Wade Clark Mulcahy LLP

<p style="text-align: justify;">A Pennsylvania appellate court recently considered whether to reverse a dismissal entry in an alleged breach of contract and breach of warranty claim involving the sale of a used truck. See<em> <a href="https://www.wcmlaw.com/wp-content/uploads/2021/02/Kloniecke.pdf">Kloniecke</a> v. GT Motors, Inc.</em>, 2021 WL 276177, No. 806 MDA 2020 (Pa. Super. Ct. Jan. 27, 2021). Kloniecke’s Complaint alleged GT Motors “warranted that the vehicle was in a state of good repair and was safe for operation” in the advertisement. More specifically, Kloniecke alleged GT Motors concealed mold damage in the cab of the truck that made it impossible to operate.</p>
<p style="text-align: justify;">Kloniecke attached the bill of sale to his Complaint which provided for no express or implied warranties and stated that the sale was “AS IS: THIS MOTOR VEHICLE IS SOLD AS IS WITHOUT ANY WARRANTY EITHER EXPRESSED OR IMPLIED.” The bill of sale also included the following integration clause: “[t]his agreement and the related documents that Buyer signs contemporaneously with this agreement . . . contain the entire agreement” between the parties. The integration claims also expressly “cancels and supersedes any prior agreement including oral agreements relating to the sale of the motor vehicle.”</p>
<p style="text-align: justify;">GT Motors filed preliminary objections (Pennsylvania equivalent of a motion to dismiss) asserting Kloniecke failed to state a claim. In support of the motion, GT Motors attached a warranty disclaimer which provided:</p>
<p style="text-align: justify;">The seller . . . hereby expressly disclaims all warranties, either express or implied, including all implied warranties of merchantability or fitness for a particular purpose and the seller neither assumes nor authorizes any other person to assume for it any liability in connection with the sale of the vehicle.</p>
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NOTICE OF VEHICLE SOLD WITHOUT WARRANTY
<p style="text-align: justify;">This vehicle is sold without any warranty. The buyer will bear the entire expense of repairing or correcting any defects that presently exist and/or may occur in the vehicle unless the salesperson promises in writing to correct such defects.</p>
<p style="text-align: justify;">Kloniecke signed the bottom of the warranty disclaimer at the time of sale.</p>
<p style="text-align: justify;">The trial court sustained the preliminary objections and dismissed Kloniecke’s claims because “the ‘as-is’ warranty language and integration clause, together with the contemporaneously signed warranty disclaimer precluded relief for breach of contract.”  Kloniecke appealed arguing, inter alia, that the trial court erred by considering documents outside the pleadings. Specifically, Kloniecki asserted consideration of the warranty disclaimer amounted to reversible error because the disclaimer was not attached to the Complaint amounted to reversible error. The Superior Court disagreed.</p>
<p style="text-align: justify;">Contrary to Kloniecki’s assertions, the disclaimer should be considered because Pennsylvania law requires plaintiffs to attach written agreements to the complaint in breach of contract actions. (Citing Pa.R.C.P. 1019(h), (i)). The Court effectively held that a plaintiff’s failure to attach a complete copy of contract documents does not preclude a defendant from attaching all of the documents to preliminary objections. (Citing <em>Conrad v. City of Pittsburgh</em>, 218 A.2d 906, 907 (Pa. 1966)). Moreover, the Court clarified, it is not the averments and characterizations contained in the complaint that control whether the plaintiff has stated a cause of action, but rather the contract documents themselves. Id. Although a court generally takes all averments in a complaint as true for purposes of ruling on preliminary objections, a court need not accept averments in direct conflict with the contract documents.</p>
<p style="text-align: justify;">Furthermore, whether the bill of sale represents the entirety of the agreement is a question of law for the court. In Pennsylvania, a contract refers to and incorporates provision in other documents, the contract and incorporated documents should be construed together.  (Citing Southwestern <em>Energy Prod. Co. v. Forest Resources</em>, LLC, 83 A.3d 177, 187 (Pa. Super. Ct. 2013). As applied to Kloniecki’s purchase, the bill of sale expressly referred to the disclaimer of warranties and, as such, the documents should be read together. Therefore, the trial court did not err in considering the disclaimer of warranties despite the fact that Kloniecki failed to attach the disclaimer to the Complaint.</p>
<p style="text-align: justify;">The trial court’s analysis of the disclaimer was likewise upheld. The Pennsylvania statute governing exclusion or modification of warranties requires conspicuous disclaimers of implied warranties. 13 Pa. C.S.A. §2316. Courts interpret the statute to require use of the term “merchantability” in any disclaimer of the warranty of merchantability. See <em>Mosciatiello v. Pittsburgh Contractors Equip. Co.,</em> 595 A.2d 1190, 1194 (Pa. Super. Ct. 1991). As applied to Kloniecki, the first page of the bill of sale includes a section titled “VEHICLE WARRANTY” which expressly states:</p>
<p style="text-align: justify;">No Express or Implied Warranties. AS IS: THIS MOTOR VEHICLE IS SOLD AS IS WITHOUT ANY WARRANTY EITHER EXPRESSED OR IMPLIED.</p>
<p style="text-align: justify;">The Superior Court, like the trial court below, concluded that this was sufficient to effectively disclaim any warranties.</p>
<p style="text-align: justify;">In dicta, the court noted a separate issue warranting dismissal of Kloniecki’s claims. Specifically, that the Complaint failed to provide any language of the express warranties. Pennsylvania law requires a plaintiff to allege the terms of an express warranty in the pleadings. Failure to do so could result in dismissal of the claims asserted. This case is instructive in that it exemplifies the importance of evaluating and attacking every deficiency in a complaint related to the sale of goods at the motion to dismiss stage. Failure to obtain a complete copy of all documents issued at the point of sale of a product could result not only in the missed opportunity of an early dismissal, but potentially waiver of those issues.</p>
Thanks to Jennifer Seme for her contribution to this post. Please contact <a href="mailto:Haquino@wcmlaw.com">Heather Aquino</a> with any questions.