On appeal from Superior Court of New Jersey, Law Division, Bergen County.
Before Judges D'Annunzio and Coburn.
The opinion of the court was delivered by: Coburn, J.A.D.
The Mighty Quinn, a six-year old show horse, was purchased by plaintiff David B. Simpson from defendant Ann Sullivan Scher on December 3, 1989. Over four years later, Simpson *fn1 filed this action under Article 2 of the Uniform Commercial Code, N.J.S.A. 12A:1-101 to :11-108. *fn2 He claims entitlement to damages for breach of an express warranty based on the seller's representation that the horse was sound. Simpson asserts that at the time of the sale Scher knew the horse might have ringbone disease, a condition which could adversely affect the horse's resale value and, at sometime in the future, its ability to compete.
Scher *fn3 successfully moved for summary judgment in the Law Division. Plaintiffs appeal, contending there are material issues of fact which should be resolved by a jury. Scher argues that her statements regarding the horse were either true or merely statements of opinion and not express warranties. In the alternative, she contends there is insufficient evidence of fraud, and, consequently, the action is barred by the Code's four-year statute of limitations, N.J.S.A. 12A:2-725.
We find that the evidence, viewed most favorably for plaintiffs, establishes the following facts.
Scher, a professional riding instructor and horse trainer since 1974, owned a stable in West Orange which housed about fifty horses and was known as Suburban Essex Equestrian Center. In her career she had bought or sold over a hundred horses. In 1986 she began using Dr. Brendan W. Furlong and Dr. Donald Bruno, two veterinarians who practiced together, for advice on the health of horses she wanted to purchase.
In the spring of 1989, Scher purchased five horses in Belgium, including The Mighty Quinn, for $110,000. She paid $20,000 to ship the horses to New Jersey, and they arrived here by the end of June. In making this purchase, she relied on Dr. Bruno's examination of the horse in Belgium and on his opinion, although he did not provide her with any details regarding what the examination revealed.
Within a few days of The Mighty Quinn's arrival, Scher called Richard Widger, the operator of a large stable in Rockleigh, from whom she had purchased over fifty horses since 1980. Scher had acquired The Mighty Quinn for resale and wanted Widger's assistance in that regard. They agreed that if he found a purchaser she would pay him a commission of $5,000.
Plaintiff David B. Simpson has been a lawyer since 1965, specializing in business transactions. Between 1981 and 1989, he had purchased six horses for his children from Widger. In July 1989, the two horses that Simpson was boarding at Widger's farm became unridable. As a result, Simpson approached Widger, asking him to assist in finding a suitable horse for his daughter Catherine. In August 1989, Widger told Simpson about The Mighty Quinn, a horse which he believed Catherine could use in competitive shows.
After seeing the horse, Simpson decided to have it moved to Widger's farm, where he and his daughter could spend some time observing and testing its capabilities and potential as a show horse. During the time the horse was at Widger's farm, Simpson decided to have the horse examined for soundness by a veterinarian. The examination, which included x-rays of the horse's legs, was performed on October 24, 1989, by Dr. Furlong, who had cared for all of Simpson's horses.
There is a substantial conflict about what Dr. Furlong observed on the x-rays and about what he said in that regard to Widger and then to Simpson over the telephone in Widger's presence. For present purposes we will assume that Dr. Furlong's analysis of the x-rays of The Mighty Quinn's left front foot should have resulted in findings which accorded with those of plaintiffs' experts, Drs. Paxton and McIlwraith.Dr. Paxton indicated the x-rays showed "changes . . . of the left front pastern and foot." He added that the changes were "obvious and significant in prognosticating the gelding's condition, performance capabilities, value and future salability." He also noted "the potential for their expansion into articular ringbone with resulting lameness . . . ." (Emphasis added). He concluded that the 1989 x-rays showed that the horse's "long-term prognosis for soundness was guarded." (Emphasis added).
Dr. McIlwraith also observed that the 1989 "radiographic changes are indicative of the potential for expansion into articular ringbone which could lead to lameness." (Emphasis added). He would have advised the purchaser "that such radiographic changes would deter future purchasers, notwithstanding that such changes might not progress or cause actual lameness." He also noted "changes" in bone structure on the distal aspect of the second phalanx; however, they were within "normal range." (Emphasis added).
According to Widger, Dr. Furlong said the horse was sound but that the x-rays had shown "remodeling." Widger asked, "Tell me something in layman's terms, between 1 and 10, making 10 the worst, how would you . . . value this horse?" He said the doctor replied, "between 5 and 6." Widger immediately conveyed this information to Simpson in a telephone call from the doctor's office and then handed the telephone to the doctor who gave Simpson the same information, and added the following statement:
[Y]ou've bought horses from Mr. Widger that had worse x-rays . . . Bart and Mo. And . . . everything went all right with them, so it's a gamble whether they might . . . be problems down the road.
According to Simpson, Dr. Furlong said the horse was sound, but "there was something which he called a change--I think he used the term `change.'" Simpson further recounted:
And I asked him what he meant. I didn't understand any of the technical jargon. What he said to me was . . . that the change was some sort of irregularity of some sort.
He could not recall whether Dr. Furlong had used the word "remodeling," but he was aware that the changes had shown up on x-rays.
Widger then took the telephone and advised Simpson not to consummate the purchase. Although Simpson asserted that Widger recommended the purchase, he also admitted he knew there was a problem and that he decided to have the horse returned to defendant's stable, which was done by Widger that day. Catherine testified that after the doctor's examination she "became emotionally upset when Mr. Widger told me that there was some problem and that might mean I couldn't get the horse." Simpson admitted that shortly after the examination, Widger brought another horse to his farm for Catherine to consider instead of The Mighty Quinn. The other horse proved unsatisfactory and Simpson decided to pursue the purchase of The Mighty Quinn.
Before describing the subsequent conversations between Scher and Simpson upon which Simpson rests his case of warranty breach and fraud, we must describe what the evidence shows with respect to what Scher knew about ringbone and what she learned from Widger and Dr. Bruno regarding the outcome of Dr. Furlong's examination of the horse.
When Widger returned the horse to Scher, he told her that Dr. Furlong found "problems with the x-rays," "changes." He also described the doctor's five to six rating of the horse's value. Finally, he told her that he had advised Simpson to withdraw from the purchase.
Later that week, when Dr. Bruno visited Scher's stable on other business, she asked him "if there was anything to worry about with the horse . . . ." He told her Dr. Furlong had found an "irregularity on a bone." However, she asked Dr. Bruno about the cause of the irregularity, and he said it was from "calcium" and might have been caused by the horse striking "a jump." During her deposition, she testified that Dr. Bruno's comments did not seem significant since he had just "vetted" the horse in ...