Dudley B. Durham, Jr. and Barbara L. Durham, husband and wife, and their farming and trucking corporations, Double D Farms, Inc. and L.B. Trucking, Inc petitions on December 20, 1983 * * *. On March 5, 1985, James L. Patton was appointed Trustee. At the time of trial this adversary proceeding involved a claim by Southern States Cooperative, Inc. (Southern
Dudley B. Durham, Jr. and Barbara L. Durham, husband and wife, and their farming and trucking corporations, Double D Farms, Inc. and L.B. Trucking, Inc petitions on December 20, 1983 * * *. On March 5, 1985, James L. Patton was appointed Trustee.
At the time of trial this adversary proceeding involved a claim by Southern States Cooperative, Inc. (Southern States) for monies owed in connection with its sale and application of herbicides and other chemicals on the Durhams’ farm fields. The Trustee was pursuing the Durhams’ counterclaims contending that these herbicides were negligently misapplied and also breached the various UCC warranties which caused severe crop damage to the Durhams’ 1983 harvest.
After consideration of the relevant facts and the applicable law, the court concludes that Southern States is not entitled to any recovery and that the Trustee, on behalf of the consolidated debtors’ estate, is entitled to recover in full on its products liability claims, * * *
Dudley Durham, Jr. has been a farmer most of his life and has been farming on his own since 1972. Durham leased most of the farmland he cultivated and handled most of the planting and other farming operations himself while his wife, Barbara Durham, maintained the farm business’ books and records. * * *
The facts leading to this controversy arise from the Durhams’ dealings with Southern States concerning the planting of their 1983 crops. Southern States is a farmers’ cooperative that engages in the business of supplying farmers with various agricultural supplies like seed, fertilizer, feed, herbicides, and other farm products as well as certain services in connection with these products * * *. Durham had done business with Southern States before switching to Flo-N-Gro, Inc. as his supplier, but due in part to the substantial debt accumulated to Flo-N-Gro and other creditors, Durham approached Southern States once again prior to planting his 1983 corn and bean crops.
In April of 1983, Durham contacted Richard Thomas, the Southern States Middletown store manager, about arranging for the application of herbicides. Durham planned to use ‘‘no-till’’ farming for most of his 1983 crops. The ‘‘no-till’’ farming procedure does not require plowing or disking of the ground like the conventional plow mode of farming; instead, the farmer kills and controls weeds through the application of herbicides and then plants the seed with a special planter machine designed to plant in untilled soil. Durham apparently had done ‘‘no-till’’ farming in 1980, but did not personally apply the chemicals because he feared the potential health risks * * *. In any event, Durham explained to Thomas that he wanted to use ‘‘no-till’’ farming for most of his 1983 corn and bean crops and discussed credit terms generally regarding the chemicals. At this initial meeting, Thomas extended to Durham a $2,000 line of credit to purchase starter fertilizer known as ‘‘10–24–0’’ to begin his corn planting. Nevertheless, Thomas told Durham that a crop lien would be necessary for additional credit on the rest of the needed chemicals.
Subsequently, on May 5 or 6, 1983, Durham met Thomas again, this time accompanied by his father. The elder Durham signed a credit application with Southern States so that he might guarantee any credit extended to his son. During this meeting, the younger Durham told Thomas words to the effect of ‘‘Richard, you know I’m trying to pay, get straightened around and get all my stuff straightened around. I want it done the cheapest way, the best way it can be done.’’ In response, Thomas replied, ‘‘Will do.’’ The two Durhams and Thomas then went into a small room of the Middletown store where Thomas outlined with some specificity the herbicidal chemicals he proposed to use on Durham’s fields. Thomas stated that water would be employed as a carrier for the herbicides with nitrogen being applied by drop nozzling at a rate of 150 lbs. per acre after the crops were standing. The alternative to using a water-based carrier for the chemicals would be to use a 30% nitrogen solution which was more expensive than using water as a carrier and violated the recommendations of the University of Delaware’s Department of Agriculture. The junior Durham had no experience or expertise on herbicidal chemicals and relied on Thomas’ briefing on the various herbicide mixtures in choosing which ones to apply. Yet, the younger Durham did emphasize to Thomas that a large number of acres per day would require spraying in order to keep up with Durham’s heavy planting schedule. Thomas answered that the 1983 season was a normal year in terms of the number of acres to be sprayed by Southern States, and in most instances, Southern States was able to keep up with the farmers.
