                                                                                                                    FILED
                                                                                                            COURT OF APPEALS
                                                                                                                  DWIStDHTI

                                                                                                           201Li JUL 22   AM 60: 74
    IN THE COURT OF APPEALS OF THE STATE OF                                              WASHINOWASi ifdliTOw'
                                              DIVISION II

CANTERBURY                APARTMENT .       HOMES                               No. 44545 -0 -II
LLC, a Washington limited liability company,

                                   Respondent,


          v.



LOUISIANA           PACIFIC     CORPORATION, ,        a                UNPUBLISHED OPINION
Delaware corporation,


                                   Appellant.


          MELNICK, J. —      Louisiana Pacific Corporation ( LP) appeals the trial court' s denial of its

motions for judgment as a matter of law and for a new trial after a jury found it liable to

                 Apartment Homes, LLC (      Canterbury) in      the amount           of $   755, 314. 17 for defective
Canterbury

siding.    First, LP argues the trial court erred when it concluded that the remedy listed in LP' s 25-

year written      warranty ( hereinafter " Limited   Warranty ") was not Canterbury' s sole and exclusive

remedy.        Second, LP argues the trial court erred when it instructed the jury on failure of essential

purpose        for the remedy    provided   in the Limited      Warranty.             Finally, LP argues the jury

instructions improperly required the jury to award damages outside the remedy listed in the

Limited Warranty and that Canterbury presented insufficient evidence to support the jury' s
award of       damages.   Because the Limited Warranty does not contain an unmistakable expression

that the exclusive remedy was contained therein, we hold Canterbury could avail itself of other
remedies under Washington law. Next, we hold that the trial court erred by giving the failure of

 essential purpose instruction but because it did not prejudice LP, the error was harmless. Last, we

hold that when read as a whole, the jury instructions properly instructed the jury on the law and
                      submitted sufficient evidence    to   support   the   jury' s   damages     award.   We   affirm.
 that   Canterbury
44545 -0 -II



                                                            FACTS


I         BACKGROUND


          Canterbury is a 180 -unit apartment complex constructed in 1995 with Inner -Seal siding

manufactured        by    LP.      The siding   came with a written             Limited      Warranty       that   covered " against




manufacturing defects under normal conditions of use and exposure" for 25 years if the siding

was properly installed and maintained. Clerk' s Paper' s ( CP) at 74.

          A    nationwide class settlement          in 1996 ( hereinafter " Settlement Agreement ") involved the


same LP siding and provided a process through which claimants with defective siding installed •

prior    to   January     1,    1996   could submit claims and receive compensation.                         The settlement class


included " all Persons who have owned, own, or subsequently acquire Property on which Exterior

Inner -Seal      Siding has        been installed   prior   to   January        1,     1996."     CP   at   329.    The Settlement


Agreement provided that the " Agreement shall be the sole and exclusive remedy for any and all

Settled Claims          of     Settlement Class    members."          CP   at        345.   The Settlement Agreement term


ended     January    1,        2003.   Because the United States District Court for the District of Oregon

recognized that some claimants' siding may become defective after the settlement term ended, it

amended the Settlement Agreement so that settled claims did not include " claims made against

L - after the expiration of the term of the Settlement Agreement under the express terms of the
  P

L - 25 -year Limited
  P                              Warranty issued    with   the   product."           CP at 264.


II.           EVIDENCE OF DAMAGE TO CANTERBURY' S SIDING


              In December 2008, Ray Dally, the owner of Canterbury, noticed chunks of siding missing

    on one of the apartment buildings, mushrooms growing out of the siding, and areas of the siding

    becoming    concave.         When Dally later noticed more pervasive problems with the siding, he hired

    Qualified Envelope Diagnostics in spring 2011 to evaluate the siding and provide a report on its
                                                                  2
44545 -. -II
       0



condition.       Erin Weatherspoon, a Qualified employee, first visited Canterbury on May 3, 2011,

and then returned with two other Qualified employees later in the month to perform a four -
                                                                                          day

forensic    evaluation         of   the    siding.    Weatherspoon testified that the siding was deteriorating,

delaminating, splitting, that there was material loss and fungal growth, and that the deterioration
 was             much everywhere"               on   the   Canterbury    buildings.   II Report of Proceedings ( RP) at
        pretty


131.


          On May 26, 2011, Canterbury sent LP a letter requesting, per the Limited Warranty, that

LP inspect the siding           within      60 days because Canterbury          wanted    to   replace   the siding.'   In the


letter, Canterbury included the information LP requested on its claim form and some pictures

from Qualified'         s   inspection.     It also offered LP a copy of Qualified' s report; however, LP never

asked    for the   report.       On June 8, Canterbury submitted the LP claim form/questionnaire to LP

with another letter.


