Gared Holdings, Llc. v. Best Bolt Products, Inc.

Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not
be regarded as precedent or cited
before any court except for the Nov 19 2014, 10:13 am
purpose of establishing the defense of
res judicata, collateral estoppel, or the
law of the case.

ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:

JEFFREY O. MEUNIER S. GREGORY ZUBEK
Carmel, Indiana Whitham Hebenstreit & Zubek LLP
Indianapolis, Indiana

IN THE
COURT OF APPEALS OF INDIANA

GARED HOLDINGS, LLC, )
)
Appellant-Plaintiff, )
)
vs. ) No. 49A04-1404-PL-181
)
BEST BOLT PRODUCTS, INC., )
)
Appellee-Defendant. )

APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Heather A. Welch, Judge
Cause No. 49D12-0909-PL-41784

November 19, 2014

MEMORANDUM DECISION - NOT FOR PUBLICATION

BROWN, Judge
 Gared Holdings, LLC (“Gared”), appeals from the trial court’s order of March 28,

2014, finding that Best Bolt, Inc. (“Best Bolt”) breached an implied warranty of

merchantability with respect to certain pulleys and awarding damages based upon the

pulleys’ fair market value. Gared raises one issue, which we restate as whether the court

erred in finding Gared was not entitled to consequential damages. Best Bolt raises an

issue on cross-appeal, which we restate as whether the court erred in finding that Best

Bolt breached its warranty of merchantability. Best Bolt also argues this appeal should

be dismissed. We affirm.

FACTS AND PROCEDURAL HISTORY

The facts as stated in our previous opinion in this litigation follow:

Best Bolt primarily sells fasteners, such as “bolts, nuts and screws
and miscellaneous hardware items.” Tr. at 115. Best Bolt is a distributor;
it does not manufacture the products that it sells. Sometime in 2006, Curtis
Sparks, a salesman for Best Bolt, noticed that Gared had playground
equipment outside its facility and thought that Gared could be a potential
customer. Sparks stopped in and introduced himself. He was directed to
Lori Turner, a purchasing manager who is responsible for ordering parts
that Gared uses in the products that they manufacture. Sparks began
stopping in every four weeks in hopes of establishing a business
relationship with Gared. Gared eventually placed orders for cable clamps,
clevis pins, and D rings.

At issue in this case are two orders that Gared placed for pulleys.
Gared uses pulleys in the basketball goal systems that it manufactures. The
basketball goals are designed to hang from the ceiling and can be raised and
lowered. The facts favorable to the judgment reflect that, during one of
Sparks’s regular sales calls in 2006, Turner asked him if Best Bolt could
supply pulleys. Turner indicated that their current supplier, Inventory
Sales, was going to raise the price, and she was hoping to find a less
expensive pulley. Turner also indicated that there was a problem with
cables slipping off the wheel and becoming lodged between the wheel and
the side plate. Turner provided samples [sic] pulleys in two sizes, # 3 and #
5. Sparks told Turner, “I’ll see what I can do.” Id. at 129. Sparks did not

2
tell Turner that neither he personally nor Best Bolt generally had ever sold
pulleys before.

Sparks requested a drawing, but Turner indicated that they did not
have one. Gared did not provide detailed specifications for the pulleys, but
did indicate that the # 5 pulleys needed to be rated at 1550 pounds,
withstand a standard pull test of 8000 pounds, and withstand a side pull test
of 5000 pounds. At some point during the design process, Gared also
requested that the pulleys be fastened together with nylocks rather than
rivets.

Best Bolt decided to source the pulleys through Dakota Engineering,
which would manufacture the pulleys in China. The sample pulleys from
Gared were sent to Dakota’s engineer in China, who sent back a sample.
Joe Connerly, the engineering manager for Gared, examined the samples,
measured the diameter, and looked for a proper gap between the wheel and
side plate. He did not take the samples apart because they “appeared to be
correct.” Id. at 191. Although he could not tell for sure without taking the
pulley apart, he believed that the pulley contained a lubricated bushing
because there was a small gap on each side of the wheel between the wheel
and the side plate. However, the sample pulleys did not actually have a
bushing.

Gared then sent the samples to St. Louis Labs, which performed the
standard pull and side pull tests. The standard pull test involves pulling
down on the pulley to see how much weight it takes to destroy the pulley.
The side pull test is designed to determine how much force it takes to pull
the pulley apart from the sides. The sample pulleys exceeded the minimum
requirements that Gared had set for each test.

On June 27, 2007, after receiving the test results, Turner placed an
order with Best Bolt for 4995 # 5 pulleys. On April 14, 2008, Turner
placed an order for 2000 # 3 pulleys and an additional 5000 # 5 pulleys.
The purchase order requested that Best Bolt send samples of each for
testing, although it is unclear whether Best Bolt sent the samples and, if so,
whether Gared had any testing done.

In the fall of 2008, one of Gared’s customers reported that a
basketball goal had fallen part way to the floor. Connerly examined the
goal system and determined that the pulley had stopped turning. Because
the pulley was not moving with the cable, the cable eventually became
frayed and snapped. Connerly took the pulley apart and realized for the
first time that the pulley did not have a bushing and was not lubricated in
any way. Without any lubrication, the wheel and axle had become “frozen”

3
together. Id. at 194. Connerly conducted a cycling test on two Best Bolt
pulleys, which involves repeatedly lifting and lowering a load. The pulleys
each seized up after twenty-one cycles.

