Erdman v. Johnson Bros. Radio & Television Co.

¹⁹² Finan, J., delivered the opinion of the Court. It has been said that “the seller’s warranty is a curious hybrid, born of the illicit intercourse of tort and contract, unique in the law.” 1 A further reading of this opinion will show why. On June 24, 1965, the appellants (Erdman and Pfaff) purchased a color television-radio-stereo console from the appellees (Johnson Brothers) for approximately $1,000. As events unfolded this proved to be a most unfortunate investment.

The set was put into operation, by one of Johnson Brothers’ repairmen, and Erdman and Pfaff looked forward with great expectations to many hours of pleasant viewing. Their joy soon turned to consternation, however, as they began experiencing difficulty with the set almost from the outset. In an act of great foresight, the appellants had purchased a service policy from Johnson Brothers; they had many occasions to avail themselves of its benefits. Approximately one month after the purchase, the set was sent back to Johnson Brothers for repairs, and was returned to the appellants’ home about a week later.

Sometime after that, Erdman noticed a “crackling sound” in the television; the noise was often accompanied by a “tear” in the picture. This, of course, precipitated complaints by the appellants to Johnson Brothers, and resulted in some two dozen service calls to the appellants’ house. Sometime in September, 1966, Erdman and Pfaff for the first time noticed sparks and heavy smoke shooting out of the back of the set and the smell of burning rubber, wire, or some other substance. Another complaint was made.

Johnson Brothers’ serviceman examined the set on September 30, 1966, and stated that whatever had happened had “fused itself together again,” and that if anything serious developed he would be able to fix it. For the next few months the television- operated in its usual (cantankerous) manner and there was no difficulty serious enough to warrant another complaint, at least not ¹⁹³ until December 7, 1966, a Wednesday. On that date Erdman called Johnson Brothers and for the second time complained about having seen actual sparks and smoke emanating from the rear of the television. The person taking this complaint ventured no opinion as to the cause of the trouble, and merely noted that there would be a serviceman out to the appellants’ house on Saturday, December 10, 1966.

(Inasmuch as Erdman and Pfaff both worked during the week, the usual practice of the parties was to have the set serviced on Saturdays, as a matter of convenience to the appellants. The very fact that it was necessary to establish a “policy” for making service calls to the plaintiffs’ residence perhaps describes the condition of the set more eloquently than this Court ever could.) On the fateful evening of Thursday, December 8, 1966, (after the second complaint and prior to the day on which the repairs were to be performed) Erdman and Pfaff watched television from approximately 11:20 P.M. until 1:30 A.M. of Friday, December 9, 1966, at which time they observed for the third time that there were sparks and smoke coming from the set. They turned off the television, and retired for the night. About half an hour later they were awakened by the barking of one of their eleven dogs, and discovered that a fire was very much in progress in the vicinity of the television set.

The fire spread rapidly, and by the dawn’s early light Erdman and Pfaff saw, tragically, that their residence had been completely destroyed. The total loss in real and personal property was $67,825.91. Suit was brought in Baltimore County, the appellants alleging in one count a breach of warranty in the sale to them of a defective unit, and in the other count a breach of the service contract and negligence. The lower court (Turnbull, J.) sitting without a jury, ruled that there was no breach of the service contract, that the appellants’ use of the set was not “normal” under the circumstances, thereby negating the warranty of merchantability and, without deciding whether or not there was any primary negligence on the part of the appellees, ruled that the ap ¹⁹⁴ pellants’ use of the set amounted to contributory negligence under the facts of this case.

The court therefore rendered judgment for the appellees, and the appellants brought this appeal. They urge that their conduct did not negate the warranty of fitness, that they were not contributorily negligent, and that the trial court wrongfully excluded the expert opinion testimony of two of their witnesses. In our view of the case, the key to the decision turns on the conduct of the appellants. The Uniform Commercial Code (U.C.C.) Maryland Code (1964 Repl.

