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Boatel Industries Inc. v. Hester11/30/1988
This case demonstrates the real-life consequences for some individuals who ignore the old maxim that it may be unwise to mix business with pleasure. The appellees in the instant case sought to enjoy all of the financial benefits of setting up and maintaining a corporate business, yet when that status later worked to their detriment, they attempted to disavow it on the grounds that it was only a "sideline" and essentially not the "business" which they had represented it to be. In this case, at least, they cannot have it both ways.
On 21 August 1985, appellees James N. Hester and Sharon E. Hester entered into a contract of sale under which they agreed to purchase a 51 foot Bluewater power boat manufactured by Boatel Industries, Inc. Under the terms of the contract Mr. Hester agreed to demonstrate and promote the Bluewater line of boats, in return for which the manufacturer would substantially reduce the purchase price. On 17 October 1986, Mr. Hester, his wife, and a corporation of which Mr. Hester is the sole stockholder,
Bluewater Cruisers of Annapolis, Inc., filed a suit against the manufacturer of the boat, Boatel Industries, Inc., and the dealer which sold the boat, Executive Services, Ltd. Citing dozens of minor as well as major defects in the boat, the Hesters alleged breach of warranty and fraud on the part of both defendants, and contended that appellees had successfully revoked acceptance of the contract. Executive Services cross-claimed against Boatel for any liability found on its part, charging that "such liability will have been brought about solely by the acts, omissions, conduct and negligence of the manufacturer and designer, Boatel Industries, Inc."
Following an 8-day trial in the Circuit Court for Anne Arundel County, Judge Bruce C. Williams presiding, the jury returned a verdict against Boatel only in the amount of $255,000, finding that the Hesters had justifiably revoked acceptance of the boat (Count I), that Boatel had breached warranties to the Hesters (Count II), and that Boatel had made false or misleading representations to the Hesters (Count III). On 13 October 1987, Judge Williams ordered that Boatel pay attorney's fees and costs of $53,709.78 to the Hesters and of $15,261.55 to Executive Services, Ltd. Boatel appeals both the judgment on the jury verdict and the awards of counsel fees to both parties.
We shall reverse, holding that Boatel had successfully limited the Hesters' remedies to repair or replacement of defective parts.
Facts
During the fall of 1984, James and Sharon Hester began looking for a boat to replace their 31 foot Silverton. In early May of 1985, they responded to a magazine advertisement for Boatel boats by contacting the local dealer, Executive Services Ltd. Soon thereafter, Hester went for a demonstration ride with the owner of Executive Services, Arthur Esch, on Esch's 51 foot Boatel Bluewater Cruiser, and obtained some additional sales literature from him. Hester felt that the original price of over $238,000 quoted
by Mr. Esch was "definitely out of my range." Even the less fully equipped model, at $221,250, appeared to be unaffordable. Esch and Hester were able to arrive at an arrangement, however, which would allow Hester to receive a substantial "dealer discount" on the boat.
After making a $15,000 down payment, Mr. Hester, on 21 August 1985, signed a written agreement with Esch which would lower the total cost of the boat to $192,000. Under the terms of the agreement, Boatel provided a letter to Hester to assist him in obtaining financing for the boat. The letter indicated that Hester had made a deposit of $44,250 (consisting of the $15,000 down p
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