Gared contacted Best Bolt about the problem, and Best Bolt
proposed applying a spray lubricant to the pulleys. Connerly felt that this
solution was inadequate because there was no guarantee that the spray
could be accurately applied to the axle, the spray would likely need to be
applied repeatedly, and the process would require a lot of manpower.
Gared wanted Best Bolt to accept the return of the unused pulleys and pay
for the replacement of the pulleys that had [] already been used, but Best
Bolt refused. Concerned that the basketball goal systems incorporating the
Best Bolt pulley posed a safety hazard, Gared decided to replace the pulleys
with a more expensive pulley manufactured by Block Division (“Block”).
Gared refused to pay for the second order of Best Bolt pulleys and also
refused delivery of an order of clevis pins.

On September 10, 2009, Gared filed a complaint against Best Bolt
stating five claims: breach of contract, breach of the implied warranty of
merchantability, breach of the implied warranty of fitness for a particular
purpose, breach of express warranty, and fraud. On November 4, 2009,
Best Bolt filed an answer and a counterclaim seeking payment for the
second order of pulleys and the clevis pins.

A bench trial was held on June 5 through 7, 2012. It was undisputed
that Gared did not specifically request that the pulley have a lubricated
bushing. However, Gared attempted to show that a lubricated bushing was
a standard or essential component of a pulley, and therefore a buyer would
not typically need to make a specific request for a lubricated bushing.
Connerly testified that he considered pulleys to be an “off-the-shelf” item
that could be purchased from a catalog without needing to provide a
drawing. He testified that a buyer would not have to specify that it have a
lubricated bushing or bearing because “[t]hat’s standard in the industry.”
Id. at 189. Connerly stated that the pulleys that Gared has purchased from
suppliers other than Best Bolt have all had lubricated bushings and did not
have problems with seizing up. Connerly testified that a pulley without a
lubricated bushing could work only “[f]or a short period of time,” but not
for the “expected life of the . . . pulley.” Id. at 190. He stated that the Best
Bolt pulleys started failing less than a year after the basketball goal systems
were sold, and he would expect a pulley to last more than a year. Connerly
testified that he had not opted to perform a cycle test on the pulleys before
approving them for purchase because “the pulleys that . . . are normally
manufactured . . . it’s a requirement of that pulley to be able to rotate. So
when you purchase a pulley you expect it to be able to rotate and it was

4
really no reason to do a cycle test at that point in time.” Id. at 188. After
the problem arose with the Best Bolt pulleys, Connerly made a detailed
drawing of a pulley “so that if we chose to go to . . . another supplier who
was not a normal manufacturer of pulley[s] they would understand the
requirements of manufacturing a pulley.” Id. at 200. However, when
Gared started purchasing pulleys from Block, it did not provide the drawing
to Block because Block had its own drawing.

Turner likewise testified that the pulleys that Gared had purchased
from other manufacturers all had lubricated bushings. She said that at the
time that she started ordering from Best Bolt, Gared did not have a
specification sheet for the # 5 pulley because “it was a standard item. There
was nothing custom about it. . . .” Id. at 52. She did not think that it was
necessary to specify that the pulleys needed to have a lubricated bushing
because they were an off-the-shelf item and always have a lubricated
bushing.

Kevin Needier [sic],[1] the operations manager of Gared, also
characterized pulleys as an off-the-shelf part. Needier [sic] also testified
that the pulleys that Gared had purchased from other manufacturers all had
lubricated bushings. He stated that Gared had not had to ask Inventory
Sales or Block to provide a lubricated bushing.

Gared also presented testimony from Bobby Day, the president of
Block. Day has a B.S. degree in engineering and has designed a pulley.
Day testified that he did not ask Gared to supply a drawing and that Block’s
customers typically rely on its catalog. He characterized the pulley that
Block sells to Gared as an off-the-shelf product. While he agreed that it
would be good practice to give a manufacturer a set of requirements, he did
not think that a pulley should be made without a lubricated bushing
regardless of what the requirements were. Day opined that the Best Bolt
pulley was “doomed to failure” because the friction between the metal parts
would eventually “cause the effect known as galling where the metal will
grab to the metal and finally it will just completely seize.” Id. at 273-74.
Day testified that he is not aware of any manufacturer that makes a pulley
without a lubricated bushing and that it would not be good engineering or
manufacturing practice to do so.

Alan Jones, the president of Dakota, testified that he knew that the
pulleys would bear a dynamic (moving) load. He acknowledged that the
pulleys had failed due to galling between the wheel and axle, and the
problem could have been prevented by a lubricated bushing. Jones is not
an engineer, and he stated that he would not disagree with Day’s testimony
1
The transcript spells Kevin Needler’s name as Needler.
5
that a lubricated bushing is an essential component of a pulley. However,
he also testified that they did not receive drawings or specifications, that
“every other product we sell is made to a specification,” and that it “is very
uncommon to typical engineering business—to just have an unknown
sample.” Id. at 338.

Dustin Hostetler, the quality manager of Best Bolt, testified that he
knew that “if you had metal on metal it could fail,” and that the purpose of
a bushing would be to prevent that problem. Id. at 361. He was not aware
that the pulleys lacked a bushing until Gared started having problems with
the pulleys. However, he also testified that Best Bolt normally had prints
and standards for the items that it sells.

