HOUSTON – The Court of Appeals for the 1st District of Texas has affirmed a trial court’s ruling against a customer seeking warranty for an allegedly defective bulldozer.
In the ruling on Dec. 6, the Appeals Court agreed with Mustang Machinery Co. LTD, doing business as Mustang Cat, saying the contract and warranty claims are barred because of the disclaimer of warranties in the installment contract.
According to the opinion, Dewey Clark bought the defective bulldozer from Mustang Machinery Co. LTD in 2011.
The court said the parties completed the purchase after signing two documents - an installment sale contract and a purchaser's order and security agreement for used product.
The installment contract, cited by the court, "contained a 'disclaimer of warranties' provision as well as a clause that stated that 'this contract, each schedule, any riders or addends hereto completely states the rights of seller and purchaser and supersedes all prior agreements with respect to a unit.'”
According to the Appeal Court, "the bulldozer was described in printed language as including a '1 year/1,000 Hour Powertrain + Hydraulics Warranty,' and in handwriting as being sold 'as is where is.'”
“Immediately, there were problems with the bulldozer, causing it to be inoperable for extended periods of time,” the opinion stated. “Between July 2011 and February 2012, Clark returned the bulldozer for repairs on several occasions, all unsuccessful.”
After Caterpillar Financial repossessed the bulldozer in 2013 and sued Clark in 2015 for amount still owing, Clark then asserted third-party claims against Mustang Cat, the opinion stated.
The Appeal Court said Mustang Cat moved for summary judgment on limitations grounds and argued that there was no express warranty, saying the bulldozer was sold “as is” and the installment contract expressly disclaimed all warranties.
The case went to the Appeals Court after the Civil Court at Law No. 1 in Harris County granted summary judgment in favor of Mustang Cat and an agreed judgment resolved Caterpillar Financial's claim against Clark, the opinion stated.
According to the Appeals Court, the disclaimer language only acknowledged the possibility that manufacturer’s warranties may exist.
“The mere reference on the purchasers order to ‘1 year / 1,000 Hour Powertrain + Hydraulics Warranty,” without more, does not indicate that any such warranty was being extended by Mustang Cat as the seller,” the opinion stated.
The Appeals Court said Clark also argued on appeal that Mustang Cat “ratified, substantiated and partly performed the warranty agreement.”
“These arguments were not included in the summary-judgment response and, accordingly, have been waived,” the opinion stated.
In a concurring opinion, Judge Terry Jennings said Clark’s claim for breach of contract is barred by the statute of limitations and the trial court did not err in granting Mustang Cat summary judgment.
Jennings said Mustang Cat’s purported warranty in the purchasers order and security agreement for used product, stating “1 year/1000 Hour Powertrain + Hydraulics Warranty,” is not a warranty that “explicitly extends to future performance of the goods.”