovery for economic loss on a claim sounding in tort. We have addressed that contention in our *634 discussion conсerning Elite’s strict liability claim. The contention does not pass muster. Elite makes no claim for economic loss.
As we divine Carrier’s arguments, an implicitly urged contention is simply that the preclusion language of the printed warranty and disclaimer encompasses recovery in negligence.
While it is true that the policy of the law in general is to permit mentally competent parties to arrange their own contracts and fashion their own remedies where no fraud or overreaching is practiced and that contracts freely arrived at and fairly made aré favоrites of the law
(Kansas City Structural Steel Co. v. L.G. Barcus & Sons, Inc.,
In
Mid-America Sprayers, Inc. v. United States Fire Ins. Co.,
“ ‘Contracts for exemption for liability from negligence are not favored by the law. They are strictly construed against the party relying on them. . .
“ ‘The rule seems to be that, unless against public policy, a contract exempting liability will be enforced, however, it will be enforced very strictly. In Cason v. Geis Irrigation Co.,211 Kan. 406 ,507 P.2d 295 (1973), we said:
“Contracts for exemption from liability for negligence are not favored by the law and are strictly construed against the party relying on them.” . . .
“The general rule is that private contracts exculpating one from the consequences of his own acts are looked upon with disfavor by the courts and will be enforced only when there is no vast disparity in the bargaining power between the parties and the intention to do so is expressed in clear and unequivocal language. ...”
“ ‘ “. . . [T]he law does not look with favor on provisions which relieve one from liability for his own fault or wrong. . . . [CJlauses limiting liability are givеn rigid scrutiny by the courts . . . ” (Emphasis added.)
Similar statements are found elsewhere.
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“[Indemnification for the indemnitee’s own negligence must be clearly and unequivocally indicated as the intention of the parties.”
United States v. Seckinger,
In
Corral,
as previously observed, within the parties’ agreement it was provided that “ ‘[t]he parties agree that if loss or damage should result from the failure of performance or operation ... of the [Rollins] system, that Rollins’ liability, if any, for the loss or damage thus sustained shall be limited . . . and that
the provisions of this paragraph shall apply if loss or damage . . . results . . . from negligence ... of Rollins, its agents or employees.’ ”
(Emphasis added.)
We turn to consideration of Elite’s claim for breach of express warranty. According to the printed warranty and disclaimer, that warranty is a limited repair or replace warranty. From the language of the printed warranty and disclaimer previously set forth, one finds that the terms and conditions of the limited remedy are expressed in this text:
*636 “Carrier . . . through its dealer organization, shall, at their facility, during normal working hours, repair or replace with a new or remanufactured part, any parts or components of the [refrigeration unit] . . . which . . . malfunction as a result of defects in material or workmanship.”
Shortly put, Carrier argues that it satisfied its repair or replace obligation when it replaced the defective solenoid valve coil upon Elite’s first presentation of the malfunctioning refrigeration unit to Carrier. That occurred at the Carrier service facility at Fontana, California — after the refrigeration unit had malfunctioned and the meat had spoiled.
Elite’s position is that the limited remedy failed of its essential purpose thereby freeing it from the exclusivity of the repair or replace remedy. Elite points to K.S.A. 84-2-719(2), where it is providеd:
“Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this act [Uniform Commercial Code — Sales—Remedies; K.S.A. 84-2-701 et seq.].”
Elite argues that whether the limited remedy failed of its essential purpose is a fact question which, under the circumstances of this case, is for resolution by a factfinder and that the trial court’s entry of summary judgment has improperly deprived it of the opportunity to try that question. We agree.
Without reiterating the evidence, we conclude that the record does not establish as a mаtter of law the time and place availability to Elite of normal working hours services at a Carrier facility on September 16 and 17, 1987. It strikes us that, because of the printed warranty and disclaimer’s promissory recitation that “Carrier . . . shall, at their facility, during normal working hours, repair or replace [defective parts or components],” the determination of that time and place availability is critical to resolution of the express limited repair or replace promise question, particularly where resolution of that question as a matter of law is undertаken. It strikes us that if that time and place availability was such that remedial repair or replace work by Carrier was unavailable to Elite meaningfully prior to the arrival of the loaded reefer trailer at Far West’s place of business on the morning of September 17, Carrier’s promise was no more than illusory in the context of this case. That consequence reasonably could be *637 found to amount to failure of the essential purpose of the limited remedy.
In the official UCC Comments to K.S.A. 84-2-719, it is said:
“1. Under this section parties are left free to shape their remediеs to their particular requirements and reasonable agreements limiting or modifying remedies are to be given effect.
“However, it is of the very essence of a sales contract that at least minimum adequate remedies be available. If the parties intend to conclude a contract for sale within this Article they must accept the legal consequence that there be at least a fair quantum of remedy for breach of the obligations or duties outlined in the contract. . . . [Ujnder subsection (2), where an apparently fair and reasonable clause because of circumstances fails in its purрose or operates to deprive either party of the substantial value of the bargain, it must give way to the general remedy provisions of this Article.” (Emphasis added.)
When Simpson and the loaded reefer arrived at Gallup, the circumstances confronting Elite required it to choose the most expedient reasonable course of action to take to protect its cargo. It appears that the decision made was that, in view of the times and places involved, it was the better choice to get the load to Far West in Hayward directly. The reаsoning seems to have been that by making a direct run to Hayward it was more likely that the arrival of the cargo there would be earlier than when assistance at a Carrier service facility might be obtained.
Also arising in this case is the question whether the K.S.A. 84-2-719(2) failure of essential purpose rule is applicable in a situation where the seller is not given the opportunity to repair or replace until after the damage causing occurrence but it does, in fact, repair or replace promptly after presentation of the defective product tо it. In the case before us, a fair argument may be made that in the context of the existing circumstances, the limited repair or replace remedy foiled of its essential purpose.
A Wisconsin court was faced with a comparable situation in
Phillips Petroleum v. Bucyrus-Erie Co.,
We conclude the fact that the seller is first given the opportunity to repair or replace after the harmful occurrence does not, standing alone, bar recovery for failure of essential purpose at least in those instances where the outcome of the repair or replacement leaves the user in the position of one who has been afforded an unconscionably inadequate remedy, that is, where the user has not been afforded a reasonably “fair quantum of remedy.”
Whether the remedy failed in this case is a question of fact ánd should not have been decided on summary judgment. Seé 5 Anderson, Uniform Commercial Code § 2-719:29 (1984). In
Delhomme Industries, Inc. v. Houston Beechcraft,
In summary, we conclude that the summary judgment against Elite must be reversed. It was improvidently granted. On the present record, the printed warranty and disclaimer does not preclude recovery by Elite on its asserted strict liability, negligence, or warranty theories as a matter of law.
Reversed and remanded for further proceedings.