COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 70509 MONARCH STEEL COMPANY : : Plaintiff-appellant : : JOURNAL ENTRY -vs- : AND : OPINION COMMUNICATION SOLUTIONS, INC. : : Defendant-appellee : : DATE OF ANNOUNCEMENT OF DECISION: MARCH 20, 1997 CHARACTER OF PROCEEDING: Civil appeal from Court of Common Pleas Case No. CV285430 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellant: For Defendant-Appellee: MICHAEL D. LINN, ESQ. JEFFREY P. HASTINGS, ESQ. JAVITCH, BLOCK, EISEN & RATHBONE 24441 Detroit Road, Suite 200 601 Rockwell Building - 6th Floor Westlake, Ohio 44145-1543 Cleveland, Ohio 44114-1601 - 2 - DYKE, J.: Appellant, Monarch Steel Company, purchased a telephone system from appellee, Communication Solutions Inc., on or about September 10, 1993. The phone system was under a one year parts and labor warranty, during which time appellee agreed to service the system. Following the expiration of that warranty, appellant had the option to purchase a four year service agreement which would cover certain repairs and replacements of the telephone equipment. This service agreement would cost $500.00 per year. The check sent to cover the cost of the first year of the four year service agreement was not sent prior to September 20, 1994, the date on which the agreement was to commence. The check was also non-negotiable and has never been replaced with a negotiable instrument. Appellee's president testified that he informed appellant's controller that he would not accept another check. Because of prior payment problems, he no longer wished to do business with appellant. Thus, the parties were not under any service agreement beyond the one year warranty expiration date in September of 1994. On February 27, 1995 appellant filed a complaint alleging that appellee breached its implied warranty of merchantability and the implied warranty of fitness for a particular purpose with regard to the phone system. Appellee counterclaimed, alleging a breach of contract by appellant in failing to pay $500.00 in execution of the four year service agreement. - 3 - After a trial to the bench, the court determined that appellant had failed to prove by a preponderance of the evidence that appellee breached its contract. The court further found that appellee did not prove that it had suffered any damages as a result of a breach of the service agreement contract by appellant. Both the complaint and counterclaim were dismissed at appellant's costs. Appellant filed a timely notice of appeal asserting three assignments of error. I THE TRIAL COURT'S DECISION WAS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. II THE TRIAL COURT ERRED IN NOT FINDING THAT DEFENDANT- APPELLEE HAD BREACHED EXPRESS AND IMPLIED WARRANTIES UNDER OHIO REVISED CODE SECTIONS 1302.26, 1302.27 AND 1302.28. This Court will review the merits of the first two assignments of error together, as they present similar arguments. Appellant asserts that it was charged for many instances which should have been covered by the one year warranty. Appellant further asserts that the system failed to perform to such an extent that it failed to perform its essential purpose. Appellant explicitly cites problems with the voice mail system as supporting a finding that a breach of express and implied warranties existed. We do not find merit in appellant's arguments. The trial court testimony of Carl Ursich, appellant Monarch Steel Company's controller, and John Benko, president of appellee - 4 - Communication Solutions, Inc., clearly resolved the issue of services which were performed on the telephone system both before and after the one year warranty period ended. A number of invoices were admitted as exhibits and reviewed by the witnesses. The court found that the two companies met to discuss the billing and unpaid charges at some point and had come to an agreement as to which bills would be paid by appellant. Pursuant to this agreement, appellee's president testified that he went as far as to withdraw charges for service calls which were premised on user error, not having any connection to the warranted parts or labor. No evidence was presented to show any work performed on the system prior to the end of the one year warranty period which was billed to appellant unless it was a service call unrelated to parts or labor. Under the parties subsequent agreement some of these charges were written off by appellee nonetheless. We can find no error in the court's finding that no breach of the express warranty agreement existed on the part of appellee. As to the breach of any implied warranties, we find that appellant did not offer evidence to prove such a breach. An implied warranty of fitness for particular purpose may be created pursuant to R.C. 1302.28: "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, there is unless excluded or modified under section 1302.29 of the Revised Code an implied warranty that the goods shall be fit for such purpose." * * * In order to create an implied warranty for a particular purpose, the seller must have reason to know - 5 - of the buyer's particular purpose, the seller must have reason to know that the buyer is relying on the seller's skill or judgment to select the appropriate goods and the buyer must in fact rely upon the seller's