Jenner Trucking v. Pioneer Machinery

THIS OPINION
HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN
ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Jenner Trucking
& Construction, Inc., Appellant,

v.

Pioneer
Machinery, LLC, and Peterson Pacific Corp.,

of whom Pioneer
Machinery, LLC, is Respondent.

Appeal From Dorchester County

James C. Williams, Jr., Circuit Court
Judge

Unpublished Opinion No.  2011-UP-072

Submitted November 1, 2010 – Filed
February 23, 2011

AFFIRMED

Steven L. Smith, of N. Charleston, for Appellant.

Steven A. McKelvey, Christopher C. Genovese and Thomas William McGee, III, all of Columbia, for Respondent.

PER CURIAM: In this
action for breach of express warranty, breach of implied warranty of
merchantability, fraudulent misrepresentation, and conversion, Jenner Trucking
and Construction (Jenner Trucking) appeals the grant of summary judgment to
Defendant Pioneer Machinery (Pioneer).  We affirm.[1]

In 2003, Jenner Trucking purchased an HC-4400-B Waste
Recycler ("grinder") manufactured by Peterson Pacific Corp. (Peterson)
from Pioneer for use in its land clearing business.  Timothy Jenner, the
president and sole shareholder of Jenner Trucking, finalized the purchase after
a trial period during which Jenner Trucking's head mechanic noticed numerous
problems with the machine that indicated it had "been sitting up for a
while."  Within six months of the date of purchase, the clutch on the
grinder malfunctioned.  Pioneer replaced the clutch at no cost to Jenner
Trucking, but it malfunctioned again less than a month later.  This time,
however, although Pioneer repaired the grinder, it refused to return it to
Jenner until he paid the $12,000 repair bill, which Jenner did about a year
later. 

Jenner Trucking
then filed the present lawsuit against Pioneer and Peterson, asserting claims
for breach of express and implied warranties, fraudulent misrepresentation, and
conversion.  Both defendants moved for summary judgment after filing responsive
pleadings, and the trial judge conducted separate hearings on the motions.  The
trial judge then granted summary judgment to Pioneer, holding (1) Pioneer did
not provide an express warranty to Jenner Trucking, (2) Jenner Trucking's claim
for breach of implied warranty of merchantability failed as a matter of law
because of the disclaimer on the sales contract, (3) Jenner Trucking's
fraudulent misrepresentation failed as a matter of law because any reliance on
any alleged misrepresentation would be unreasonable, and (4) Pioneer did not
convert the grinder for its own use.  In a separate order, the trial judge
granted only partial summary judgment to Peterson, holding (1) there were
questions of fact as to whether Peterson complied with the terms of its express
limited warranty, (2) Peterson had effectively disclaimed the implied warranty
of merchantability, (3) there was no evidence that Peterson made any false
statements to induce Jenner to purchase the grinder and Jenner's reliance on
any such false representations would have been unreasonable, and (4) Jenner's
claim for lost profits was speculative and was disclaimed under the express
limited warranty.

Jenner Trucking unsuccessfully
moved for reconsideration of both orders and then filed a notice of appeal.  While
the appeal was pending in this court, Jenner Trucking settled its claim against
Peterson.

1.  Jenner Trucking argues the trial
judge erred in finding the disclaimer on the sales contract effectively
disclaimed any possible warranties, express or implied, on the grinder.  In
support of his argument that the disclaimer was invalid, Jenner Trucking points
out that (1) the front page of the document contained an express warranty,
which, under section 36-2-316(1) of the South Carolina Code (2003), Pioneer
could not disclaim in the same agreement[2] and (2) although the disclaimer complied with the technical requirements of the
South Carolina Uniform Commercial Code, it was not truly
"conspicuous" as that term is used in section 36-2-316(2).  We
disagree with these arguments.

Counsel for Jenner Trucking argued to the trial judge
that Jenner believed the express warranty included in the sales agreement came
from Pioneer rather than Peterson; however, during his deposition, Jenner
responded affirmatively to a question regarding whether he "received the
Peterson Pacific manufacturer warranty of nine months, a thousand hours." 
 Furthermore, there is nothing in the record suggesting Pioneer gave Jenner
Trucking an express warranty on the grinder.  We therefore hold the trial judge
was correct in determining that the only express warranty at issue here was
issued by Peterson, the manufacturer of the grinder.  Pioneer never attempted
to disclaim any warranty issued by Peterson; therefore, section 36-2-316(1),
which prohibits such disclaimers, is not applicable here.

2.  Jenner Trucking further contends
there is a genuine issue of material fact regarding whether the disclaimer was
conspicuous.  We disagree.  The disclaimer included the word
"merchantability" and was set off in block letters rather than lower
case letters; therefore, it satisfied the relevant statutory requirements to be
effective.  Jenner Trucking, though acknowledging this contrast in type, argues
the paragraph following the disclaimer was also in block letters and contends
this creates a genuine issue of material fact regarding conspicuousness.  In
contrast to the following paragraph, however, the disclaimer was also italicized. 
We therefore affirm the trial judge's determination that the disclaimer of the
warranty of merchantability satisfied the relevant statutory requirements.  See S.C. Code Ann. § 36-2-316(2) (2003) (requiring exclusions or modifications of
the implied warranty of merchantability to mention merchantability and to be in
writing and conspicuous); id. § 36-1-201(10) (stating "[l]anguage in
the body of a form is 'conspicuous' if it is in larger or other contrasting
type or color" and specifying that "[w]hether a term or clause is
'conspicuous' or not is for decision by the court") (emphasis added).

