{
  "id": 8555067,
  "name": "JUNE RODD T/A THE STUDIO OF HAVELOCK v. W. H. KING DRUG COMPANY",
  "name_abbreviation": "Rodd v. W. H. King Drug Co.",
  "decision_date": "1976-09-01",
  "docket_number": "No. 763SC237",
  "first_page": "564",
  "last_page": "570",
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    "name_abbreviation": "N.C. Ct. App.",
    "id": 14983,
    "name": "North Carolina Court of Appeals"
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    "name_long": "North Carolina",
    "name": "N.C."
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      "cite": "467 F. 2d 588",
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      "cite": "280 N.C. 385",
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      "cite": "217 N.C. 750",
      "category": "reporters:state",
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      "cite": "135 S.E. 141",
      "category": "reporters:state_regional",
      "reporter": "S.E.",
      "year": 1926,
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    {
      "cite": "192 N.C. 330",
      "category": "reporters:state",
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  "last_updated": "2023-07-14T18:42:34.327987+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
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  "casebody": {
    "judges": [
      "Judges Morris and Vaughn concur."
    ],
    "parties": [
      "JUNE RODD T/A THE STUDIO OF HAVELOCK v. W. H. KING DRUG COMPANY"
    ],
    "opinions": [
      {
        "text": "CLARK, Judge.\nSince all of the evidence supports the finding by the jury that there was a breach of warranty in that there was a defect in the color enlarger purchased by plaintiff from defendant for use in her commercial photography business, we find that the primary question before this Court relates to damages. The defendant assigns error in the charge of the court on the damage issue and the denial of the defendant\u2019s motion to set aside the verdict.\nIn her complaint plaintiff alleged damages as follows:\n\u201c(15) That, because of defendant\u2019s breaches of warranty and failure to take such steps as necessary to correct the defects in the manufacture of the enlarger, plaintiff suffered extensive and severe damages, in the amount of Thirty Thousand and No/100 ($30,000.00) Dollars, which such damages include but are not limited to:\n(a) the purchase price of the enlarger;\n(b) lost profits and potential earnings;\n(c) costs of replacing numerous items of equipment burned out or destroyed by the defective operation of the enlarger;\n(d) travel, telephone and other communication and transportation costs incurred by plaintiff and her agents and employees in their efforts to fix the defective enlarger and encourage defendant to do likewise;\n(e) other incidental and consequential damages to which the plaintiff may be entitled under the provisions of North Carolina General Statutes Sec. 25-2-715.\u201d\nBefore filing an answer defendant filed a motion for a more definite statement by the plaintiff of damages. The motion was denied. Defendant then filed a motion for partial summary judgment by \u201cdismissing this action as to items (b) and (e) in paragraph 15 of the complaint,\u201d supporting its motion by the complaint and the deposition (not a part of the record on appeal) of the plaintiff. This motion was allowed and the court ordered that \u201cplaintiff have and recover nothing of the defendant on account of lost profits, potential earnings or consequential damages.\u201d Plaintiff excepted.\nThe plaintiff contends that her evidence established that as a result of the malfunction of the color enlarger for the period between the date of original delivery on 15 March 1969, and the date of return delivery after repair on 29 September 1969, she suffered such operating losses that she had to close her commercial photography business in December 1970; that she was entitled to recover for the operating losses during 1969 and 1970, for the debts which she owed when she closed her studio in December 1970, for the cost of the color processing unit in the sum of $6,006.24, and for the reasonable value of her services during 1969 and 1970 in the sum of $10,400.00, all amounting to the total sum of $30,627.44, and that these various elements of damage support the jury award of damages in the sum of $30,000.00.\nIn accordance with prior North Carolina law, under the Uniform Commercial Code (G.S. 25-2-314), there is an implied warranty that the goods sold are merchantable, unless there is an exclusion or modification of warranty as provided by G.S. 25-2-316. The requirements of \u201cmerchantability\u201d are spelled out in detail in Subsection (2) of G.S. 25-2-314, which includes the prior case law definition that the personal property must be reasonably fit for the purposes for which sold. See Swift & Co. v. Aydlett, 192 N.C. 330, 135 S.E. 141 (1926); Aldridge Motors, Inc. v. Alexander, 217 N.C. 750, 9 S.E. 2d 469 (1940) for prior law. And see Performance Motors, Inc. v. Allen, 280 N.C. 385, 186 S.E. 2d 161 (1972).