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Hodges v. Johnson, 288 Kan. 56, 199 P.3d 1251, 67 UCC Rep.Serv.2d 954

Facts

In January 2005, Jim Johnson sold a 1995 Mercedes S320 to Dr. Merle Hodges and Melissa Hodges for $17,020. Johnson had used the car as his personal vehicle for two years prior to the sale and assured the Hodgeses that it was in good condition. However, shortly after the purchase, the Hodgeses discovered that the air conditioning did not work, leading to a series of repairs and ultimately a lawsuit against Johnson for damages related to the defective air conditioner.

At the time the Hodgeses bought the Mercedes from Johnson, there was no discussion about the operation of the air conditioning, heating, or other components of the vehicle.

Issue

Did the sale of the used car trigger an implied warranty of merchantability, and were the buyers entitled to attorney fees?

The Court of Appeals reversed the district court, concluding that the implied warranty of merchantability 'warrants the operation of major components that are necessary for the vehicle to operate' and that the air conditioner is not a major component of the used vehicle.

Rule

The implied warranty of merchantability applies to all sales by merchants and assures that goods are fit for ordinary purposes. A breach occurs if the goods are defective at the time of sale and the defect causes injury.

The implied warranty of merchantability applies by operation of law to all sales by merchants and arises from the fact of the sale.

Analysis

The court found that the sale of the Mercedes triggered the implied warranty of merchantability, which includes the air conditioning unit. Evidence indicated that the air conditioning was defective at the time of sale, and the Hodgeses were entitled to damages for the necessary repairs. The court also determined that the attorney fees provision in the Small Claims Procedure Act was applicable.

The implied warranty of merchantability applies to the transaction in this case as a matter of law under K.S.A. 84–2–314.

Conclusion

The Kansas Supreme Court reversed the Court of Appeals' decision, affirmed the district court's judgment in favor of the Hodgeses, and awarded them attorney fees.

We reverse the Court of Appeals, affirm the district court's decision affirming the small claims court, reverse the district court's decision regarding attorney fees, and remand the case to the district court for an assessment of those fees.

Who won?

The buyers, Dr. Merle Hodges and Melissa Hodges, prevailed because the court found that the implied warranty of merchantability applied to the air conditioning unit, which was defective at the time of sale.

The Hodgeses were entitled to judgment against Johnson for the sum of $3,474, together with costs of $56 and interest.

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