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03/17/95 JEWEL M. NEWBURN AND ROY J. NEWBURN v.

March 17, 1995

JEWEL M. NEWBURN AND ROY J. NEWBURN
v.
DOBBS MOBILE BAY, INC., D/B/A TREADWELL FORD



Appeal from Mobile Circuit Court. (CV-92-1592). Robert G. Kendall, TRIAL JUDGE.

Released for Publication June 27, 1995.

Shores, Hornsby, C.j., and Maddox, Almon, Houston, Ingram, Cook, and Butts, JJ., concur.

The opinion of the court was delivered by: Shores

SHORES, JUSTICE.

This case involves an action on a release agreement. The plaintiffs, Roy J. Newburn and his wife Jewel Newburn, appeal from a summary judgment for the defendant Dobbs Mobile Bay, Inc. d/b/a Treadwell Ford (hereinafter "Treadwell Ford"). We reverse and remand.

The evidence, viewed in the light most favorable to the plaintiffs, suggests the following facts: The Newburns purchased a used 1988 Kenworth tractor from Treadwell Ford to operate in a small trucking business known as Newburn Trucking. The title to the truck was in both of their names. The Newburns financed the purchase of the truck by a loan from Orix Credit Alliance, Inc.; the Newburns signed a note promising to pay Orix $49,224.

At the time of the purchase, an "odometer disclosure statement" was issued to the Newburns, reflecting that the odometer indicated 248,601 miles on the vehicle. The salesman at Treadwell Ford assured them that the truck was in good shape; that it was a one-owner truck; and that the odometer reading of 248,601 miles indicated the actual miles on the Kenworth truck.

In February 1991, the truck developed a transmission problem while on a trip in the Cullman, Alabama, area. The truck was taken to a shop in Cullman, where the transmission was replaced. While the new transmission was being installed in the truck, the Newburns contacted the original owners of the vehicle to determine if there was a warranty on the transmission. During this contact, Jewell Newburn learned that the vehicle's odometer had been replaced and that the actual mileage on the truck was over 170,000 miles more than the odometer disclosure statement reflected when the Newburns bought the truck.

The Cullman repair shop installed the wrong transmission on the truck. Jewell Newburn called Rick Doran, the general manager at Treadwell Ford, and informed him of the incorrect mileage and of the transmission problems. During this conversation, the Newburns say, Rick Doran admitted that the mileage had not been correctly stated to the Newburns when they bought the truck. They say Doran told them that, if they brought the truck to Treadwell Ford for repairs, Treadwell Ford would put in the correct transmission without charge. They further allege that Doran told the Newburns that they would be reimbursed for the $900 Cullman repair bill and for their downtime. During this contact, there was no mention of a release. The Newburns thereafter sent the truck to Treadwell Ford for the correct transmission to be installed. They were told that the truck would be ready on March 14, 1991.

On March 14, the Newburns returned to Treadwell Ford to pick up the Kenworth truck. Treadwell Ford presented them with a check for $600 and a general release absolving Treadwell Ford of all claims arising out of the Newburns' being given an incorrect mileage statement when they purchased the Kenworth truck. The Newburns were told that, in order to get their truck back, they had to sign the release. Treadwell Ford orally promised the Newburns that, if they signed the release, future repairs would be made at dealer cost for parts and labor. Treadwell Ford admits that this is the first time the Newburns were told they would have to sign a release in order to get the truck back. Treadwell Ford does not dispute the fact that it would not return the truck to the Newburns unless they signed this release. Roy Newburn testified that, faced with the choice of financial disaster or signing the release, he signed the release. *fn1 Jewell Newburn was not named in the release, nor did she sign it. Treadwell Ford gave the Newburns the truck, and they left with the $600 check.

In early November 1991, the truck's turbo malfunctioned. Mr. Newburn telephoned Treadwell Ford for a price quote, but found a cheaper quote from a Peterbilt truck dealer for the part. Rather than purchasing the part from Treadwell Ford and having the truck repaired at Treadwell Ford's cost, Roy Newburn purchased the part from the Peterbilt dealer and installed it himself. When Mr. Newburn installed the turbo and started the engine, the engine continued to accelerate, resulting, he said, in the engine's "blowing up." The vehicle was then towed to Treadwell Ford so the Newburns could obtain a quote for it to be repaired. With the truck out of service, the Newburns could not make the loan payments to Orix Credit Alliance. Because of the default in payments, Orix Credit Alliance repossessed the vehicle; Orix sold it and sued the Newburns for a deficiency judgment. After Orix sued the Newburns, the Newburns filed a third-party complaint against Treadwell Ford. The third-party complaint alleged claims of fraud, breach of contract, breach of express warranty, negligence, and wantonness, arising out of the sale of the vehicle with the incorrect mileage, and it alleged that Treadwell Ford had failed make repairs to the truck at dealer cost for parts and at reduced cost for labor, as the Newburns allege Treadwell Ford had agreed to do.

Treadwell Ford denied all of these allegations and affirmatively pleaded release and accord and satisfaction, based on the general release signed on March 14, 1991. Treadwell Ford also pleaded that, although Jewell Newburn did not sign the release, she had ratified it. The Newburns have since settled the case with Orix, so the only remaining litigation is between the Newburns and Treadwell Ford.

The first issue is whether Roy Newburn presented substantial evidence that he signed the release under economic duress; if he signed it under duress, it is void.

Roy Newburn does not deny that he read, understood, and signed the release. He argues that he signed the release under economic duress, because, he says, the transmission problem had placed him and his wife behind in their payments to Orix and because they had delivery contracts on March 14, 1991, and risked breaching those contracts if they did not have the use of the truck. *fn2 The Newburns also risked the loss of their ...


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