\nWhere there is a breach of the implied warranty of merchantability the Uniform Commercial Code provides for recovery by the buyer of both \u201cgeneral\u201d damages, which are implied by law, and \u201cspecial\u201d damages, which arise from the special circumstances of the case and must be properly pleaded.\nGeneral damages for seller\u2019s breach with regard to accepted goods are provided for by G.S. 25-2-714(2) as follows:\n\u201cThe measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.\u201d\nSpecial damages are provided for by G.S. 25-2-715 as follows:\n\u201cBuyers incidental and consequential damages.\u2014 (1) Incidental damages resulting from the seller\u2019s breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach.\n(2) Consequential damages resulting from the seller\u2019s breach include\n(a) any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and\n(b) injury to person or property proximately resulting from any breach of warranty.\u201d\nThe distinction between general and special damages is principally important with regard to the pleadings and quantum of proof. General damages are the natural and necessary result of the wrong, are implied by law, and may be recovered under a general allegation of damages. But special damages, those which do not necessarily result from the wrong, must be pleaded, and the facts giving rise to the special damages must be alleged so as to fairly inform the defendant of the scope of plaintiff\u2019s demand. G.S. 1A-1, Rule 9(g) provides that \u201cWhen items of special damage are claimed each shall be averred.\u201d This rule codifies established North Carolina law. See Shuford, N. C. Civil Practice and Procedures, Sec. 9-10.\nUnder the pleadings and the evidence in this case, the plaintiff may recover general damages as provided by G.S. 25-2-714(2) for breach of warranty (i.e., the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted), and incidental damages as provided by G.S. 25-2-715(1) for expenses reasonably incurred in connection with handling the defective color enlarger. Considering the evidence in the light most favorable to plaintiff, general damages would not exceed the cost of the color processing unit in the sum of $6,006.24. Although plaintiff offered evidence that expenses were incurred in the handling of the defective color enlarger, such as telephone calls to defendant in her efforts to have the malfunction corrected, she failed to offer evidence of the amount of these expenses.\nOperating losses are special damages which must be alleged under G.S. 1A-1, Rule 9(g) and are consequential damages which are recoverable under G.S. 25-2-715(2) if defendant knew or reasonably could have foreseen that the probable result of a malfunctioning color enlarger would be such operating losses. See Gurney Industries, Inc. v. St. Paul Fire & Marine Ins. Co., 467 F. 2d 588 (4th Cir. 1972).\nIn the case before us, it does not appear whether the basis for the ruling by the trial court in its \u201cpartial summary judgment\u201d that plaintiff could not recover \u201clost profits, potential earnings or consequential damages\u201d was plaintiff\u2019s failure to allege special damages as required by G.S. 1A-1, Rule 9(g), or her failure to offer proof in her deposition that the claimed damages proximately resulted from the defective enlarger as required by G.S. 25-2-715(2) (a). In any event, plaintiff did not move before trial to amend her complaint to allege special or consequential damages, and did not move at trial to amend to conform to the evidence under G.S. 1A-1, Rule 15. Clearly, the pleading and the evidence limited plaintiff to the recovery of general damages for breach of warranty under G.S. 25-2-714(2) and do not support the jury award of $30,000.00 in damages to the plaintiff.\nOn the damage issue the trial court instructed the jury in pertinent part as follows:\n\u201cNow it is a general rule of law that the only damages which may be recovered are those damages which are the proximate result of the breach. In considering those damages you may consider the following types of damages: The out of pocket expenses, repairs, the cost of the equipment purchased, and incidental expenses. In considering these damages you may not consider loss of profits, potential earnings, and consequential damages. ...\u201d\nThese instructions do not adequately declare and explain and apply the law to the damage features of the case as required by G.S. 1A-1, Rule 51(a).\nWe find no error in the trial other than on the damage issue, and on this issue only there must be a new trial.\nThe case is remanded for a new trial on the issue of what damages the plaintiff is entitled to recover from the defendant.\nRemanded.\nJudges Morris and Vaughn concur.",
        "type": "majority",
        "author": "CLARK, Judge."