skill or judgment. Hollingsworth v. The Software House (1986), 32 Ohio App.3d 61, 65, 513 N.E.2d 1372, 1375. Delorise Brown, M.D., Inc. v. Allio (1993), 86 Ohio App.3d 359, 362. No direct testimony or evidence was offered to explain how this telephone system was not fit for appellant's purpose. The system required service on an occasional basis, twice due to a power surge. No evidence was offered to prove the seller had any reason to know of appellant's particular purpose, other than the sending and receiving of calls, which one could assume if one were selling telephones. No evidence was offered of appellee's special skill or judgment in selecting the phone system. Finally, no witness actually involved in the purchase of the phone system testified to having, in fact, relied upon the skill and judgment of appellee. Appellant failed to present evidence to support a breach of any implied warranty of fitness for a particular purpose. To prove a breach of the implied warranty of merchantability under R.C. 1302.27, appellant must have shown that the goods were not merchantable: (B) Goods to be merchantable must be at least such as: (1) pass without objection in the trade under the contract description; and (2) in the case of fungible goods are of fair average quality within the description; and (3) are fit for the ordinary purposes for which such goods are used; and - 6 - (4) run, within the variations permitted by the agreement, of even kind, quality and quantity, within each unit and among all units involved; and (5) are adequately contained, packaged, and labeled as the agreement may require; and (6) conform to the promises or affirmations of fact made on the container or label if any. Appellant failed to prove that the phone system was not merchantable. Except for two days when electrical power surges caused the power supply to go down and the phones to quit functioning, appellant did not offer any evidence that the phones were not fit for sending and receiving calls. The two instances do not support a finding of a breach of the warranty of merchantability. The phones worked within a range of normal functioning for such products, according to the testimony and exhibits offered by appellant. In reviewing the evidence in the record to determine whether the court's dismissal of the complaint is against the manifest weight of the evidence: [W]e are necessarily constrained by the principle that judgments supported by competent, credible evidence going to all the material elements of the case must not be reversed, as being against the manifest weight of the evidence. C.E. Morris Co. v. Foley Constr. Co. (1978), 54 Ohio St.2d 279, 8 O.O.3d 261, 376 N.E. 2d 578, syllabus. We must indulge every reasonable presumption in favor of the lower court's judgment and finding of facts. Seasons Coal Co. v. Cleveland (1984), 10 Ohio St.3d 77, 10 OBR 408, 461 N.E.2d 1273. In the event the evidence is susceptible to more than one interpretation, we must construe it consistently with the lower court's judgment. See Ross v. Ross (1980), 64 Ohio St.2d 203, 18 O.O.3d 414, 414 N.E.2d 426. Gerijo, Inc. v. Fairfield (1994), 70 Ohio St.3d 223, 226. - 7 - The trial court heard all of the evidence and found that appellant presented no objective proof of a breach of any warranties, express or implied. We find no reason to reverse such a finding. Appellant's first and second assignments of error are overruled. III THE TRIAL COURT ERRED IN FAILING TO AWARD PLAINTIFF- APPELLANT DAMAGES AS A RESULT OF PLAINTIFF-APPELLANT'S REVOCATION OF ACCEPTANCE AND DEFENDANT-APPELLEE'S BREACH OF EXPRESS AND IMPLIED WARRANTIES PURSUANT TO OHIO REVISED CODE SECTIONS 1302.65, 1302.66, 1302.85 AND 1302.89. Appellant argues that notice was given of appellant's revocation of acceptance of the goods with the filing of the complaint, a year and five months after purchasing the phone system. Appellant claims that the breach of implied and express warranties allows appellant to revoke acceptance and entitles appellant to reimbursement of the system's cost, plus any other costs incurred in the maintenance of the system. Appellant's argument is not well taken. As we determined in the prior assignments of error, no breach of any implied or express warranty is evident from the testimony and exhibits presented at the trial. Without proof that the system did not somehow conform or that a breach occurred, appellant is not entitled to revoke acceptance of the system. Given the length of time the system was in use and the few instances of actual repairs required to maintain the system, we can not find a legal reason to - 8 - allow revocation of appellant's acceptance. The evidence simply does not support such a conclusion. The trial court did not err in failing to award any damages to appellant as a result of a breach or revocation of acceptance. Appellant's third assignment of error is overruled. The trial court's dismissal of the complaint in favor of appellee is affirmed. - 9 - It is ordered that appellee recover of appellant its costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Court of Common Pleas to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. JAMES D. SWEENEY, C.J. AND SPELLACY, J., CONCUR ANN DYKE JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the .