        IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA


                                September Term 2014
                                                                 FILED

                                  _______________            October 30, 2014

                                                               released at 3:00 p.m.
                                    No. 13-1247                RORY L. PERRY II, CLERK
                                                             SUPREME COURT OF APPEALS
                                  _______________                OF WEST VIRGINIA


                        APPALACHIAN LEASING, INC.,
                          a West Virginia corporation,
                           Plaintiff Below, Petitioner

                                          v.

                           MACK TRUCKS, INC.,

                          a foreign corporation; and

                       WORLDWIDE EQUIPMENT, INC.,

                             a foreign corporation,

                        Defendants Below, Respondents



                 Appeal from the Circuit Court of Mercer County

                    The Honorable William J. Sadler, Judge

                            Civil Action No. 08-C-527


                             REVERSED AND REMANDED



                              Submitted: October 1, 2014

                                 Filed: Oct. 30, 2014



Stephen P. New, Esq.                                Harry F. Bell, Jr., Esq.
The New Law Office                                  Jonathan W. Price, Esq.
Beckley, West Virginia                              The Bell Law Firm, PLLC
Counsel for the Petitioner                          Charleston, West Virginia
                                                    Counsel for the Respondents


JUSTICE KETCHUM delivered the Opinion of the Court.
                               SYLLABUS BY THE COURT




       1. Under W.Va. Code, 46-2-719(2) [1963], of the West Virginia Uniform Commercial

Code, where an express warranty limits the buyer’s remedies to repair or replacement of parts

found to be defective, the refusal or inability of the seller to remedy the defect is a failure of

the essential purpose of the express warranty, and the buyer may pursue remedies and

damages as provided in Article 2 of the West Virginia Uniform Commercial Code.



       2. Under W.Va. Code, 46-2-719(3) [1963], of the West Virginia Uniform Commercial

Code, where an express warranty fails of its essential purpose thereby allowing the buyer to

pursue remedies and damages under Article 2 of the West Virginia Uniform Commercial

Code, the seller’s exclusion of consequential damages from the express warranty remains in

effect, unless the exclusion is unconscionable.
Justice Ketchum:


      This matter arose from a business transaction subject to the West Virginia Uniform

Commercial Code. The plaintiff, Appalachian Leasing, Inc., (“Appalachian”) purchased four

coal trucks from the defendants, Mack Trucks, Inc., (“Mack”) and Worldwide Equipment,

Inc., (“Worldwide”). Alleging that the trucks were defective, Appalachian filed an action

in the Circuit Court of Mercer County, seeking a revocation of acceptance of the vehicles,

a refund of the purchase price, and incidental and consequential damages.



      On November 12, 2013, the circuit court entered an order granting summary judgment

in favor of Mack and Worldwide and dismissing the action with prejudice. The circuit court

determined that Mack and Worldwide had satisfied their obligations under the trucks’

express warranty and that all implied warranties had been disclaimed.



      Upon review, this Court reverses the summary judgment. Although the implied

warranties were validly disclaimed, the appendix record reveals genuine issues of material

fact concerning whether Mack and Worldwide satisfied their obligations under the trucks’

express warranty. Appalachian is entitled, on remand, to pursue the various remedies and

damages provided in Article 2 on “Sales” of the Uniform Commercial Code.




                                            1

       Accordingly, the November 12, 2013, order of the circuit court is reversed, and this

action is remanded to that court for proceedings consistent with this opinion.



                                  I. Factual Background

       Appalachian is a coal hauling company in southern West Virginia with approximately

seventy-five employees and in excess of one hundred trucks. Its principal officers were

Kenny Compton and his wife, Lynn Compton. In December 2007 and January 2008,

Appalachian purchased four, new 2008 Mack trucks, Model GU-713, for off-road coal

hauling purposes. The trucks were sold to Appalachian by Worldwide, a franchised retail

dealer for Mack.1 Appalachian purchased three of the trucks for $165,000 each and the

fourth for $175,000. The sale agreements for the trucks were signed on Appalachian’s behalf

by Kenny Compton.