          By August 10, Canterbury still had not heard from LP about scheduling an inspection so

on that day Canterbury sent a letter to LP informing it that Canterbury planned to begin
replacement        of   the siding        on   September 2.        The third week of August, LP sent a third - arty
                                                                                                             p

inspector to      Canterbury        to    perform a    two -day    evaluation of   the siding.   The third - arty inspector
                                                                                                           p

had to complete the inspection and evaluation of the building pursuant to a warranty inspector

training manual LP created in 2003. The inspection protocol utilized at Canterbury differed from

the inspection protocol used pre -2003, during the Settlement Agreement term.

           After    seeking         bids    from     at    least   six   companies,   Canterbury began removal and

replacement of          the siding in September 2011.               Canterbury hired Laer Enterprises which provided


 1
     Dally testified that he wanted to start replacing the siding as soon as possible before the winter
 months.

                                                                     3
44545 -0 -II




the lowest bid. Anatoly Laer, Laer Enterprises' s owner, testified that he replaced the siding with

Hardie, fiber        cement,     siding.       He started the job in September and finished in approximately

April 2012.          Laer testified that the LP siding had deteriorated and delaminated and that every

wall   of    every   building     had   some       deteriorated siding.    Laer and Dally also testified that because

there was deteriorated siding on all walls and because of the siding' s installation, they could not

replace      only the damaged siding.                Instead, Laer testified that every board of siding above the

deteriorated board had to be removed to get to the deteriorated board, so when there was


deteriorated siding on a wall, he replaced the whole wall of siding.

            When Canterbury started to remove the siding, Weatherspoon returned to evaluate the

back    of    the siding boards.             At that time, Weatherspoon contacted Warren Harris from Case

Forensics to "       characterize      the   composition and mode of         failure   of   siding   planks."    III RP at 220.


Canterbury       also asked       Harris to "       assess the degree of damage and photographically document,

memorialize          the damage        at   the    Canterbury    Apartments,"     and "   to investigate the adequacy of

assessment       by   others."    III RP      at   220 -21.   Harris concluded there existed " dimensional instability

between the          rigid   paper"     on     the siding     and   that the "   mobile or moving woods fibers was

incompatible."           III RP   at    238.       Harris concluded that permanent damage to 70 percent of the


siding existed.


             After LP'   s   August 2011 inspection,           Canterbury finally    heard from LP       on     October 12. LP


offered      Canterbury $ 8, 363 for the damaged siding and claimed it found that damage existed in

only 11       percent of      the siding.          Canterbury responded and objected to both the amount offered

and    the   amount of       damage LP found. It asked LP to explain the standards its inspector used to


evaluate      the siding.      LP never responded to Canterbury' s letter, never sent another inspector out,

 and never asked Canterbury to save any of the siding being replaced.
                                                                    4
44545 -0 -II




II.       EVIDENCE OF AMOUNT OF DAMAGES


          At trial, Canterbury did not produce records for the purchase price of the LP siding in
1995.                        did                               that   it   paid      Laer   a   total   of $817,   584.44 to replace the
          Canterbury                proffer evidence




siding.    It   also paid a        company $ 105, 439. 34 to               paint     the    new    siding.   Additionally, Canterbury

                                                                                     to     have the                       re- sided.    The
                county $ 16, 893. 11          for                                                         apartments
paid    the                                          building         permits




replacement cost totaled $939, 916. 89.

          LP testified it          arrived    at   its   claim    for damages              of $  8, 363 by resorting to the Limited

Warranty that stated the remedy would be twice the retail cost of the original siding, less the
aging deduction.         LP used the highest amount its sales department had on record for the retail

price   before 1996,     which was $          0. 52      per square        foot. It then doubled the amount per the Limited


Warranty        to $ 1. 04   per     square    foot.          Lastly, LP calculated the aging deduction based on the

number of years it had been since the siding was installed.

III.      PROCEDURAL HISTORY


          On November 11, 2011, Canterbury filed a claim for breach of written warranty, breach

of warranties created by advertising or similar communications to the public, and violations of

the Washington Consumer Protection Act.                               By order of the United States District Court for the

 District of Oregon, Canterbury and LP stipulated to a dismissal with prejudice of Canterbury' s
 latter two claims.


