Atkinson v. Elk Corp. of Texas

• Decision Date: 23 August 2006
• Docket Number: No. H028933.,H028933.
• Citation: Atkinson v. Elk Corp. of Texas, 48 Cal.Rptr.3d 247, 142 Cal.App.4th 212 (Cal. App. 2006)
• Parties: James ATKINSON, Plaintiff and Appellant, v. ELK CORPORATION OF TEXAS, Defendant and Respondent.
• Court: California Court of Appeals

48 Cal.Rptr.3d 247

142 Cal.App.4th 212

James ATKINSON, Plaintiff and Appellant, v. ELK CORPORATION OF TEXAS, Defendant and Respondent.

No. H028933.

Court of Appeal, Sixth District.

August 23, 2006.

Sharon L. Kinsey, Soquel, for Appellant.

Burton, Volkmann & Schmal and John S. Burton, Santa Cruz, and Michael A. Miller, for Respondent.

ELIA, J.

In this second appeal between these two parties we are asked to decide if roofing shingles purchased by Pacific Coast Roofing (hereinafter Pacific) pursuant to a contract to re-roof an existing dwelling for Atkinson are consumer goods under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (Pub.L. No. 93-637 (Jan. 4, 1975) 88 Stat. 2183, 15 U.S.C. § 2301 et seq.) (hereinafter Magnuson-Moss). In addition, we must decide whether Atkinson's claim for breach of the implied warranty of merchantability under Magnuson-Moss is barred by the statute of limitations.

Facts and Proceedings Below¹

On August 15, 1992, Atkinson contracted with Pacific to re-roof his family home. Atkinson chose Prestique I shingles manufactured by Elk as the roofing material. The brochure in which the shingles were advertised contained the following language: "When you upgrade to Prestique I High Definition, you get the protection and durability to match the beauty. Elk's 30-year limited warranty covers both labor and shingles, plus you get a 5-year limited wind warranty." The last page of the brochure contained a comparison chart of Elk products, including the applicable limited warranties. The warranty for the Prestique I shingles stated that it was "30 years: Material/Labor: 5 years: Wind." However, the brochure did not contain any disclaimers or other limitations and Atkinson did not see or receive any other warranty. When Atkinson went to the building supply facility from where the shingles were purchased, there was no other limited warranty on display, nor was he given one.² Based on the written warranty he saw in the brochure, Atkinson instructed Pacific to use Elk Prestique I shingles to re-roof his home. Atkinson paid Pacific $7,400 for the re-roofing work. Included in that price was the cost of the shingles.³

In January 1998, while cleaning the gutters in his roof, Atkinson noticed cracks in many of shingles. Immediately, he contacted Pacific. Pacific contacted Elk. In February 1998, Elk telephoned Atkinson requesting a copy of the contract between Atkinson and Pacific. Atkinson faxed the contract that same day.

In March 1998, Brian Woods from Elk called Atkinson to set up an appointment to visit Atkinson's home in order to take a sample of the damaged shingles to be tested and evaluated by Elk. The analysis conducted by Elk revealed that the shingles were defective and had to be replaced.

In April 1998, Atkinson received a letter and check from Elk for $2,949.79. Atkinson called Elk and spoke to Kim Gutierrez. He asked Ms. Gutierrez to explain how Elk arrived at that number. In May 1998, Atkinson received a letter from Ms. Gutierrez explaining that the $2,949.79 was a prorated amount for materials and labor for the shingles applied to his roof in 1992. Atkinson did not respond to Ms. Gutierrez's letter until November 18, 1998.⁴ He wrote to Ms. Gutierrez to dispute the settlement amount and return the check. He explained that the settlement amount did not cover the actual cost of materials and labor in his geographic area.

Ms. Gutierrez responded on December 3, 1998. Included with her letter was the original check that Atkinson had returned, and a copy of a lengthy one-page document entitled "Limited Warranty." Atkinson had never seen this "Limited Warranty" before. Between December 1998 and April 1999, Atkinson sought the aid of a consumer legal advocate from a local television station to help his efforts to resolve this matter with Elk.

On April 1, 1999, Atkinson left a message for Linda Frazier, an Elk field service representative. On April 2, 1999, Bonnie Dlabaj, an Elk technical administrative assistant, telephoned Atkinson and informed him that Ms. Frazier was out and that the case was closed. Atkinson asked that Ms. Frazier call him the following Monday.

On April 5, 1999, Ms. Frazier called to say she would reevaluate the settlement. She asked Atkinson to obtain three bids to reroof his home. She asked that the bids be broken down to include the individual costs for tear off, materials and labor. In addition, she requested that the roofers not be allowed to see the roof before they bid. Atkinson obtained three bids as requested.

On July 21, 1999, Atkinson sent a letter to Ms. Frazier with the three bids, which ranged from a low bid of $6,480 to a high bid of $7,350.