3.  Jenner Trucking complains that
although the trial judge properly denied Peterson's summary judgment motion
with respect to the express warranty it provided, the trial judge incorrectly
granted summary judgment to Peterson based on the disclaimer language in the
sales contract, to which Peterson was not a party.  Because Peterson has been
dismissed with prejudice from this appeal, it is unnecessary to address this
issue.

4.  Jenner Trucking next
contends significant material factual disputes remain regarding its claims for
fraudulent misrepresentation, namely, that contrary to Jenner's intention to
purchase a "like new" machine that was in good shape, had no previous
problems, and would not require extensive maintenance in the near future, the
grinder Pioneer sold him was about seven years old and had been sitting on
Pioneer's lot for much of that time without maintenance.  Jenner Trucking
further challenges the trial judge's reasoning that because Jenner had actual
knowledge that the grinder had been previously operated with approximately
forty to sixty hours of prior use, he could not have justifiably relied on the
description in the contract that it was "new," arguing the questions
regarding reasonable reliance generally involve factual determinations.  We
disagree.

Jenner Trucking is correct that issues of
reliance are generally determined by the finder of fact; however, "if the
undisputed evidence clearly shows the party asserting reliance has knowledge of
the truth of the matter, there is no genuine issue of material fact." Quail
Hill, LLC v. County of Richland, 387 S.C. 223, 240, 692 S.E.2d 499, 508
(2010) (citing Gruber v. Santee Frozen Foods, Inc., 309 S.C. 13, 20, 419
S.E.2d 795, 800 (Ct. App. 1992)).  See also Whitman v. Seaboard Air
Line Ry., 107 S.C. 200, 204, 92 S.E. 861, 863 (1917) ("[E]ven if there
had been fraud, its effect was destroyed by the abundant opportunity to learn
the truth.").  Here, it was undisputed that (1) Jenner held himself out as
an expert in grinders and had purchased several machines in the past, (2)
Jenner could have easily determined the age and condition of the grinder before
buying it by using the serial number or requesting the maintenance records from
Pioneer, and (3) Jenner's own mechanic warned him of problems he had observed
during the demo period.  The record supports the trial judge's determination
that Jenner could not have reasonably relied on any alleged misrepresentations
made by Pioneer's employees.

5.  Jenner Trucking argues
the trial judge erred in requiring definitive proof of lost profits and cites
authority that the law does not require absolute certainty before lost profits
can be recovered.  See Collins Holding Corp. v. Landrum, 360 S.C.
346, 350, 601 S.E.2d 332, 333-34 (2004).  This ruling appears only in the order
granting partial summary judgment to Peterson.  Because Peterson has been
dismissed from this appeal, we do not believe it is necessary to address this
issue, particularly in view of our proposed disposition to affirm on the
remaining issues.

6.  Jenner Trucking next
argues the trial judge erred in dismissing its conversion claim on the ground
that it was "simply a restatement of its breach of warranty claims under a
different name."  It further contends the second repair that Pioneer made
to the clutch system was unauthorized and therefore amounted to conversion.  We
find no reversible error.

In its complaint, Jenner Trucking made no
reference to unauthorized repairs to the grinder as the basis for its conversion
claim.  During discovery, Jenner Trucking, in response to an interrogatory from
Pioneer requesting all facts and circumstances to support its contention that
Pioneer converted the grinder to its own use in derogation of Jenner Trucking's
property rights, stated only that "[a]fter repairing the clutch, Pioneer
refused to cover the repairs under the warranty.  The Defendant further refused
to place the amount due onto the Plaintiff[']s parts account."  Furthermore,
contrary to Jenner Trucking's argument on appeal that the basis for its
conversion claim was "an assertion for unauthorized repairs," during
the summary judgment hearing, counsel for Jenner Trucking did not specifically
assert that Jenner instructed Pioneer not to perform any repairs that were not
covered by warranty.  Under these circumstances, we agree with the trial judge
that Jenner Trucking's conversion claim was merely a restatement of its claims
for breach of warranty.  See Langehans v. Smith, 347 S.C. 348,
353, 554 S.E.2d 681, 684 (Ct. App. 2001) (holding an issue was not preserved
for appeal because the appellants "did not raise this specific argument to
the trial court"). 

7.  Finally, Jenner
Trucking contends the trial judge failed to apply the proper standard in
granting summary judgment to Pioneer.  We have determined that there are no
issues of material fact warranting the denial of summary judgment on any of the
specific issues involved in this appeal and likewise hold the trial judge did
not fail to apply the proper standard in granting summary judgment.

CONCLUSION

For the foregoing reasons, we affirm the grant to
summary judgment to Pioneer.

AFFIRMED.

THOMAS, PIEPER, and GEATHERS, JJ., concur.

[1]  We decide this case without oral argument pursuant
to Rule 215, SCACR.

[2] Section 36-2-316(1) reads as follows:  "If the
agreement creates an express warranty words disclaiming it are
inoperative."