Vol.) Art. 95B, governs the sale of the television in this case, and it provides that anyone who sells goods and who is a merchant with respect to that kind of goods, impliedly warrants in his contract for sale that the goods sold are “merchantable.” In order for goods to be considered merchantable, they must be “fit for the ordinary purposes for which such goods are used.” Code (1964 Repl. Vol.) Art. 95B (U.C.C.), § 2-314(2) (c). It would appear that Johnson Brothers most assuredly is a merchant within the meaning of the U.C.C. (§ 2-104) and that they gave an implied warranty to the appellants that the television in question was fit for the ordinary purposes to which a television might be put.

The Official Comments to § 2-314 state that protection under the “fitness for ordinary purposes” aspect of the implied warranty of merchantability extends not only to a person buying for resale to the ultimate consumer (e. g. a retailer), but also, as here, to the ultimate consumer for his own use. Section 2-714 of the U.C.C. indicates that a buyer may recover not only normal damages from a seller in case of breach, but in a “proper case” the buyer may also recover incidental and consequential damages. Section 2-715 provides that consequential damages may include any “injury to person or property proximately resulting from any breach of warranty.” Code (1964 Repl. Vol.) Art. 95B (U.C.C.), §2-715(2) (b). ¹⁹⁵ The Comments to the U.C.C. speak in terms of “causation” with respect to the implied warranty of merchantability.

Comment 13 to § 2-314 (implied warranty of merchantability) indicates that the buyer must show not only a breach of warranty, but also that the breach was the “proximate cause of the loss sustained.” Comment 5 to § 2-715 (consequential damages) treats “proximate causation” in more explicit terms, reiterating the fact that the section allows damages for injuries resulting “proximately” from the breach of warranty. In further delineation, the Comment states that if the buyer did in fact discover a defect in the goods prior to his using them, then the injury suffered from the use of the goods would not proximately result from the breach of warranty. See also 1 Hawkland, Transactional Guide to the Uniform Commercial Code, 268 (1964) ; 1 Anderson’s Uniform Commercial Code, § 2-715, p. 454, Notes 13 and 14 (1964 Cum. Supp.).

The U.C.C. view of the question of warranty in terms of principles of causation is in harmony with the view of the text writers who have addressed themselves to the problem. See W. Prosser, Law of Torts, 651-657 (3rd Ed. 1964) ; 1 Hursh, American Law of Products Liability, § 3:9. At this juncture it is appropriate that we review the rationale upon which the trial judge predicated his opinion. Judge Turnbull stated: “I think the law is that there was a warranty, either expressed or implied, from Johnson to the Plaintiffs, warranty that this television set would operate safely for the general purpose for which it was intended when used in a normal manner. * * * “* * * you have a man of high intelligence, who purchased this television set, who continued to use it, even though he knew and had complained that it was arcing, smoking, with actual sparks and a burning odor.

Now using a set ¹⁹⁶ which is in that condition is certainly not, in my opinion, a use in a normal manner. So that it is my opinion, and I so hold that, even assuming the fire came about as a result of a defect in the set, that the warranty did not extend to the point, under the circumstances of this case, of covering the Plaintiff’s damages resulting from the fire. So that I find, and hold that, under the warranty, the Defendant is not responsible to the Plaintiffs. “* * * [I] t is inescapable to me that the Plaintiffs were guilty of contributory negligence in failing to act as an ordinarily prudent person would act under the circumstances then and there existing, in that, knowing that the set was sparking, arcing, burning or there was an odor of burning, nonetheless, they used the set for a period of, according to the testimony, somewhere in the general neighborhood of two hours, on the late evening and early morning of December 8th and December 9th. I believe that that constitutes negligence; * * *. “* * * So that, sitting as a trier of the facts sitting as a jury, gentlemen, I find that it is inescapable that, even if you assume primary negligence, any trier of the facts must find that there was glaring contributory negligence on the part of the plaintiffs [appellants].” Judge Turnbull in his opinion makes it abundantly clear that he was of the opinion after hearing all the facts that the appellants used the television set after discovering the defect (when they noticed the burning and sparks and made their second complaint on December 7, 1966), and that therefore the implied warranty of merchantability did not apply.