                             A. Warranties and Disclaimers



       1
        Mack is the manufacturer of commercial vehicles, including vehicles used in the
coal mining industry in southern West Virginia. In this action, Mack delivered the four
trucks as incomplete units, and Worldwide outfitted them with load-carrying bodies for
off-road work, as specified by Appalachian.

        Defendants Mack and Worldwide argue in their joint brief that Article 2 of the
West Virginia Uniform Commercial Code is the controlling law in this action. Mack does
not contend that it is not a seller as defined in Article 2 of the Uniform Commercial Code
or that Article 2 does not apply to it in this action. The plaintiff, Appalachian, also agrees
that the Uniform Commercial Code applies to both defendants.

                                              2

      The only express warranty made with regard to Appalachian’s purchase of the four

trucks was included in Mack’s “Pedigreed Protection Plan.” That warranty, known as

Mack’s “Standard Warranty,” along with various disclaimers, stated:


              Mack Trucks, Inc. (the “Manufacturer”) warrants each new Mack motor
      vehicle (the “Vehicle”) sold by it or by any of its authorized new truck sales
      facilities to be free from defects in material or workmanship under normal use
      and service, its obligation under this warranty being limited to repairing or
      replacing, as hereinafter provided, at its option, at the Manufacturer’s
      authorized truck repair facility any part or parts of the Vehicle found to the
      Manufacturer’s satisfaction to be defective upon examination by it[.] * *
      *

           THIS WARRANTY IS MADE EXPRESSLY IN LIEU OF ANY
      OTHER WARRANTIES OR CONDITIONS, EXPRESSED OR IMPLIED,
      INCLUDING ANY IMPLIED WARRANTY OR CONDITION OF
      MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
      AND OF ANY OTHER OBLIGATION OR LIABILITY ON THE PART OF
      THE MANUFACTURER INCLUDING, WITHOUT LIMITATION OF THE
      FOREGOING, CONSEQUENTIAL AND INCIDENTAL DAMAGES.



      Worldwide’s sales agreement with Appalachian incorporated by reference Mack’s

Standard Warranty. The sales agreement, entitled the “Truck-Equipment Sales Agreement,”

included the following disclaimer (with emphasis added):


           DISCLAIMER OF WARRANTIES: SELLER MAKES NO
      WARRANTIES AS TO THE PROPERTY, EXPRESS, IMPLIED OR
      IMPLIED BY LAW EXCEPT, AS TO NEW VEHICLES ONLY, THE
      MANUFACTURER’S [Mack’s] STANDARD VEHICLE WARRANTY,
      WHICH IS INCORPORATED HEREIN BY REFERENCE. SELLER
      SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF
      MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE

                                            3

       AND ANY LIABILITY FOR CONSEQUENTIAL DAMAGES FOR ANY
       BREACH OF WARRANTY.



       Finally, a similar disclaimer appeared on Worldwide’s invoices for the four trucks:


             Any warranties applicable to a new motor vehicle ordered hereunder are
       the Manufacturer’s [Mack’s] warranties only and not the Dealer’s. DEALER
       HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES, EITHER
       EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
       MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
       BUYER SHALL NOT BE ENTITLED TO RECOVER FROM THE SELLER
       ANY CONSEQUENTIAL DAMAGES, DAMAGES TO PROPERTY,
       DAMAGES FOR LOSS OF USE, LOSS OF TIME, LOSS OF PROFITS OR
       INCOME OR ANY INCIDENTAL DAMAGES.



                     B. Allegations that the Trucks were Defective

       According to Appalachian, each of the four trucks failed to properly function due to

a multitude of problems beginning immediately after the purchase from Worldwide. The

trucks continually broke down, resulting in repeated instances of driving or towing the trucks

back to Worldwide for repairs. As described by Kenny and Lynn Compton, the problems

included (1) would not run, (2) hard to start, (3) transmission problems, (4) overheating, (5)

leaking water pump, (6) hoods falling off and (7) cabs falling apart. Moreover, although

Mack and Worldwide never declined to try to repair the trucks, the repairs allegedly were

never successful and replacement vehicles were never provided.




