This is the second in a multi-part series on the basics of products liability practice. This month’s installment will discuss products liability causes of action based on express and implied warranties. Causes of action for breach of warranty are contract, rather than tort, causes of action. These actions, which arose out of the common law of contracts, are now governed by the Florida Uniform Commercial Code contained in Chapters 670 through 680, Florida Statutes. Appendix 1 to this article is a sample complaint alleging breach of express and implied warranties.
Most Important Distinction Between Strict Liability and Breach of Warranty:
Privity of Contract Requirement
The most important distinction between product liability actions based in warranty versus actions based in negligence or strict liability is that warranty causes of action, both express and implied, require privity of contract between the seller and the injured party. If a plaintiff cannot establish privity of contract, he is limited to negligence and strict liability theories.
In the years leading up to the Florida Supreme Court’s adoption of the doctrine of strict liability in West v. Caterpillar, 531 So.2d 531 (Fla. 1976), Florida case law had created many exceptions to the privity requirement, making it easier for injured parties to recover. However, these exceptions were eliminated after West v. Caterpillar. See, Kramer v. Piper Aircraft Corporation, 520 So.2d 37 (Fla. 1988) in which the Florida Supreme Court stated: “ . . . the doctrine of strict liability in tort supplants all no-privity, breach of implied warranty cases, because it was, in effect, created out of these cases. This groundbreaking holding [in West v. Caterpillar] did not result in the demise of the contract action of breach of implied warranty, as that action remains, said the West court, where privity of contract is shown.” Id. at 39.
The requirement that the seller and injured party be in privity of contract eliminates breach of warranty as a cause of action in “bystander cases” in which the injured party has no relationship to the product. However, in F.S. § 672.318, entitled “Third-party beneficiaries of warranties express or implied,” the Florida legislature extended the reach of the privity relationship. That section provides that “[a] seller's warranty whether express or implied extends to any natural person who is in the family or household of his or her buyer, who is a guest in his or her home or who is an employee, servant, or agent of his or her buyer if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty.” F.S. § 672.318.
Express Warranty
Florida Statutes § 672.313 states that an express warranty is created by an affirmation of fact or promise made by the seller to the buyer that relates to the goods, by any description of the goods that is made part of the basis of the bargain, or by any sample or model that is made part of the basis of the bargain. The warranty created by any of the above is that the product will conform to the promise, description, sample, or model. According to Florida Statutes, Section 762.313, it is not necessary that the seller use formal words such as "warranty" or "guarantee" or that the seller have a specific intention to make a warranty, in order for an express warranty to be created. However, a statement that is merely about the value of the goods or is merely the seller's opinion or commendation of the goods does not create a warranty.
Elements of an Action for Breach of Express Warranty
The essential elements of a cause of action for breach of express warranty are:
The “Notice” element (Number 6 above) is a statutory requirement contained in F.S. § 672.607(3)(a). That statute requires that a buyer must “within a reasonable time after he or she discovers or should have discovered any breach notify the seller of the breach or be barred from any remedy. . . .” The notice required by F.S. § 672.607(3)(a) is a condition precedent to maintaining a cause of action for breach of warranty and the burden is on the plaintiff to show that the condition was met. General Matters, Inc. v. Paramount Canning Company, 382 So.2d 1262 (Fla. 2nd DCA 1980). See also, Dunham-Bush, Inc. v. Thermo-Air Service, Inc., 351 So.2d 351 (Fla. 4th DCA 1977) and F.S. §672.607(3)(a)
Defenses to an Action for Breach of Express Warranty
The most common defenses to an action for breach of express warranty go to element Number 3 above, whether or not a warranty as described in Florida Statutes § 672.313 was created. This element, a warranty as described in F.S. § 672.313, encompasses the notion that the warranty must have been part of the “basis of the bargain.” A common defense to a cause of action for breach of express warranty is that, although a warranty may have been made, the buyer did not rely on the statement made by the defendant as part of the “basis of the bargain”. Another common defense to an action for express warranty is disclaimer. Since most sales contracts have “boilerplate” disclaimer clauses, disclaimers can also be a major hurdle in products liability cases. A third common defense is that no warranty was created by a seller’s statements because the seller was merely “puffing”, which is referred to in the final sentence of F.S. § 762.313 as “a statement purporting to be merely the seller’s opinion.”