Best Bolt presented expert testimony from Peter Hylton, an associate
professor in the School of Engineering and Technology at Indiana
University Purdue University Indianapolis. Hylton testified that he had
never designed a pulley, but if he were asked to do so, he would want to
know the specifications, such as dimensions and material properties. In the
absence of specifications, he would want to know the “requirements,”
which he defined as “the set of operating characteristics under which the
component or the assembly or subassembly whatever you’re discussing will
be operating that defines what it must be able to do—withstand, that sort of
thing.” Id. at 451-52.

Hylton agreed that the Best Bolt pulleys had failed due to galling
between the wheel and axle. He also agreed that it is not possible to tell
that the pulleys are not lubricated without taking them apart. When asked if
dynamic testing of the pulleys would have been appropriate, he said, “I
would’ve thought it would’ve been mandatory.” Id. at 476.

Hylton testified that he had done some research on the internet and
found one supplier that sold pulleys that could be ordered with or without
bushings. He also stated that he has his students conduct a laboratory
experiment involving pulleys, and those pulleys do not have bushings. He
testified that “under certain load—static load or . . . very low dynamic loads
a non[-]bushed pulley could work just as well as a bushed pulley.” Id. at
509.

Gared voluntarily dismissed its fraud claim during the bench trial.
On September 21, 2012, the trial court entered a judgment for Best Bolt on
Gared’s remaining claims and on Best Bolt’s counterclaim. The court’s
order included findings of fact and conclusions thereon. As to Gared’s
breach of contract claim, the court’s order states:

6
 The Court finds that the facts do not establish that there was
an oral contract for the sale of pulleys which matched the
samples provided by Turner to Sparks. . . . Turner and Sparks
nor any other representative of either company agreed that
they would provide pulleys identical to the samples furnished
by Turner. In fact, Best Bolt furnished samples of what it
“could do.” Gared agreed that [it] would complete [its] own
inspection and testing on the samples provided by Best Bolt,
as required by Gared policy. . . . [I]t was established that Best
Bolt would provide samples of what it could supply at a cost
that Gared would pay, and Gared would do its own inspection
and testing to determine if the Best Bolt pulleys would work
for Gared in its basketball systems.

Appellant’s App. at 17-18.

As to Gared’s claim for breach of the warranty of merchantability,
the court’s order states: “The evidence demonstrated that this was the first
and last sale of pulleys by Best Bolt. In fact Best Bolt was merely the
distributor and Gared was aware that Best Bolt was trying to find a
company to manufacture the pulleys at a price acceptable to Gared.” Id. at
20.

As to Gared’s claim for breach of the warranty of fitness for a
particular purpose, the court’s order noted that Gared was required to prove
three things: (1) that Best Bolt had reason to know of Gared’s particular
purpose; (2) that Best Bolt had reason to believe that Gared was relying on
Best Bolt’s skill and judgment; and (3) that Gared in fact had relied on Best
Bolt’s skill and judgment. The court found that Best Bolt knew that the
pulleys would be used in basketball goal systems. However, the court
found that the evidence was unclear as to the second element and that
Gared had not established the third element. The trial court also rejected
Gared’s claim for breach of express warranty. Having rejected all of
Gared’s claims, the trial court found that Gared was not justified in
rejecting the second order of pulleys and the order of clevis pins and
therefore entered judgment for Best Bolt on Best Bolt’s counterclaim.

Gared Holdings, LLC v. Best Bolt Prods., Inc., 991 N.E.2d 1005, 1007-1011 (Ind. Ct.

App. 2013) (“Gared Holdings I”), reh’g denied, trans. denied.

Gared appealed and argued that the trial court’s findings regarding its claims for

breach of contract, breach of the implied warranty of fitness for a particular purpose, and

7
breach of the implied warranty of merchantability were erroneous and that it had a proper

basis for rejecting the second order of #5 pulleys, and the court therefore erred in its

ruling on Best Bolt’s counterclaim insofar as Gared was ordered to pay for the #5 pulleys.

Id. at 1012. Gared did not challenge the court’s ruling that it must pay Best Bolt for the

#3 pulleys and clevis pins. Id.

This court affirmed the findings of the trial court with respect to Gared’s claims

for breach of contract and implied warranty of fitness for a particular purpose. See id. at

1012-1014. With respect to the claim of implied warranty of merchantability, we found

that the trial court erred by focusing on the fact that Best Bolt was a distributor rather

than a manufacturer and concluded that Best Bolt is a merchant with respect to pulleys.

Id. at 1016. We then turned to whether Best Bolt breached the implied warranty of

merchantability and noted the provisions of Ind. Code § 26-1-2-314(2).2 We observed

that the undisputed evidence establishes that the ordinary purpose of a pulley is to bear a

2
Ind. Code § 26-1-2-314(2) provides:

Goods to be merchantable must at least be such as:

(a) pass without objection in the trade under the contract
description; and

(b) in the case of fungible goods, are of fair, average quality within
the description; and

(c) are fit for the ordinary purposes for which such goods are used;
and

(d) run, within the variations permitted by the agreement, of even
kind, quality, and quantity within each unit and among all units
involved; and

(e) are adequately contained, packaged, and labeled as the
agreement may require; and

(f) conform to the promises or affirmations of fact made on the
container or label if any.
8
dynamic load, that several of Gared’s witnesses testified that a lubricated bushing was an

essential part of a pulley, that lubricated bushings were standard in the industry, that it

was unreasonable to make pulleys without lubricated bushings, and that a pulley without

a lubricated bushing would inevitably have a short useful life. Id. We also observed that

Hylton testified that he was aware of pulleys made without lubricated bushings and

opined that “under certain load—static load or . . . very low dynamic loads a non[-

]bushed pulley could work just as well as a bushed pulley.” Id. (citing Transcript at 509).