Durham actually began planting his crops a few days before his early May meeting with Thomas. Gilbert McClements, the principal Southern States herbicide applicator for Durham’s fields, began spraying on May 8, 1983.
In sum, Durham’s 1983 farming operations consisted of roughly 740 acres of corn, about 230 acres of beans, and a winter wheat crop.
As to the herbicidal chemical applications by McClements, spray tickets were issued by Southern States detailing the job date, location, approximate acreage, and the various chemicals used in each application. McClements received instructions concerning which chemicals to apply from his superiors at Southern States, namely, Mr. Thomas and Mr. Fox. McClements would mix the herbicides each day prior to spraying, but apparently did not make extensive prespraying inspections of the grass and weeds nor did he perform a ‘‘hands and knees’’ inspection of the planted corn prior to spraying.
After planting the corn and bean crop, Durham observed a significant number of weeds and grasses that had escaped the herbicidal treatment and the correspondingly low crop population. Durham promptly notified Southern States of these difficulties. On June 1, 1983, Thomas visited several of Durham’s fields and indicated to Durham that Southern States would remedy the problem. As a result, numerous acres were resprayed by Southern States and fields with very low plant populations were replanted. Nevertheless, the 1983 corn and bean harvest was dismal and far below the County average.
The issues involved are: whether Southern States’ herbicidal chemicals were negligently applied; [and] whether Southern States breached UCC warranties * * *. Collateral to the product liability claims, and asserted as an affirmative defense by the Trustee against Southern States’ claim, is whether Southern States may recover payment for the chemicals and their application.
Product Liability Claims Against Southern States For
Alleged Harm Resulting from Use of Its Chemicals
Delaware does not have strict products liability arising out of the sale of goods. [Citation.] (UCC warranty provisions on sales preempt judicial extension of strict liability in tort involving sale of goods.) Consequently, those claiming injury from defective products in Delaware must seek recovery under a negligence and/or warranty rubric rather than a theory premised on strict liability in tort. [Citations.]
B. Warranty The Delaware version of the UCC provides for three types of warranties arising from the sale of goods: (1) express warranties, UCC §2–313, (2) implied warranties of merchantability UCC §2–314, and (3) implied warranties for a particular purpose, UCC §2–315. These warranties are mutually exclusive and independent of one another but each type of warranty may arise out of the sale of goods depending on the facts surrounding the sale. See UCC §2–102.
1. Express Warranty An express warranty may be created by a seller through: (1) any affirmation of fact or promise to the buyer relating to the goods which becomes the basis of the bargain so that the goods conform to the affirmation or promise; (2) any description of the goods which is made part of the basis of the bargain so that the whole of the goods conform to the sample of model. UCC §2–313(1)(a)–(c). The question of whether an express warranty has been made in a particular transaction is for the trier of fact. [Citation.] In the case at bar, there are no written express warranties claimed, but instead, oral statements made principally by the Middletown store manager, Thomas, to Durham which the Trustee contends were express warranties.
The relevant testimony concerning Thomas’ statements to Durham reveal several oral express warranties concerning the herbicides and their application which Southern States plainly breached. First, Thomas stated that water would be the carrier for the herbicides, especially since Durham wanted the job done inexpensively. In its application, Southern States used the nitrogen solution regardless of the University of Delaware recommendations dissuading its use and despite the fact that it is more expensive than using water as a carrier. Southern States’ reference to the common trade usage of nitrogen in 1983 is inapposite in an action for breach of express warranty because it is the affirmation or promise—not the custom or trade usage—which becomes the standard against which a breach is determined. In addition, Thomas’ statements were more than ‘‘seller’s talk’’ or puffing in that they were product-specific and not overly broad or vague. Second, Thomas also made statements regarding the effectiveness of the herbicides in removing weeds and grass so as to promote successful no-till farming. The purchase of herbicides is characteristically the subject of express warranties because the buyer of the product cannot determine its effectiveness prior to use and evaluate its effectiveness in a given situation. Here, Thomas’ statements in early May of 1983 were part of the basis of the bargain upon which Durham relied when purchasing the herbicides. Beyond this, Thomas had superior knowledge about the herbicides as opposed to Durham who had little or none. Consequently, Thomas’ selection of herbicidal recipes combined with his statements as to their effectiveness amounted to an express warranty that the respective mixtures would do the job adequately. Thomas made at least two express warranties which formed the basis of Durham’s purchase of the chemicals and were ultimately breached. The liability for breach of express warranty is a strict liability. No defect need be shown other than breach of the warranty itself which is the proximate cause of the property damage. [Citations.] Accordingly, the court finds that Southern States breached its express warranty to Durham and, thus, is liable for the Durham’s crop damage. * * *
2. Implied Warranties There are two theories of recovery for breach of implied warranty under the Delaware UCC: breach of implied warranty of merchantability under UCC §2–314 and breach of implied warranty of fitness for a particular purpose under UCC §2–315. The implied warranty of fitness for a particular purpose may, to some degree, overlap a seller’s express warranty. [Citations.] Unless there is a valid disclaimer, these implied warranties are implied in every sales transaction involving goods and run not only to those in contractual privity with the seller but to third party beneficiaries as well. UCC §2–318; [Citation.]. Obviously, Durham was in direct privity with Southern States regarding the herbicides sale.