                                              4

                               II. Procedural Background

       On September 16, 2008, Appalachian filed a complaint in the Circuit Court of Mercer

County against Mack Trucks and Worldwide. The complaint was grounded on Article 2 on

“Sales” of the West Virginia Uniform Commercial Code, W.Va. Code, 46-1-101 [2006], et

seq. Appalachian alleged that Mack and Worldwide breached both express and implied

warranties relating to the four trucks. With regard to the express warranty, Appalachian

alleged that, despite repeated attempts, the trucks were never repaired as initially promised,

and Appalachian never received comparable replacement vehicles. With regard to the

implied warranties of merchantability and of fitness for a particular purpose, the complaint

alleged:


              The implied warranty made by defendants that their off-road coal trucks
       were of good and merchantable quality and fit and suitable for its intended use
       was breached upon the failure of defendants to design and install component
       parts of fully and reliably built design and manufacture, so as to permit their
       proper use in the off-road trucking industry.2


       2
         Under W.Va. Code, 46-2-313(1)(a) [1963], of the Uniform Commercial Code, an
express warranty is created when the seller’s “affirmation of fact or promise” concerning
the goods sold becomes part of the basis of the bargain. With regard to the implied
warranty of merchantability, W.Va. Code, 46-2-314(2)(c) [1963], provides that, to be
merchantable, goods must be, at least, “fit for the ordinary purposes for which such goods
are used.” Finally, W.Va. Code, 46-2-315 [1963], provides that an implied warranty of
fitness for a particular purpose is created where the seller “at the time of contracting has
reason to know any particular purpose for which the goods are required and that the buyer
is relying on the seller’s skill or judgment to select or furnish suitable goods[.]”

      For a discussion of the differences between the warranty of merchantability and
the warranty of fitness for a particular purpose, see Vol. 3, R. W. Duesenberg, Sales &

                                              5

       For relief, Appalachian sought a revocation of acceptance of the four trucks, a refund

of the purchase price, and incidental and consequential damages. Included in the demand for

damages, Appalachian sought lost business income, expenses for towing and replacement

transportation, and compensation for annoyance and inconvenience.



       On September 5, 2013, Mack and Worldwide filed a motion for summary judgment.

Mack and Worldwide alleged that, since they never refused to attempt repairs on the four

trucks, Appalachian would be unable to show a breach of the Standard Warranty found in

Mack’s Pedigreed Protection Plan. That express warranty was limited to repairing and

replacing defective parts. Moreover, Mack and Worldwide alleged that Appalachian would

be unable to show a breach of the implied warranties of merchantability and fitness because

Appalachian waived those claims at the time of purchase, as evidenced by Worldwide’s

Truck-Equipment Sales Agreements and invoices.



       On November 12, 2013, the circuit court granted summary judgment in favor of Mack

and Worldwide and dismissed the action with prejudice. The order addressed (1) Mack and

Worldwide’s (incorporated) express warranty, (2) Mack’s and Worldwide’s disclaimers of

implied warranties and (3) Mack’s and Worldwide’s limitation of Appalachian’s remedies.




Bulk Transfers Under the Uniform Commercial Code, § 7.02[3] (Matthew Bender 2014).

                                             6

With regard to the express warranty, the circuit court concluded:


              The defendants’ obligation pursuant to Mack’s express warranty was
       limited to repair or replacement of any vehicle components that Defendant
       Mack found to be defective. * * * Kenny Compton gave sworn testimony
       that the Defendants had never failed to perform warranty service upon the
       subject vehicles. Accordingly, Appalachian’s claim for breach of express
       warranty is without merit.


