Peter F. Schlenzka, Julie Langhorne v. Fountaine Pajot, Rod Gibbons, Cruising Cat USA
Published: Nov. 25, 2003 | Result Date: Feb. 26, 2003 | Filing Date: Jan. 1, 1900 |Case number: C8377221 Bench Decision – $3,250,000
Judge
Court
Alameda Superior
Attorneys
Plaintiff
David C. Lee
(Nossaman)
Defendant
Michael P. Acain
(McKay, De Lorimier & Acain)
Experts
Plaintiff
Keith Giron
(technical)
Nicholas Graham
(technical)
Richard May
(technical)
Francois Muse
(technical)
James C. Jessie
(technical)
Marlo Marti
(technical)
David C. Jones
(technical)
Facts
ACCORDING TO THE PLAINTIFF: Plaintiffs Peter Schlenzka and his wife Julie Langhorne agreed to buy a new semi-custom built ocean catamaran sailboat, the Marquises 56, from defendants Rod Gibbons and Cruising Cat USA. The catamaran was manufactured by Fountaine Pajot, a French manufacturer, at its plant in France and then sailed across the Atlantic under winter storm conditions to Miami in February 2000. The boat was then transferred to defendants and sailed to the Bahamas for delivery to the plaintiffs. The plaintiffs sailed the Marquises 56 on a 5,000-mile tour of the Caribbean. The plaintiffs made several warranty claims concerning alleged defective conditions on the boat. During routine boatyard work in Trinidad in September 2000, the plaintiffs first noticed evidence that the boat was not new. It had undergone substantial prior repairs below the waterline. Removing the outer layer of paint showed large areas of poor fiberglass repairs. According to plaintiffs, the defendants and Fountaine Pajot never disclosed any prior accident or damage. The plaintiff revoked their acceptance under the UCC and tendered the boat back to the defendants who refused to accept it. The plaintiffs sued the defendants and Fountaine Pajot for breach of warranty, fraud and failure to comply with the Magnuson-Moss Consumer Warranty Act. In August 2002, a friend of the plaintiffs discovered that, after the boat had been launched in France but before it was delivered to them, the boat had undergone significant repairs at Fountaine Pajot's facility in France. The repairs were necessary because the boat was damaged in a hurricane-force storm in December 1999. In October 2002, Gibbons admitted that Fountaine Pajot had disclosed the storm and some damage in March 2002. Through discovery, defendants had maintained that they knew of nothing that could have caused the damage. Fountaine Pajot contended that plaintiffs made major repairs and changes to the boat without its authorization. Although some warranty claims were approved, Fountaine Pajot claimed the plaintiffs consistently failed to follow its written warranty procedure. Fountaine Pajot further argued that French law applies and it never consented to California jurisdiction. According to plaintiffs, Fountaine Pajot was a party to the boat purchase contract and thus the written contract contains such a consent. Fountaine Pajot refused to participate in the action.
Settlement Discussions
Multiple offers were made by Fountaine Pajot during the litigation in which Fountaine Pajot either offered to buy the boat outright or to find a buyer for the boat. The plaintiffs refused. In January 2003, Fountaine Pajot offered to purchase the boat back by returning the plaintiffs' purchase price ($826,009), with an additional good faith offer to pay the plaintiffs' attorney fees and costs plus interest to date. Even though the plaintiffs had use of the boat for over one and a half years and sailed it nearly 5,000 miles with their family, the plaintiffs refused all offers by Fountaine Pajot.
Damages
The plaintiffs sued for restoration of their purchase price ($826,009), cost of repairs and improvements, warranty repairs, interest and attorney fees, all totaling $1.85 million.
Result
A $3.25 million bench decision was returned against Fountaine Pajot, including $1.8 million in punitive damages which is 20 percent of Fountaine Pajot's net worth. The judge ruled that Fountaine Pajot defrauded the plaintiffs by failing to disclose the storm damage and repairs, committed perjury in discovery and withdrew from the case in order to thwart plaintiffs' legitimate financial condition discovery and to avoid answering the final supplemental interrogatories. The judge further found that Fountaine Pajot was a party to the contract, a finding made in connection with the award of contract-based attorney fees.
Other Information
The case was originally scheduled for a jury trial but when Fountaine Pajot failed to appear, plaintiffs waived a jury. Prior to trial, defendants Gibbons and Cruising CAT filed for bankruptcy and were dismissed.
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