Manouchehri v. Heim

123 N.M. 439, 941 P.2d 978 (N.M. Ct. App. 1997)

PARTIES: P = Manouchehri – the physician and x-ray purchaser

D = Heim – medical supply sales rep. and the seller

FACTS:

Suit arose when Manoucheri (M) purchased an x-ray machine from Heim (H). It was supposed to be a 100/100 x-ray machine. (M) bought the machine for $1900 and paid by check. At the top of the check he made a notation regarding a warranty by seller that the x-ray would work and obtained (H’s) signature for the guarantee.

Some weeks later (M) discovered the x-ray was performing with imaging of a 100/60 quality and could only get good images of small children and skinny people. (M) notified (H) to repair it and (M) offered to pay ½ of the repairs. (H) had someone come out to inspect the x-ray machine but no repairs were made. (M) and (H) maintained communications re: the problem until (M) filed suit in Sep. 1994. (H) first denied knowing that the x-ray machine was a 100/60 machine but later admitted that he knew. He also indicated that it could only be purchased for $1900.

PROCEDURAL HX:

Default judgment entered against (H), but then set aside. At trial court (M) obtained judgment for $4400 ($1900 for direct K damages & $2500 for incidental damages).

(H) did not dispute that he breached the warranty but he appealed on the award of damages. He claimed 1) venue was improper; 2) direct damages based on the cost of repair should not have been awarded because there was no direct evidence of such cost; and 3) consequential damages should not have been awarded because a) (M) could have avoided them by obtaining a replacement x-ray; b) they were not foreseeable; and c) they were not proved with required certainty.

RULE: statutory provisions § § 55-2-714 and –715

direct damages: the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different number

consequential damages:

a) any loss resulting from general or particular requirements and need of which the seller at the time of K’ing had reason to know and which could not reasonably be prevented by cover or otherwise; and

b) injury to person or property proximately resulting from any breach of warranty

ISSUE 1:

Was the direct damage award of $1900 appropriate?

HOLDING 1:

(M) could not be awarded direct damages based on cost of repair because the evidence was that the machine could not be transformed into a 100/100 machine. The trial court computed the direct damages on a proper ground even though the judgment didn’t state that ground.

Purchase price of the damaged goods was the best evidence of the value of the goods as warranted and there was no value of goods as accepted since the x-ray could not be repaired.

*value of goods as warranted/purchase price – value of goods as actually delivered

$1900 - $0 = $1900

ISSUE 2:

Was the consequential damage award of $2500 appropriate?

§ Could (M) have avoided the costs?

§ Were the damages foreseeable to (H)?

§ Did (M) prove these damages with certainty?

HOLDING 2:

The award should have been for consequential damages not incidental damages.

Although there was no evidence besides (M)’s testimony of his loss profits, it was adequate to use the lowest possible profit per x-ray of $79 and multiply it by loss x-rays (30).

avoiding the costs

(M) took reasonable steps to avoid the costs and it was reasonable for (M) to rely on (H)’s assurances that the breach would be remedied.

foreseeability

(M)’s lost income was a reasonably foreseeable consequence. (H) knew his customer, he knew how the x-ray would be used, and knew that the doctor would charge a higher rate to take the x-rays so that he could make a profit.

certainty of proof

Although the evidence presented for proof of damages was minimum, the evidence was sufficient to support an award of $2500.

CONCLUSION:

District court’s judgment affirmed. Damages in amount of $4400 for (M).