       Next, the circuit court recognized that W.Va. Code, 46-2-316(2) [1963], allows the

parties to a commercial sale to exclude or modify the implied warranties of merchantability

and of fitness for a particular purpose, if the language used in the transaction specifically

mentions those warranties and is conspicuously set forth in the sale documents. The circuit

court concluded that the disclaimers of the implied warranties found in Mack’s Pedigreed

Protection Plan and in Worldwide’s Truck-Equipment Sales Agreements and invoices met

the requirements of W.Va. Code, 46-2-316(2) [1963], and that, consequently, Appalachian

could not prevail on a theory of implied warranties.



       Finally, the circuit court recognized that W.Va. Code, 46-2-316(4) [1963], provides

that “[r]emedies for breach of warranty can be limited” by the parties. Accordingly, the

circuit court noted that Mack was only obligated to repair the trucks and replace defective

parts and that under the terms of its Pedigreed Protection Plan and Worldwide’s sale

agreement and invoices, all claims for incidental and consequential damages were precluded.

Finding that Kenny Compton, who signed the sale documents, had sufficient experience in

                                             7

the coal industry to understand their import, the circuit court rejected Appalachian’s assertion

that the limitation of remedies was unconscionable.



       The ruling of the circuit court precluded Appalachian from seeking a revocation of

acceptance and a refund of the purchase price, as well as incidental and consequential

damages. This appeal followed.



                                  III. Standards of Review

       Pursuant to Rule 56 of the West Virginia Rules of Civil Procedure, summary judgment

is proper where the record demonstrates that “there is no genuine issue as to any material fact

and that the moving party is entitled to a judgment as a matter of law.” As a result of that

straightforward language, this Court’s standards of review concerning summary judgment

are well settled. Syllabus point 3 of Aetna Cas. & Sur. Co. v. Fed. Ins. Co. of N. Y., 148

W.Va. 160, 133 S.E.2d 770 (1963), holds: “A motion for summary judgment should be

granted only when it is clear that there is no genuine issue of fact to be tried and inquiry

concerning the facts is not desirable to clarify the application of the law.” Accord syl. pt. 1,

Coleman Estate v. R.M. Logging, Inc., 222 W.Va. 357, 664 S.E.2d 698 (2008).



       Moreover, this Court has observed that, in reviewing an order granting a motion for

summary judgment, any permissible inferences from the underlying facts must be drawn in


                                               8

the light most favorable to the party opposing the motion. See Mueller v. Am. Elec. Power

Energy Serv., 214 W.Va. 390, 393, 589 S.E.2d 532, 535 (2003). Finally, in syllabus point

1 of Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994), this Court stated that a circuit

court’s entry of summary judgment “is reviewed de novo.” Accord Grant Thornton, LLP v.

Kutak Rock, LLP, 228 W.Va. 226, 233, 719 S.E.2d 394, 401 (2011).



                                      IV. Discussion

                     A. Mack and Worldwide’s Express Warranty

       Under W.Va. Code, 46-2-313(1)(a) [1963], of the Uniform Commercial Code, a

seller’s express warranty is created by any “affirmation of fact or promise” relating to the

goods, which “becomes part of the basis of the bargain.” Tracking that language, syllabus

point 7 of Reed v. Sears, Roebuck & Co., 188 W.Va. 747, 426 S.E.2d 539 (1992), states:


               West Virginia Code § 46-2-313(1)(a) and (b) (1966) mandates that an
       express warranty is created only when the affirmation of fact, promise or
       description of the goods is part of the basis of the bargain made by the seller
       to the buyer about the goods being sold.



       Here, the Standard Warranty found in Mack’s Pedigreed Protection Plan promised that

each new Mack vehicle would be “free from defects in material or workmanship under

normal use and service” and that Mack’s obligation in that regard would be limited to

repairing or replacing defective parts. Worldwide incorporated Mack’s standard express


                                             9

warranty in its sales agreement with Appalachian.



