Knarles and Barkley

There are several things that have gone wrong in the case we were given to examine. Knarles had left his 17-year-old son Barkley to look after the Maryland based facilities maintenance business while Knarles attended a convention in Hawaii. The exact scope of the duties to be performed in Knarles’ absence was not given to the reader. Knarles and Barkley’s company had a roster of satisfied clients who they maintained a working relationship without the benefit of a signed renewal contract.

Knarles had a professional relationship with his clients for a number of years, an express contract would not be considered unusual under these circumstances. Part of the services Knarles and Barkley (referred to hereafter as K & B) provided was a paid replacement of outdated and broken equipment that were part of a building heating system as well as the cosmetic maintenance required. In addition to his other duties, Barkley was responsible for renewing an employee’s license, which was a feature of the plumber’s employment contract.

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His failure to do so resulted in having an unlicensed plumber on staff, which can affect future dealings with clients that require plumbing services for their buildings. Although Barkley was instructed by Knarles to take care of the licensing and gain experience in this area of building maintenance operations, I blame the plumber for not looking after his own interest and putting something as valuable as having a working license be the responsibility of someone else. A sensible employee would have negotiated the renewal fee to be reimbursed upon receiving an updated license.

The state of Maryland, K & B’s home state, offers online renewal of application, which does seem complicated or time consuming. 1 Even though the plumber was licensed out of the District of Columbia, the WSSC will reciprocate a plumber’s license from D.C, Maryland and Virginia. During Knarles’ absence, Barkley was approached by Ian Chetum owner of a business in Virginia, to perform the facilities maintenance on his establishment. K&Bs’ service had clients in the DC/Maryland/Virginia area and therefore Barkley sent Ian a standard agreement to which Ian signed and sent the appropriate fee to begin to receive services.

A contract creates an agency that was implied from facts and circumstances. In this case Barkley was operating the business with his father. The problem here that although Barkley was acting as an agent for the maintenance company he was seventeen years old and both “parties to a contract must be legally capable of entering into a contract. A minor, a lunatic, or the principal of an agent, not authorized to act in such a capacity is not responsible for debts contracted, therefore none of them could be parties to a contract.”2 No doubt Barkley grew up in the industry and appeared to Chetum to be a reasonable person giving the impression that he was capable of offering and accepting the contract. “In some cases, if the minor had purposely misrepresented his or her age, the minor may not be permitted to avoid the contract.”3 Our scenario seems to imply that offer and acceptance (although under doubtful terms) was met.

The buyer (Chetum) promised to purchase all products (in this case a mixed sale of goods and services) it requires from the seller (K & B) and fulfilled his financial obligation by sending in an initial payment. A short time after the contract was signed; Chetum contacts K & B regarding one of his properties without heat. Barkley who is still in charge of the operations sends over his lapsed license plumber to look into the situation. The plumber immediately finds a House Warmer Boiler that was recalled due to a carbon monoxide venting failure. “..a product maybe defectively designed if it is found that it fails to perform safely according to ordinary consumer expectations.”4 While House Warmer is guilty of a defect in either manufacture or design, they did discover the defect and followed proper procedure for notifying purchasers and users. We are not told what steps House Warmer followed from there; but it was obvious to a trained plumber that the item was not in operating condition. At this point, the issue of who sold the boiler comes into play.

The Restatement (Second) of Torts Section 402A indicates that a seller is ultimately responsible for a defective condition. The Restatement (Third) of Torts loosely translates to that when the boiler was sold with the manufacturing defect the strict liability falls on House Warmer. “An important component of product liability is that there occurred a sale of the defective product. As set forth in the UCC (2-106(i), a sale is defined as the passing of title from the seller to the buyer for a price.” 5 The case study indicates that the boiler was purchased at a salvage yard. The salvage yard “..who engages in buying or selling used products is generally not susceptible to strict liability because the chain of distribution has been broken.”6 In addition to the boiler being recalled, the plumber notices that the boiler was improperly installed, adding another potential hazard released by the boiler. “However, where the product was already in a defective state before it reached the hands of the assembler or installer, courts differ as to their imposition of strict liability.

Liability may turn on their ability to detect the defect during the assembly or installation.”7 What we have been told about Chetum’s penny-pinching habits, he may have had a non-licensed operator install this boiler to save a few dollars. The plumber immediately notifies Barkley of the situation who in turn notifies Chetum, who does not want to pay for a new working boiler and tells Barkley to have his plumber fix it no matter what. Obviously the contract between Chetum and K & B does not have an exculpatory clause that would relieve K & B from the continuation of negligence (carbon monoxide exposure in an apartment building). Barkley is showing his inexperience in this matter and could have easily sited UCC 2 – Sale of Services, claiming this situation is “…so one sided and detrimental to the interest of one of the parties that it operates to render the contract unenforceable.”8 The interest in this case refers to the excellent service K & B have offered their clients over the years. Barkely, operating on the theory that the customer is always right, tells the plumber to continue to fix the boiler since that’s what the customer wants at this point in time.

