Taylor v. Ramsay-Gerding Construction Co.

Todd Taylor and his wife (plaintiffs) hired Ramsey-Gerding Construction Company (codefendant) to construct a hotel. Ramsey-Gerding hired a subcontractor to install stucco siding manufactured by ChemRex, Inc. (codefendant). After Taylor became concerned about possible rusting of the stucco fittings, construction was suspended. Taylor met with representatives from Ramsey-Gerding, and the stucco installer, as well as Mike Mcdonald, ChemRex’s territory manager for Oregon, to discuss the issue. At the meeting, McDonald stated that the stucco system was covered by a five-year warranty, which the stucco installer and Taylor asked for in writing. Following completion of construction, McDonald sent a letter on ChemRex letterhead, which he signed as Territory Manager, confirming the warranty. Thereafter, Taylor found rusted fittings in the stucco. Although Ramsey-Gerding and ChemRex were informed, the issue was never fixed. Taylor filed suit against Ramsey-Gerding, alleging breach of contract. Ramsey-Gerding brought a third-party breach of warranty complaint against ChemRex. The Taylors amended their complaint to add a breach-of-warranty claim. The claims went to a jury, and ChemRex moved for a directed verdict, arguing that a reasonable jury could not conclude that McDonald had authority to provide the warranty. The jury found that McDonald had apparent authority to provide the warranty, and that ChemRex breached the warranty. The court of appeals reversed. The Taylors appealed.