The plaintiff, Richard Albert Imry, is a small business owner who, with his two adult sons, co-plaintiffs Max and Mathias, operates an auto body repair shop located in a garage adjacent to his house. The defendant, Western Generator Co. (“WGC”) is a large-scale manufacturer and distributor of generators, which they advertise for personal, business, and industrial application. To combat the loss of profits caused by frequent weather-related power outages, Richard purchased a Western Generator Company 17,500 Watt Electric Start Portable Generator from WGC’s online store.
Before accepting the terms and completing the order, Richard noticed a hyperlink reading, “PLEASE CLICK TO SEE OUR IMPORTANT WARRANTY POLICY. ” Due to his technological naivety and old fashioned business savvy, Richard relied on the hyperlink’s language and the website’s advertising to conclude the product was suitable for personal and small business application and included an “important warranty policy. ” Shortly after he installed the generator, a power outage necessitated its use. Due to a manufacturer known defect in the fuel line, which caused gasoline to leak onto the extremely hot exhaust manifold, the generator caused a fire.
This fire not only destroyed Richard’s home and business, but also caused severe injuries to Max and Mathias. Now, Richard and his sons seek relief from these harms based on the implied warranty of merchantability which WGC claims to have waived by their disguised disclaimer. In this motion, the Imry’s seek summary judgment determining that the warranty disclaimer on WGC’s website was invalid and unenforceable as well as the denial of the defendant’s motion for summary judgment.
Richard Imry, whose education did not surpass the eighth grade, operated a small business out of his home in the only trade he knows, auto body repair. (Deposition of Richard Imry, p. 5, line 3-4). On October 26, 2016, Richard Imry purchased a Western Generator Company 17,500 Watt Electric Start Portable Generator to shield his livelihood from costly and frequent weather-related power outages. (Imry, p. 1, line 22-23; p. 2, line 17-23). Before Richard completed his purchase, he noticed a hyperlink requesting that he review the warranty policy. Imry, P. 3, line 1-10).
Fearful that this would cause his outdated computer to crash, he relied on the language of the hyperlink and his old-fashioned business expectations to trust that the warranty existed. (Imry, p. 3, line 12-16). The hyperlink, which deceivingly invited the user to read an “important warranty policy,” linked to a page reading “THE MANUFACTURER (“WGC”) MAKES NO WARRANTIES AS TO ANY OF ITS PRODUCTS, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTY OF MERCHANTABILITY. ” (Exhibit A).
Relying on this disclaimer to shield them from liability, WGC continued to market this defective product until they were overburdened by the resulting number of lawsuits. (Deposition of Alana Walbrecht, p. 2, line 7-9). As expected, on November 5, 2015, a storm caused a power outage. (Imry, p. 4, line 1-6). Richard started the generator he purchased for this exact situation at 8:30 p. m. (Imry, p. 4, line 8-9). That night, while Richard and his sons were sleeping, despite carefully following the setup instructions provided with the generator, the defective gas line leaked fuel onto the hot exhaust manifold undoubtedly causing the fire. Imry, p. 3, line 20-24).
The fire engulfed and destroyed the Imry’s auto body shop before spreading to their home. (Imry, p. 4, line 20-24). Due to the fire, Richard was not able to get through his house to warn his sons. (Imry p. 4, line 17-18). Fortunately, he managed to escape through a window and call 911. (Imry p. 4, line 17). Before emergency services arrived, both Max and Mathias suffered severe burns. (Imry p. 4). Unable to rebuild his home and only means of livelihood lost the fire, Richard has had to care for his incapacitated sons while living off the generosity of friends and battling insurance companies. Imry p. 1, 5).
The Plaintffs Should Be Granted Summary Judgment Determining That The Disclaimer Of Warranties In The Contract Of Sale Is Invalid And Does Not Prohibit Plaintiffs’ Recovery Stemming From A Breach Of Warranty The Imrys should be granted summary judgment determining they are not bound by WGC’s warranty disclaimer. Under Federal Rule of Civil Procedure 56(c), summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc. , 477 U. S. 242.
California Uniform Commercial Code § 2314 dictates that every contract for the sale of goods includes an implied warranty of merchantability unless it is excluded or modified. Cal. Com. Code § 2314 (Deering, Lexis Advance through all 2016 legislation and propositions (2016 Regular and 2015-2016 2nd Ex. Sessions)). A seller can disclaim the implied warranty of merchantability if (1) the written disclaimer’s placement and design is conspicuous enough to attract a reasonably prudent buyer’s attention, (2) the purchaser is put on notice of the terms when it is in the form of an internet browsewrap agreement, and (3) it is not unconscionable.
