Facts

Peter Wilson filed a class action against Gateway Inc. and others, alleging their warranties had been nullified.

PLAINTIFF'S CONTENTIONS:
Plaintiff contended that Gateway assigned their warranties to an insolvent company and impaired its customers' ability to obtain services they had purchased. Although Gateway was largely successful in the 1980s and 1990s, it began to lose its market share in the 2000s. Plaintiff contended Gateway then began to aggressively market its extending warranties, but disregarded its customers when it later assigned those warranties to MPC Corp.

Gateway then had its consumer business acquired by Acer Inc., who purchased Gateway for $700 million. Shortly afterwards, MPC filed for bankruptcy, effectively nullifying the consumers' warranties.

Plaintiff argued that Gateway should have been aware that MPC was on the brink of insolvency, but still transferred the warranties to MPC regardless. Based on this, plaintiff asserted causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment.

DEFENDANT'S CONTENTIONS:
Defendants denied plaintiffs' allegations and asserted various affirmative defenses.

Result

The parties settled. Gateway agreed that members of plaintiff class would be allowed to submit claims for new 12-month warranties, with a value of $60.