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  "name": "BELL FUELS, INC., Plaintiff-Appellant, v. LOCKHEED ELECTRONICS COMPANY, INC., et al., Defendants-Appellees",
  "name_abbreviation": "Bell Fuels, Inc. v. Lockheed Electronics Co.",
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      "BELL FUELS, INC., Plaintiff-Appellant, v. LOCKHEED ELECTRONICS COMPANY, INC., et al., Defendants-Appellees."
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      {
        "text": "JUSTICE LORENZ\ndelivered the opinion of the court:\nThis is an appeal from the trial court\u2019s dismissal of plaintiff\u2019s verified two-count second amended complaint which sought damages against defendants Lockheed Electronics Company, Inc. (Lockheed), and Don Johns, Inc., caused by the breach of their implied warranty of merchantability on allegedly defective goods that they manufactured and distributed. We affirm, and pertinent to our disposition are the following.\nPlaintiff, a distributor of fuel oil to individual and commercial consumers, filed a verified second amended complaint on September 2, 1982, after its prior complaints alleging breaches of various express and implied warranties had been dismissed.\nCount I, directed at defendant Lockheed, alleged that metering registers manufactured by Lockheed and purchased by plaintiff from Don Johns, Inc., were defective in their design; that plaintiff had given Don Johns, Inc., due notice of several defects; and that Lockheed knew or should have known of these defects. It further alleged that Lockheed had attempted to disclaim its implied warranty of merchantability in writing through a \u201cwarranty.\u201d A copy of this \u201cwarranty\u201d was attached to the complaint as an exhibit. Its terms provided as follows:\n\u201cWARRANTY CERTIFICATE NO.\nLockheed Electronics Company, Inc. (LEC) warrants the Computing Register delivered hereunder (1) will be free from defects in material and workmanship under normal use and service; and (2) will meet applicable specifications and descriptions at the time of delivery to Buyer. For a period of one (1) year from the date of purchase, LEC will replace or repair, for the original Buyer from an authorized Factory Dealer, free of charge, any part or parts returned to said Dealer within such one (1) year period, which are found upon examination by said Dealer to be non-conforming or defective. All transportation costs must be borne by Buyer. The foregoing shall also apply to any repaired, reworked or replaced product, part or component.\nBuyer\u2019s remedies are expressly limited to LEC\u2019s obligation stated above. This warranty extends to said Buyer only. LEC shall in no case be liable to said Buyer or Buyer\u2019s customers for any incidental or consequential damages, or loss of use, or other commercial loss, however occasioned.\nTHIS WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS.\u201d\nAdditionally, it alleged that language was attached to this \u201cwarranty\u201d which stated: \u201cThis Warranty shall be effective only providing attached card is properly filled out and returned to Lockheed Electronics Company, Inc. at time of purchase\u201d; that plaintiff had not returned the attached card to Lockheed; and that the implied warranty of merchantability was therefore still applicable. Finally, the complaint alleged that Lockheed had breached its implied warranty of merchantability, and plaintiff had been damaged as a result of this breach. Count II realleged and incorporated by reference all allegations made against Lockheed as against Don Johns, Inc.\nOn September 30, 1982, defendant Lockheed moved to dismiss plaintiff\u2019s second amended complaint on the grounds that the implied warranty of merchantability had been effectively disclaimed by Lockheed; that plaintiff\u2019s complaint failed to allege breach of an implied warranty of merchantability; that plaintiff\u2019s complaint failed to allege any causal relationship between the claimed damages and any defects; and that the complaint failed to allege compliance with certain conditions precedent.\nAt the hearing on Lockheed\u2019s motion to dismiss the second amended complaint, the court considered Lockheed\u2019s initial argument on the existence/applicability of the disclaimer. In opposition to Lockheed\u2019s motion, plaintiff argued that the disclaimer language included in the \u201cWarranty Certificate\u201d drafted by Lockheed was ambiguous and should be strictly construed against its drafter, Lockheed, as an ineffective disclaimer. Further, plaintiff urged that there was no effective disclaimer of implied warranties because the written \u201cwarranty\u201d and its \u201cincorporated\u201d disclaimer were expressly predicated on the return of the card attached to the \u201cWarranty Certificate\u201d and that the condition precedent was never satisfied since plaintiff had never returned the card.