Cal. Com. Code § 2316 (Deering, Lexis Advance through all 2016 legislation and propositions (2016 Regular and 2015-2016 2nd Ex. Sessions)); Nguyen v. Barnes and Nobel Inc. , 763 F. 3d 1171, 1176 (9th Cir. 2014); A & M Produce Co. v. FMC Corp. , 135 Cal. App. 3d 473, 484-86 (Cal. Ct. App. 1982). The Plaintiff Is Entitled To Summary Judgment Since There Is No Genuine Dispute Of Fact Concerning The Existence Of A Valid Warranty The court should grant summary judgment in favor of the plaintiffs.
Per Federal Rule of Civil Procedure 56(e) the non-moving party must show a dispute regarding a genuine issue of material fact to withstand a motion for summary judgment. See Anderson, 477 U. S. 242. A genuine issue of material fact exists where a reasonable jury could find for the non-moving party based on the evidence. Id. at 248-49. If there is no genuine issue of material fact, the moving party is entitled to judgment solely as a matter of law, then the judge must grant summary judgment. Id. t 250.
Here, the facts are not disputed. Richard Imry purchased a generator from WGC’s online store. Due to a faulty gas line, the generator caused a fire which burned down Richard’s home, business, and caused severe injuries to his sons. The contested issues are whether the browsewrap agreement satisfied the requirements of a valid disclaimer of warranties, and whether the disclaimer of warranties was unconscionable. Neither of these issues are questions of fact, but rather questions of law.
The Design And Position Of The Browsewrap Hyperlink On The Defendant’s Website Were Not Sufficient To Put The Plaintiff On Inquiry Notice Of The Warranty Disclaimer And Therefore The Plaintiff Was Not Bound By The Terms Of The Disclaimer. The warranty disclaimer is not enforceable because the browsewrap agreement was not a binding legal contract. Generally, there are two types of internet contracts – clickwrap and browsewrap. Nguyen, 763 F. 3d at 1175-76. Clickwrap agreements require a user to manifest affirmative assent by clicking an “I Agree” box after being presented with a list of terms and conditions.
Id. On the contrary, browsewrap agreements require users to voluntarily access terms by clicking a hyperlink generally posted near the bottom of the screen. Nguyen, 763 F. 3d at 1176. Where browsewrap agreements require no affirmative assent, they are enforceable only when the terms are conspicuous and the user had actual notice of the agreement. Id. For a browsewrap agreement to be enforceable where the user did not have actual knowledge of the agreement, the website must put a reasonably prudent user on inquiry notice of the terms.
Id. at 1177. The design and content of the website determine whether there is valid inquiry notice. Id. While the court acknowledges failure to read a contract before agreeing does not does not relieve a party of their obligation, it is the responsibility of the website owner to put users on notice of the terms. Id. at 1179. In Nguyen, the court found a browsewrap agreement unenforceable where the design and placement of a website’s hyperlink did not put the user on inquiry notice of the terms. Id. at 1178-79.
The simply labeled “terms and conditions” hyperlink was in the lower corner of the screen. Id. at 1177. Due to this placement, the hyperlink was either visible without scrolling, or came into the field of vision to reach the button necessary to complete the order. Id. at 1178. The court held that where terms are available by a conspicuous hyperlink which otherwise provides no notice and requires no affirmative consent, even close proximity to the relevant buttons is insufficient to give rise to constructive notice.
Id. at 1178-79. WGC’s website failed to meet the Nguyen requirements for inquiry notice. The admonition “PLEASE CLICK TO SEE OUR IMPORTANT WARRANTY POLICY” does not suggest to any prudent reader that the contents would consist of a warranty disclaimer any more than a button simply labeled “WARRANTY POLICY” would. Further, the hyperlink’s position relative to the “ACCEPT AND ORDER” button is not enough to constitute affirmative assent.
The user does not need to click the hyperlink prior to completing the order and the acceptance could reasonably refer to the shipping terms and terms of sale presented on the order page. (Walbrecht, p. 3, line 1-4). Since nothing indicated the existence of a disclaimer of warranties and no affirmative assent required, there was no constructive notice despite the hyperlink’s visibility to the user when completing the order. Therefore, due to lack of the inquiry notice required by Nguyen, WGC’s browsewrap agreement was not a binding legal contract and the warranty disclaimer is not enforceable.
