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Deere & Co. v. Johnson

Although the buyer of a combine continued to use the combine after discovering it was a lemon and sending a letter of revocation to the company that financed the purchase, a reasonable jury could conclude that continued use of the combine did not nullify revocation of acceptance.

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Appeals from the United States District Court for the Northern District of Mississippi

Deere financed a combine its dealer, Parker Tractor & Implement Company (“Parker”), sold to Johnson. Johnson was unhappy with the combine because it would not do the job. Deere was unhappy with Johnson because he failed to make any payments on the loan. Johnson wrote Deere a letter revoking acceptance of the combine. Deere refused to take it back. Johnson continued to use the combine. Deere finally sued Johnson to collect the unpaid balance on the loan. Johnson counter-claimed against Deere, as the manufacturer of the combine, for breach of implied and express warranties, breach of the implied warranty of fitness for a particular purpose, and intentional misrepresentations. The jury returned a verdict that effectively awarded zero to both parties. The district court conformed the pleadings to the evidence and entered a quantum meruit award for Deere for the rental value of the combine while Johnson was using it.

Today’s appeal addresses three issues: First, whether Johnson effectively revoked acceptance in the view of his continuing to assert ownership of the combine and failing to return it to Deere; second, whether the district court erred in conforming the pleadings to state a quantum meruit claim for Deere and awarding Deere a judgment on that basis; and finally, whether Deere presented sufficient evidence of the rental value of the combine. We hold that under the circumstances of this case, Johnson effectively revoked acceptance of the combine; that the district court erred in conforming the pleadings to state a quantum meruit claim and in entering a judgment for Deere; and that Deere presented evidence to support the jury’s determination of the rental value of the combine. At the end of the day, this case is a “wash”–neither party receives anything. Accordingly, we reverse and remand for entry of a take-nothing judgment.

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