\nThe trial court found that the card attached to the enclosed \u201cWarranty Certificate\u201d was a condition precedent, and that the intent of the parties (seller) was to sell some merchandise at a given price and to afford the purchaser an express warranty within the terms of the agreement with a condition precedent attached to that warranty that the purchaser would have to notify the seller of the date and identity of the buyer. The court found that the disclaimer was effective regardless of notification, and that the disclaimer complied with the terms of the Uniform Commercial Code. It therefore dismissed plaintiffs second amended complaint.\nPlaintiff appeals from this dismissal.\nOpinion\nSection 2\u2014314 of the Uniform Commercial Code creates an implied warranty of merchantability in every contract for the sales of goods where the seller is a merchant regularly engaged in the sale of goods of that kind, unless the warranty is excluded or modified. (Ill. Rev. Stat. 1981, ch. 26, par. 2\u2014314.) This implied warranty, which arises independently and outside of the sales contract by operation of law, embraces at least the undertaking that the goods shall be reasonably suited for the ordinary purpose for which goods of that description are sold. See 1 R. Anderson, Uniform Commercial Code sec. 2\u2014 314:58 (2d ed. 1970).\nIn the present case, plaintiff\u2019s second amended complaint alleged a breach of the implied warranty of merchantability as against both defendants. However, manufacturer Lockheed\u2019s motion to dismiss claimed that it had effectively disclaimed the implied warranty of merchantability arising from the sale of its equipment by delivering a \u201cWarranty Certificate\u201d to plaintiff. The issue presented here is whether the trial court properly granted defendant Lockheed\u2019s motion to dismiss based upon an effective disclaimer of the implied warranty of merchantability.\nSection 2\u2014619(a)(9) of the Illinois Code of Civil Procedure provides for involuntary dismissal based on \u201cother affirmative matter avoiding the legal effect of or defeating the claim.\u201d (Ill. Rev. Stat. 1981, ch. 110, par. 2\u2014619(a)(9).) On its face, section 2\u2014619(a)(9) appears to be all-encompassing, but it has limits. A motion to dismiss under 2\u2014619(a)(9) admits all well-pleaded facts; it does not admit conclusions of law, nor does it admit conclusions of fact unsupported by allegations of specific fact upon which such conclusions rest. (See Village of Niles v. City of Chicago (1980), 82 Ill. App. 3d 60, 401 N.E.2d 1235.) For this reason, the alleged \u201caffirmative matter\u201d must be something more than evidence offered to refute the complaint, because such well-pleaded facts, together with all reasonable inferences, must be taken as true; the alleged affirmative matter must negate the cause of action completely or refute a crucial conclusion of law or conclusions of material facts contained in or inferred from the complaint. Hayna v. Arby\u2019s, Inc. (1981), 99 Ill. App. 3d 700, 709-10, 425 N.E.2d 1174.\nWith these principles in mind, we have reviewed plaintiff\u2019s contentions on appeal, and we first consider plaintiff\u2019s claims that the disclaimer is conditional and ambiguous, rendering it ineffective.\nPlaintiff contends that the \u201cWarranty Certificate\u201d is made conditional in its entirety by the language which conditions the warranty upon return of the card. Plaintiff argues that capitalization of \u201cWarranty\u201d in the conditional clause indicates the nominative case, referring to the \u201cWarranty Certificate,\u201d and not referring to the descriptive term, \u201cwarranty.\u201d According to plaintiff, because the card was never returned, neither the express warranties, nor the disclaimer of implied warranties was effective. Alternatively, plaintiff argues that the language and structure of the \u201cWarranty Certificate\u201d are at best ambiguous, and must be construed against defendant Lockheed, the drafter of the condition and disclaimer.\nDefendants respond that the plain meaning of the conditioning language, \u201cThis Warranty shall be effective only providing attached card is properly filled out and returned to Lockheed Electronics Company, Inc. at time of purchase,\u201d is to condition only the effectiveness of the express warranty (descriptive) contained in the \u201cWarranty Certificate\u201d (nominative), and not the disclaimer. Further, defendants argue that if the effectiveness of all of the terms set forth in the \u201cWarranty Certificate\u201d had been conditioned upon the return of the attached card, then the language of the sentence would have been \u201c[t]his Warranty Certificate shall be effective only ***.\u201d Finally, they posit that the provisions requiring the return of the attached card were intended only to establish a record of the purchase date and the identity of the original purchaser, for purposes of honoring the terms of the one-year express warranty.