          LP filed a motion to enforce the settlement agreement and asked the federal court to order

                  to take           further              to   prosecute              released claims against           LP.     In its July 26,
 Canterbury                  no               steps                            any


 2012,    opinion      the     federal        court       concluded "          that [      Canterbury] is          a   class   member     and




  Canterbury' s]      remedy, if any, is the 25 -year warranty.                                 L - claims that [ Canterbury] cannot
                                                                                                  P

 pursue the warranty claim in state court, but the warranty does not contain any language
                                                                           5
44545 -0 -II




precluding     state court action."           CP   at   32.   LP then moved the federal court to enforce its July 26,

2012 order and hold that Canterbury' s sole and exclusive remedy was the remedy provided in the

Limited Warranty. The federal court stated that in its July 26, 2012 order it " did not make any

determination concerning               Canterbury' s       damages, only the          claims   it   could pursue."        CP at 109.


The federal      court   then     held that the " Washington state trial court is in the best position to


interpret the warranty in light of Washington law, and to make rulings concerning Canterbury' s

remedies and      damages."           CP at 109.


         Before trial, LP submitted a motion in limine to preclude Canterbury from introducing

                                                        money it           to             the siding.           LP argued that the
evidence    regarding the         amount        of                  paid        replace




Limited Warranty provided Canterbury' s sole and exclusive remedy and evidence of

replacement costs was           irrelevant      and prejudicial.          The trial   court    denied LP'       s motion.   The case


proceeded      to a   jury   trial.    At the close of Canterbury' s case and the close of its case, LP moved

for judgment      as a, matter of        law.      It renewed its argument that Canterbury' s sole and exclusive

remedy was the remedy listed in the Limited Warranty. The trial court denied LP' s motions.

         Regarding the exclusivity of the Limited Warranty, the trial court concluded that the

Limited Warranty did not provide Canterbury' s sole and exclusive remedy because it did not
contain unmistakable           language that the           stated   remedy is the      exclusive         remedy: "   In this warranty,

L - disclaims other warranties but does not clearly state that the remedy provided is the
  P

exclusive      remedy.       It certainly had the ability to include language which says that this is the sole

                                                         do that in this                VI RP            833.   The trial court also
                      remedy, but it did
and exclusive                                      not                       case."                 at




stated   that LP "      holds    all    the   cards"      under     the Limited       Warranty; "[ i]t determines, after the

inspection and verification, if there is a failure under the warranty, according to the criteria and



                                                                      6
44545 -0 -II



the   protocols    that   it has developed, ...     which were different, as has been pointed out at trial,


from the     protocols    that   were used under   the   class action   lawsuit." VI RP at 833 -34.


           The trial   court gave    jury   instruction 9,   over   LP'   s objection, which stated: "   The limited


remedy stated in the warranty is not the sole and exclusive remedy available under the warranty."

CP    at   198.    Also over LP' s objection, the trial court gave the following instruction jury

instruction 10) for calculating damages:

                  It is the duty of the Court to instruct you as to the measure of damages.
           By instructing you on damages the Court does not mean to suggest the amount of
           any damages that should be awarded. With regard to the breach of warranty
           claim of Plaintiff, in your determination of damages, you are to use the following
           measure of damages in the amounts proved by Plaintiff:

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

                    The costs of repair and /or replacement may be evidence of the difference
           between the value of goods as accepted and their value as warranted.


CP    at   199.   Finally, the trial court instructed the jury as to failure of essential purpose of the

remedy provided in the Limited Warranty, over LP' s objection, in jury instruction 11:

                  If the remedy provided in the warranty fails of its essential purpose, the
           remedy is the difference at the time and place of acceptance between the value of
           goods accepted and the value they would have had if they had been as warranted,
           unless special circumstances show proximate damages of a different amount. The
            costs of repair and /or replacement may be evidence of the difference between the
            value of goods as accepted and their value as warranted.


                    A limitation of remedies fails of its essential purpose when the limitation
            deprives a party of the substantive value of its bargain, or it fails to provide
            minimum adequate remedies.



CP    at   200.   The jury also had a copy of the Limited Warranty, and LP argued in closing that the
                           damages according to the remedy                    in the Limited   Warranty.   LP never
jury   should award                                                  stated




proposed an instruction regarding the remedy stated in the Limited Warranty.
                                                             7
44545 -0 -II




        LP also objected to Canterbury' s proposed verdict form, which asked only for the jury' s

final damages calculation and proposed an alternate verdict form, which asked the jury to

determine the         amount      of   damaged siding        and    then the     amount    of   damages.   The trial court


refused LP' s proposed verdict form and concluded that it could be seen as a comment on the

evidence.



         The   jury found      for     Canterbury in the        amount of $755,       314. 17. LP renewed its motion for


judgment      as a matter of       law   and moved        for   a new   trial   on   December 17, 2012.    The trial court


denied LP' s motions. LP appeals.


