David Parker v. Alexander Marine Co., Ltd.
15-55995
9th Cir.Dec 6, 2017Background
- Alexander Marine custom-built a 98-foot yacht (Jelly Bean II) for David Parker; Parker and Big Bird Holdings sued after Alexander Marine refused to pay for repairs claimed to result from manufacturing defects.
- Plaintiffs sought damages for breach of express and implied warranties and statutory remedies under California’s Song-Beverly Consumer Warranty Act.
- At trial a jury found Alexander Marine liable under the express warranty and awarded damages and a Song-Beverly civil penalty and attorney’s fees.
- Alexander Marine challenged standing under Song-Beverly, waiver of warranty defenses, waiver based on pre-notification repairs by a third party (Gambol), and sufficiency of evidence for willfulness supporting the civil penalty.
- The district court denied post-trial motions and Alexander Marine appealed; the Ninth Circuit affirmed, finding many defenses waived and the evidence sufficient to support willfulness and the penalty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under Song-Beverly | Parker and Big Bird were proper buyers under Song-Beverly and entitled to remedies. | Alexander Marine argued plaintiffs lacked statutory standing. | Waived: defendant failed to timely raise standing; court treated argument as waived. |
| Waiver of express-warranty defense based on pre-notification repairs by Gambol | Parker: pre-notification discovery work was common and approved previously; did not void warranty. | Alexander Marine: Gambol’s work before notice voids express warranty as a matter of law. | Waived: defense raised too late; jury could find no voiding based on evidence. |
| Transfer of ownership (Parker → Big Bird) voiding warranty | Plaintiffs: warranty remained enforceable; transfer did not trigger denial. | Alexander Marine: transfer terminated warranty. | Rejected: jury permissibly found Alexander Marine waived any transfer defense. |
| Willfulness and availability of Song-Beverly civil penalty | Plaintiffs: actions and communications support willfulness; penalty available even though jury found breach under commercial code. | Alexander Marine: insufficient evidence of willfulness; penalty unavailable because jury didn't find Song-Beverly breach. | Affirmed: ample evidence supported willfulness; civil penalty available for willful breach of express warranty under §1794. |
| Recovery offset by insurance proceeds (collateral source) | Plaintiffs: insurance payments did not reduce damages owed by defendant. | Alexander Marine: plaintiffs received insurance proceeds for same harm and damages should be offset. | Rejected: collateral source rule applied; insurance proceeds excluded from offset. |
Key Cases Cited
- Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020 (9th Cir. 2003) (Rule 50/JMOL timing and waiver principles)
- Pershing Park Villas Homeowners Ass’n v. United Pac. Ins. Co., 219 F.3d 895 (9th Cir. 2000) (pretrial order designations and waiver of nonjurisdictional standing issues)
- Wallace v. City of San Diego, 479 F.3d 616 (9th Cir. 2007) (late-asserted JMOL arguments may be waived)
- Phoenix Tempe Stone Co. v. De Waard, 20 F.2d 757 (9th Cir. 1927) (waiver of contractual defenses by conduct)
- Helfend v. S. Cal. Rapid Transit Dist., 465 P.2d 61 (Cal. 1970) (collateral source rule application in tort-like contract claims)
- City of Salinas v. Souza & McCue Constr. Co., 424 P.2d 921 (Cal. 1967) (collateral source rule applied in contract contexts)