\nWe agree with the trial court\u2019s interpretation that the disclaimer was \u201cindependent of the existence of [the] condition precedent.\u201d Section 2\u2014316(1) of the Uniform Commercial Code provides that \u201c[w]ords or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other ***.\u201d (Emphasis added.) (Ill. Rev. Stat. 1981, ch. 26, par. 2\u2014316(1).) This section is designed to \u201cprotect a buyer from unexpected and unbar-gained language of disclaimer by denying effect to such language when inconsistent with language of express warranty and permitting the exclusion of implied warranties only by conspicuous language or other circumstances which protect the buyer from surprise.\u201d Ill. Ann. Stat., ch. 26, par. 2\u2014316, Uniform Commercial Code Comment 1, at 254-55 (Smith-Hurd 1963).\nWe reject plaintiff\u2019s contention that the language contained in the conditional acceptance clause also refers to the disclaimer language. We perceive \u201c[t]his Warranty shall be effective\u201d to be clear and unambiguous, referring only to an express warranty provided by Lockheed, and not to the disclaimer of implied warranties also found on the \u201cWarranty Certificate.\u201d\nRegarding the alternative contention by plaintiff that the language and structure of the \u201cWarranty Certificate\u201d were at best ambiguous, we note initially that the existence of an ambiguity is a question of law for the court. (Pioneer Trust & Savings Bank v. Lucky Stores, Inc. (1980), 91 Ill. App. 3d 573, 575, 414 N.E.2d 1152.) \u201cA contract is ambiguous when the language used is reasonably susceptible to more than one meaning.\u201d (White v. White (1978), 62 Ill. App. 3d 375, 379, 378 N.E.2d 1255.) A contract is not rendered ambiguous simply because the parties do not agree on its meaning. (Harris v. American General Finance Corp. (1977), 54 Ill. App. 3d 835, 839, 368 N.E.2d 1099.) \u201cWhen contract terms are clear and unambiguous, they must be given their ordinary and natural meaning, and no parol or extrinsic evidence may be considered to vary the meaning of the terms.\u201d Susmano v. Associated Internists (1981), 97 Ill. App. 3d 215, 219, 422 N.E.2d 879.\nApplying these principles to the case at bar, our review of the plain meaning of the terms of the \u201cWarranty Certificate\u201d reveals a clear and unambiguous disclaimer of implied warranties included within the \u201cWarranty Certificate.\u201d\nWe now turn to consider the effectiveness of the disclaimer of the implied warranty of merchantability. Plaintiff contends that Lockheed\u2019s disclaimer failed to meet the strict requirements for disclaimer of the implied warranty of merchantability. We disagree.\nSection 2\u2014316 of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, par. 2\u2014316) permits negation of warranties, provided such limitations comply with other sections of the Act. Subsection 2 of the aforementioned statute provides:\n\u201c*** to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that \u2018There are no warranties which extend beyond the description on the face hereof.\u2019 \u201d Ill. Rev. Stat. 1981, ch. 26, par. 2-316(2).\nIt is abundantly clear that the disclaimer in question complied with the requirements of section 2\u2014316(2) of the Uniform Commercial Code. There is no question that the language of the disclaimer contains the word \u201cmerchantability\u201d and thus would comply with one portion of the requirements of section 2\u2014316 for the disclaimer of the implied warranty of merchantability. We next consider whether the written disclaimer was \u201cconspicuous.\u201d\nSection 1\u2014201(10) of the Uniform Commercial Code provides as follows:\n\u201cA term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed heading in capitals (as: NON-NEGOTIABLE BILL OF LADING) is conspicuous. Language in the body of a form is \u2018conspicuous\u2019 if it is in larger or other contrasting type or color. *** Whether a term or clause is \u2018conspicuous\u2019 or not is for decision by the court.\u201d Ill. Rev. Stat. 1981, ch. 26, par. 1\u2014201(10).\nOfficial Code Commentary suggests that courts should test conspicuousness by asking if \u201cattention can reasonably be expected to be called to [the term or clause].\u201d (Ill. Ann. Stat., ch. 26, par. 1\u2014201(10), Uniform Commercial Code Comment 10, at 48 (Smith-Hurd 1963).) Specifically, a conspicuous disclaimer ought to be set apart from the rest of the contract by larger contrasting type with attention-catching colors such as red or dark shades of black, and prominent placement. See Annot., 73 A.L.R.3d 248 (1976).