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BAYLINER MARINE CORP. v. CROW


BAYLINER MARINE CORP.

v.

CROW


January 8, 1999
Record No. 980392

BAYLINER MARINE CORPORATION

v.

JOHN R. CROW

FROM THE CIRCUIT COURT OF THE CITY OF
PORTSMOUTH

Johnny E. Morrison, Judge
Present: All the Justices
OPINION BY JUSTICE BARBARA MILANO KEENAN


In this appeal, the dispositive issue is
whether there was sufficient evidence to support the trial
court’s ruling that the manufacturer of a sport fishing boat
breached an express warranty and implied warranties of
merchantability and fitness for a particular purpose.

In the summer of 1989, John R. Crow was invited
by John Atherton, then a sales representative for Tidewater Yacht
Agency, Inc. (Tidewater), to ride on a new model sport fishing
boat known as a 3486 Trophy Convertible, manufactured by Bayliner
Marine Corporation (Bayliner). At that time, Tidewater was the
exclusive authorized dealer in southeastern Virginia for this
model Bayliner boat. During an excursion lasting about 20
minutes, Crow piloted the boat for a short period of time but was
not able to determine its speed because there was no equipment on
board for such testing.

When Crow asked Atherton about the maximum
speed of the boat, Atherton explained that he had no personal
experience with the boat or information from other customers
concerning the boat’s performance. Therefore, Atherton consulted
two documents described as "prop matrixes," which were
included by Bayliner in its dealer’s manual.

Atherton gave Crow copies of the "prop
matrixes," which listed the boat models offered by Bayliner
and stated the recommended propeller sizes, gear ratios, and
engine sizes for each model. The "prop matrixes" also
listed the maximum speed for each model. The 3486 Trophy
Convertible was listed as having a maximum speed of 30 miles per
hour when equipped with a size "20×20" or
"2019" propeller. The boat Crow purchased did not have
either size propeller but, instead, had a size "20×17"
propeller.

At the bottom of one of the "prop
matrixes" was the following disclaimer: "This data is
intended for comparative purposes only, and is available without
reference to weather conditions or other variables. All testing
was done at or near sea level, with full fuel and water tanks,
and approximately 600 lb. passenger and gear weight."

Atherton also showed Crow a Bayliner brochure
describing the 1989 boat models, including the 3486 Trophy
Convertible. The brochure included a picture of that model fully
rigged for offshore fishing, accompanied by the statement that
this model "delivers the kind of performance you need to get
to the prime offshore fishing grounds."

In August 1989, Crow entered into a written
contract for the purchase of the 3486 Trophy Convertible in which
he had ridden. The purchase price was $120,000, exclusive of
taxes. The purchase price included various equipment to be
installed by Tidewater including a generator, a cockpit cover, a
"Bimini top," a winch, a spotlight, radar, a navigation
system, an icemaker, fishing outriggers, an automatic pilot
system, extra fuel gauges, a second radio, and air conditioning
and heating units. The total weight of the added equipment was
about 2,000 pounds. Crow did not test drive the boat after the
additional equipment was installed or at any other time prior to
taking delivery.

When Crow took delivery of the boat in
September 1989, he piloted it onto the Elizabeth River. He
noticed that the boat’s speed measuring equipment, which was
installed in accordance with the contract terms, indicated that
the boat’s maximum speed was 13 miles per hour. Crow immediately
returned to Tidewater and reported the problem.

During the next 12 to 14 months, while Crow
retained ownership and possession of the boat, Tidewater made
numerous repairs and adjustments to the boat in an attempt to
increase its speed capability. Despite these efforts, the boat
consistently achieved a maximum speed of only 17 miles per hour,
except for one period following an engine modification when it
temporarily reached a speed of about 24 miles per hour. In July
1990, a representative from Bayliner wrote Crow a letter stating
that the performance representations made at the time of purchase
were incorrect, and that 23 to 25 miles per hour was the maximum
speed the boat could achieve.

In 1992, Crow filed a motion for judgment
against Tidewater, Bayliner, and Brunswick Corporation, the
manufacturer of the boat’s diesel engines.
[1] Crow
alleged, among other things, that Bayliner breached express
warranties, and implied warranties of merchantability and fitness
for a particular purpose.

At a bench trial in 1994, Crow, Atherton, and
Gordon W. Shelton, III, Tidewater’s owner, testified that speed
is a critical quality in boats used for offshore sport fishing in
the Tidewater area of Virginia because of the distance between
the coast and the offshore fishing grounds. According to these
witnesses, a typical offshore fishing site in that area is 90
miles from the coast. Therefore, the speed at which the boat can
travel to and from fishing sites has a major impact on the amount
of time left in a day for fishing.