Our reading of the U.C.C. in light of the record supports this interpretation. It would appear that an individual using a product when he had actual knowledge of ¹⁹⁷ a defect or knowledge of facts which were so obvious that he must have known of a defect, is either no longer relying on the seller’s express or implied warranty or has interjected an intervening cause of his own, and therefore a breach of such warranty cannot be regarded as the proximate cause of the ensuing injury. Such an interpretation gives effect to the true nature of the action involved and the intention of the U.C.C. without needlessly involving the courts in a discussion of whether the implied warranty is founded in contract, tort, or both. See generally Contributory Negligence or Assumption of Risk as Defense to Action for Personal Injury, Death, or Property Damage Resulting from Alleged Breach of Implied Warranty, 4 A.L.R.3d 501 ; Prosser, The Assault Upon the Citadel, 69 Yale L.J. 1099 , 1126 (1960) ; 39 Temp.

L.Q. 361-367 (1966). In fairness to the appellants it should be noted that, as was pointed out in their brief, it is somewhat unclear as to whether the trial judge based his holding of no liability on the fact that the plaintiffs, by their continued use of the television set after the discovery of the defect, were no longer relying on the seller’s warranty, or on his finding that their actions amounted to contributory negligence, or on both. We should add that from the wording of his opinion he might well have found, and we think properly so, that there was a coalescence of both. At the trial below there appears to have been no objection raised to the defense of contributory negligence in an implied warranty case; however, on appeal the appellants make the observation that, “whether or not contributory negligence is a bar to any recovery under a warranty theory remains a somewhat open question in this jurisdiction.” We would think, however, that the recent decision of this Court in Levin v. Walter Kidde & Co., 251 Md. 560, 561 , 248 A. 2d 151 (1968), leaves little doubt but that the negligence of the plaintiff contributing to the accident, in a case involving a breach of implied warranty, would bar recovery.

Before further discussing the theory of liability in the case at bar and in ¹⁹⁸ Levin, supra, it will be helpful to review the remarks of Professor Prosser in his article, The Fall of the Citadel, 32 American Trial Lawyers Association Journal 1, at 21 (1968) ; 50 Minn. L.R. 791, wherein he states: “Superficially the warranty cases, whether on direct sale to the user or without privity, are in a state of complete contradiction and confusion as to the defense of contributory negligence. It has been said in a good many of them that such negligence is always a defense to an action for breach of warranty. It has been said in almost as many that it is never a defense.

This is no more than a part of the general murk that has surrounded ‘warranty,’ and is one more indication that this unfelicitous word is a source of trouble in the field. Actually, however, the disagreement is solely a matter of language; and if the cases are examined as to their substance, they fall into a very consistent pattern. “Where the negligence of the plaintiff consists only in failure to discover the danger in the product, or to take precautions against its possible existence, it has uniformly been held that it is not a bar to an action for breach of warranty. * * * But if he discovers the defect, or knows the danger arising from it, and proceeds nevertheless deliberately to encounter it by making use of the product, his conduct is the kind of contributory negligence which overlaps assumption of risk; and on either theory his recovery is barred. * * Of similar import is the comment found in 1 Hursh, American Law of Products Liability, p. 415, § 3:9, wherein the author points out that the decisions on the application of contributory negligence in breach of warranty cases “are less than entirely harmonious.” Hursh observes that, “the weight * * * which is hardly a great weight * * * of authority appears to be on the side of ¹⁹⁹ the view that negligence on the part of the user of the product is no defense in a breach of warranty action against the manufacturers or seller of the product.” However, the author emphasizes that “liability for breach of warranty exists only where it is shown that the breach was the proximate cause of the harm for which recovery is sought, * * *” and he raises the