Procedural Posture

Procedural Posture

General

Defendant tool manufacturer challenged an order from the Superior Court of Los Angeles County (California) that entered judgments in favor of plaintiff oil production company in actions for damages based on the breach of express and implied warranties and negligence in the design and manufacture of suspension plugs for use in plaintiff’s wells.

California Business Lawyer & Corporate Lawyer, Inc. is a Corporate Defense Attorney

Overview

Plaintiff oil production company purchased suspension plugs from defendant tool manufacturer after defendant promised to make the plugs “as good as” those that plaintiff had been using. The plugs failed, and plaintiff filed complaints based on a breach of warranties and negligence. The superior court ruled in favor of plaintiff, and on appeal, the court affirmed except on the issue of damages. The court found that the meaning of “hold harmless” language in defendant’s catalog and invoices was not clear, and it resolved that doubt in favor of plaintiff because defendant had written the provision for its own benefit. The court concluded that the language limited defendant’s liability for breach of warranty but did not exculpate it from liability for its negligence. The superior court had resolved the question of conflicting evidence on the issues of plaintiff’s contributory negligence and failure to mitigate the damages, and the court found that resolution binding. However, the portion of the order assessing damages for the third well was reversed because it should have been limited to the lesser of the value of the well before the damage or the cost to repair it.

Outcome

The court affirmed the order that found defendant tool manufacturer negligent and liable for damages to the wells of plaintiff oil production company because that liability was not limited by defendant’s invoices and the superior court had properly resolved the issues of contributory negligence and the mitigation of damages. However, the judgment for damages was reversed and ordered for retrial when the amount exceeded the value of the well.