Alabama Supreme Court: Auctioneer Can be Liable for Implied Warranty Breach

Dec 3, 2013 - Dangerous Products/Liability by Cross & Smith

For anyone who has suffered an injury due to product liability in Alabama, it’s important to understand that state and federal laws are very specific regarding whom you can sue and for what.

In the recent case of Alabama Powersport Auction, LLC v. Wiese, the Alabama Supreme Court has affirmed a plaintiff’s right to seek damages for liability from an auctioneer as a merchant-seller for breach of the implied warranty of merchantability, per 7-2-314, Ala. code 1975. Here, a father sued the seller of a go-cart upon which his minor son crashed, suffering severe head injuries that ultimately killed him.

The high court’s dismissal of a request from the defendant for a summary judgment of the claim has implications not only for those who purchase goods at in-person auction, but also potentially for those who purchase goods online from retailers on sites like eBay or Craigslist.

To fully understand the possible ramifications of this decision, it’s important to first understand the general principal of implied warranties. Any time a product is bought or sold, a sales contract is established. This typically consists of the buyer agreeing to pay for a certain item(s) and the seller agreeing to that exchange. Most of the time, these agreements are oral.

For example, if you buy a pack of batteries, it’s usually not considered worth it to draw up a written sales agreement stipulating that the buyer expects the batteries to be functional. Still, even without a written contract, buyers are protected under implied warranties.

There are two different kinds of implied warranties: fitness and merchantability. The latter, an implied warranty of merchantabiltiy, involves an unwritten and sometimes even unspoken agreement that the goods being sold “conform to the ordinary standards of care” and that they are going to be of the same quality, value and general grade as other similar products sold under similar circumstances.

This kind of unspoken agreement serves to protect consumers from defective products.

Usually, there is not a question as to who the merchant is, and therefore who might be liable. But here in the Alabama Powersport Auction case, that was precisely the issue.

Back in 2005, the plaintiff in the case, James Wiese attended an auction, at which he purchased a Yerf Dog Go-Cart for use by his two underage sons. The go-cart was on consignment to the auctioneer from the manufacturer, FF Acquisition Corp. At no time during the transaction did the auctioneer disclose the identity of the manufacturer.

After the purchase, the plaintiff discovered the engine of the go-cart wouldn’t operate for more than a few minutes. He tried several times to fix it, but eventually gave up, storing the equipment in his garage for two years. Then in the fall of 2/car-accidents/alabama-traffic-accidents-likely-to-increase-with-economic-recovery/, he successfully repaired it.

A few days later, his son took the go-cart for a ride. He crashed, striking his head on the ground, suffering severe brain damage. He died three years later, ultimately as a result of those injuries.

Several months after his death, his father filed a wrongful death lawsuit against the auctioneer, alleging liability in part due to a breach of warranty under state law. The plaintiff alleged that the defendant impliedly warranted the product as merchantable and fit for intended use as a recreational, off-road vehicle. The plaintiff alleged the defendant breached this implied warranty, as the vehicle was not fit for its intended use and wasn’t in fact merchantable.

The auctioneer countered that it could not be sued for breach of implied warranty of merchantability because it wasn’t technically a seller or merchant, as defined by the state’s Uniform Commercial Court.

The circuit court disagreed, a ruling backed recently by the Alabama Supreme Court.

Additional Resources:

Alabama Powersport Auction v. James Wiese, Nov. 8, 2013, Supreme Court of Alabama, Appeal from Limestone Circuit Court