Crow testified that because of the boat’s slow
speed, he could not use the boat for offshore fishing, that he
had no other use for it, and that he would not have purchased the
boat if he had known that its maximum speed was 23 to 25 miles
per hour. Crow testified that he had not used the boat for
fishing since 1991 or 1992. He admitted, however, that between
September 1989, and September 1994, the boat’s engines had
registered about 850 hours of use. Bob Schey, Bayliner’s manager
of yacht testing, testified that a pleasure boat in a climate
such as Virginia’s typically would register 150 engine hours per
year.

The trial court entered judgment in favor of
Crow against Bayliner on the counts of breach of express warranty
and breach of implied warranties of merchantability and fitness
for a particular purpose. The court awarded Crow damages of
$135,000, plus prejudgment interest from June 1993. The court
explained that the $135,000 award represented the purchase price
of the boat, and about $15,000 in "damages" for a
portion of the expenses Crow claimed in storing, maintaining,
insuring, and financing the boat.

On appeal, we review the evidence in the light
most favorable to Crow, the prevailing party at trial. Tuomala
v. Regent University
, 252 Va. 368, 375, 477 S.E.2d 501, 505
(1996); W.S. Carnes, Inc. v. Chesterfield County, 252 Va.
377, 385, 478 S.E.2d 295, 301 (1996). We will uphold the trial
court’s judgment unless it is plainly wrong or without evidence
to support it.
[2] Code Sect. 8.01-680; Horton v. Horton,
254 Va. 111, 115, 487 S.E.2d 200, 203 (1997).

Crow argues that the "prop matrixes"
he received created an express warranty by Bayliner that the boat
he purchased was capable of a maximum speed of 30 miles per hour.
We disagree.

Code Sect. 8.2-313 provides, in relevant
part:

Express warranties by the seller are
created as follows:

(a) Any affirmation of fact or promise
made by the seller to the buyer which relates to the
goods and becomes part of the basis of the bargain
creates an express warranty that the goods shall conform
to the affirmation or promise.

(b) Any description of the goods which
is made a part of the basis of the bargain creates an
express warranty that the goods shall conform to the
description.

The issue whether a particular affirmation of
fact made by the seller constitutes an express warranty is
generally a question of fact. See id., Official
Comment 3; Daughtrey v. Ashe, 243 Va. 73, 78, 413 S.E.2d
336, 339 (1992). In Daughtrey, we examined whether a
jeweler’s statement on an appraisal form constituted an express
warranty. We held that the jeweler’s description of the
particular diamonds being purchased as "v.v.s. quality"
constituted an express warranty that the diamonds were, in fact,
of that grade. Id. at 77, 413 S.E.2d at 338.

Unlike the representation in Daughtrey,
however, the statements in the "prop matrixes" provided
by Bayliner did not relate to the particular boat purchased by
Crow, or to one having substantially similar characteristics. By
their plain terms, the figures stated in the "prop
matrixes" referred to a boat with different sized propellers
that carried equipment weighing substantially less than the
equipment on Crow’s boat. Therefore, we conclude that the
statements contained in the "prop matrixes" did not
constitute an express warranty by Bayliner about the performance
capabilities of the particular boat purchased by Crow.

Crow also contends that Bayliner made an
express warranty regarding the boat’s maximum speed in the
statement in Bayliner’s sales brochure that this model boat
"delivers the kind of performance you need to get to the
prime offshore fishing grounds." While the general rule is
that a description of the goods that forms a basis of the bargain
constitutes an express warranty, Code Sect. 8.2-313(2)
directs that "a statement purporting to be merely the
seller’s opinion or commendation of the goods does not create a
warranty."

The statement made by Bayliner in its sales
brochure is merely a commendation of the boat’s performance and
does not describe a specific characteristic or feature of the
boat. The statement simply expressed the manufacturer’s opinion
concerning the quality of the boat’s performance and did not
create an express warranty that the boat was capable of attaining
a speed of 30 miles per hour. Therefore, we conclude that the
evidence does not support the trial court’s finding that Bayliner
breached an express warranty made to Crow.

We next consider whether the evidence supports
the trial court’s conclusion that Bayliner breached an implied
warranty of merchantability. Crow asserts that because his boat
was not capable of achieving a maximum speed of 30 miles per
hour, it was not fit for its ordinary purpose as an offshore
sport fishing boat. Bayliner contends in response that, although
the boat did not meet the needs of this particular sport
fisherman, there was no evidence from which the trial court could
conclude that the boat generally was not merchantable as an
offshore fishing boat. We agree with Bayliner’s argument.