We concluded that, “[b]ecause the evidence is in conflict and the trial court did not reach

the issue, we remand for the trial court to determine whether Best Bolt breached the

warranty of merchantability,” and that, depending on the court’s resolution of this issue,

it may be necessary to reconsider the portion of Best Bolt’s counterclaim dealing with #5

pulleys. Id. at 1016-1017.

On remand, the trial court entered Amended Findings of Fact and Conclusions of

Law on March 28, 2014, in which the court adopted the findings in its previous

September 21, 2012 order. Under the heading Findings of Fact, the court found that

neither the #5 pulleys nor the #3 pulleys supplied by Best Bolt to Gared had lubricated

bushings and that Gared did not make a claim that the #3 pulleys were defective. The

court found: “Several witnesses from Gared testified that a lubricated bushing was an

essential part of a pulley, that lubricated bushings were standard in the industry, that it

was unreasonable to make pulleys without lubricated bushings and that a pulley without a

lubricated bushing would inevitably have a short useful life.” Appellant’s Appendix at 7.

The court further found: “Day opined that the Best Bolt pulley was ‘doomed for failure’

9
because the friction between the metal parts would eventually ‘cause the effect known as

galling where the metal will grab to the metal and finally it will just completely seize.’”

Id. The court also found that “Hylton agreed that the Best Bolt pulleys had failed due to

galling between the wheel and axle,” that “[h]e also testified that he had done some

research on the internet and found one supplier that sold pulleys that could be ordered

with or without bushings,” that “[h]e also stated that he has his students’ [sic] conduct a

laboratory experiment involving pulleys, and those pulleys do not have bushings,” and

that “[h]e testified that ‘under certain load-static load or . . . very dynamic loads a non-

bushed pulley could work just as well as a bushed pulley.’” Id.

Under the heading Conclusions of Law, the court found that Best Bolt was a

merchant in the sale of the #5 and #3 pulleys and turned to an examination of the factors

in Ind. Code § 26-1-2-314(2) to determine whether Best Bolt breached its implied

warranty of merchantability. The court found:

The first factor to consider to determine if the #5 pulleys were
merchantable is did the #5 pulleys pass without objection in the trade under
the contract description. This Court previous [sic] found that there was no
oral contract and the Court [of] [A]ppeals affirmed this Court and further
noted that it was reasonable to conclude that Gared did not want or expect
Best Bolt to replicate the Inventory Sales pulley. The third factor is are the
goods fit for ordinary purposes for which such good[s] are used. The Court
was provided conflicting testimony regarding whether a pulley was
required to have a lubricating bushing. Day opined that he did not think
that a pulley should be made without a lubricating bushing regardless of
what the requirements were and that the Best Bolt pulley was “doomed to
failure” because the friction between the metal parts would eventually
“cause the effect known as galling where the metal will grab the metal and
finally it will just completely seize”. On the other hand, Professor Hylton
testified that he had conducted laboratory experiments with his students
using pulleys without a lubricating bushing but he agreed that the Best Bolt
pulleys failed due to galling between the wheel and axle. He also stated
that “under certain load or . . . very low dynamic loads a non-bushed pulley

10
 could work just as well as a bushed pulley”. This Court finds that the
testimony of Day and Professor Hylton demonstrate that the #5 pulleys
were not fit for the ordinary purpose being for use in basketball goal
systems because the undisputed testimony is that they failed here because
they did not have lubricated bushings.

Id. at 11. The court also found the remaining factors were inapplicable to this case.

Specifically, it found the second factor does not apply because the goods are not fungible;

the fourth factor does not apply because there was no oral agreement on details regarding

what specifications the #5 pulleys should have, although it is undisputed Gared ordered

the #5 pulleys for use in their basketball goal systems; and that the fifth and sixth factors

do not apply because there was not labeling on the #5 pulleys. The court found that

“[t]he #5 pulleys were defective when used in Gared’s basketball goal systems because

they failed and were not useable,” that Best Bolt breached its implied warranty of

merchantability as to the sales of the #5 pulleys, and that “[t]he breach of the implied

warranty of merchantability which was that the pulleys did not have a lubricated bushing

was the proximate cause or reason the #5 pulleys failed.” Id. at 12.

With respect to damages, the court found that Gared was entitled to damages of

$32,393.50, calculated as the fair market value of the pulleys less their salvage value.3

The court further found that Gared was not entitled to incidental or consequential

damages. With respect to consequential damages, the trial court found:

Gared also requests consequential damages under I.C. § 26-1-2-715. This
statute defines consequential damages as any loss resulting from general or
particular requirements and needs of which the seller at the time of
contracting had reason to know and which could not reasonably be
prevented by cover or otherwise. This Court was affirmed on the issue that
there was no oral contract which required that the #5 pulleys have

3
The court found that the total cost of the #5 pulleys paid by Gared to Best Bolt was $34,000 and
that the metal recycled value was $1,606.50.
11
 lubricated bushings and Gared never provided such specifications to Best
Bolt in writing or orally. Thus, this Court does not find that consequential
damages under this prong of the statute are warranted. Secondly, the
statute states that consequential damages include injury to person or
property proximately resulting from any breach of warranty. Gared did not
present any evidence that any individuals were injury [sic] as a result of the
#5 pulleys which actually failed and no evidence was presented that there
was any property damage as a result of the #5 pulleys which actually failed.
Thus, this Court also does not find that consequential damages under this
prong of the statute are warranted. Therefore, this Court declines to award
incidental or consequential damages to [Gared].