Implied Warranty
There are two types of implied warranties:the implied warranty of merchantability and the implied warranty of fitness for a particular purpose.These two types of implied warranties are described in F.S. § 672.314 and 672.315, respectively.
The Implied Warranty of Merchantability
Florida Statutes § 672.314 says that when a seller sells a product that is of the kind of product he regularly sells, there is an implied warranty in the sales contract that the goods will be “merchantable”.To be merchantable, goods must meet the following criteria:
(a) Pass without objection in the trade under the contract description; and
(b) In the case of fungible goods, be of fair average quality within the description; and
(c) Be fit for the ordinary purposes for which such goods are used; and
(d) Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
(e) Be adequately contained, packaged, and labeled as the agreement may require; and
(f) Conform to the promises or affirmations of fact made on the container or label, if any.
Elements of a Cause of Action for Breach of an Implied Warranty of Merchantability
To state a cause of action for breach either the implied warranty of merchantability, the plaintiff must allege the following elements:
The Implied Warranty of Fitness for a Praticular Purpose
Florida Statutes § 672.315 deals with implied warranties of fitness for a particular purpose. An implied warranty of fitness for a particular purpose arises where, at the time of contracting, the seller had reason to know of a particular purpose for which the goods are required, and the buyer relied on the seller's skill or judgment to select or furnish suitable goods for that purpose. This type of implied warranty arises in the situation where the seller has certain expertise that the buyer does not and recommends a particular product to meet a need of the buyer. The buyer must rely on the seller’s expertise, skill, or judgment to select the proper product for the buyer’s purpose.
Elements of a Caues of Action for Breach of an Implied Warranty of Fitness for a Particular Purpose
The elements of a cause of action for breach of the implied warranty of fitness for a particular purpose are very similar to the elements for breach of an implied warranty of merchantability. They are:
A "Defect" is an Element of Both Strict Liability and Breach of Warranty Cases
The concept of “defect” in strict liability actions is applicable to breach of express and implied warranty actions with slight variations on what it means to be defective under these different theories. While the Uniform Commercial Code introduced the terms “not merchantable” and “not fit for its ordinary purpose,” Florida’s standard jury instructions suggest that those terms are essentially interchangeable with the term “defect” in the products liability context. Florida Standard Jury Instruction PL1, PL2 and PL3 provide as follows:
The issues for your determination on the claim of (claimant) against (defendant) are whether the (describe product)[sold][supplied] by (defendant) was defective when it left the possession of (defendant) and, if so, whether such defect was a legal cause of [loss][injury] [or][damage] sustained by (claimant or person for whose injury claim is made). A product is defective.
PL 1 express warranty
if it does not conform to representations of fact made by (defendant), orally or in writing, in connection with the [sale][transaction], on which (name) relied in the[purchase and]use of the product. [Such a representation must be one of fact, rather than opinion].
PL 2 implied warranty of merchantability
if it is not reasonably fit for the uses intended or reasonably foreseeable by (defendant).
PL 3 implied warranty of fitness for particular purpose
if it is not reasonably fit for the specific purpose for which (defendant) knowingly sold the product and for which the purchaser bought the product in reliance on the judgment of (defendant).
Damages Recoverable in a Breach of Warranty Case
Florida Statutes §672.714 provides that if a buyer has accepted goods and given notice that he goods are nonconforming under F.S. § 672.607(3)(a), he or she may recover the loss resulting in the ordinary course of events from the seller's breach, as determined in any manner which is reasonable. Subsection (2) of that Section states that the measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount. Subsection (3) goes on to say that “[i]n a proper case any incidental and consequential damages . . . may also be recovered.”
The following Section, F.S. §672.715, states that consequential damages include “[i]njury to person or property proximately resulting from any breach of warranty.” F.S. §672.715 (2)(b). Therefore, in a breach of warranty case involving personal injuries, the buyer of a product is entitled to recover the same damages for the personal injuries as he would be entitled to recover in a strict liability action.
Did the Adoption of Strict Liabilty in Florida Render Actions for Breach of Warranty Obsolete?
