The Rule of Phillips v. Volvo Penta of the Americas, LLC is that under the Song-Beverly Consumer Warranty Act, a component manufacturer's duty to replace goods or reimburse the buyer is limited to the goods the manufacturer itself sold and warranted, not to the entire consumer product incorporating the component, under circumstances where the component manufacturer issued an express warranty only for its component part.
Appeal from order granting summary judgment in Alameda County Superior Court.
Defendant Appellant was Brian Phillips — the boat buyer who claimed Volvo must replace the entire boat or pay its full purchase price due to engine defects.
Plaintiff Respondent was Volvo Penta of the Americas, LLC — the engine manufacturer who warranted only the power package component and ultimately replaced the defective engine.
The suit sounded in breach of express warranty under the Song-Beverly Consumer Warranty Act. No cross-claims were described.
The key substantive facts leading to the suit were Phillips purchased a Bennington boat with a Volvo power package that repeatedly overheated from July 2018 to August 2019, requiring multiple repair attempts. After the final incident in August 2019, technicians discovered a cracked exhaust manifold had allowed water to enter the engine cylinders. Volvo initially declined the warranty claim in September 2019, but reversed course in October 2019 and replaced the entire engine before learning of Phillips's lawsuit. Phillips demanded replacement or repurchase of the entire boat rather than just the engine.
The procedural result leading to the Appeal: The trial court granted summary judgment in favor of Volvo, ruling that Phillips could not prove damages cognizable under the Song-Beverly Act because he failed to show he suffered any damages beyond the defective engine that Volvo had already replaced.
The key question(s) on Appeal: Whether a component manufacturer's express warranty for a power package obligates the manufacturer, upon failure to repair after reasonable attempts, to replace or reimburse the purchase price of the entire consumer good (boat) rather than just the component (engine) it manufactured and warranted.
The Appellate Court held that the Song-Beverly Act's text and structure limit a manufacturer's replacement or reimbursement obligations to "the goods" the manufacturer itself sold and expressly warranted, not to an entire consumer product incorporating the manufacturer's component, and Phillips failed to prove any damages beyond the engine defect that Volvo remedied.
The case is inapplicable when a manufacturer warranties the entire consumer good rather than just a component, when there is evidence that component defects damaged other parts of the consumer good, or when the manufacturer fails to adequately replace or repair the warranted component after reasonable attempts.
The case leaves open questions regarding what constitutes adequate replacement when a warranty covers a "power package" with multiple components but only the engine is replaced, the method for calculating the proportional purchase price of a component when no separate price was paid, and whether different results would apply under the Lemon Law provisions for motor vehicles.
Counsel
For Appellant: Bickel Sannipoli APC, Brian J. Bickel and Jordan K. Sannipoli
For Respondent: Lewis Brisbois Bisgaard & Smith, Jordan R. Fisher, Anthony E. Sonnett, and Jocelyn A. Julian
Amicus curiae: [Not determinable from opinion text]