Summary
denying motion to dismiss because issues of fact remain as to agency
Summary of this case from Dewey v. Volkswagen AGOpinion
05-248.
Decided December 15, 2005.
Harris Beach, John T. Refermat, Esq., of counsel On behalf of movant Fashion-Fain Homes, Inc., Linda H. Joseph, Esq., On behalf of movant Champion Home Builders, Co. Hiscock Barclay, LLP, Paul Sanders, Esq., of counsel, On behalf of Plaintiff-Respondent.
MEMORANDUM-DECISION AND ORDER
The court has before it motions from both defendants in this matter, seeking summary judgment dismissing the plaintiff's Complaint in its entirety. The plaintiff has cross-moved for attorney's fees alleging the motions made by the defendants are frivolous in nature. It is noted that no discovery has been done in this matter and that one of plaintiff's main arguments in opposition to the motion is that it is premature.
The plaintiff in this matter purchased a used manufactured home in September of 2003, from Fashion-Fain Home, Inc. (hereinafter "Fashion-Fain"), for the sum of $45,000.00. The Defendant, Champion Home Builders, Co., is the manufacturer of the home in question (hereinafter "Champion"), and Fashion-Fain is an authorized dealer of Champion. The home was not assembled when, before purchase, the plaintiff inspected it in or about early September, 2003. It had been used as a model at the Fashion-Fain site. The plaintiff alleges that Fashion-Fain representatives told her the home had only been apart about three months but she subsequently discovered the home had been apart for years. After delivery of the home in late October 2003, it became apparent that the home had been severely water-damaged and had mildew and mold.
The first cause of action alleges Fashion-Fain breached its contract with plaintiff and the second cause of action alleges Fashion-Fain breached its warranty provided the plaintiff. The third and fourth causes of action allege breach of the express manufacturer's warranties against defendant Champion. The tenth cause of action alleges breach of contract against both defendants. It is undisputed that the contract Fashion-Fain entered into with the plaintiff indicated the home was "sold as is' including only manufacturer's warranty" with the defendant Champion's limited warranty annexed. Fashion Fain, however, also provided a written definition of "as is" for purposes of the contract entered into with the Plaintiff. (Exhibit B, Champion motion papers; Exhibit D, Fashion Fain motion papers) Champion and Fashion-Fain rest on the premise that the plaintiff refused to let them repair or correct the purported defects within the time frame of the one-year express warranty. They submit that there is no question of fact that the plaintiff refused to allow them to make the repairs within the one-year time frame and that the documentary evidence they submit rebuts the vague conclusorary allegations of plaintiff's reply papers.
The defendants cite Hole v. General Motors Corp., 83 AD2d 715 (3rd Dept, 1981). In Hole, the proof was undisputed that the plaintiff flatly refused to allow repair efforts to be made by the manufacturer. "These offers were flatly rejected by plaintiff who advised GM that he was rescinding the entire transaction and that GM could either provide him with a new Safari or refund to him in cash the entire purchase price. In declining to accept either of plaintiff's alternatives, GM indicated its continued willingness to make all necessary repairs at plaintiff's earliest convenience and at GM's expense. Plaintiff again rejected the offer and returned the vehicle to Morris." Hole, supra at p. 716.
Here, the plaintiff points out an ambiguity in Fashion-Fain representative Jack Freer's affidavit. Mr. Freer alleges the plaintiff refused to let them make repairs during the one year time frame, but then acknowledges a walk-through with her at the residence on or about November 3, 2003. (Exhibit C, Gold's affidavit). Mr. Freer also fails to rebut the plaintiff's allegations that at the time of the walk-through, he swore at her and was verbally abusive; that he got into an altercation with the plaintiff's son Chad and that the police were called. (Plaintiff's Affidavit, ¶ 16; Freer affidavit, dated October 10, 2005, paragraph 4). The plaintiff alleges, albeit without specifics, that she asked the defendants to inspect and correct and they refused. (Plaintiff's Affidavit, ¶ 17). The plaintiff further alleges that on July 29, 2004, Champion's representative came to remediate the mold in the bedroom and bathroom. She says, however, that Champion simply bleached the rooms and attempted to cover the problems up. (Plaintiff's Affidavit ¶ 18). In paragraph 21 of plaintiff's Affidavit, she alleges that on March 16, 2005, Fashion-Fain employee Freer and Attorney Joseph (attorney for Champion) inspected the premises.