                                                           ANALYSIS


         LP argues the trial court erred by denying its motions for judgment as a matter of law and

for   a new   trial   for three   reasons.   First, LP argues the trial court erred by instructing the jury that

the remedy stated in the Limited Warranty was not the sole and exclusive remedy available to

Canterbury. Second, LP argues the trial court erred by giving the jury the failure of an essential

purpose     instruction.       Third, LP argues the trial court erred by rejecting its argument that no

legally sufficient basis supported the jury' s damages award. We disagree.

I.       STANDARD OF REVIEW


         We review a trial court' s denial of a CR 50 motion for judgment as a matter of law de

novo,   engaging in the        same      inquiry   as   the trial   court.   Schmidt v. Coogan, 162 Wn.2d 488, 491,


 173 P. 3d 273 ( 2007).        Judgment as a matter of law is proper only when, viewing the evidence in

the light most favorable to the nonmoving party, substantial evidence cannot support a verdict

for the nonmoving party. Schmidt, 162 Wn.2d at 491, 493.

          Generally, we review the denial of a new trial to determine if the trial court' s decision is

 manifestly unreasonable, is exercised for untenable reasons, or is based on untenable grounds.
                                                                    8
44545 -0 -II



Edwards       v.   Le Duc, 157 Wn.          App.    455, 459, 238 P. 3d 1187 ( 2010).          But when an error of law is


cited   as   grounds      for   a new    trial,   we review   the   alleged error of      law de   novo.   Edwards, 157 Wn.


             459.    The                 law   complained of must        be   prejudicial.    Dickerson v. Chadwell, Inc.,
App.    at                    error of




62 Wn. App. 426, 429, 814 P. 2d 687 ( 1991).

II.          EXCLUSIVITY OF LIMITED WARRANTY REMEDY


             LP argues that Canterbury' s sole remedy is stated in the Limited warranty because ( 1) it

should       be   read   in   conjunction with       the Settlement Agreement; (           2) based on the federal court' s


                                                                         from claiming                                    3) the
2012     rulings,    Canterbury is .collaterally          estopped                           another   remedy;   and, (




plain language of the limited warranty mandates this result.

             Because the Limited Warranty does not contain an unmistakable expression that it is the

exclusive remedy, Canterbury could pursue other available remedies under Washington law.

Thus, we hold the Limited Warranty does not provide the exclusive remedy and the trial court

correctly denied LP' s motion for judgment as a matter of law on this issue.

             A.          THE SETTLEMENT AGREEMENT DOES NOT STATE THE REMEDY PROVIDED IN THE
                         LIMITED WARRANTY IS CANTERBURY' S EXCLUSIVE REMEDY

             LP argues the Settlement Agreement and the Limited Warranty must be interpreted

together and that the sole remedy available to Canterbury is pursuant to the express terms of the

Limited Warranty. Because the federal court ordered that the Limited Warranty applied after the
Settlement Agreement term ended, but made no legal determination as to the scope of the

remedies available under the Limited Warranty, we disagree.

             The Settlement Agreement states it " shall be the sole and exclusive remedy for any and

 all   Settled Claims         of   Settlement Class     members."        CP   at   345.   An amendment to the Settlement


 Agreement stated that settled claims do not include " claims made against L - after the expiration
                                                                             P


                                                                     9
44545 -0 -II



of the term of the Settlement Agreement under the express terms of the L - 25 -year Limited
                                                                         P

Warranty       issued   with   the   product."    CP    at   264.        The amendment to the Settlement Agreement


further clarified the release of claims:


          The release in the Settlement Agreement is amended to exclude claims filed
          against L - after the expiration of the Settlement Agreement by consumers under
                    P
          the terms of the L - 25 -year Limited Warranty.
                                P                                At the termination of the
          Settlement Agreement, L - s 25 -year Limited Warranty shall be in effect for the
                                  P'
          balance of its term when measured from the date of original installation of the
          claimant' s siding.


CP 'at 268.


          The Settlement Agreement did not specify the remedies available to a party under the

Limited Warranty; it merely stated that at the conclusion of the Settlement Agreement period,
                                             LP                   the Limited      Warranty.   And while the Settlement
parties   may file      a claim against           under




Agreement did state that the amendment to the Settlement Agreement was " fair, reasonable, and

adequate        and   in the best interests      of   the Class,"         it did not specifically state that the remedy

provided in the Limited Warranty was fair, reasonable, and adequate, or that it was the exclusive

remedy     under      the Limited     Warranty.       CP     at   259.    Accordingly, when interpreted together LP' s

 argument fails.


