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Linda Payne v. Berry's Auto

April 16, 2013

LINDA PAYNE, PLAINTIFF AND APPELLANT,
v.
BERRY'S AUTO, INC., DEFENDANT AND APPELLEE.



APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 12-405 Honorable Russell C. Fagg, Presiding Judge

The opinion of the court was delivered by: Jim Rice

April 16 2013

Submitted on Briefs: December 19, 2012

Filed:

Clerk

Justice Jim Rice delivered the Opinion of the Court.

¶1 Appellant Linda Payne (Payne) appeals the judgment of the Thirteenth Judicial District Court, which affirmed the holding of the Yellowstone County Justice Court, that Berry's Auto, Inc. (Berry's) disclaimed implied warranties for a used vehicle sold to Payne. Although we conclude that Berry's failed to effectively disclaim implied warranties on the vehicle, we nonetheless affirm the District Court on alternate grounds. We address the following issues:

¶2 1. Did Berry's effectively disclaim implied warranties of a used vehicle under § 30-2-316, MCA, when the transaction included purchase of a service contract for the vehicle?

¶3 2. Did the District Court err by affirming the Justice Court's denial of Payne's implied warranty claim?

FACTUAL AND PROCEDURAL BACKGROUND

¶4 Payne, a resident of Dawson County, purchased a used 1997 Ford Explorer from Berry's in Billings on September 4, 2007. Payne also purchased an extended service contract for the vehicle for an additional cost of $1,870.00. Payne signed several transactional documents, including the Buyer's Guide, the Retail Installment Contract, the Retail Purchase Agreement, and the Extended Service Contract.

¶5 The Buyer's Guide is a double-sided form designed to be affixed to the window of a used vehicle offered for sale and identifies the subject 1997 Ford Explorer. A section of the Buyer's Guide is labeled "Warranties for this Vehicle" and sets forth various statements about the transaction that are placed beside boxes to be checked if the statement is applicable. The first statement reads: "AS IS -- NO WARRANTY. YOU WILL PAY FOR ALL COSTS FOR ANY REPAIRS. The dealer assumes no responsibility for any repairs regardless of any oral statements about the vehicle." The box next to this statement was checked. Boxes next to statements describing full and limited warranties were not checked. However, the box next to the following statement was checked: "SERVICE CONTRACT: A service contract is available at an extra charge on this vehicle. Ask for details as to coverage, deductible, price, and exclusions. If you buy a service contract within 90 days of the time of sale, state law 'implied warranties' may give you additional rights." (Emphasis added.)

¶6 The Retail Installment Contract and the Retail Purchase Agreement contain similar statements addressing warranties. The Retail Installment Contract reads:

Warranties Seller Disclaims. You understand that the seller is not offering any warranties and that there are no implied warranties of merchantability, of fitness for a particular purpose, or any other warranties, express or implied by the seller, covering the vehicle unless the seller extends a ...


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