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Tentative Ruling
Judge Thomas Anderle
Department 3 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION

John Wampler vs Charles S Crail Automobiles et al

Case No: 1439844
Hearing Date: Tue May 13, 2014 9:30

Nature of Proceedings: Demurrer First Amend.Complt

Demurrer

                                       

Rulings

 

The Court sustains the demurrer of defendants Charles S. Crail and Charles S. Crail Automobiles to the seventh cause of action in plaintiff John Wampler’s first amended complaint, without leave to amend, and sustains the demurrer to the ninth cause of action, with leave to amend. Plaintiff John Wampler has withdrawn the sixth and eighth causes of action and, therefore, the Court orders the sixth and eighth cause of action stricken from the first amended complaint.

 

First Amended Complaint (FAC)

 

Plaintiff John Wampler filed this action on January 30, 2014. In his FAC, Wampler names as defendants Charles S. Crail Automobiles (business form unknown – “Crail Auto”), Charles S. Crail and Edla Enberg. Wampler alleges:

 

In October 2011, Wampler entered into a written purchase/restoration agreement with Crail and Crail Auto (collectively “Crail”), under which Wampler agreed to purchase a 1928 Rolls Royce Phantom I automobile, Chassis #S304KP. Crail agreed to restore the automobile “to the standard of the Green Ascot (S189FR) sold to Lawrence Smith and the Silver Ghost (S214ML) sold to Gooding and Company which were restored to the standard of a very nice driving car but not to a Pebble Beach show class standard.” Wampler paid $380,000 plus $3,000 for tail lights. The contract provided specifications for the restoration work.

 

The automobile Wampler received bore little resemblance to the automobile promised in the contract but, instead, was defective, not restored as promised and never operated or performed properly or as intended. It failed to function and had to be trailered after the first eight miles driven and, in less than 100 miles of driving, has had to be trailered or towed no less than eight times. Wampler has discovered that the automobile suffered from several mechanical defects, inferior body and interior work and poor quality paint. The automobile is worth substantially less than what Wampler paid. Wampler has made several requests that defendants perform their obligations under the contract but they have failed to do so. 

 

Wampler asserts intentional and negligent misrepresentation causes of action against all three defendants. (All the other causes of action are only against the two Crail defendants.) Wampler alleges: Defendants intentionally misrepresented material matters without any intention of performing, specifically, they misrepresented the condition and quality of the automobile and restoration work they intended to provide to Wampler. 

 

The causes of action in the FAC are: 1) breach of contract, 2) intentional misrepresentation, 3) negligent misrepresentation, 4) breach of the implied covenant of good faith and fair dealing, 5) breach of express warranty, 6) violation of the Song-Beverly Consumer Warranty Act (SBWA) for failure to conform to express warranty, 7) breach of implied warranty, 8) breach of implied warranty of merchantability under the SBWA, 9) violation of the Magnuson-Moss Warranty – Federal Trade Commission Improvement Act (MMWA), and 10) violation of B&P Code § 17200, et seq.

 

Cross-Complaint (CC)

 

Crail, Crail Auto and Enberg cross-complain against Wampler and allege: After the purchase of the vehicle, Wampler alleged the automobile was unsatisfactory and contrary to the agreement and, on May 16, 2013, demanded a one-time payment of $20,000 to relinquish all further claims arising out of the parties’ business dealings. On May 16, 2013, cross-complainants agreed to accept Wampler’s settlement offer or to refund the purchase price of the vehicle. Again Wampler demanded a one-time payment of $20,000 in exchange for a release. On May 17, 2013, cross-complainants paid Wampler $20,000, receipt of which he acknowledged the following day. In May, July and August 2013, Wampler demanded additional money to avoid litigation, which cross-complainants refused to pay. Cross-complainants substantially performed under the purchase contract but then Wampler breached the contract by demanding performance and then inhibiting cross-complainants’ ability to satisfy his demands. Wampler breached the settlement agreement by filing this suit in violation of the release.  Wampler has made false defamatory statements to others about Crail, calling Crail “Charles Crook Crail;” a crook, liar, thief, carpetbagger, cheat, swindler, and a vulture; and corrupt.