       The circuit court found that Mack and Worldwide “never failed to perform warranty

service upon the subject vehicles” and that, consequently, summary judgment was

appropriate. Appalachian contends, however, that questions of fact were never resolved

concerning whether the express warranty was breached. According to Appalachian, each of

the four trucks failed to function due to a multitude of defects that became apparent

immediately after the purchase. Appalachian further asserts that the four trucks were

incapable of being repaired. During the hearing on the motion for summary judgment,

counsel for Appalachian stated that there were “upwards of 54 attempts” to repair one

particular truck.



       Pursuant to W.Va. Code, 46-2-607(4) [1963], “[t]he burden is on the buyer to establish

any breach with respect to the goods accepted.” The evidence reveals related questions of

fact as to whether the express warranty was breached ab initio on the basis that the trucks

were inherently defective and unusable and whether the trucks were incapable of being

repaired. Nothing in the record indicates that the four trucks actually hauled coal on

Appalachian’s behalf for any appreciable period of time.



       During his deposition, Worldwide’s corporate representative acknowledged that a


                                             10

number of Worldwide’s customers were having problems with the Mack GU-713 trucks,

particularly “with the engines.” The trucks purchased by Appalachian were Mack GU-713

trucks. Worldwide’s representative also acknowledged that, if a problem was not fixed after

repeated attempts, it could mean the presence of a manufacturing defect. Kenny Compton

of Appalachian testified during his deposition as follows:



              A. There’s one of them still at Worldwide now that we traded back in
       to them. I went over there personally myself and picked that truck up three
       times, and it broke down before I got to Walmart. The last time I picked it up,
       I had to have a wrecker bring it back in. It went in there to have a cab put on
       it because the cab had fell apart on it. And the company gave us a cab. They
       – Mack supplied a cab to go back on it. Before we could get it out of there, I
       think the motor blew up in it. * * * The – we couldn’t keep the hoods on
       them. The hoods fell off of them. The cabs fell apart. * * * [W]e had
       transmission issues, clutch issues, rear end issues.3



       By contrast, as the circuit court found, Mack and Worldwide rely on evidence to the

effect that they never failed to attempt to make repairs, or replace defective parts, when the

trucks were presented for warranty service.



       The Official Comment to W.Va. Code, 46-2-313 [1963], on the creation of express

warranties, confirms the fundamental views that “the whole purpose of the law of warranty


       3
         In addition, Kenny Compton indicated that, on at least one occasion, one of the
trucks lost power and slipped backwards on the side of a hill, threatening employee
safety.

                                              11

is to determine what it is that the seller has in essence agreed to sell” and that “the probability

is small that a real price is intended to be exchanged for a pseudo-obligation.” Here,

Appalachian did not purchase the four trucks knowing them to be defective and hoping that

the trucks would be repaired at a later time. The trucks purchased were new, 2008 Mack

trucks, Model GU-713, customized for off-road coal hauling purposes.



       If the trucks were inherently defective and unusable because of a manufacturing defect

and incapable of being repaired, then Appalachian was deprived of the basis of its bargain.

The circuit court did not address the quality and satisfactoriness of the repairs or the

replacement parts. As summarized by J. S. Herbrand, Annotation, Construction and Effect

of New Motor Vehicle Warranty Limiting Manufacturer’s Liability to Repair or Replacement

of Defective Parts, 2 A.L.R.4th 576, 581 (1980):


              It is generally held that where a motor vehicle warranty limits the
       buyer’s remedies to repair or replacement of defective parts, the refusal or
       unsuccessful attempt by a manufacturer or seller to repair or replace defective
       parts constitutes a breach of warranty for which the buyer may recover any
       damages allowable by law.