          B.          THE FEDERAL DISTRICT COURT RULINGS Do NOT STATE THE REMEDY PROVIDED
                      IN THE LIMITED WARRANTY IS CANTERBURY' S EXCLUSIVE REMEDY

          LP next argues the federal court' s 2012 orders collaterally estop Canterbury from pursing

 any remedy other than the remedy provided in the Limited Warranty. We disagree. Because the •
 federal court specifically ruled that the state court should rely on Washington law to determine
 the remedy provided in the Limited Warranty, this argument fails.
                                         filed   four                               LP.   In   its   complaint,   Canterbury
           Canterbury initially                            claims        against




 specifically. claimed LP should be responsible for the full cost of repair and /or replacement of the
                                                                    10
44545 -0 -II




siding   as     provided         by    Washington law.                 It alleged that the Limited Warranty did not contain

express    language stating the Limited                             Warranty'         s remedies were exclusive.          In ruling on LP' s

motion to enforce the Settlement Agreement, the federal court concluded " that [ Canterbury] is a

                                                              remedy, if any, is the 25 -year warranty..
                                                                                                                            L - claims that
                                                                                                                              P
class    member           and [      Canterbury'         s]




 Canterbury] cannot pursue the warranty claim in state court, but the warranty does not contain
                                                                            CP at 32.
any language precluding                    state court action."



          LP then           moved           the federal            court   to    enforce        its   July   26, 2012 order and hold that


Canterbury           could avail           itself   of   only the remedy                   stated   in the Limited   Warranty. The federal

court held that it " did not make any determination concerning Canterbury' s damages, only the

claims    it   could pursue,"              and the " Washington state trial court is in the best position to interpret

the warranty in light of Washington law, and to make rulings concerning Canterbury' s remedies
and damages."                   CP    at    109.     Thus, the federal court did not conclude whether the remedy


provided        in the Limited             Warranty is             exclusive.         Instead, the federal court ordered Canterbury to

                          its                                 LP                its    claim    for breach    of   the Limited   Warranty.   It
 dismiss       all   of         claims       against               except




 allowed the trial court discretion to interpret Washington law to determine the specific remedies

 and damages available under the Limited Warranty. Thus, we hold Canterbury is not collaterally

 estopped from pursuing remedies other than the remedy listed in the Limited Warranty because
 the federal court did not decide this issue.




                                                                                      11
44545 -0 -II



             C.        THE LIMITED WARRANTY DOES NOT STATE THE LISTED REMEDY IS THE SOLE
                       AND EXCLUSIVE REMEDY


             LP argues the language of the warranty itself demonstrates the parties' express intent that

the    listed remedy is the          sole    and exclusive     remedy.        Because the Limited Warranty does not

clearly express that the listed remedy is the sole and exclusive remedy, we hold that the Limited

Warranty does not provide Canterbury' s exclusive remedy.

             Parties may      contract   for   an exclusive    remedy for      a    breach   of   warranty. Shepler Constr.,


Inc.   v.   Leonard, 175 Wn.           App.     239, 246, 306 P. 3d 988 ( 2013) ( citing Graoch Assocs. # 5 Ltd.


P' ship      v.   Titan Constr.     Corp.,     126 Wn.   App. 856,      865, 109 P. 3d 830 ( 2005)).            But " resort to a


remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which
case    it is the    sole   remedy."     RCW 62A. 2- 719( 1)( b).         The comments to subsection ( 1)( b) further


clarify that "[        s] ubsection (    1)( b) creates a presumption that clauses prescribing remedies are


cumulative rather than exclusive. If the parties intend the term to describe the sole remedy under

the    contract,     this   must   be clearly   expressed.      RCW 62A.2 -719, UCC                cmt.   2. Thus, " the contract


                                                   intent to            the                                              Shepler
            clearly indicate the
must                                    parties'               make            stipulated    remedy        exclusive."




Constr.,          175 Wn. App. at 246; see also Torgerson v. One Lincoln Tower, LLC, 166 Wn.2d 510,

522, 210 P. 3d 318 ( 2009) ( "[              P] rovisions limiting remedies in a consumer transaction must be

explicitly         negotiated      between buyer       and     seller   and    be    set   forth   with     particularity. "); Nw


Perfection Tire Co.           v.   Perfection Tire    Corp.,    125 Wash. 84, 92, 215 P. 360 ( 1923) (               a remedy is

not exclusive " unless the contract by unmistakable terms so provides ")).

