This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The Plaintiff sought the Defendant's services to replace the engine in her car, opting for a used engine due to cost concerns. After installation, the car exhibited issues, including smoking and oil loss, and ultimately ceased functioning within three months. The Defendant denied responsibility for the engine's failure, claiming no warranty was provided for the used engine (paras 2-5).
Procedural History
- Trial Court: Found the Defendant liable for breach of express and implied warranties and violations of the Unfair Practices Act (UPA), awarding compensatory and punitive damages, as well as attorney fees, but denying damages for loss of use (para 1).
- Court of Appeals: Reversed the trial court, holding that the evidence was insufficient to support the judgment (para 5).
Parties' Submissions
- Plaintiff: Argued that the Defendant breached express and implied warranties and violated the UPA by failing to provide a functional engine and appropriate warranty information (paras 5, 12, 26).
- Defendant: Contended that no express warranty was provided for the used engine, that implied warranties were effectively disclaimed, and that the Plaintiff failed to prove a defect in the engine (paras 9-10, 14, 20).
Legal Issues
- Was there substantial evidence to support the trial court’s finding of a breach of the implied warranty of merchantability?
- Did the Defendant violate the Unfair Practices Act by failing to provide appropriate warranty information?
- Was the exclusion of implied warranties valid under the Uniform Commercial Code?
Disposition
- The Supreme Court of New Mexico reversed the Court of Appeals' decision, reinstated the trial court’s compensatory damages award, and remanded the case for further consideration of punitive damages, attorney fees, and loss of use damages (paras 28-29).
Reasons
Per Chávez CJ (Serna, Maes, Bosson, and Daniels JJ. concurring):
Implied Warranty of Merchantability: The Court found substantial evidence that the used engine was not fit for its ordinary purpose, as it smoked and lost oil immediately after installation. The Defendant’s attempt to disclaim implied warranties was ineffective because the exclusion provision was not conspicuous and lacked the Plaintiff’s agreement (paras 14-20).
Unfair Practices Act: The Defendant violated the UPA by failing to provide the Plaintiff with a written statement of warranty or a clear disclaimer, as required by regulations governing automotive repair services (paras 24-27).
Express Warranty: The Court determined there was insufficient evidence to support the trial court’s finding of an express warranty, as no statements or promises by the Defendant regarding the used engine were part of the basis of the bargain (paras 8-13).
Remand: The Court reinstated the compensatory damages award and remanded the case to the Court of Appeals to address unresolved issues, including punitive damages, attorney fees, and loss of use damages (paras 28-29).