Id. at 15-16. Gared filed its notice of appeal.

On June 20, 2014, Best Bolt filed a motion to dismiss appeal on the basis that

Gared solicited and received payment of the judgment, and a panel of this court denied

the motion. Gared argues in its appeal that the trial court erred in failing to award it

consequential damages. Best Bolt argues on cross-appeal that the court erred in finding it

breached its warranty of merchantability. Best Bolt also requests this court to reconsider

the previous order denying Best Bolt’s motion to dismiss appeal.

DISCUSSION

I.

We first address Best Bolt’s request that we reconsider our previous order denying

its motion to dismiss this appeal. Best Bolt argues that Gared filed its notice of appeal

and then afterwards accepted payment from Best Bolt in the amount of the judgment.

Best Bolt appears to argue that, while the claim on appeal which may reduce Gared’s

judgment was raised in its cross-appeal, Best Bolt “always disputed liability and

damages.” Appellee’s Brief at 29. In response, Gared maintains that its appeal is in no

12
way inconsistent with its acceptance of payment of the damages awarded by the trial

court and that it seeks solely additional damages on appeal.

Ind. Code § 34-56-1-2 states: “The party obtaining a judgment shall not take an

appeal after receiving any money paid or collected on a judgment.” The statute merely

summarizes the common-law rule “that a party cannot accept the benefits of a decision

and yet claim it is inconsistent.” Ind. & Mich. Elec. Co. v. Louck, 243 Ind. 17, 21, 181

N.E.2d 855, 856 (1962). The Indiana Supreme Court has held that “where no

inconsistency in the position taken exists, the general rule is not applicable. An

acceptance of an amount to which the acceptee is entitled in any event, does not estop

him from appealing or claiming error in the judgment, since there is no inconsistency in

such position.” Id., 181 N.E.2d at 857. Also, this court has previously concluded that

when an appellant accepts a sum pursuant to judgment, but appeals to collect more, the

appeal may proceed and a motion to dismiss the appeal must be denied. See R & R Real

Estate Co., LLC v. C & N Armstrong Farms, Ltd., 854 N.E.2d 365, 370 (Ind. Ct. App.

2006) (“R & R contends that it is entitled to more, and a reversal of the judgment based

on R & R’s appeal would not result in R & R receiving any less.”), reh’g denied.

In its March 28, 2014 order, the trial court found Best Bolt breached its implied

warranty of merchantability as to the sales of the #5 pulleys and awarded damages to

Gared of $32,393.50. On appeal, Gared argues the court erred in not awarding an

additional sum for consequential damages. On cross-appeal, Best Bolt claims that the

court erred in finding that it breached the warranty of merchantability with respect to the

13
pulleys it supplied. If Gared were successful, it would receive additional damages. If

Best Bolt were successful, the damages found by the trial court would be reduced.

Although Gared may have collected the amount the trial court ordered, Gared

believes it is entitled to consequential damages in addition to the damages awarded and

thus appeals only to collect more. This appeal should not be dismissed based on the issue

raised by Gared on appeal. See id.

In addition, the fact Best Bolt challenges the court’s March 28, 2014 order on

cross-appeal does not warrant dismissal. We addressed the issue of dismissal and the

effect of a cross-appeal in R & R Real Estate:

The Supreme Court of Oregon was confronted with such a case and
addressed the cross-appellant’s motion to dismiss the appeal as follows:

We do not believe that the plaintiffs’ appeal should be
dismissed because the defendant has cross appealed. If the
defendant had not filed a cross-appeal, it is clear that the court
could not have dismissed plaintiffs’ appeal on the grounds
that plaintiffs had accepted part of the benefits. . . .

If a cross-appeal could prevent the original appellant from
pursuing a valid appeal on the grounds the cross-appeal
allows the appellate court to possibl[y] reduce the award
given the original appellant, the cross-appeal could be used as
a vehicle to dismiss the original appeal. The losing party
could pay part of the judgment, file what could amount to a
completely spurious cross-appeal, and by doing so secure the
dismissal of the original appeal.

Schlecht v. Bliss, 271 Or. 304, 532 P.2d 1, 6 (1975), disapproved on other
grounds by Illingworth v. Bushong, 297 Or. 675, 688 P.2d 379 (1984). See
also Marriage of Mask, 143 Or. App. 377, 923 P.2d 1304, 1305-06 (1996)
(relying on Schlecht in denying cross-appellant husband’s motion to
dismiss wife’s appeal); Stevens Constr. Corp. v. Draper Hall, Inc., 73
Wis.2d 104, 242 N.W.2d 893, 896 (1976) (“As long as the party accepting
the money has not put his right to that money in jeopardy in his own appeal,

14
 there is no waiver, even though his right to the money may be endangered
by his opponent’s cross-appeal or notice of review.”) (footnote omitted).

Likewise here, if C & N had not filed a cross-appeal, it is clear that we
could not dismiss R & R’s appeal on the grounds that it had accepted
$10,252.92 from C & N. R & R contends that it is entitled to more, and a
reversal of the judgment based on R & R’s appeal would not result in R &
R receiving any less. While we do not suggest that C & N’s cross-appeal is
spurious, we agree with the Supreme Court of Oregon’s rationale for
denying a cross-appellant’s motion to dismiss in similar cases. To conclude
otherwise would be to encourage gamesmanship and to discourage prompt
satisfaction of judgments. We therefore deny C & N’s request to dismiss R
& R’s appeal pursuant to Indiana Code Section 34-56-1-2.

