Extra Edition / Business Management

Court Case Could Have Implications For HVACR Contractors

January 11, 2004
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A case was recently decided by the sixth district of the California Court of Appeals in which the court held that roofing shingles are building components used to complete a roof system. Because the shingles are attached to the realty in a way that they cannot be picked up for service and repair, as can other types of goods under the Song-Beverly Consumer Warranty Act, they are not consumer goods as defined by that act.

Therefore, the Court of Appeals confirmed the trial court's decision that the cause of action against the roofer alleging a violation of that act should be dismissed.

This is an important decision because there is some confusion as to what is or is not covered under the Song-Beverly Act. The Song-Beverly Act provides for treble (triple) damages and attorneys fees. Presumably, this is the very reason that the owner filed the suit alleging a violation of the act. The act deals with retail sales of "consumer goods." Non-consumer goods, consumables, and all non-retail commercial transactions are not covered by the act.

To the Court, the roofer argued that he was not a retail seller of shingles. The shingles were just part of a roof system, just like flashing, roof gutters, plywood sheathing, and felt underlayment. The court tried to interpret legislative intent and, without knowing exactly what the intent was, found that the act would define the roofer as a retail seller as within the meaning of the Song-Beverly Act. The next step was to determine if the shingles are consumer goods within the meaning of the act.

"Consumer goods" means "any new product or part thereof, that is used, bought, leased for use primarily for personal, family, or household purposes, except for clothing and consumables." The roofer cited two out-of-state cases (one in the District of Columbia and the other in the state of Ohio) that hold that building materials, like a new roof or a window sash, become part of the realty and thus were not purchased for personal, family, or household purposes.

The California court also turned to another case from the fourth district of California dealing with a motor home coach. One of the things that swung this court was that the Act contemplated a return of goods. If the goods cannot be returned to the manufacturer because of the method of attachment, the manufacturer has three options.

The goods could be serviced or repaired at the buyer's residence, they can be picked up for service and repair, or the manufacturer can arrange for transporting of the goods to its service and repair facility. This was the most important part of the court's reasoning for its decision.

The fact that the manufacturer has three options from which he or she may choose implies that the goods are at least removable from their location without causing further damage. This was a heavy burden placed on a manufacturer. Further, the court doubted whether roofing shingles could be "serviced" or "repaired" without impairing the visual appeal of the shingles. Accordingly, it was decided that roof shingles are not consumer goods and therefore, the owner was not the buyer of consumer goods within the Song-Beverly Act.

It is a good idea to note that the court was unhappy with its decision. The court stated that Atkinson's case was "of the type that Song-Beverly was designed to cover," but, because "building materials" do not appear to be covered by the Act as now written, the court had no choice but to find against the buyer.

Of most importance, the court went on to urge the legislature to "directly address the issue of whether building materials that are incorporated into the realty are consumer goods within the meaning of Song-Beverly."

This means two things: First, the scope and vitality of this decision is unclear and contractors and their counsel should wait a bit before celebrating. Also, it is unclear whether Atkinson will further appeal his case and whether the California Supreme Court will hear the case. Second, this case may just replace the question of whether a product is a "consumer good" with the question of whether it is a "building material." Litigation may go merrily along, parties arguing whether the attachment to the realty makes the product's removal impractical and costly enough to call it a "building material."

Thus, although contractors may give a sigh of relief for now, this issue is far from settled and will require continued observation. Watch for further developments.

Abdulaziz is a partner in the law offices of Abdulaziz & Grossbart, North Hollywood, Calif. He can be reached at 818-760-2000 or info@aglaw.net.

Publication date: 01/12/2004

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