Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-04850/USCOURTS-cand-5_05-cv-04850-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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ORDER GRANTING MOTION TO DISMISS PLAINTIFF'S THIRD CAUSE OF ACTION FOR BREACH OF IMPLIED

WARRANTY—No. C-05-04850 RMW

JAH

E-FILED on 2/21/06

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

MONTEREY REGIONAL WATER

POLLUTION CONTROL AGENCY, a Joint

Powers Agency,

Plaintiff,

v.

CH2M HILL, INC; CH2M HILL

COMPANIES, LTD.; and DOES 1 through 20,

Defendants.

No. C-05-04850 RMW

ORDER GRANTING MOTION TO DISMISS

PLAINTIFF'S THIRD CAUSE OF ACTION

FOR BREACH OF IMPLIED WARRANTY

[Re Docket Nos. 12, 15, 16]

Defendants CH2M Hill, Inc. and CH2M Hill Companies, Ltd. move under Federal Rule of

Civil Procedure 12(b)(6) to dismiss plaintiff Monterey Regional Water Pollution Control Agency's

third cause of action, for breach of an implied warranty. For the reasons set forth below, the court

grants defendants' motion.

I. BACKGROUND

The following facts are taken from the complaint, which the court generally must accept as

true on a motion to dismiss: Plaintiff Monterey Regional Water Pollution Control Agency

("MRWPCA") hired CH2M Hill California Inc. for assistance in the construction of a wastewater

Case 5:05-cv-04850-RMW Document 18 Filed 02/21/06 Page 1 of 4
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ORDER GRANTING MOTION TO DISMISS PLAINTIFF'S THIRD CAUSE OF ACTION FOR BREACH OF IMPLIED

WARRANTY—No. C-05-04850 RMW

JAH 2

treatment plant. CH2M Hill California specified copper pipe for a part of the plant. The pipe

ruptured, causing damage to the plant and necessitating repairs and replacement of the copper pipe. 

MRWPCA sued CH2M Hill, Inc. and CH2M Hill Companies, Ltd. (collectively "CH2M") as

CH2M Hill California's successors in interest to the contract with MRWPCA. The complaint

contained three causes of action: negligence, breach of contract, and breach of implied warranty. 

CH2M moves to dismiss the claim for breach of implied warranty.

II. ANALYSIS

The contract specifies that is is governed by California law, and neither party challenges the

application of California law. The dispute is whether, under California law, the plaintiff may

maintain a cause of action against the defendants for breach of an implied warranty for the

defendants' design work. "[T]he well settled rule in California is that where the primary objective of

a transaction is to obtain services, the doctrines of implied warranty and strict liability do not apply." 

Allied Props. v. John A. Blume & Assocs., Eng'rs, 25 Cal. App. 3d 848, 855 (1972).

Plaintiff claims that "CH2M sold it a wastewater treatment plant." Opp'n at 2. However, this

claim is belied by the parties' contract, which is attached to the complaint as Exhibit A. Plaintiff

claims that its assertions that CH2M was involved in "building" and the "development" of the plant

are sufficient to prevent dismissal of its claim for breach of implied warranty because it has alleged

that CH2M sold it a plant. The court need not decide if, absent consideration of the contract,

plaintiff has sufficiently stated a cause of action for breach of implied warranty against CH2M. 

While a court ordinarily must, on a motion to dismiss, accept the allegations of the complaint as

true, a court may properly consider a contract attached to a complaint and disregard allegations in

the complaint contradicted by the contract. Spreewell v. Golden State Warriors, 266 F.3d 979, 988

(9th Cir. 2001).

The parties' contract makes it clear that CH2M provided only services, not property, to

plaintiff. According to the contract, CH2M "is employed to render a professional service only." 

Compl., Ex. A, § XII. Representative responsibilities contractually assigned to CH2M are document

review, assisting plaintiff in obtaining permits, designing the facility, writing operating manuals, and

analyzing bids. Id. § IV(B)-(D). The primary objective of the parties' contract is to obtain services,

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ORDER GRANTING MOTION TO DISMISS PLAINTIFF'S THIRD CAUSE OF ACTION FOR BREACH OF IMPLIED

WARRANTY—No. C-05-04850 RMW

JAH 3

thus the doctrine of implied warranty is inapplicable. Allied Props., 25 Cal. App. 3d. at 855. 

Plaintiffs' cause of action for breach of implied warranty thus must be dismissed.

Plaintiff may attempt to amend its complaint to state a viable claim for breach of implied

warranty. See Fed.R.Civ.P. 15(a). To do so, plaintiff must set forth facts that show CH2M was

engaged in building or that additional contracts covered building by CH2M. 

III. ORDER

For the foregoing reasons, plaintiff's cause of action for breach of implied warranty is

dismissed.

DATED: 2/17/06 /s/ Ronald M. Whyte

RONALD M. WHYTE

United States District Judge

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ORDER GRANTING MOTION TO DISMISS PLAINTIFF'S THIRD CAUSE OF ACTION FOR BREACH OF IMPLIED

WARRANTY—No. C-05-04850 RMW

JAH 4

Notice of this document has been electronically sent to:

Counsel for Plaintiffs:

Thomas R. Hogan trh@hoganlaw.com 

Mark Vincent Boennighausen mvb@hoganlaw.com

Counsel for Defendants:

Christopher John Hersey chersey@millermorton.com 

Peter V. Dessau

Counsel are responsible for distributing copies of this document to co-counsel that have not

registered for e-filing under the court's CM/ECF program.

Dated: 2/21/06 /s/ JH 

Chambers of Judge Whyte

Case 5:05-cv-04850-RMW Document 18 Filed 02/21/06 Page 4 of 4