R & R Real Estate, 854 N.E.2d at 369-370.

Similarly, had Best Bolt not filed a cross-appeal, it is clear we could not dismiss

Gared’s appeal on the grounds it accepted payment from Best Bolt for damages as

determined by the trial court. Gared asserts it is entitled to additional damages, and its

claim on appeal would not result in it receiving any less. Consistent with the reasoning in

R & R Real Estate, we decline to dismiss Gared’s appeal based on the fact that Best Bolt

raised an issue on cross-appeal which, if successful, would reduce the amount of damages

to which Gared is entitled. While Best Bolt argues it has always disputed its liability,

Best Bolt may have elected to appeal or not to appeal the trial court’s March 28, 2014

order, and Gared did not control Best Bolt’s decision. We do not wish to encourage or

incentivize appellees to raise issues on cross-appeal for the purpose or additional purpose

of seeking a dismissal of the appeal or to discourage prompt satisfaction of judgments.

We deny Best Bolt’s request to dismiss Gared’s appeal.

15
 II.

We next address the issue raised by Best Bolt on cross-appeal of whether the trial

court erred in finding it breached its implied warranty of merchantability with respect to

the #5 pulleys it supplied. Ind. Code § 26-1-2-314(2) provides:

Goods to be merchantable must at least be such as:

(a) pass without objection in the trade under the contract
description; and

(b) in the case of fungible goods, are of fair, average
quality within the description; and

(c) are fit for the ordinary purposes for which such goods
are used; and

(d) run, within the variations permitted by the agreement,
of even kind, quality, and quantity within each unit and
among all units involved; and

(e) are adequately contained, packaged, and labeled as the
agreement may require; and

(f) conform to the promises or affirmations of fact made
on the container or label if any.

Any action based on breach of warranty requires evidence showing not only the

existence of the warranty but that the warranty was broken and that the breach of

warranty was the proximate cause of the loss sustained. Frantz v. Cantrell, 711 N.E.2d

856, 860 (Ind. Ct. App. 1999). When the sufficiency of the evidence is questioned on

appeal, we will not reweigh the evidence but will consider only that evidence most

favorable to the appellee together with the reasonable inferences to be drawn therefrom.

Id. Moreover, when the trial is before the court, we must accept the ultimate facts as

16
found by the trial court if there is sufficient evidence to support such facts, and may not

reverse the judgment unless it is clearly erroneous. Id.

Best Bolt contends on cross-appeal that it did not breach the warranty of

merchantability. It argues that Gared was seeking a #5 pulley at a bargain price and that

Needler, an operations manager for Gared, knew that pulleys without bushings were sold

in the marketplace. Best Bolt asserts there was no evidence that the standard of trade is

that every pulley must have a bushing, which was consistent with e-mails by Needler and

Turner, a purchasing manager for Gared, regarding whether Best Bolt could provide the

#5 pulleys with an oilite bushing.4 Best Bolt also argues that the #3 pulleys it supplied to

Gared lacked a bushing and Gared has made no claim the #3 pulleys were defective. In

response, Gared maintains that the trial court properly held Best Bolt breached the

implied warranty of merchantability, and that the evidence established that the industry

standards require a pulley to have a lubricated bearing in order to pass without objection

in the trade and to be fit for the ordinary purposes for which such goods are used. Gared

argues the court’s finding should be affirmed because the #5 pulleys lacked a lubricating

bearing and were unusable for the purpose for which they were sold.

4
Best Bolt cites to an exhibit showing that Needler sent an e-mail message to Turner on
November 11, 2008, stating, “[p]lease check with Best Bolt to see if they can provide the #5 pulleys with
an oilite bushing,” and that later that day Turner sent an e-mail message to a quality manager at Best Bolt
forwarding Turner’s e-mail message and stating: “Still need an answer on returning the shipment of
pulleys and can you provide them (#5’s) with an iolite [sic] bushing and if so, what’s the pricing?”
Appellee’s Brief at 8 (citing Defendant’s Exhibit L-1). According to the court’s findings, the pulleys
supplied by Best Bolt “began failing in the fall of 2008” and “were seizing or locking up and would not
turn when lifting or lowering the basketball systems” and that “Gared notified Best Bolt of the failure of
the pulleys and requested Best Bolt to accept return of the remaining pulleys.” Appellee’s Appendix at 9.
The record contains several e-mail messages between Gared and Best Bolt in December 2008 regarding
the problems with the pulleys, possible solutions suggested by Best Bolt, Gared’s responses to the
suggested solutions, and Gared’s request for a credit for the #5 pulleys. The e-mails of Needler and
Turner reveal that Gared desired to find a replacement for the #5 pulleys that would have a lubricated
bushing.
17
 The evidence in this case supports the trial court’s conclusion that the #5 pulleys

supplied by Best Bolt failed and that they failed because they did not have a lubricated

bushing. Day testified that his opinion was that a pulley without a lubricated bushing or

bearing is doomed for failure because of the friction in the pulley. Day testified that “part

of a bearing[’s] function is to level out both load and speed,” that the effect of not having

a bearing in a pulley used to lift a load is “friction, heat,” and that as a result “eventually

it’ll [] cause the effect known as galling where the metal will grab to the metal and finally

it will just completely seize.” Transcript at 274. Hylton agreed that the Best Bolt pulleys

had failed due to galling between the wheel and axle. When asked if dynamic testing of

the pulleys would have been appropriate, Hylton said, “I would’ve thought it would’ve

been mandatory.” Id. at 476. He testified that “under certain load – static load or statics

or very low dynamic loads a non[-]bushed pulley could work just as well as a bushed

pulley.” Id. at 509.