Based upon the limited information to date, the court cannot say that there are no factual issues as to whether or not the plaintiff's actions were reasonable under the circumstances, particularly in light of the confrontation that occurred at the time of the initial walk-through. The court finds the cases cited by Champion's counsel in support of its argument that the documentary evidence "unequivocally contradict" plaintiff's allegations are distinguishable. Those cases involved a review of the language contained in various contracts, which directly contradicted the other party's claims. ( McGrath v. Parker, 4 AD3d 457, separation agreement; Coleman v. Norton, 289 AD2d 130, promissory note and King David Association v. Schonberger, 255 AD2d 423, lease.) Here, the defendant alleges the plaintiff's conduct prevented the defendant from effectuating its warranty. The plaintiff disputes this and says that Fashion-Fain's representative made the first inspection hostile and justified her reluctance to allow future inspections. The Defendants' letters to the Plaintiff and/or her attorneys are some evidence of their willingness to make repairs, and of her reluctance or unwillingness to allow them to do the same. They do not completely contradict her submissions, however, that the initial walk-through was hostile and that she subsequently allowed later inspections and repair efforts.
Accordingly, the defendant's motion to dismiss the first through fourth and the tenth causes of action against them is denied without prejudice to renewal following completion of discovery.
Defendant Champion also moves to dismiss, as does defendant Fashion-Fain, the seventh through ninth causes of action against them, which are grounded in negligence and strict product's liability. The defendants submit these claims must fail as there is no bodily injury, and that this is really a claim for economic loss from the purported breach of contract. The court concurs. In Amin Realty LLC v. K R Construction Corp., 306 AD2d 230-231 (2nd Dept, 2003), the court noted, "The economic loss rule provides that tort recovery and strict product's liability and negligence against a manufacturer is not available to a downstream purchaser where the claimed losses flow from damage to the property that is the subject of the contract and personal injury is not alleged or at issue (citations omitted). Accordingly, the economic loss rule barred the plaintiff's strict product liability and negligence claims . . .". The plaintiff attempts to argue she is seeking personal injury recovery and attaches a letter saying one Daniel Christensen has some allergies which "could be" caused or exacerbated by molds. Mr. Christensen is not a plaintiff and all of the plaintiff's causes of action seek the same sum of money, $65,000.00 (with the exception of the statutory treble damages available in a General Business Law 349 claim). See also Carpinone v. Zucker, 241 AD2d 596, 598 (3rd Dept. 1997).
The defendants' motion to dismiss the seventh through ninth causes of action based on negligence and strict product's liability is granted.
Both defendants move to dismiss the fifth cause of action alleging breach of the implied warranty of merchantability and the sixth cause of action, breach of the implied warranty of fitness for a particular purpose. Champion submits there is no privity of contract between it and the plaintiff. The plaintiff counters there may be actual privity of contract and/or Champion may be bound by the acts of Fashion-Fain, if the court finds Fashion-Fain was Champion's authorized agent. In support of the actual privity of contract argument, the plaintiff notes that both defendants are listed on the top of the letterhead Fashion-Fain sent the plaintiff. (Exhibit B). Further, Fashion-Fain may be the agent of Champion authorized to bind Champion by contract. There is no dispute that the defendant Fashion-Fain is an authorized representative of homes manufactured by Champion. (Freer Affidavit, ¶ 2). It is further noted that in support of its motion, Champion only referenced plaintiff's refusals to let Fashion-Fain representative Freer inspect the premises.
