Facts

On July 11, 2001, the plaintiffs purchased a Yamaha wave runner from Montclair Yamaha. Incident to their purchase of the wave runner, the plaintiffs purchased an extended service contract issued by Western Service Contract Corp. The plaintiffs claimed that the dealer who sold them the service contract misrepresented the scope and coverage of the service contract. But for such representations, the plaintiffs claimed that they would not have purchased the service contract.

In 2004, the plaintiffs' wave runner stopped working due to engine failure. When the plaintiffs presented the wave runner for repairs to Western, it denied the repairs finding that the failure was caused by water intrusion, an express exclusion in the service contract. The plaintiffs denied that water intrusion was the cause of the failure and claimed that the repairs should have been made.

PLAINTIFFS' CONTENTIONS:
The plaintiffs contended that Western Service Contract Corp. violated the Consumers Legal Remedies Act based on the alleged misrepresentations of the dealer in selling them the service contract. The plaintiffs argued that Western was responsible for the dealer's representations under the theory of agency. The plaintiffs also argued that Western violated the Song Beverly Act by failing to repair the wave runner, and that Western's failure was willful.

DEFENDANT'S CONTENTIONS:
The defendant maintained that the dealer was not Western's agent and therefore had no authority to make any representations regarding the scope of the service contract beyond the express terms of the contract. Western further argued that the damage to the wave runner was caused by water intrusion, which was an express exclusion. Therefore, Western had no duty to repair plaintiff's wave runner.

Settlement Discussions

The plaintiffs rejected the defendant's C.C.P. section offer for $7,501.

Damages

The plaintiffs claimed damages of 12,600 not including attorneys fees to which they would be entitled if they prevailed, in addition to statutory penalties and punitive damages.

Result

Nonsuit was granted on cause of action for consumers legal remedies act violations as court found no evidence of agency. Unanimous defense verdict by jury as to cause of action for violations of Song Beverly Act.

Other Information

EXPERT TESTIMONY: Daniel Calef testified that the repairs had been wrongfully denied as engine failure in wave runner was caused by dry seize that was not excluded. Mark Reece testified that water intrusion had caused engine failure and was an express exclusion in the extended service contract. MEDIATOR: Douglas H. Barker, Esq. FILING DATE: July 8, 2005.

Deliberation

one hour

Length

seven days