\nIn the case at bar, we are confronted with a disclaimer which is adequately set apart from the express warranty by its own paragraph, and is in large-type capital letters. Given the configuration of the disclaimer, together with the boldface heading of the \u201cWarranty Certificate\u201d upon which the disclaimer is found, we believe that the trial court was justified in concluding that the disclaimer was written and positioned so that a reasonable business entity such as plaintiff could reasonably be expected to have noticed this disclaimer. (See FMC Finance Corp. v. Murphree (5th Cir. 1980), 632 F.2d 413, 419 (applying Illinois law).) The trial court properly found that the disclaimer in question effectively disclaimed any implied warranty of merchantability.\nFinally, plaintiff argues that the disclaimer was ineffective because it was delivered along with the equipment, after the bargain had been struck. It is true that a disclaimer of implied warranties which is delivered with the goods is insufficient (Midland Supply Co. v. Ehret Plumbing & Heating Co. (1982), 108 Ill. App. 3d 1120, 1125, 440 N.E.2d 153; Gideon Service Division v. Dunham-Bush, Inc. (1980), 80 Ill. App. 3d 633, 637, 400 N.E.2d 89), but plaintiff did not raise timeliness before the court either by way of complaint, or in response to defendant\u2019s motion to dismiss. It is a well-established principle of appellate review that an issue not presented to or considered by the trial court cannot be raised for the first time on re-view. (Kravis v. Smith Marine, Inc. (1975), 60 Ill. 2d 141, 324 N.E.2d 417.) Plaintiff should have presented a proposed amended complaint alleging late delivery of the disclaimer in order to preserve the issue for review (see Urfer v. Country Mutual Insurance Co. (1978), 60 Ill. App. 3d 469, 474, 376 N.E.2d 1073; People ex rel. Scott v. Cardet International, Inc. (1974), 24 Ill. App. 3d 740, 748, 321 N.E.2d 386), and we will not address an issue presented for the first time to this court on appeal.\nIn further review, we note that both the defendants and the trial court improperly considered dismissal on grounds of an affirmative defense before determining the legal sufficiency of plaintiff\u2019s complaint. In Janes v. First Federal Savings & Loan Association (1974), 57 Ill. 2d 398, 406, 312 N.E.2d 605, the supreme court held that the joinder of \u201can inquiry into whether a pleading is sufficient to state a cause of action with an examination which almost necessarily assumes that a cause of action has been stated\u201d confuses both the parties and the court. In the instant case, the defendant should have first challenged the legal sufficiency of the complaint and when, and only when, a sufficient legal cause of action had been stated should the court have entertained the motion to dismiss on an \u201caffirmative matter\u201d (disclaimer) which was a defense which negated the cause of action completely. However, the joinder of such motions is not grounds for reversal per se. (See Janes v. First Federal Savings & Loan Association (1974), 57 Ill. 2d 398, 312 N.E.2d 605, where the court did not reverse for joinder of a motion for summary judgment and a motion to dismiss under section 2\u2014615 (Ill. Rev. Stat. 1981, ch. 110, par. 2\u2014615, formerly section 45 of the Civil Practice Act), but considered the issues.) Even where error is shown, a case will not be reversed absent a showing of prejudice. Premier Electrical Construction Co. v. La Salle National Bank (1983), 115 Ill. App. 3d 638, 642, 450 N.E.2d 1360.\nIn sum, defendants\u2019 disclaimer was an unambiguous affirmative matter, which was a defense that negated plaintiff\u2019s cause of action completely and was proper grounds for dismissal of plaintiff\u2019s second amended complaint under section 2\u2014619(aX9). See Bowers Manufacturing Co. v. Chicago Machine Tool Co. (1983), 117 Ill. App. 3d 226, 453 N.E.2d 61.\nThe order of the trial court dismissing the complaint with prejudice is affirmed.\nAffirmed.\nMEJDA, P.J., and SULLIVAN, J., concur.",
        "type": "majority",
        "author": "JUSTICE LORENZ"
      }
    ],
    "attorneys": [
      "Laser, Schostok, Kolman & Frank, of Chicago (Joel A. Stein and Brad Levin, of counsel), for appellant.",
      "Louis C. Roberts and Larry A. Hoellwarth, both of Peterson, Ross, Schloerb & Seidel, of Chicago, for appellee Lockheed Electronics Company, Inc.",
      "Thomas P. Luning and Kevin J. Byrne, both of Schiff, Hardin & Waite, of Chicago, for other appellee."
    ],
    "corrections": "",
    "head_matter": "BELL FUELS, INC., Plaintiff-Appellant, v. LOCKHEED ELECTRONICS COMPANY, INC., et al., Defendants-Appellees.\nFirst District (5th Division)\nNo. 83\u20141266\nOpinion filed February 1, 1985.\nLaser, Schostok, Kolman & Frank, of Chicago (Joel A. Stein and Brad Levin, of counsel), for appellant.\nLouis C. Roberts and Larry A. Hoellwarth, both of Peterson, Ross, Schloerb & Seidel, of Chicago, for appellee Lockheed Electronics Company, Inc.\nThomas P. Luning and Kevin J. Byrne, both of Schiff, Hardin & Waite, of Chicago, for other appellee."
  },
  "file_name": "0940-01",
  "first_page_order": 962,
  "last_page_order": 970
}