Turning first to the implied warranty of merchantability, there are five elements which the claimant must establish: (1) that a merchant sold goods, (2) which were not merchantable at the time of sale, (3) proximately causing by the defective nature of the goods, (4) injury and damages to the claimant or his property, and (5) notice to the seller of the injury. [Citation.] As to the element requiring the seller to be a merchant, there is no doubt that Southern States was a merchant. * * *
Addressing the second element concerning whether the herbicides were ‘‘merchantable,’’ the goods must pass without objection in the trade under the contract description be fit for the ordinary purposes for which it was intended. UCC §2–314(2)(a) and (c). The facts show that Southern States sprayed (and in some instances resprayed) the various Durham farm tracts with herbicidal and other chemicals in order to increase the crop yields. Nevertheless, the farms’ respective crop yields did not improve, but rather fell dramatically as the result of the chemical applications. Specifically, the herbicidal recipes were unfit for the ordinary purpose for which they were intended to be used, chemical agents that would kill weeds without damaging the primary crops. [Citation.] The chemicals did not operate for their ordinary purpose which was to promote no-till farming which is why Durham purchased them in the first place.
There is ample evidence to support the finding that the herbicides were not merchantable. Dr. Mitchell’s unrebutted expert testimony indicates that Southern States incorrectly used liquid nitrogen as the herbicidal carrier rather than a water-based carrier. As a result, this created acidic soil conditions which inhibited operation of the herbicides * * *. In this case, the herbicides did not effectively control 85% of the weeds; instead, the weeds flourished and the crops died. Dr. Mitchell cited a number of other reasons for the crop failure, including: Southern States’ improper selection of herbicides needed to control weeds based on the time of the crop planting, its failure to use a sufficient volume of carrier, and its applicator’s failure to perform the necessary inspections (such as the ‘‘hands and knees’’ examination) to determine what herbicide recipe should be applied * * *. Based on this evidence, the court concludes that the herbicide and other chemicals were not merchantable since they neither could pass in the trade without objection nor were they fit for the ordinary purpose for which they were intended.
As for proximate cause and damages, the court finds that these elements have been met. * * *
Finally, the notice requirement for a breach of implied warranty of merchantability cause of action was plainly met. Durham notified Southern States as soon as he suspected that the herbicides were failing to work just a few weeks after their application. * * *
Southern States also breached the implied warranty that the herbicides were fit for their particular purpose. * * *
The breach of this warranty is the one most apparent on the facts. As indicated earlier, Durham relied on Thomas’ skill and judgment in selecting suitable herbicides to conduct no-till farming on his farms. The chemicals were mixed by Southern States’ herbicide applicator, McClements, before each job based on a formula or recipe provided by Thomas or some other Southern States official. The herbicides did not effectively do their job of keeping the fields clear of weeds and the crops died. Though thoroughly familiar with till farming, Durham had no experience with the no-till farming method and, therefore, was not a ‘‘sophisticated purchaser’’ who might have been able to recognize mistakes made by Southern States’ personnel. As a result, the herbicides’ failure to do their intended task coupled with Durham’s reliance on Southern States’ judgment and skill in formulating, mixing, and applying the herbicidal chemicals breached the implied warranty of fitness. [Citations.] Accordingly, Southern States is found to be liable under U.C.C. §2–315.
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Smith and Roberson Business Law
Authors: Richard A. Mann, Barry S. Roberts