 

The causes of action in the CC are: 1) breach of the purchase/restoration contract, 2) breach of implied covenant of good faith and fair dealing as to the purchase/restoration contract, 3) breach of the settlement agreement, 4) breach of implied covenant of good faith and fair dealing as to the settlement agreement, 5) fraud –false promise, 6) intentional infliction of emotional distress, and 7) defamation per se – libel (Crail only).

 

Demurrer to FAC

 

Crail and Crail Auto (again, collectively, “Crail”) demur to the sixth, seventh, eighth and ninth causes of action in the FAC on the ground that Wampler fails to state facts sufficient to constitute the causes of action. Specifically, as to the sixth and eighth causes of action, the automobile is not a consumer good as defined by the SBWA, the contract contains no express warranty as defined by the SBWA, Crail is not a distributor or retail seller under the SBWA, and the contract disclaimed implied warranties. As to the seventh cause of action, the vehicle was sold as is. As to the ninth cause of action, the contract makes no express warranties and MMW does not apply to consumer products manufactured prior to 1975.

 

Opposition

 

Wampler withdraws the sixth and eighth causes of action. Wampler contends: The “as is” language in the contract is ineffective to disclaim implied warranties because the disclaimer conflicts with the express warranty. Wampler concedes that the MMWA cause of action does not specifiy that it is for breach of implied warranty. Wampler will amend the cause of action to clarify that the claim is for breach of implied warranty.

 

Reply

 

Demurrer should still be granted with respect to the seventh cause of action for breach of implied warranty. Assuming there is an express warranty, the waiver of implied warranties is not inconsistent.

 

Analysis

 

The parties agree, for purposes of demurrer only, that the restoration standard stated in the purchase/restoration contract is an express warranty. It is also undisputed that the contract provides that the automobile was sold “AS-IS FOB Santa Barbara, CA, with no warranty written or implied.” The question is whether the “as is” language is effective to disclaim an implied warranty where there is a written express warranty.

 

UCC § 2316(1) provides: “Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this division on parol or extrinsic evidence (Section 2202) negation or limitation is inoperative to the extent that such construction is unreasonable.” UCC § 2316(3)(a) provides: “Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like ‘as is,’ ‘with all faults’ or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty….”

 

Wampler relies on Fundin v. Chicago Pneumatic Tool Co., 152 Cal.App.3d 951 (1984). That court held:

 

“In the case here, when a product has been expressly described by its manufacturer as having certain detailed capacities under certain conditions, it would be both unfair and unreasonable to construe the language "[the] only warranty applicable is our standard written warranty. We make no other warranty count express or implied and particularly make no warranty of suitability for any particular purpose" as negating the express description, particularly when, for all the consumer knows, ‘our standard written warranty’ is the detailed list of specifications. We therefore hold that the warranties contained in the brochure could not be disclaimed or excluded, and hence they were not.” Id. at 958 (1984). That court said the disclaimer was ineffective to negate the express description of detailed capacities. The court said nothing about implied warranties.

 

Here it does not appear that negation of implied warranties is unreasonable or in any way inconsistent with the standards for restoration of the automobile, which remain intact even absent implied warranties. UCC § 2316 “allows the parties to disclaim the implied warranty of merchantability. Therefore, an express warranty may be construed to supersede an implied warranty.” Mocek v. Alfa Leisure, Inc., 114 Cal.App.4th 402, 409 (2003).

 

The Court concludes that the express language of the contract attached to the FAC effectively disclaims implied warranties. Therefore, the Court sustains the demurrer to the seventh cause of action for breach of implied warranty, without leave to amend.

 

Given that there is no implied warranty, it is not clear to the Court that Wampler can amend his complaint to state a claim under the MMWA. However, since defendants do not address the ninth cause of action in their reply given the offer to amend, the Court will permit an amendment, if Wampler honestly believes he can state such a claim given the ruling on the demurrer to the seventh cause of action.

 

Please note:     As a result of staffing limitations, the Court has experienced delays in routing time-sensitive documents, including oppositions and replies, for prompt review. The Court encourages the parties to email courtesy copies to the court at: tanderle@sbcourts.org.