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  4.  | Judges Are Not Like Pigs: UCC 2-725 allows short 1-year statute of limitations for breach of warranty claim

Judges Are Not Like Pigs: UCC 2-725 allows short 1-year statute of limitations for breach of warranty claim

| Feb 11, 2008 | Firm News |

What is the statute of limitations for breach of warranty claims? Under UCC 2-725 (1), the default limitations period is the later of four years from the breach, or one year from discovery. The parties can substitute a shorter limitations period (at least in non-consumer settings).

California’s version of UCC 2-725 (Ca. Comm. Code Section 2275(1)) provides a four year statute, but the statute accrues when the breach occurs regardless of knowledge of the breach. Ca. Comm. Code Section 2275(1), (2). This period can be shortened to one year by agreement of the parties (not restricted to non-consumer cases).

In a recently released unpublished opinion, Mendelson v. Country Coach, Inc., (Nov. 19, 2007) (U.S. D. Dt., Central Dist. of Ca., No. EDCV 06-00572-SGL (OPx), 2007 WL 4811927) the court came down on the side of the manufacturer of a motor home. Although the claim was to “enforce a warranty” under California’s Magnuson-Moss Warranty Act, the court applied UCC 2-725 (California’s version, Ca. Comm Code Section 2725). The court enforced a contract term that required “any action to enforce this express or any implied warranty” to one year of the “expiration of the warranty.” The purchaser complained that the statute should have been tolled, or equitably estopped, while some forty attempts to repair the vehicle were undertaken. The court denied this argument, since the purchaser’s evidence did not clearly establish that these involved the same or related problems. Judge Stephen G. Larson declined the purchaser’s suggestion that he review the service record in evidence: “judges are not like pigs, hunting for truffles buried in the record” –quoting Albrechtsen v. Board of Regents of University of Wisconsin System, (7th Cir. 2002) 309 F. 3d 433, 476.

Interestingly, the opinion does not discuss a potential discrepancy between the one year limitations period contemplated by Section 2275(1) and the contract terms in the case. Section 2275 states the parties may reduce the limitations period to “not less than one year,” presumably “after the cause of action has accrued.” The Country Coach contract tied the one-year claims period to the “expiration of the warranty.” The opinion appears to assume that, a breach of the warranty, if it occurs at all, would occur before the expiration of the warranty period. If the repair is unsuccessfully undertaken outside he warranty period, for a defect that first became apparent within the warranty period, one might argue that the breach ocurrred when the repair failed, and that the one-year period for a claim should accrue then. Under these circumstances, the contractual limitation of the period to one year from the expiration of the warranty might be unenforceable under California’s Section 2275, as being less than one year from the date the breach accrued.

Take away for the manufacturer: make sure the contract includes a one-year limit on claims for breach of warranty.

Take away for the purchaser: (1) file a claim sooner, rather than later!; and (2) make sure you present a detailed explanation of all events that have any bearing on the occurrence of the breach, tolling while repairs of the same or related defect are underway, and any equitable estoppel, because “judges are not like pigs” and they don’t want to root around in the record looking for evidence that may save your case.