       In that regard, circumstances can exist where a limited remedy, such as an express

warranty limited to repairing or replacing defective parts, may fail of its essential purpose of

providing the buyer with a usable product. As W.Va. Code, 46-2-719(2) [1963], provides:

“Where circumstances cause an exclusive or limited remedy to fail of its essential purpose,

                                                12

remedy may be had as provided in this article.” In Kraft v. Staten Island Boat Sales, Inc., 715

F. Supp.2d 464, 475 (S.D.N.Y. 2010), for example, the District Court stated:


               Under U.C.C. section 2-719, a sales contract may limit the remedies
       available under express warranties to repair or replacement. See N.Y. U.C.C.
       § 2-719. “The U.C.C. permits this limitation so long as the remedy does not
       fail of its essential purpose, such as through the inability of the warrantor to
       repair defects.” Demorato v. Carver Boat Corp., 304 Fed. Appx. 100, 102 (3d
       Cir. 2008) (applying New York law)[.]


       Moreover, we note the following language found in Givan v. Mack Truck, Inc., 569

S.W.2d 243 (Mo. Ct. App. 1978): “[T]he fact that the manufacturer in good faith attempts

to repair the defect whenever requested to do so is not a fulfillment of the warranty; he must

demonstrate that the defect is permanently remedied as promised in the express warranty.”

569 S.W.2d at 247.



       Accordingly, this Court holds that, uuder W.Va. Code, 46-2-719(2) [1963], of the West

Virginia Uniform Commercial Code, where an express warranty limits the buyer’s remedies

to repair or replacement of parts found to be defective, the refusal or inability of the seller

to remedy the defect is a failure of the essential purpose of the express warranty, and the

buyer may pursue remedies and damages as provided in Article 2 of the West Virginia

Uniform Commercial Code.



       In this action, genuine issues of material fact remain concerning whether Mack and

                                              13

Worldwide satisfied their obligations under Mack’s express warranty, or whether the trucks

were so defective, unusable, and incapable of being repaired that the express warranty failed

of its essential purpose of providing Appalachian with four trucks suitable for off-road coal

hauling purposes. Therefore, the granting of summary judgment with regard to the express

warranty was error.4



                       B. The Disclaimer of Implied Warranties

       Mack’s Pedigreed Protection Plan, as well as Worldwide’s sales agreement and

invoices, included disclaimers of the implied warranty of merchantability and the implied

warranty of fitness for a particular purpose. The circuit court upheld the disclaimers on the

basis of W.Va. Code, 46-2-316(2) [1963], which provides that


       to exclude or modify the implied warranty of merchantability or any part of it
       the language must mention merchantability and in case of a writing must be
       conspicuous, and to exclude or modify any implied warranty of fitness the
       exclusion must be by a writing and conspicuous.



       As stated in the Official Comment to W.Va. Code, 46-2-316 [1963], that provision



       4
         In the following cases, summary judgment was found inappropriate on a claim
that a warranty failed of its essential purpose: Pack v. Damon Corp., 434 F.3d 810 (6th
Cir. 2005); Kraft, supra, 715 F. Supp.2d at 476 (“Thus, whether the limited warranty
failed in its essential purpose is a question of fact for the jury to determine based on
circumstances transpiring after the contract was formed.”); Siemens Credit Corp. v.
Marvik Colour, Inc., 859 F. Supp. 686 (S.D.N.Y. 1994).

                                             14

permits the exclusion of implied warranties “only by conspicuous language or other

circumstances which protect the buyer from surprise.” Accord 67A Am. Jur. 2d Sales § 733

(2014). See Mountaineer Contractors, Inc. v. Mountain State Mack, Inc., 165 W.Va. 292,

296, 268 S.E.2d 886, 889 (1980) (“The Uniform Commercial Code anticipates that the

parties, by agreement or by deed, may limit or exclude entirely the warranty of

merchantability otherwise implied in a contract for the sale of goods.”).



       The circuit court also upheld the disclaimers on the basis that they were not

unconscionable. However, Appalachian contends that the implied warranty disclaimers were

unconscionable because of the unequal bargaining position of the parties at the time of sale

and because Mack and Worldwide never advised Appalachian of the disclaimers’ import.5




       5
           W.Va. Code, 46-2-302(1) [1963], provides:

               If the court as a matter of law finds the contract or any clause of the
       contract to have been unconscionable at the time it was made the court may
       refuse to enforce the contract, or it may enforce the remainder of the
       contract without the unconscionable clause, or it may so limit the
       application of any unconscionable clause as to avoid any unconscionable
       result.

