Appellant buyer sought review of summary judgment granted by the Superior Court of Los Angeles County (California) in favor of respondent seller in appellant’s action for damages that alleged breach of express warranty, implied warranty of merchantability, and implied warranty of fitness for a particular purpose. A claim for indemnity was subsequently included.

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Overview

The product which appellant buyer purchased from respondent seller to remove grease that accumulated on air conditioning coils did not work properly. The contents began contaminating the groundwater. The costs to appellant for rectifying the contamination were approximately $ 10 million. After filing suit against respondent for breach of warranty, appellant amended its complaint and added a claim for indemnification. Respondent filed a motion for summary judgment urging that the claim was time barred by the four-year limitation provision of Cal. Com. Code § 2725(2), which provided that a cause of action accrued when the breach of warranty occurred, which was when tender of delivery was made. The court held, however, that in a case involving indemnification for damages under express or implied warranty based on a sales contract, the traditional time limitations for commencement of actions, Cal. Civ. Proc. Code § 337(1), four years from the date of discovery would prevail over Cal. Com. Code § 2725. Summary judgment for respondent was reversed and appellant was awarded its costs on appeal.

Outcome

The court reversed summary judgment granted to respondent seller and awarded appellant buyer costs on appeal, holding that in a case involving indemnification under express or implied warranty based on a sales contract, the traditional time limitations for commencement of actions controls: from the date of discovery, not from the date tender of delivery was made.