Barkley and the plumber (acting as his agent) are as guilty (negligent) of exposing those people to carbon monoxide poisoning as Chetum is. Even though Barkley is a minor, and isn’t well versed in every aspect of the maintenance building field, he should have trusted his plumber’s opinion and not ordered the plumber to complete the job. Barkley, acting as an agent to K& B and not standing behind his plumber’s opinion and ordering the plumber to put in a defective item, has put the company in a precarious position. A toxic tort is a tort caused by an individual’s contact with a toxic substance, which due to Chetum’s order and Barkley and his agent, the plumber are all responsible for continuing to expose the tenants to. Our poor plumber, following orders has repaired the boiler so it can continue for the rest of the winter, given to him by an underage boss. Nothing is indicated what the plumber had completed a work order form.

A completion of work certificate would have a portion of the plumber’s opinion written down, claiming that the client was notified of the defective recalled boiler and completed the job to client’s wishes against his professional opinion. A completion certificate, “…is often relied on to counter arguments raised later that, in fact, the job was not finished as promised or that the consumer was not satisfied with the work performed..”9 A signed completion of work certificate, although will not get K & B off the negligence charge, would possibly help a case further down the road, should Chetum claim he never knew about the condition of the boiler. At this point, I need to add my own diversity of citizenship issue to this case. I am not aware of the lease violation that occurred in this Virginia apartment complex, but in New Jersey, all leased apartments must have a carbon monoxide detector in them. The tenant is not allowed to remove the batteries unless to replace the batteries, but not allowed to disengage the working alarm, this is to allow the tenants to know that they are being exposed to a serious invisible chemical and seek not only medical attention but I am responsible for remedying the situation.

I am not sure what Virginia’s position is on notifying tenants when a leak has been found, but I’m sure that they would consider the three parties (Chetum, K&B, and the plumber) all negligent. Knarles returns from Hawaii and at a business luncheon discussed with colleagues finds out about the Chetum incident that was reported in the local paper. Knarles and his colleagues Knarles makes a slanderous comment about Chetum during the luncheon, which is followed by other colleagues coming up with similar comments. Unfortunately, as this case begins to unravel, a seemingly immature comment may “…tend to harm the reputation of another as to lower him in the estimation of the community, or deter third persons from associating or dealing with him.”10 Knarles’ colleague Joe Stucko made a vapid comment that he could not validate about a HVAC system but shed some light on Chetum’s overall business dealings. After leaving the luncheon Barkley informs Knarles about the contract and the boiler. Knarles contacts Chetum tells him he wants to void the contract and refunds the initial payment minus work done by the plumber. Chetum at this point sues K& B; therefore mutual rescission was not met.

Breaking the contract involves several issues in this case. As previously mentioned the contract was negotiated with an underage minor, who we are not sure if he had contractual powers while his father was away, could be one way to legally dissolve the contract. Chetum may claim that he was duped into believing the contract was valid since the external appearance of Barkley led him to believe that Barkley was a legitimate agent for the firm. Second, the fact that Chetum, K & B, and the plumber are all negligent of carbon monoxide poisoning and that K & B wants to distance themselves from Chetum, might be a reason for breaking the contract, it should be noted that parties to an illegal contract (keeping the flow of carbon monoxide going in the apartment complex) are responsible for their actions and their actions during the contract may have no standing in court. Not having complete knowledge of Virginia’s public policy on carbon monoxide exposure in apartment complexes, a breach of ethics is a concern.

K & B’s actions, with the boiler repair/carbon monoxide poisoning, will no doubt hurt their fine reputation in the region for providing building maintenance that Knarles’ worked years to attain. It is possible that K & B may feel that continuing to service Chetum may require them to perform a future illegal act and they feel uncomfortable about doing future business with them based on the recent events. The last in the series of arguments on valid reasons K & B could present for breaking the contract is that Chetum prevented them from fulfilling their end of the bargain, which is to provide safe and reliable maintenance service. There are several courses of remedy that the courts may decide upon. If the courts decide to honor the contract then they have the option of choosing specific performance, if this is the case it would be based on the unique benefit Chetum receives and K & B need to fulfill the contract until it expires, however, it is doubtful that the courts want to be involved in monitoring the decisions made by K & B and Chetum, given the original situation.

A form of reformation, where perhaps it could be negotiated that K & B performs cosmetic maintenance on the properties and not handles the commercial maintenance. It is doubtful based on the personalities and the situation involved that either mediation or arbitration would conclude the problem. Some form of compensatory damages may have to be paid by K & B to have another service maintain the buildings until Chetum finds another service that would fulfill his requirements. Monetary damages based on the position breaking the contract put Chetum in might be considered. Naturally attorney fees will have to be paid until this situation is resolved if this was in the original contract.