      }
    ],
    "attorneys": [
      "Ward, Tucker, Ward & Smith, P.A. by David L. Ward, Jr., and Thomas R. Crawford for plaintiff appellee.",
      "Jacob W. Todd for defendant appellant."
    ],
    "corrections": "",
    "head_matter": "JUNE RODD T/A THE STUDIO OF HAVELOCK v. W. H. KING DRUG COMPANY\nNo. 763SC237\n(Filed 1 September 1976)\n1. Damages \u00a7 12\u2014 general and special damages \u2014 pleadings\nGeneral damages, which are the natural and necessary result of a wrong, are implied by law and may be recovered under a general allegation of damages; special damages, those which do not necessarily result from the wrong, must be pleaded, and the facts giving rise to the special damages must be alleged so as fairly to inform the defendant of the scope of plaintiff\u2019s demand. G.S. 1A-1, Rule 9(g).\n2. Damages \u00a7 12; Uniform Commercial Code \u00a7 21\u2014 operating losses \u2014 pleadings \u2014 breach of warranty of merchantability\nOperating losses are special damages which must be alleged under G.S. 1A-1, Rule 9(g) and are consequential damages which are recoverable under G.S. 25-2-715(2) if the seller knew or reasonably could have foreseen that the probable result of a malfunctioning product would be such operating losses; the pleadings and evidence in this case did not permit recovery of operating losses by plaintiff for breach of warranty of merchantability of a photographic color enlarger.\n3. Damages \u00a7 16; Uniform Commercial Code \u00a7 21\u2014 breach of warranty \u2014 damages \u2014 inadequate instructions\nThe trial court\u2019s instructions did not adequately declare and apply the law as to damages recoverable for breach of warranty of merchantability of a photographic color enlarger.\nOn writ of certiorari to review proceedings before Browning, Judge. Judgment entered 30 May 1975, Superior Court, Craven County. Heard in the Court of Appeals 14 June 1976.\nIn this action to recover damages in the sum of $30,000.00 for breach of implied warranty of merchantability in the sale of a color processing unit by defendant to plaintiff for use in her photography studio, defendant denied the breach and counterclaimed to recover $870.97 for goods sold.\nAt trial evidence for the plaintiff tended to show that the purchase price of the color processing unit, which included an enlarger, was $6,006.24; the unit was delivered 15 March 1969; the enlarger malfunctioned from the beginning and continuously thereafter until it was corrected by the manufacturer, who found defective wiring, and returned to plaintiff on 29 September 1969. The unit then functioned properly. During this period plaintiff was unable to duplicate and process color photographs. Plaintiff\u2019s net income was $697.75 in 1965, $213.79 in 1966, $1,285.44 in 1967. She had a net loss of $285.59 in 1968, $4,619.91 in 1969, and $6,625.86 in 1970. She closed the studio in December 1970, at which time she was indebted for rent, insurance and photography equipment and supplies in the total sum of $2,111.65. Plaintiff testified that her losses began with the malfunctioning of the color enlarger, but she waited until December 1970 to close her studio because she \u201cthought King Photo Supply was going to help me with the cost of some of the losses incurred because of the malfunction.\u201d\nDefendant\u2019s evidence tended to show that it had received numerous telephone calls from plaintiff relative to malfunctioning of the enlarger, and that defendant responded to these calls and attempted to correct the defects but was unable to do so. The unpaid balance of her account was $870.97.\nThe jury found a breach of warranty, and rendered verdict for plaintiff in the sum of $30,000.00, and for defendant on its counterclaim for $870.97. The trial court denied defendant\u2019s motion to set aside the verdict. From judgment on the verdict defendant appealed.\nWard, Tucker, Ward & Smith, P.A. by David L. Ward, Jr., and Thomas R. Crawford for plaintiff appellee.\nJacob W. Todd for defendant appellant."
  },
  "file_name": "0564-01",
  "first_page_order": 592,
  "last_page_order": 598
}
