JWR Sales Co. v New Millenium Cinemas, 168 NC App 240 (03-1672) 01/18/2005

Appeal by defendants from judgment entered 25 June 2003 by Judge Hugh B. Campbell in the District Court in Mecklenburg County. Heard in the Court of Appeals 11 October 2004.

Hanzel & Newkirk, by Robert B. Newkirk, III, for plaintiff- appellee.

Miller & Miller, by J. Jerome Miller, for defendant- appellants.

    HUDSON, Judge.

    Plaintiff JWR Sales Company brought this action against defendants New Millennium, L.L.C. and Bryan Smith d/b/a Independent Theatre Booking Service seeking the balance due under a 15 May 2000 contract. On 1 March 2001, defendants filed an answer and counterclaim alleging breach of express and implied warranties. An arbitrator ruled in favor of defendants on the breach of contract claim and against defendants on their counter claims for breach of warranties. On 30 September 2001, plaintiff filed an appeal and request for trial de novo.    On 20 May 2002, the parties reached a tentative settlement agreement. On 28 June 2002, plaintiff moved to enforce the unsigned settlement agreement, which motion the court denied. On 23 June 2003, the court entered judgment in favor of plaintiff in the amount of $11,277.94 plus interest. Defendants appeal. For the reasons discussed below, we affirm.
    On 15 May 2000, plaintiff and defendants entered into a contract for plaintiff to furnish twelve Egyptian-themed sphinx theatre entranceways (“entranceways”) made of a coated foam material for use on the interior of defendants' movie theatre. Robert S. Smith, president of New Millennium Cinemas, testified that Randy Busse, president of JWR Sales Company, furnished him with a hard coat sample of the material to be used in the entranceways. Smith also testified that the entranceways would be subject to abuse from children during their use in the theatre. Smith went to inspect the entranceways after they were installed and testified that he knew immediately that they did not have the agreed-upon finish. After one month, the entranceways were noticeably damaged by contact from theatre patrons. As a result, Smith stopped payment on the final check to plaintiff and sent Busse a letter stating that the entranceways did not have the proper finish and were not acceptable. Smith also testified that he had relied on Busse's expertise in selecting an appropriate hard coat for the entranceways.
    Busse testified that he provided no specifications for the particular coating to be used on the entranceways. The sample heprovided was used to show the hieroglyphics and coating to be used. Once plaintiff completed the first entranceway, New Millennium sent a representative to plaintiff's workshop to inspect it, and the representative approved the design. Plaintiff and defendants discussed the coating to be used, and plaintiff had the responsibility of selecting the appropriate coating to protect the entranceways. Plaintiff delivered the first entranceways to defendants on 4 October 2000 and received no complaint about them. The invoice for the entranceways contained disclaimer language including only a warranty of title and excluding all other warranties. After the final delivery of entranceways on 3 November 2000, plaintiff received no notice of any defects at or near that time.
    Defendants contend that the court erred in failing to make several findings: 1) in failing to find that the sample provided by plaintiff created an express warranty under N.C. Gen. Stat. § 25-2-313(1)(c), 2) in failing to find that the entranceways were not merchantable as defined by N.C. Gen. Stat. § 25-2-314(1), and 3) in failing to find the existence of an implied warranty of fitness for particular purpose under N.C. Gen. Stat. § 25-2-315. We disagree.
    “[W]hether [expressed and implied] warranties were made or breached were questions of fact, not law.” Davis Realty, Inc. v. Wakelon Agri-Products, Inc., 84 N.C. App. 97, 100, 351 S.E.2d 816, 818 (1987).
        Where the trial judge sits as the trier of the facts, his findings of fact are conclusive onappeal when supported by competent evidence. This is true even though there may be evidence in the record to the contrary which could sustain findings to the contrary. The trial judge is both judge and jury, and he has the duty to pass upon the credibility of the witnesses who testify. He decides what weight shall be given to the testimony and the reasonable inferences to be drawn therefrom. The appellate court cannot substitute itself for the trial judge in this task.
General Specialties Co. v. Teer Co., 41 N.C. App. 273, 275, 254 S.E. 2d 658, 660 (1979) (citations omitted). Plaintiff contended that whether any warranties were created or breached was irrelevant because defendants did not effectively reject the allegedly defective entranceways under N.C. Gen. Stat. § 25-2-602(1). “Generally, to make an effective rejection of goods, a buyer must (1) reject the goods within a reasonable time after delivery, and (2) seasonably notify the seller of the rejection.” Business Communs. v. Ki Networks, 157 N.C. App. 710, 712, 580 S.E.2d 77, 78 (2003); N.C. Gen. Stat. § 25-2-602(1) (1999). “If a buyer fails to make an effective rejection, he is deemed to have accepted the goods.” Id. at 713, 580 S.E.2d at 79; N.C. Gen. Stat. § 25-2-606 (1999).
    It appears from the transcript that the court based its judgment in favor of plaintiff not on the issue of whether any express or implied warranty was created or breached, but rather on its determination that defendants did not effectively reject the allegedly defective entranceways:
        It appears to me that there was no effective rejection of these goods that the-- I'm not deciding this on the basis of the warranty of the disclaimer-- I wouldn't find that thedisclaimer was effective to disclaim the warranties, but I'm not sure that the question really is whether there was a warranty or not as much as it is the fact that there was an acceptance of the goods and on that basis, I would find for the plaintiff as to the principal amount and I would hear you further on any additional amounts as to interest and attorneys' fees.

    Here, the court chose not to make findings on the existence or breach of any warranties, having decided the matter on other grounds. Although it is unusual, and not the recommended practice, for the written judgment to refer to findings in the transcript, here we conclude that the judgment is adequate. The judge's findings are specific enough to enable appellate review, in that we can discern the factual and legal basis for the judgment. Chapel Hill-Carrboro City Sch. Sys. v. Chavioux, 116 N.C. App. 131, 132- 33, 446 S.E.2d 612, 613-14 (1994). The findings that appear in the transcript are separately stated, are supported by the testimony, and in turn support the court's conclusion and judgment. Although this Court has rejected as inadequate a ruling in which findings were never entered in open court or in writing, this case does not present the same scenario. Girard Trust Bank v. Easton, 12 N.C. App. 153, 155, 182 S.E.2d 645, 646, cert. denied, 279 N.C. 393, 183 S.E.2d 245 (1971).
    Affirmed.
    Chief Judge MARTIN and Judge TIMMONS-GOODSON concur.
    Report per Rule 30(e).

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