On August 16, 1999, Atkinson received a letter from Ms. Frazier offering the same refund as before, $2,949.79. Ms. Frazier stated that according to the terms of the Limited Warranty, Atkinson was not entitled to the cost associated with tear-off of the defective shingles, flashings, nails, stuccowork, or any other related costs of replacing the shingles.

Atkinson filed a complaint on December 22, 1999, against Elk and Lyle Thomas doing business as Pacific Coast Roofing. The first cause of action alleged breach of express warranty under the Song-Beverly Consumer Warranty Act (hereinafter Song-Beverly) (Civ.Code, § 1790 et seq.) against Elk. The second cause of action alleged breach of implied warranty under Song-Beverly against Elk. The third cause of action alleged violation of the Consumers Legal Remedies Act (Civ.Code, § 1750 et seq.) against Elk and Pacific.⁵

On April 25, 2001, Atkinson filed a motion to amend the complaint to add two causes of action under Magnuson-Moss; a cause of action for fraud; and a cause of action for violations of the Unfair Practices Act. (Bus. & Prof.Code, § 17000 et seq.) At the same time, he moved to continue the trial.

Shortly thereafter, Elk filed a combined opposition to Atkinson's motion to amend and to continue the trial. On May 4, 2001, the court denied both of Atkinson's motions. On May 9, 2001, the trial court heard and ruled on the various pending motions. After considering the argument of counsel, conducting research and, pursuant to the facts as stipulated by both Atkinson and Elk,⁶ on its own motion, the trial court ruled that Atkinson was not a buyer of consumer goods within the meaning of Song-Beverly. As such, he did not have standing to assert his two remaining causes of action,⁷ thereby entitling Elk to nonsuit.

Atkinson appealed the trial court's ruling. On June 11, 2003, this court issued a published opinion that upheld the trial court's ruling that Atkinson was not a buyer of consumer goods, reasoning that roof shingles are not consumer goods within the meaning of Song-Beverly. (Atkinson v. Elk Corp., supra, 109 Cal.App.4th at pp. 751-757, 135 Cal.Rptr.2d 433.) However, we reversed the trial court's ruling that denied Atkinson the right to file an amended complaint to add allegations under Magnuson-Moss. (Id. at p. 761, 135 Cal. Rptr.2d 433.)

Subsequently, on May 20, 2004, Atkinson filed a second amended complaint that included four causes of action. The first cause of action was for breach of express warranty under Magnuson-Moss. The second cause of action was for breach of implied warranty under Magnuson-Moss. The third cause of action was for fraud. Finally, the fourth cause of action was for unlawful and deceptive practices under Business and Professions Code section 17200.

On July 19, 2004, Elk filed a motion for summary judgment or in the alternative summary adjudication contending that the roofing material purchased from Elk as part of the reroofing of Atkinson's house were not consumer goods within the meaning of Magnuson-Moss. As to Atkinson's second cause of action for breach of implied warranty, Elk argued that it was barred by the statute of limitations.

On October 29, 2004, the trial court heard argument on Elk's summary judgment motion. The court granted Elk's motion as to the first two causes of action, but allowed the third and fourth causes of action to go forward. As to the first cause of action, Commissioner Irwin reasoned that because the contract was for "a lump sum" with no separate charge for materials, and the shingles were incorporated into a dwelling, the shingles were not consumer goods under Magnuson-Moss. As to the second cause of action, Commissioner Irwin reasoned that it was barred because the breach occurred after the expiration of the one year implied warranty period governed by Civil Code section 1791.1.

Thereafter, on February 4, 2005, Atkinson filed a voluntary dismissal without prejudice of the third cause of action for fraud and fourth cause of action for violation of Business and Professions Code section 17200.⁸

The court entered judgment on April 8, 2005. Atkinson filed his notice of appeal on June 7, 2005. Atkinson raises two issues on appeal. First, he contends that roofing shingles are consumer goods under Magnuson-Moss. Second, he contends that his breach of the implied warranty of merchantability claim under Magnuson-Moss is not barred by the statute of limitations. We agree with Atkinson's first contention, but disagree with the second. Accordingly, we will reverse the summary adjudication of Atkinson's breach of express warranty cause of action and remand for further proceedings.

Discussion

In his first assignment of error, Atkinson argues that the roofing materials he "purchased as part of the re-roofing contract with Pacific are consumer goods under Magnuson-Moss."

As noted, the trial court granted Elk's motion as to Atkinson's first cause of action under Magnuson-Moss, reasoning that because Atkinson's contract with Pacific was for "a lump sum" with no separate charge for materials, and the shingles were incorporated into a dwelling, the shingles were not consumer goods under Magnuson-Moss.

Any party to an action may move for summary adjudication. (Code Civ. Proc., §...