See M. Roberts, Annotation, Unconscionability, Under UCC § 2-302 or § 2-719(3), of
Disclaimer of Warranties or Limitation or Exclusion of Damages in Contract Subject to
UCC Article 2 (Sales), 38 A.L.R.4th 25 (1985) (“[S]ome courts have expressly or
impliedly adopted the view that § 2-302 is applicable to disclaimers, even though they
comply with the requirements for validity of § 2-316[.]”).

                                             15

       The enforceability of Section 2-316 disclaimers of implied warranties is addressed in

the treatise Sales & Bulk Transfers Under the Uniform Commercial Code:


               An effective disclaimer of implied warranties depends upon two
       inquiries: First, whether the requisites of a disclaimer as set forth in the Code
       have been complied with, and second, even where satisfied, whether other
       factors will frustrate its operation. * * * Thus, courts have generally held
       that disclaimers [of] warranty made on or after delivery of the goods by means
       of an invoice, receipt, or similar note are ineffectual unless the buyer assents
       or is charged with knowledge of the disclaimer.6



       Here, the parties are in agreement that the purchase of the four Mack trucks by

Appalachian was not a consumer transaction subject to W.Va. Code, 46A-6A-1 [1984], et

seq., entitled “Consumer Protection - New Motor Vehicle Warranties.” The sale of the trucks

was a commercial transaction under the West Virginia Uniform Commercial Code. Mack

sold the trucks as incomplete units, and Worldwide outfitted them with load-carrying bodies

for off-road work, as specified by Appalachian. See n. 1, supra.



       Kenny Compton, Appalachian’s corporate officer, was the sole individual acting on

Appalachian’s behalf in the purchase of the trucks, and he signed Worldwide’s sale

agreements. As the circuit court found, Mr. Compton, had been engaged for many years in

the business of hauling coal. Moreover, Mr. Compton indicated in his deposition that he had


       6
      Vol. 3, R. W. Duesenberg, Sales & Bulk Transfers Under the Uniform
Commercial Code, § 7.03[1] (Matthew Bender 2014).

                                              16

been involved on numerous occasions in the purchase of trucks from other manufacturers.



        The Pedigreed Protection Plan, the sale agreements, and the invoices set out the

disclaimers of the implied warranties in capital letters. Mr. Compton’s signature on the sale

agreements appears on the same page as the disclaimers. Mr. Compton indicated in his

deposition that he never looked at the Pedigreed Protection Plan prior to purchasing the

trucks, nor did he read the disclaimers set forth on the invoices.



       The circuit court correctly determined that the disclaimers were conspicuous and in

conformity with W.Va. Code, 46-2-316(2) [1963]. Given the amount paid for the trucks, Mr.

Compton should have been more careful with respect to the documents surrounding the

purchase. The disclaimers were not couched in a “linguistic maze.” In Reddy v. Community

Health Foundation, 171 W.Va. 368, 373, 298 S.E.2d 906, 910 (1982), this Court observed:

“A person who fails to read a document to which he places his signature does so at his peril.”

 Moreover, we find unpersuasive Appalachian’s assertion that the disclaimers of the

warranties are unconscionable. Appalachian’s coal hauling business, with numerous

employees and trucks, was substantial. This Court finds no disparity in the bargaining

position of the parties rising to the level of unconscionability with regard to the disclaimers

of the implied warranty of merchantability and the implied warranty of fitness for a particular

purpose.


                                              17

       We therefore find that the circuit court did not err in granting Mack and Worldwide

summary judgment with regard to the implied warranties of merchantability and fitness.