             Here, there is no unmistakable expression that the remedy listed in the Limited Warranty

 is the     sole and exclusive       remedy.       The Limited Warranty warrants the siding " for a period of 25




                                                                  12
44545 -0 -II



years from the date of installation against manufacturing defects under normal conditions of use

and exposure."        CP at 74. It further provides that:


                  L -P must be given a 60 -day opportunity to inspect the siding before it will
           honor any claims under the above warranty. If after inspection and verification of
           the problem, L - determines that there is a failure covered by the above warranty,
                          P
           L - will refund to the owner an amount of money equal to twice the retail cost of
             P
           the original siding material. The cost of labor and materials other than siding are

           not   included.       Warranty payments will be based upon the amount of affected
           siding material.
                   During the first 5 years, L - s obligation under the above warranty shall
                                                P'
           be limited to twice the retail cost of the siding material when originally installed
           on the structure.

                  If the original siding cost cannot be established by the owner the cost shall
           be determined by L - in its sole and reasonable discretion.
                                P
                  During the 6th through 25th year, as determined in the above manner,
           warranty payments shall be reduced equally each year such that after 25 years
           from the date of installation no warranty shall be applicable.

                    Except for the express warranty and remedy set forth above, L - disclaims
                                                                                  P
           all   other     warranties,    express   or      including implied warranties of
                                                          implied,

           merchantability or fitness for a particular purpose.

                      This warranty gives you specific legal rights and you may also have other
           rights which vary from state to state.

CP    at   74.   This Limited Warranty provides only an optional remedy of "twice the retail cost of

the   original     siding    material,"   which " shall    be     reduced     equally   each   year"   under the aging


deduction.       CP   at   74.   But it contains no clear or unmistakable terms that the provided remedy is

the sole and exclusive remedy.

            Our Supreme Court has held that              where    a written   warranty   guaranteed "    all tires, tubes



 and casings to be in good condition and to make good all defects therein due to defective

 manufacture,"        the written replacement remedy was not exclusive but permissive because an

 injured party is only obliged to resort to the listed remedy if the " contract by unmistakable terms
 so provides.         Nw Perfection Tire, 125 Wash. at 92; see also Graoch, 126 Wn. App. at 865 -66

                                                             13
44545 -0 -II



holding that one year warranty not an exclusive remedy for defective construction where the
contract   did   not so state).   Like the warranty in Northwest Protection Tire, the Limited Warranty

here contains no unmistakable terms that the listed remedy is the exclusive remedy; rather, it

                                                                                                     Further, the
merely     provides   a permissive    remedy if siding fails     under   the   express   warranty.


Limited Warranty specifically references that parties may have other rights under state law.

Thus, while LP certainly provided a limited warranty for the siding by specifically listing what

the express warranty covered and disclaiming all other warranties, it did not provide for a limited

and exclusive remedy for failure of the siding under the express warranty.

          Accordingly, the listed remedy is presumed optional and not exclusive. See RCW 62A.2-
719( 1)( b).     We hold the remedy listed in the Limited Warranty is not exclusive, Canterbury had
the right to pursue remedies and damages available under state law, and the trial court properly

denied LP' s motions for judgment as a matter of law and a new trial regarding this issue.

III.       FAILURE OF ESSENTIAL PURPOSE


           LP next argues the trial court erred by instructing the jury on failure of essential purpose.

Although the trial court erred by giving a failure of essential purpose instruction, the error was

harmless.


           We    review alleged errors of    law in   jury   instructions de   novo.     Blaney v. Int' l Ass 'n of

Machinists & Aerospace Workers, Dist. No. 160, 151 Wn.2d 203, 210, 87 P. 3d 757 ( 2004).                      Jury

 instructions are proper when they permit the parties to argue their theories of the case, do not

 mislead the jury, and properly inform the jury of the applicable law. Hue v. Farmboy Spray Co.,
 127 Wn.2d 67, 92, 896 P. 2d 682 ( 1995).

           Under the UCC, "[       w]here circumstances cause an exclusive or limited remedy to fail of

                                                                        in this Title."     RCW 62A.2- 719( 2).
 its   essential   purpose,   remedy may be had        as    provided



                                                         14
44545 -0 -II




Because the trial court had already decided as a matter of law that the Limited Warranty remedy

was not exclusive and gave such an instruction to the jury, the trial court erred in also giving the

failure      of essential purpose             instruction.      Failure of essential purpose is relevant only with an

 exclusive or limited" remedy. See RCW 62A.2- 719( 2).

              An erroneous jury instruction is harmless if it is ` not prejudicial to the substantial rights

of   the   part[ ies]   ... ,     and   in   no   way   affected     the final   outcome of     the   case. '   Blaney, 151 Wn.2d

at   211 (   alteration     in   original) (      quoting State v. Britton, 27 Wn.2d 336, 341, 178 P.2d 341 ( 1947)).