Code Sect. 8.2-314 provides that, in all
contracts for the sale of goods by a merchant, a warranty is
implied that the goods will be merchantable. To be merchantable,
the goods must be such as would "pass without objection in
the trade" and as "are fit for the ordinary purposes
for which such goods are used." Code
Sect. 8.2-314(2)(a),(c). The first phrase concerns whether a
"significant segment of the buying public" would object
to buying the goods, while the second phrase concerns whether the
goods are "reasonably capable of performing their ordinary
functions." Federal Signal Corp. v. Safety Factors, Inc.,
886 P.2d 172, 180 (Wash. 1994). In order to prove that a product
is not merchantable, the complaining party must first establish
the standard of merchantability in the trade. Laird v.
Scribner Coop, Inc.
, 466 N.W.2d 798, 804 (Neb. 1991).
Bayliner correctly notes that the record contains no evidence of
the standard of merchantability in the offshore fishing boat
trade. Nor does the record contain any evidence supporting a
conclusion that a significant portion of the boat-buying public
would object to purchasing an offshore fishing boat with the
speed capability of the 3486 Trophy Convertible.

Crow, nevertheless, relies on his own testimony
that the boat’s speed was inadequate for his intended use, and
Atherton’s opinion testimony that the boat took "a long
time" to reach certain fishing grounds in the Gulf Stream
off the coast of Virginia. However, this evidence did not address
the standard of merchantability in the trade or whether Crow’s
boat failed to meet that standard. Thus, we hold that Crow failed
to prove that the boat would not "pass without objection in
the trade" as required by Code Sect. 8.2-314(2)(a).

We next consider whether the record supports a
conclusion that Crow’s boat was not fit for its ordinary purpose
as an offshore sport fishing boat. Generally, the issue whether
goods are fit for the ordinary purposes for which they are used
is a factual question. See Federal Ins. Co. v. Village
of Westmont
, 649 N.E.2d 986, 990 (App. Ct. Ill. 1995); Tallmadge
v. Aurora Chrysler Plymouth, Inc.
, 605 P.2d 1275, 1278 (Wash.
Ct. App. 1979). Here, the evidence is uncontroverted that Crow
used the boat for offshore fishing, at least during the first few
years after purchasing it, and that the boat’s engines were used
for 850 hours. While Crow stated that many of those hours were
incurred during various repair or modification attempts and that
the boat was of little value to him, this testimony does not
support a conclusion that a boat with this speed capability is
generally unacceptable as an offshore fishing boat. Thus,
considered in the light most favorable to Crow, the evidence
fails to establish that the boat was not fit for the ordinary
purpose for which it was intended.

We next address Crow’s claim that Bayliner
breached an implied warranty of fitness for a particular purpose.
Code Sect. 8.2-315 provides that when a seller "has
reason to know any particular purpose for which the goods are
required and that the buyer is relying on the seller’s skill or
judgment to select or furnish suitable goods, there is … an
implied warranty that the goods shall be fit for such
purpose." See also Medcom, Inc. v. C.
Arthur Weaver Co., Inc.
, 232 Va. 80, 84-85, 348 S.E.2d 243,
246 (1986). This statute embodies a long-standing common law rule
in Virginia. Layne-Atlantic Co. v. Koppers Co., 214
Va. 467, 471, 201 S.E.2d 609, 613 (1974). The question whether
there was an implied warranty of fitness for a particular purpose
in a sale of goods is ordinarily a question of fact based on the
circumstances surrounding the transaction. Stones v. Sears,
Roebuck & Co.
, 558 N.W.2d 540, 547 (Neb. 1997).

Crow contends that the "particular
purpose" for which the boat was intended was use as an
offshore fishing boat capable of traveling at a maximum speed of
30 miles per hour. However, to establish an implied warranty of
fitness for a particular purpose, the buyer must prove as a
threshold matter that he made known to the seller the particular
purpose for which the goods were required. See Medcom,
232 Va. at 84, 348 S.E.2d at 246. The record before us does not
support a conclusion that Crow informed Atherton of this precise
requirement. Although Crow informed Atherton that he intended to
use the boat for offshore fishing and discussed the boat’s speed
in this context, these facts did not establish that Atherton knew
on the date of sale that a boat incapable of travelling at 30
miles per hour was unacceptable to Crow. Thus, we conclude that
the evidence fails to support the trial court’s ruling that
Bayliner breached an implied warranty of fitness for a particular
purpose.

For these reasons, we will reverse the trial
court’s judgment and enter final judgment in favor of Bayliner.

Reversed and final judgment.

 

 

 

FOOTNOTES:

[1] Crow nonsuited his claim against Tidewater prior to
trial. The negligence claim against Brunswick was dismissed in
the trial court’s final judgment order.

[2] Because our rulings on the warranty
issues are dispositive of this appeal, we do not address
Bayliner’s assignments of error concerning the damages awarded by
the trial court.

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