Champion is correct that normally, privity of contract is required before there can be any liability under the implied warranties. Hole, supra; 86 NY Jur 2d Products Liability § 124 Breach of Warranty — Remote buyers or users. The case at bar is at a very early stage of the proceedings, however, and much of the information concerning the relationship between Champion and Fashion-Fain is exclusively within the possession of said defendants. At this point, with the limited information before the court, it appears there are questions of fact concerning whether or not there was privity between the plaintiff and defendant Champion, necessitating denial of this motion at this time. Carpinone v. Zucker, supra @ 597-598; Hodgson, Russ, Andrews, Woods Goodyear LLP V. Isolatek International Corporation, 300 AD2d 1051, 1053 (4th Dept, 2002).
The "as is" language in the Fashion Fain contract does not defeat the implied warranty claims. (Champion motion papers, Ex. B; Fashion Fain motion papers, Ex. D). As previously noted, Fashion Fain, through its representative, Jack H. Freer, gave the Plaintiff a written definition of "as is" for purposes of the contract in question, which is much more expansive than the normal meaning given the phrase. (See also, Ex. A attached to the Allan Reve, Esq. Letter dated November 9, 2005). Accordingly, even though the "as is" language would normally preclude implied warranty claims ( Brennan v. Shapiro, 12 AD3d 547 (2d Dept., 2004); 93 NY Jur 2d Sales Section 249, "Where language such as "as is" or "with all faults" is employed"), this is not the case under the definition supplied by Fashion Fain. Fashion Fain attempts to argue the contract is clear on its face that it is inclusive of all terms, and nothing extrinsic can be considered regarding the meaning of "as is". The Court notes, however, that the additional definition was provided by Fashion Fain when the Plaintiff was paying the balance due on the purchase price. It is clear the language was provided to the Plaintiff-consumer as additional assurance of her warranty coverage, above and beyond the usual "as is" sale. (Ex. D, Fashion Fain papers; Ex. B, Champion papers).
Both defendants' motion to dismiss the fifth and sixth causes of action is denied. This denial is without prejudice to renewal following completion of discovery, if appropriate.
Fashion-Fain's motion for summary judgment dismissing all of the causes of action against it is denied, without prejudice, with the exception of the dismissal of the negligence and strict product's liability causes of action, previously addressed. The court finds there are factual issues pertaining to the reasonableness of the parties' conduct as aforementioned. Counsel for Fashion-Fain submits that plaintiff entered into the contract at her own risk, having inspected the unassembled home on two prior occasions, and cites Richardson v. United Funding, Inc., 16 AD3d 570 (2d Dept., 2005). In Richardson, the home buyer did not have an expert inspect the home before she purchased the same, and her post-purchase expert's report indicated at least some of the problems were discoverable upon reasonable inspection. It is not clear at this early stage of litigation what was or should have been apparent to the plaintiff in its unassembled condition. In particular, the must and moisture of a moldy, wet interior might not be apparent in the home where the two sides are apart, but would become so after being sealed together. The gentleman who assembled the home on behalf of Fashion Fain, Allan LeClair, identified problems that would not have been visible, ie, mold and moss in the subfloor; visible water/moisture in the insulation; mold/mildew on drywall backing; and a half inch differential between the flooring of the two halves. (Plaintiff's Ex. B) Thus, whether the plaintiff acted with "due diligence" is yet another question of fact. (See, Refermat submission dated November 9, 2005).
The plaintiff has also asserted claims for fraud and breach of General Business Law 349 against Fashion-Fain in her eleventh and twelfth causes of action. She sufficiently alleges a material misrepresentation was made to her, to induce her to buy the home, to wit, that it was unassembled, exposed to the elements for three months and she subsequently learned it had been exposed for years. Her allegations, particularly at this early stage of the action, sufficiently allege misrepresentation, reasonable reliance and deceptive conduct. See George v. Lumbrazo, 184 AD2d 1050 (4th Dept., 1992); Stephens v. Sponholz, 251 AD2d 1061 (4th Dept., 1998).
The cross motion by the plaintiff for attorney's fees under CPLR 8303-a because of the purported frivolous nature of the motion, is denied. The movants were partially successful in their application. Fashion Fain's motion for attorney fees and/or sanctions is denied.
This constitutes the decision, judgement and order of the court.
SO ORDERED.