Actions for strict liability and breach of warranty actions both require proof that the product is defective. Further, an injured plaintiff can recover the same personal injury damages under both strict liability and breach of warranty theories. However, unlike in strict liability actions, actions for breach of warranty require the plaintiff to prove privity of contract between the plaintiff and defendant. Given these facts, the obvious question that arises is whether breach of warranty as a theory of liability in products liability actions has been obviated by the adoption of strict liability in Florida. The answer is that breach of warranty is still a viable theory of liability in product injury cases which should be alleged in some situations. Indeed, many cases have gone to juries solely on a warranty theory, or on both warranty and other theories, since Florida adopted strict liability in 1976, and plaintiffs have prevailed on warranty theories in many of those cases.
In at least one situation, where a product causes damage to itself but not to persons or other property, breach of warranty may be the only basis for recovery because the “economic loss” rule prohibits recovery on a strict liability theory. But, in a situation where privity of contract and the other elements of a cause of action for both breach of warranty and strict liability are present, the plaintiff will be faced with the decision whether to allege breach of warranty, strict liability or both. At the stage of filing the complaint, it is probably best to include counts for both breach of warranty and strict liability (assuming your investigation suggests all elements of both actions are present). At the time the case goes to trial and later to the jury, if both counts are still viable, a more in-depth, strategic analysis must be undertaken to decide whether both issues should be submitted to the jury. Some factors influencing this decision are whether the evidence strongly supports one or both issues, whether there is a risk of jury confusion of the two issues, and which evidence and witnesses you are most confident in presenting to the jury on which issue.
APPENDIX 1
NINTH JUDICIAL CIRCUIT, IN AND
FOR ORANGE COUNTY, FLORIDA
CASE NO.:
DIVISION:
JANE DOE, individually,
Plaintiff,
v.
ACME MOTOR CO., INC.,
a foreign corporation, and
ABLE CAR SALES,
a Florida Corporation,
Defendants.
COMPLAINT
The Plaintiff, JANE DOE, sues the Defendants,ACME MOTOR CO., INC., a foreign corporation, (“ACME”) and ABLE CAR SALES, a Florida Corporation (“ABLE”) and states:
Introductory Allegations
1.This is an action for damages against Defendants in excess of Fifteen Thousand
Dollars ($15,000).
2.On February 1, 2006, Plaintiff, JANE DOE, was operating a 2002 ACME Ace Sports Utility Vehicle (“the ACME Ace” or “the Subject Vehicle”) with VIN12345678910, on Interstate 100 near the intersection of State Road 20 in Orange County, Florida.At that time and place, the vehicle rolled over, severely injuring JANE DOE .
3.Plaintiff, JANE DOE, was at all times material hereto a resident of the State of Florida.
4.At all times material hereto, Defendant, ACME MOTOR CO., INC., was and is a foreign corporation and was doing business throughout the State of Florida, for which it receives substantial revenue.
5.At all times material hereto, Defendant, ACME, was and is a foreign corporation and was doing business throughout the State of Florida, for which it receives substantial revenue.
6.ACME submitted itself to the jurisdiction of this Honorable Court by doing, personally
or through its agents, at all times material to this cause of action, the following acts:
(a)Committing tortious acts within this state by distributing, selling and delivering defective ACME Ace vehicles and component ACME parts, including the ACME Ace which is the subject of this Complaint, to persons, firms, or corporations in this state via its distributors, dealers, wholesalers, and brokers.Such ACME Aces were used by consumers in Florida in the ordinary course of commerce and trade;
(b)Conducting and engaging in substantial business and other activities in Florida by selling and servicing ACME Aces and component parts, including the ACME Ace that is the subject of this Complaint, to persons, firms, or corporations in this state via its distributors, wholesellers dealers and brokers.Such ACME Aces were used by consumers in Florida in the ordinary course of commerce and trade;
(c)The acts or omissions of Defendant, ACME, caused injuries to persons in Florida, including JANE DOE.At or about the time of said injuries, this Defendant engaged in solicitation activities in Florida to promote the sale, consumption, use, maintenance and repair of ACME Aces, including the ACME Ace that is the subject of this Complaint; and
(d)Selling ACME Aces and component ACME Ace parts, including the ACME Ace which is the subject of this Complaint, with knowledge or reason to foresee that their ACME Aces would be shipped in interstate commerce and would reach the market of Florida users or consumers.