Whereas,        a   prejudicial         error "    affects or presumptively affects the results of a case, and is

prejudicial      to     a substantial right."              Blaney,   151 Wn.2d      at   211.   When evaluating an erroneous

instruction,        we presume          the   error   is   prejudicial "   subject to a comprehensive examination of the


record."       Blaney, 151 Wn.2d at 211.

             Scrutiny of the record in this case reveals that the erroneous failure of essential purpose
instruction         was   harmless because LP                suffered no prejudice.         The method to calculate damages


for failure of essential purpose was the same calculation the jury used to calculate the damages it

found. Here, if the jury decided to not award damages under the remedy provided in the Limited

Warranty, the trial court instructed that it could award damages under RCW 62A.2- 714(2),
 which provides: "              The measure of damages for breach of warranty is 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     amount."           The trial court also instructed the jury that if it determined that the remedy

 provided in the Limited Warranty failed its essential purpose, then it was instructed that it should

 calculate damages in the following manner:



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           T] he difference at the time and place of acceptance between the value of goods
           accepted and the value they would have had if they had been as warranted, unless
           special circumstances show proximate                   damages    of a   different   amount.     The costs

           of repair and /or replacement may be evidence of the difference between the value
           of goods as accepted and their value as warranted.


CP    at   200.       Accordingly, because the substantive outcome, the manner in which the jury
calculated damages, is the same regardless of the failure of essential purpose instruction, the

erroneous instruction was harmless.


IV.        SUFFICIENT BASIS FOR DAMAGES


           Lastly, LP argues ( 1) the jury instructions required the jury to award damages beyond the
express    terms      of   the Limited    Warranty, ( 2) Canterbury offered no evidence of damages under the

measure provided            by   the UCC, ( 3)      replacement cost cannot be used as a measure for damages,

and (4) the verdict form was insufficient and misleading.

           A.          JURY INSTRUCTIONS


           LP     argues "    Jury Instruction No. 10 tied the jury' s hands, forcing a damages award in
                                                  the Limited                            therefore   in   error."   Appellant' s
excess of       the   one provided under                         Warranty,   and was




Br.   at   44.     We disagree. "`         Parties are entitled to instructions that, when taken as a whole,


properly instruct the jury on the applicable law, are not misleading, and allow each party the

 opportunity to        argue     their   theory   of    the case.'"    State v. Ridgley, 141 Wn. App. 771, 779, 174

 P. 3d 105 ( 2007) (        quoting State v. Redmond, 150 Wn.2d 489, 493, 78 P.3d 1001 ( 2003)).

           Jury instruction 10 provided:

                       It is the duty of the Court to instruct you as to the measure of damages.
           By instructing you on damages the Court does not mean to suggest the amount of
            any damages that             should    be    awarded.      With regard to the breach of warranty
            claim of Plaintiff, in your determination of damages, you are to use the following
            measure of damages in the amounts proved by Plaintiff:



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

                        The costs of repair and /or replacement may be evidence of the difference
               between the value of goods as accepted and their value as warranted.


CP   at   199.       Jury   instruction 9    provides: "     The limited remedy stated in the warranty is not the sole

and exclusive           remedy    available under       the warranty."      CP at 198.


               LP argues the trial court did not instruct the jury on the method to calculate damages

under the Limited Warranty remedy. But, LP did not propose such an instruction. Further, when

read      as    a whole,      these   jury   instructions correctly        stated   the   applicable   law.       The instructions


properly instructed the jury that the Limited Warranty remedy was not the sole and exclusive

remedy. The instructions did not state that the Limited Warranty remedy was not available, only
that if it chose to award damages outside the Limited Warranty remedy, the jury was to use the

measure of damages provided in jury instruction 10. Further, the instructions as a whole allowed

each      party to      argue    their   theory   of   the   case and   damages.     LP did argue its theory of damages.

VII RP          at   883 ( " It is that warranty, that        when you go     back to the     jury   room, [   LP] will ask that


you follow the remedy in the warranty and make your decision on the amount of damages that

 Canterbury]            should   be   awarded. "),     VII RP   at   902 ( " Also   what you could     do,   as   part of your —as




a   damages           calculation would       be to follow the warranty.             You are familiar with Exhibit 9, the


warranty. The stated remedy is a refund to the owner of the amount of money equal to twice the
retail cost of          the   original   siding   material. "),   VII RP     at   910 ( " We ask when you go back to the


jury   room,         you follow       the warranty remedy. ").        Accordingly, the jury instructions did not require

 the jury to award damages outside the warranty remedy and LP' s argument fails.