                           C. Consequential Damages For

                         Any Breach of the Express Warranty


       Under the West Virginia Uniform Commercial Code, express warranties and implied

warranties are addressed in separate statutes and, pursuant to W.Va. Code, 46-2-317 [1963],

are generally considered to be “cumulative.” Consequently, in this action, the valid

defendants’ disclaimer of the implied warranties pursuant to W.Va. Code, 46-2-316(2)

[1963], does not preclude Appalachian’s remedy for the alleged breach of Mack’s express

warranty found in Mack’s Pedigreed Protection Plan, and incorporated by reference in

Worldwide’s sales agreement. On remand of this action, Appalachian can present evidence

that the express warranty failed of its essential purpose of providing Appalachian with four

trucks suitable for off-road coal hauling purposes. However, as explained in Anderson on

the Uniform Commercial Code, where “a failure of the essential purpose” is established,

“this does not reinstate any warranty that had been excluded in the manner authorized by

U.C.C. § 2-316.”7 (Emphasis added)




       7
         See Vol. 4B, L. Lawrence, Lawrence’s Anderson on the Uniform Commercial
Code, § 2-719:143 (3rd ed. 2010). As further stated therein: “In an action arising out of a
purchase of industrial equipment, a failure of the essential purpose of express warranties
did not revive disclaimed implied warranties.”

                                            18

       Pursuant to W.Va. Code, 46-2-719(2) [1963], “[w]here circumstances cause an

exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided

in this article.” If Appalachian prevails on its claim for breach of express warranty, the

remedies available would consist of those found in Article 2 on “Sales.” However, W.Va.

Code, 46-2-719(3) [1963], states that consequential damages “may be limited or excluded

unless the limitation or exclusion is unconscionable.”



       In the documents of sale, including the express warranty, Mack and Worldwide,

excluded liability for consequential damages. Thus, on remand, Appalachian must show

unconscionability to recover consequential damages. Unconscionability is an equitable

principle, and whether a provision is unconscionable is for the court to decide. See Official

Comment, W.Va. Code, 46-2-302 [1963] (Unconscionability is for the court to decide, not

the jury.). The parties must be afforded a reasonable opportunity to present evidence as to

the provision’s commercial setting, purpose and effect, to aid the court in making its

determination. W.Va. Code, 46-2-302(2) [1963].



       This area of the law is clarified in Anderson on the Uniform Commercial Code as

follows:


       [t]he mere fact that a jury found a limited remedy to have failed of its essential
       purpose did not destroy a provision in a warranty excluding consequential
       damages. However, this did not mean that the exclusion of consequential

                                              19

      damages would necessarily be upheld. Rather, that provision would be judged
      on its own merits to determine whether its enforcement would be
      unconscionable.8


      Therefore, under W.Va. Code, 46-2-719(3) [1963], of the West Virginia Uniform

Commercial Code, where an express warranty fails of its essential purpose thereby allowing

the buyer to pursue remedies and damages under Article 2 of the West Virginia Uniform

Commercial Code, the seller’s exclusion of consequential damages from the express

warranty remains in effect, unless the exclusion is unconscionable.



                                     V. Conclusion

      Although the implied warranties were validly disclaimed, the appendix record reveals

genuine issues of material fact concerning whether Mack and Worldwide satisfied their

obligations under the trucks’ express warranty. As a result, Appalachian is entitled, on

remand, to pursue the various remedies provided in Article 2 on “Sales” of the Uniform

Commercial Code. However, Appalachian’s pursuit of consequential damages is barred on

the express warranty claim unless the circuit court finds the provision relating to

consequential damages to be unconscionable.



      The November 12, 2013, order of the Circuit Court of Mercer County is reversed, and


      8
        See Vol. 4B, L. Lawrence, Lawrence’s Anderson on the Uniform Commercial
Code, § 2-719:145 (3rd ed. 2010).

                                            20

this action is remanded to that court for proceedings consistent with this opinion.



                                                                  Reversed and Remanded.




                                             21