The undisputed evidence establishes that the ordinary purpose of a pulley is to

bear a dynamic load. In its September 21, 2012 order, the court found that, according to

Day, the pulleys sold by Best Bolt were not fit for the purpose of raising and lowering

basketball systems, that Day believed the pulleys would not pass a dynamic test because

they lacked the essential component of a lubricated bushing or bearing, that they were not

fit for the ordinary purposes for which #5 pulleys are used, and that Hylton believed that

dynamic testing was mandatory to determine if the sample pulleys provided by Best Bolt

would meet Gared’s requirements. In its March 28, 2014 order, the trial court set forth

the testimony and evidence upon which it relied in finding that Best Bolt breached its

18
implied warranty of merchantability and specifically adopted its September 21, 2012

findings. After noting the testimony of Day and Hylton set forth above, the court found,

with respect to the third factor under Ind. Code § 26-1-2-314(2), that “the testimony of

Day and Professor Hylton demonstrate that the #5 pulleys were not fit for the ordinary

purpose being for use in basketball goal systems because . . . they did not have lubricated

bushings” and that therefore Best Bolt breached its implied warranty of merchantability

as to the sales of the #5 pulleys. Appellant’s Appendix at 11.

Our review of the record demonstrates there is sufficient evidence to support the

findings of the trial court that the #5 pulleys manufactured without lubricated bushings,

which caused the pulleys to fail, cannot be said to “pass without objection in the trade” or

that they “are fit for the ordinary purposes for which such goods are used.” See Ind.

Code § 26-1-2-314(2)(a), -314(2)(c). The e-mail messages of Needler and Turner to

which Best Bolt cites, which were sent when or after the pulleys began to fail and it was

discovered the pulleys did not have a lubricated bushing, do not establish that #5 pulleys

without lubricated bushings would pass without objection or would be fit for the ordinary

purposes for which such pulleys are used.

Based upon the record, we conclude the trial court’s determination that Best Bolt

breached its implied warranty of merchantability in its sale of #5 pulleys to Gared is

supported by the evidence and was not clearly erroneous. See Frantz, 711 N.E.2d at 860

(holding the court’s determination Frantz breached the implied warranty of

merchantability in its sale of shingles was supported by the record and was not clearly

erroneous).

19
 III.

The next issue is whether the court erred or abused its discretion in not ordering

Best Bolt to pay Gared consequential damages in connection with its breach of warranty.

Generally, the computation of damages is a matter within the sound discretion of the trial

court. Irmscher Suppliers, Inc. v. Schuler, 909 N.E.2d 1040, 1049 (Ind. Ct. App. 2009).

A damage award will not be reversed upon appeal unless it is based on insufficient

evidence or is contrary to law. Id. In determining whether the award is within the scope

of the evidence, we may not reweigh the evidence or judge the credibility of witnesses.

Id.

The trial court awarded damages to Gared in the amount of $32,393.50, calculated

by determining the cost of the pulleys paid by Gared to Best Bolt less their salvage value,

and found that Gared was not entitled to incidental or consequential damages. Gared

does not challenge the award of $32,393.50 or argue the court erred in not awarding

incidental damages. Rather, Gared argues the court erred in not ordering Best Bolt to pay

consequential damages under Ind. Code § 26-1-2-715.

Ind. Code § 26-1-2-714 provides:

(1) Where the buyer has accepted goods and given notification (IC 26-1-
2-607(3)), he may recover as damages for any nonconformity of
tender the loss resulting in the ordinary course of events from the
seller’s breach as determined in any manner which is reasonable.

(2) The measure of damages for breach of warranty is the difference at
the time and place of acceptance between the value of the goods
accepted and the value they would have had if they had been as
warranted, unless special circumstances show proximate damages of
a different amount.

20
 (3) In a proper case any incidental and consequential damages under IC
26-1-2-715 may also be recovered.

Ind. Code § 26-1-2-715(2) provides:

Consequential damages resulting from the seller’s breach include

(a) any loss resulting from general or particular requirements and
needs of which the seller at the time of contracting had reason
to know and which could not reasonably be prevented by
cover or otherwise; and

(b) injury to person or property proximately resulting from any
breach of warranty.

A plaintiff may recover consequential damages if they are the direct, immediate, and

probable result of the breach of an implied warranty. Irmscher Suppliers, 909 N.E.2d at

1050-1051 (citing Bob Anderson Pontiac, Inc. v. Davidson, 155 Ind. App. 395, 293

N.E.2d 232, 236 (1973)). The issue of whether claimed consequential damages are the

foreseeable and proximate result of a breach of an implied warranty is generally

determined by the trier of fact. Id. at 1051.

