## Facts

- Scott and Kelly Schuler bought 32 Pella windows from Irmscher Suppliers, Inc. in August 2000 for a home remodel; purchase price was $12,986.13.
- The order included hinged casement windows equipped with “Rolscreens,” retractable insect screens.
- After installation, the Schulers experienced extensive insect प्रवेश into the home through gaps around the Rolscreens, requiring repeated killing and cleanup over multiple years.
- The Schulers complained to Irmscher starting in 2001; Irmscher made multiple service visits and adjustments without fixing the problem.
- The Schulers also contacted Pella; Irmscher later sent letters to the Schulers reporting that a Pella employee concluded the windows were defectively designed in a way that allowed insects to enter.
- In March 2004, Pella and Irmscher offered to replace the Rolscreens with a different screen system at no cost; the Schulers declined and sought broader replacement (double-hung windows).
- After a bench trial, the court found a breach of the implied warranty of merchantability and awarded $47,827.85, including compensation for the Schulers’ time and for replacement of windows and related exterior work.

## Issues

1. Whether letters from Irmscher to the Schulers repeating a Pella employee’s design-defect conclusion were inadmissible hearsay (including double hearsay) or admissible as party-opponent/adoptive admissions.
2. Whether the hinged casement windows with Rolscreens breached the implied warranty of merchantability by failing to keep insects out during ordinary use.
3. Whether the trial court used an improper measure of UCC direct damages and improperly allowed consequential damages to accrue despite a mitigation opportunity.

## Decision

- The court affirmed admission of the letters, treating the design-defect statement as an admission attributable to Pella and the letters as adoptive admissions by Irmscher.
- The court affirmed liability, holding the evidence supported that the Rolscreen windows were not fit for their ordinary purpose and therefore breached the implied warranty of merchantability.
- The court held the trial court abused its discretion in calculating damages and remanded for entry of a new judgment with properly recalculated direct and consequential damages.

## Legal Principles

- A statement may be admissible as a party-opponent admission, and a party’s conduct or communication may qualify as an adoptive admission when it manifests acceptance of the statement’s truth.
- Under Indiana’s UCC, goods are merchantable only if fit for the ordinary purposes for which such goods are used; failure to perform a basic expected function can constitute breach of the implied warranty of merchantability.
- UCC damages must be tied to an appropriate measure (commonly value-as-accepted versus value-as-warranted or reasonable cost to cure), rather than an excessive replacement remedy untethered to curing the defect.
- Consequential damages are limited by the buyer’s duty to mitigate; damages that could have been reasonably avoided after an offered cure may not be recoverable to the extent they continue beyond a reasonable time.

## Conclusion

The court upheld the finding that the casement windows with Rolscreens breached the implied warranty of merchantability and upheld evidentiary rulings admitting letters referencing a design defect, but remanded because the damages award exceeded proper UCC measures and failed to account for mitigation after a no-cost replacement offer.


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