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Procedural Posture

Procedural Posture

Plaintiff vehicle buyer brought an action against defendant automobile manufacturer, alleging that the manufacturer had breached its obligation under the Song-Beverly Consumer Warranty Act, Cal. Civ. Code § 1791 et seq. The trial court ruled that the buyer was entitled to the replacement/restitution remedy set forth in Cal. Civ. Code § 1793.2(d). The Appellate Court of California, Fourth District, Division Three, reversed. The buyer appealed.

Overview

The trial court found that the buyer’s vehicle was substantially impaired because of a defective transmission that the manufacturer had been unable to repair after numerous attempts. The trial court found that the defect arose after the expiration of the buyer’s warranty. Nonetheless, the trial court concluded that the buyer was entitled to § 1793.2(d)’s replacement/restitution remedy because the transmission defect was covered by the buyer’s service contract and that, for purposes of the Act, a service contract was a type of express warranty. The lower appellate court reversed the trial court’s award. On further appeal, the court affirmed, holding that a service contract was not an express warranty within the meaning of the Act. The court stated that the legislature thought of service contracts and express warranties as mutually exclusive categories, except when the manufacturer chose to use the terms “warrant” or “guarantee” in a service contract. Additionally, the court rejected the buyer’s argument that the replacement/restitution remedy applied to a breach of a service contract as well as a breach of an express warranty. Appellants were represented by California business law lawyer during civil litigation.

Outcome

The court affirmed the judgment of the lower appellate court.

Procedural Posture

Appellant home builder challenged a summary judgment entered by the Superior Court of San Diego County, California, in favor of respondent manufacturer in the builder’s action for negligence and equitable indemnity. The builder alleged that various homeowners had made claims against it for damage caused by the manufacturer’s plumbing fittings, which it alleged were defective under the California Right to Repair Act, Civ. Code, § 895 et seq.

Overview

The builder claimed it had incurred costs to replace the defective fittings. The court held that a builder could recover from a product manufacturer for economic losses caused by the manufacturer’s violation of the standards set forth in the Act through an equitable indemnity action, but that a builder could not recover for those losses through a direct negligence claim against the manufacturer. Accordingly, the trial court erred in granting summary judgment for the manufacturer on the builder’s indemnity claim. The Act abrogated the economic loss rule in actions brought pursuant to the Act by homeowners against individual product manufacturers. The fact that the builder could not prevail on a direct cause of action against the manufacturer did not defeat the builder’s equitable indemnity claim. The court could not affirm the judgment on alternative grounds. The plain meaning of the Act defeated the manufacturer’s argument that Civ. Code, § 896, subd. (g)(3)(E), precluded the builder’s action. The court concluded that the manufacturer did not have a special relationship with the builder sufficient to support a negligence cause of action for economic losses pursuant to case law.

Outcome

The court reversed the trial court’s judgment and remanded the matter to the trial court with directions to deny the manufacturer’s motion for summary judgment and to consider the manufacturer’s alternative motion for summary adjudication.

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