Gared argues the official comments to Ind. Code § 26-1-2-715 “reflect the

liberality with which consequential damages are to be awarded.”5 Appellant’s Brief at

5
The Official Comments to Ind. Code § 26-1-2-715 to which Gared points provide:

2. Subsection (2) [Ind. Code § 26-1-2-715(2)] operates to allow the buyer, in an
appropriate case, any consequential damages which are the result of the seller’s
breach. The “tacit agreement” test for the recovery of consequential damages is
rejected. Although the older rule at common law which made the seller liable for
all consequential damages of which he had “reason to know” in advance is
followed, the liberality of that rule is modified by refusing to permit recovery
unless the buyer could not reasonably have prevented the loss by cover or
otherwise. Subparagraph (2) carries forward the provisions of the prior uniform
statutory provision as to consequential damages resulting from breach of
warranty, but modifies the rule by requiring first that the buyer attempt to
minimize his damages in good faith, either by cover or otherwise.

21
12. Gared contends that Best Bolt was aware that the pulleys were going to be utilized in

basketball systems and that “[i]t is certainly foreseeable that if the pulleys that they

provided were defective, [Gared] could be required to remove the pulleys from the

backstops and replace them with non-defective pulleys.” Id. at 13. Gared argues that it

presented evidence of the costs it incurred in shipping functional pulleys to the job sites,

the cost of functional pulleys, the labor to replace the defective pulleys, the employee

cost of supervising the replacement of the pulleys and the equipment rental and travel

expenses incurred, and that these expenses totaled $298,474.89. Gared claims that, while

there may have been a finding there was no oral contract, there was a finding the pulleys

were defective and that the court erroneously invoked an additional requirement of the

necessity of a contract provision addressing the deficiency in the goods purchased.

Best Bolt maintains that, although Gared argues it was aware that the pulleys were

to be used in basketball backstop systems, Turner testified she never showed Sparks how

the system operated, Sparks testified that he did not learn the pulleys were to be used in a

basketball system until after the first order was placed, and that the only particulars

Turner gave to Best Bolt about the #5 pulleys were that they had to meet a certain load

rating. Best Bolt also argues that Ind. Code § 26-1-2-714 provides that a court “may”

3. In the absence of excuse under the section on merchant’s excuse by failure of
presupposed conditions, the seller is liable for consequential damages in all cases
where he had reason to know of the buyer’s general or particular requirements at
the time of contracting. It is not necessary that there be a conscious acceptance
of an insurer’s liability on the seller’s part, nor is his obligation for consequential
damages limited to cases in which he fails to use due effort in good faith.

Particular needs of the buyer must generally be made known to the seller while
general needs must rarely be made known to charge the seller with knowledge.

Any seller who does not wish to take the risk of consequential damages has
available the section on contractual limitation of remedy.
22
award consequential damages and does not use the words “shall” or “must” or similar

words. Appellee’s Brief at 15.

The court’s March 28, 2014 order addressed the application of paragraphs (a) and

(b) of Ind. Code § 26-1-2-715(2). With respect to paragraph (b), providing for

consequential damages for injury to person or property proximately resulting from any

breach of warranty, the court found that Gared did not present evidence that any

individuals were injured and that no evidence was presented that there was any property

damage as a result of the #5 pulleys which actually failed. Gared does not point to

evidence that injury to person or property resulted from the breach of warranty and

appears to focus its argument on paragraph (a) of the statute. See Appellant’s Reply

Brief at 5 (“Gared does not contend that there was injury to any person . . . . Gared seeks

consequential damages based upon the first prong of the statute which allows recovery . .

. for any loss resulting from the general or particular requirements and needs which seller

had reason to know.”) (emphasis added).

With respect to paragraph (a), the court found, “[t]his Court was affirmed on the

issue that there was no oral contract which required that the #5 pulleys have lubricated

bushings and Gared never provided such specifications to Best Bolt in writing or orally”

and thus that consequential damages under paragraph (a) were not warranted.

Appellant’s Appendix at 15. Ind. Code § 26-1-2-715(2) provides that consequential

damages include loss resulting from “general or particular requirements and needs of

which the seller at the time of contracting had reason to know . . . .” We also note that

Ind. Code § 26-1-2-714(3) provides that, in a proper case, consequential damages “may

23
also be recovered.” (Emphasis added). We are not persuaded that the trial court’s

reference to its previous finding that the evidence did not establish the existence of an

oral contract6 means that the court added a contractual requirement not present in the

statute. It appears the court noted there was no oral contract because the language of

paragraph (a) includes the phrase “at the time of contracting” in referring to when a seller

must have had reason to know of any needs of the purchaser. In any event, the court

expressly found that Gared never provided detailed specifications to Best Bolt in writing

or orally. See Appellee’s Appendix at 7-8 (the court’s findings of fact include in part that

“Connerly agreed that Gared did not provide any specifications about the requirements

for the pulleys which they wanted to purchase” and that “all the employees of Best Bolt

testified they never provided Gared a specification sheet for the pulleys”). The court

found this fact important and that it supported the determination that consequential

damages were not warranted. See Ind. Code § 26-1-2-715, Comment 3 (“Particular needs

of the buyer must generally be made known to the seller . . . .”). The evidence did not

obligate the trial court to find this a proper case for an award of consequential damages.

Based upon the record, we cannot say the court erred or abused its discretion in declining

to award consequential damages to Gared.

CONCLUSION

For the foregoing reasons, we affirm the trial court’s order of March 28, 2014, in

all respects.

6
According to the September 21, 2012 findings, Gared asserted that Best Bolt agreed to provide
pulleys in conformity with the sample pulleys which Turner provided to Sparks. This court affirmed the
trial court’s finding that the evidence did not establish such an oral agreement.
24
 Affirmed.

BARNES, J., and BRADFORD, J., concur.

25