7.At all times material hereto, Defendant, ABLE, was and is a Florida Corporation engaged in the business of selling vehicles, including ACME Ace vehicles, to the public.As such, ABLE is subject to the jurisdiction of this Court.
The Product
8.The subject of this Complaint is the 2002 ACME Ace being driven by Plaintiff, JANE DOE, at the time of the subject accident (“the ACME Ace” or “the Subject Vehicle”). The Subject Vehicle was designed, engineered, manufactured and distributed by ACME and sold to Plaintiff by Defendant, ABLE.
The Incident
9.On or about February 1, 2006, Plaintiff, JANE DOE was driving the Subject Vehicle on Interstate 100 and the intersection of State Road 20 in Orange County, Florida.While performing a foreseeable driving maneuver, the vehicle rolled over causing JANE DOE’S injuries.
COUNT I
Breach of Implied Warranties Against ABLE
10.Paragraphs ___ through ___ are realleged.
11.Plaintiff, Jane Doe, purchased the subject 2002 ACME Ace vehicle from Defendant, ABLE on September 30, 2001.The purchase agreement for the subject vehicle is attached as Exhibit 1 to this Complaint.
12.Defendant, ABLE, impliedly warranted to Plaintiff that the subject ACME Ace vehicle was reasonably fit for its intended and reasonably foreseeable purposes, namely for the safe transportation of Plaintiff and other persons who might foreseeably come into contact with the subject vehicle, andDefendant, ABLE knew Plaintiff was purchasing the subject vehicle for that purpose.
13.The Subject Vehicle was defective in its design and warnings because:
(a)it failed to provide adequate dynamic stability when being operated as advertised and marketed and failed to alert users regarding the hazardous conditions described herein;
(b)it failed to provide sufficient rollover protection by the use of a roll-cage or other similar protective device;
(c)it’s roof structure and support pillars, could not withstand ordinary and foreseeable forces during rollovers;
(d)its restraint system, including all of its component parts, retractors, anchors and anchor points, as well as the overall design and geometry of the system, were inadequate to reasonably restrain and protect occupants when exposed to foreseeable crash forces in rollover accidents;
(e)The glass used in the side windows of the Subject Vehicle was defective and unreasonably dangerous in that it was designed and manufactured to shatter when struck or broken, thereby eliminating support necessary to the roof rails during a rollover, and allowing occupants to be ejected from the vehicle;
(f)its design failed to integrate its various components including, but not limited to, the restraint system, seats and related components, in such a way that would reasonably protect occupants in rollover accidents; and
(g)its inadequate or non-existent warnings and instructions, including warning stickers, placards or proper documentation or notice to alert users regarding all the hazardous conditions described above.
14.The defects described above directly and proximately caused the incident and injuries sustained by Plaintiff in that they directly, and in natural and continuous sequence, produced or contributed substantially to her injuries.
15.Plaintiff, JANE DOE, notified Defendant, ABLE of the defects described herein within a reasonable time after discovering said defects.A copy of Plaintiff’s Notice of Defect, sent to Defendant, ABLE on April 1, 2006, is attached as Exhibit 2 to this Complaint.
16.As a direct and proximate result of the above described defects, Plaintiff, JANE DOE, sustained bodily injury and resulting pain and suffering, impairment, disability, disfigurement, mental anguish, loss of capacity for the enjoyment of life, expense of hospitalization, medical and nursing care and treatment, loss of earning capacity, and/or aggravation of a previously existing condition.The injuries to JANE DOE are permanent within a reasonable degree of medical probability and she will continue to suffer the losses in the future.
17.As a direct and proximate result of the failure of the subject ACME Ace vehicle to perform as warranted, Plaintiff, JANE DOE, sustained property damage including destruction to the ACME Ace vehicle itself, and further incurred the costs of alternative transportation prior to purchasing a replacement vehicle and of replacing the ACME Ace vehicle.
WHEREFORE, the Plaintiff, JANE DOE demands judgment against Defendant, ACME, jointly and severally, for compensatory damages, costs, and interest, and for such other relief as the Court deems just and demands a trial by jury on all issues so triable as a matter of right.
DATED:
____________________________
ATTORNEY JONES, ESQUIRE
Florida Bar #
Address
Telephone:
Facsimile
Attorney for Plaintiff
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