Court of Appeal (Cal.) Holds that Song-Beverly Does Not Apply to Component Part Manufacturers Unless They Gave An Express Warranty

In Mega RV Corporation v. HWH Corporation, 2014 WL 1691371 (Cal.App. 4 Dist. 2014), here, the California Court of Appeal held that the Song Beverly Act does not apply to component part manufactures unless they gave an express warranty.    Civ. Code section 1792, part of the Song-Beverly Consumer Warranty Act, provides that every retail sale of consumer goods is accompanied by an implied warranty by the manufacturer and retail seller that the goods are merchantable.  It also provides that the retail seller shall have a right of indemnity against the manufacturer for any liability imposed on the seller under this section.  This decision holds that the section applies to the ultimate assembler/manufacturer and to any manufacturer of a component part that gives an express warranty to the consumer, but not to a component part manufacturer who does not expressly warrant its part.  Here, there was no evidence that HWH which built the hydraulic lifts for an RV provided any express warranty, so it owed the consumer no implied warranty of merchantability nor any indemnity to the retail seller of the RV. The trial court had awarded $166,000 to the component part manufacturer in its dispute with the dealer under the “tort-of-another” doctrine.  The Court of Appeal held that the trial court erred in awarding HWH its attorney fees under the tort of another doctrine.  Here, the consumer buyer of an RV sued Mega for breach of warranty and Mega cross-complained against HWH for indemnity.  There was no tort claim in the case.  HWH sought fees on the theory that Mega’s negligent repair of the RV led to the suit and thus to HWH’s incurring defense costs including attorney fees.  But the flaw in this theory was that Mega owed HWH no duty of care in performing repairs (at the consumer buyer’s request) on an RV in which HWH held no interest.