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.


Civil Litigation Attorneys said...

The proof was not clear about whether Hallmark triggered the cut in the truss, and thus whether that flaw was included by the manufacturer's warranty. The court reasonably could have determined that it was not included.

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