Tuesday, October 11, 2011

UCC Litigation Blog Nominated for the Top 25 Business Law Blogs of 2011

For the second year in a row, UCC Litigation has been nominated by LexisNexis for its Top 25 Business Law Blogs!

LexisNexis Corporate & Securities Law Community 2011 Top 50 Blogs

We are pleased that our blog has been noticed by one of the prominent legal publishers in the country.

You can support out blog by commenting on the nomination announcement post at LexisNexis' Corporate & Securities Community.

Each comment is counted as a vote toward the supported blog. To submit a comment, visitors need to log on to their free LexisNexis Communities account.  If you haven’t previously registered, you can do so for free by following this link. The comment box is at the very bottom of the blog nomination page. The comment period for nominations ends on October 25, 2011.

LexisNexis will then post the finalists for the Top 25 Business Law Blogs of 2011. Thereafter, a LexisNexis community vote will choose the Top Blog through a Zoomerang survey. The final announcement will be be made in early November.

Monday, October 10, 2011

Breach of Implied Warranty in Sale of Consumer Goods: Don't Forget The Jury Instructions Under Civil Code 1794 and UCC 2-711 through 2-714

Alaimo v. Hallmark-Southwest Corporation (Aug. 31, 2011) 2011 WL 3811941
(Not Officially Published)

Plaintiff lost her home in a wildfire and replaced it with a manufactured home. The home was delivered in two halves.  The homeowner had difficulty fitting together the two halves and found various other problems.  The jury rejected her claim for breach of express warranty and awarded $55,000 damages for breach of implied warranty.

The court of appeal reversed because the trial court had not not given any jury instructions on how damages for breach of implied warranty should be computed.  Neither party asked for any instructions.  Construing Agarwal v. Johnson (1979) 25 Cal.3d 932, 951, the court of appeal reversed due to a "complete failure to instruct on material issues and controlling legal principles."

The court noted that the correct measure of damages for breach of an implied warranty in sale of a consumer product is determined by California Civil Code section 1794. Section 1794, subdivisions (b)(1) and (b)(2) incorporate the UCC damages standard.  If the buyer rightfully rejected the goods, damages are calculated under sections UCC 2-711, 2-712, and 2-713 (Cal. U. Comm. Code sections 2711, 2712, 2713).  If, as in the Alaimo case, the buyer accepted the goods, damages are  calculated under UCC 2-714 and 2-715 (Cal. U. Comm. Code sections 2714, 2715).

Judgment was reversed and remanded. The plaintiff lost her status as a prevailing party and an award of attorneys fees that exceeded the implied damages.  Don't forget the jury instructions.

Monday, September 12, 2011

When Does Website Content Create an Express Warranty Under the UCC?

Zwart v. Hewlett-Packard Company (N.D. CA Aug. 23, 2011) 2011 WL 3740805

Can website content create an express warranty for the goods offered? In Zwart v. Hewlett-Packard Co. (N.D. CA Aug. 23, 2011) 2011 WL 3740805 the court said "yes". Plaintiff claimed that the computer he purchased online did not have a wireless card with features described on HP's website. Plaintiff argued that the website's feature descriptions constituted an express warranty, and that HP was liable for a breach of that warranty because the laptop did not conform. The foundation for plaintiff's case was UCC Section 2-313(1)(b), which provides that "any description of goods which is made the basis of the bargain creates an express warranty that the goods shall conform to the description."

HP answered that the website language could not be construed as a representation or warranty. The court indicated that because the language at issue was activated when a customer opened a pop-up box, it was reasonable to conclude that this could be a representation. The court's analysis was cursory. The court did not actually conclude that the language was a representation creating a warranty, merely that the allegation was sufficient to survive an attack on the pleadings. Further, the court noted that California case law supports the proposition that a limited warranty might not bar the right to pursue a claim for an express warranty by description.

Ultimately, the court dismissed the plaintiff's case, because the website language at issue related to custom-order laptops, and the plaintiff had only purchased an off-the-shelf laptop, not a custom laptop.