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         B.         DAMAGES AWARD IS SUPPORTED BY THE LAW AND SUFFICIENT EVIDENCE

         LP next argues Canterbury failed to offer evidence of the difference between the value of

the siding as accepted and the value of the siding as warranted, and that the trial court improperly
allowed evidence of replacement                costs.    Because repair and /or replacement costs are a proper


measure of damages under the UCC and Canterbury presented evidence of the costs to replace

the defective siding, the damages award is supported by the law and by sufficient evidence.

          Under RCW 62A. 2- 714( 2), the cost of repair or replacement can be used to measure the


difference in      value as      is   and as warranted.      Miller v. Badgley, 51 Wn. App. 285, 296 n.6, 753

P. 2d 530 ( 1988) ( citing J. White & R. Summers, Uniform Commercial Code §                                  10 -2, at 377 ( 2d


ed.    1980)).     Our Supreme Court also stated that repair costs may be used as a measure of

damages:


                    Courts        generally    recognize      that "[      r] epair   costs    are   an    appropriate

          alternative measure of            damages for breach            of   warranty."     Miller v. Badgley, 51
          Wn.     App.   285, 296, 753 P. 2d 530,         review    denied, 111 Wn.2d 1007 ( 1988); [        2 Roy
          R. Anderson, Damages Under the Uniform Commercial Code §                                        10: 06, at 16

                     T] he overwhelming judicial consensus has been that [ repair] costs are
           1992)] ( "[

          strong evidence of the difference between the value of the goods as accepted and
          their    value    as   warranted. "); [    1 James J. White &            Robert S. Summers, Uniform
          Commercial Code § 10 -2,              at   504 -05 ( 3d   ed. 1988)] ( noting that repair costs may
          be     a " useful objective measurement of            the   difference in value ", but pointing out
          that the measure has " limitations ").


Fed. Signal       Corp.    v.   Safety   Factors, Inc., 125 Wn. 2d 413, 440, 886 P. 2d 172 ( 1994). Further, LP


 acknowledged that the cases recognize repair costs as a measure of damages, and specifically

 objected only to the use of replacement costs to calculate damages. But, here, it was not possible
 to   repair   the defective siding         without   replacing it.        And we find no distinction between repair


 and replacement in the context of defective siding that cannot be repaired without replacing it.



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Accordingly, it was proper to allow evidence of Canterbury' s replacement costs to prove

damages under RCW 62A.2- 714( 2).

             Further,     Canterbury   presented sufficient evidence of                 its damages.    Canterbury presented

evidence of        the damage to the siding through              expert      testimony. It also presented evidence that


because of how the siding had been installed, replacement of only the defective boards would not

be   possible.      Canterbury provided evidence of the lowest bid it received to replace the siding, the

costs the company charged to remove the old siding and install new siding, the costs to have the

new siding painted, and the county permit and charge for the permit to have the siding work

completed. Thus, Canterbury presented sufficient evidence to support the jury' s damages award.

             C.          VERDICT FORM


             Finally, LP argues the verdict form was insufficient and misleading because it asked the

jury    to   provide      only the   amount of      damages it        awarded.      To support its argument, LP cites one


case,    Davis      v.   Microsoft   Corp.,   149 Wn.2d 521, 539, 70 P. 3d 126 ( 2003), which concludes that


 where a general verdict is rendered in a multitheory case and one of the theories is later

invalidated, remand must be granted if the defendant proposed a clarifying special verdict form."

                                                                                  the                damages it   awarded.   As
             The    verdict   form here   asked     the   jury   to   provide           amount of




we have discussed, the jury instructions were not misleading and, the jury could have awarded
                          the Limited                                      the   jury   instruction 10 remedy.     The verdict
 damages          under                  Warranty      remedy         or




 form here did not improperly compel the jury to choose one damages calculation over the other.

 It merely asked the jury to provide its final damages calculation. Further, LP' s proposed verdict
 form                      have   provided          clarification      regarding the       jury' s   damage   award.   Thus, we
         would not                            any


 hold the court did not err by providing the jury with this verdict form:


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        Because the Limited Warranty does not contain an unmistakable expression that the

exclusive remedy is contained therein, we hold Canterbury could avail itself of other remedies
under Washington law. Next, we hold that the trial court erred by giving the failure of essential

purpose   instruction but because it did   not prejudice   LP, the   error was   harmless.   Last, we hold


that when read as a whole, the jury instructions properly instructed the jury on the law and

Canterbury submitted sufficient evidence to support the jury' s damages award. We affirm.

        A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW

2. 06. 040, it is so ordered.




We concur:




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