Filed 5/20/14 (unmodified opn. attached)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

MEGA RV CORPORATION,

Cross

- complainant, Cross

- defendant and Appellant,

v. HWH CORPORATION,

Cross

- defendant, Cross

- complainant and Respondent. G047718 (Super. Ct. No. 30

- 2007

- 00100242)

ORDER MODIFYING OPINION AND DENYING PETITION FOR REHEARING; NO CHANGE IN JUDGMENT

It is or dered that the opinion filed herein on April 30, 2014, be modified as
follows: On page 26, line 8, before the sentence beginning with “We are unaware of

any

. . . .” insert the following:2 Like Sooy v. Peter , supra , 220 Cal.App.3d at pages 1311

- 1312, w e disagree with the majority opinion in Manning v. Sifford (1980) 111 Cal.App.3d 7, 10

- 11, wherein the court suggested it could award tort of another damages even if no tort duty existed.

The petition for rehearing is DENIED. There is no change in the judgment.

IKOLA, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

THOMPSON, J.Filed 4/30/14 (unmodified version)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

MEGA RV CORPORATION , Cross

- complainant , Cross

- defendant and Appellant ,

v.
HWH CORPORATION , Cross

- defendant , Cross

- complainant and Respondent

. G047718 (Super. Ct. No. 30

- 2007

- 00100242)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Jamoa A. Moberly, Judge. Affirmed as modified.

Adam K. Obeid for Cross

- complainant, Cross

- def endant and Appellant.
David B. Dimitruk for Cross

- defendant, Cross

- complainant and Respondent.4 This case began with a prosaic dispute. John and Dawn Ertz (collectively
the Ertzes) purchased a motor home from retail er Mega RV Corporation (Mega RV)

. Citing alleged defects in the motor home, t he Ertzes sued Mega RV, Country Coach,
L.L.C. ( Country Coach; the manufacturer of the motor home), and Bank of America, N.A. ( Bank of America; the financier of the transaction) under the Song

- Beverly Consumer Warranty Act (the Act; Civ. Code, § 1790 et seq.)

. 1 Mega RV seemingly had
little to fear. According to Mega RV’s appellate brief, “Country Coach was providing Mega RV with defense and inde mnity in this case purs uant to contract and statute.”

Unfortunately for all parties to this case , an involuntary bankruptcy petition was filed against Country Coach in 2009. Suddenly, Mega RV faced the prospect of paying for its own defense and for any award of damages and attorney fees obtained by
the Ertzes under the Act

. (See § 1794.)

Mega RV devised a clever r esponse to its predicament . Citing section 1792, which states in relevant part that “[t]he retail seller shall have a right of indemnity agai nst the manufacturer in the amount of any liability under this section, ” Mega RV posited that component part manufacturer s (not just the ultimate manufacturer of the final consumer good) are subject to liability and indemnity obligations under the Act

. HW H Corporation (HWH) manufactured hydraulic components incorporated by Country Coach into the motor home ultimately sold to the Ertzes by Mega RV. Mega RV filed a cross

complaint against HWH, seeking total or partial indemnifi cation from HWH under the
Act. But Mega RV’s stratagem backfired. The trial court concluded HWH was not required to indemnify Mega RV under the Act for any relief obtained by the Ertzes. Moreover, ruling on HWH’s cross

- complaint, t he court awarded $166,000 in damages to

1 All statutory references are to the Ci vil Code unless otherwise stated

.5

HWH and agai nst Mega RV, reasoning that the “tort of another” doctrine justified this departure from the typical rule that a party pays its own attorney fees

.

We agree with the portion of the judgment declaring that Mega RV is not entitled to indemnity from HWH. As we shall explain, a component part manufacturer is only subject to section 1792 obligations if it has provided an express warranty to the consumer pertaining to the component part at issue. But we disagree with the court’s application of the tort of anoth er doctrine. We therefore strike the award of damages to HWH and affirm the judgment as modified.

FACTS

Pre

- t rial Procedural History

The Ertzes ’ initial complaint was filed in December 2007; a first amended complaint was filed in October 2008. Both com plaints featured causes of action under
the Act and alternative causes of action under the California Uniform Commercial Code. The only difference between the two complaints was the addition of Bank of America as a defendant in the first amended complaint , alongside Country Coach and Mega RV

.

An involuntary bankruptcy petition was filed against Country Coach in
2009. Mega RV moved to compel the joinder of HWH as a defendant in June 2010. The court granted the motion, thereby compelling plaintiffs (the E rtze s) to name HWH as a
defendant. HWH was named as a defendant in the Ertzes’ December 2010 second amended complaint.

Mega RV’s August 2010 cross

- complaint sought indemnity from HWH as well as declaratory relief. The key paragraph in Mega RV’s cross

- co mplaint alleged as follows: The motor home “was designed and manufactured by Country Coach, integrating hydraulic systems and hydraulic parts

. . . designed and manufactured by HWH. Specifically, the hydraulic system, hydraulic lines, and hydraulic parts that6

comprise the mechanisms that move the [motor home’s] slide outs were manufactured and supplied by HWH. Moreover, HWH provided an express warranty

. . . for each of the hydraulic systems, hydraulic lines and hydraulic parts that it manufactured and

w hich were integrated into the design and manufacture of the [motor home].” (Italics added.) Mega RV alleged it was entitled to indemnity under section 1792 based on an alleged breach of the implied warra nty of merchantability by HWH.

In its cross

- compla int for declaratory relief and equitable indemnity, HWH contended the Act did not apply to it for several reasons , among which was the following allegation: The Act “does not apply to HWH because HWH did not issue an express warranty . . . to Country Coac h, the Ertzes or Mega RV. ” As part of its equitable indemnity cause of action, HWH alleged that cross

- defendants (including Mega RV and the Ertzes) “were negligent in the way they either designed or manufactured the motor home or its component parts, diag nosed the causes and conditions in the motor home, and effectuated and failed to effectuate repairs to the motor home. . . . [S]uch negligence (1)
caused the Ertz [es] damages, if any, (2) also caused the conditions in the motor home to not be repaired on which the Ertz [es] base their lawsuit against Mega RV, and (3) impaired HWH’s rights to effectuate repairs, if it was required to do so at all, and avo id the costs of this lawsuit.”

In June 2011, HWH and the Ertzes entered into a settlement agreement.
Pu rsuant to the settlement agreement, the Ertzes paid HWH $2,000 and dismissed HWH from the lawsuit with prejudice in exchange for a release of all claims by HWH. As recited in the settlement agreement, the Ertzes “independently determined to their own
sati sfaction that HWH . . . did not cause or contribute to causing the hydraulic leaks
that

. . . the Motor Home [is alleged to have] sustained.” The court denied HWH’s Code
of Civil Procedure section 877.6 motion for an order determining the settlement was i n good faith.7 Just before trial was set to begin, the Ertzes, Mega RV, and Bank of America agreed to submit the matter to binding arbitration. The court stayed Mega RV’s

cross

- complaint against HWH. But HWH opposed a stay of the trial on its cross

compl aint. The court allowed HWH’s cross

- complaint to proceed to a separate trial (even though it was premised on indemnity and declaratory relief issues that only needed
to be decided if the Ertzes establish ed the liability of Mega RV in the first place ). 2

E vidence at Trial

HWH is located in Iowa

. HWH doe s not manufacture motor homes. HWH
manufactures component parts and supplies th o se parts (primarily “leveling systems and
slide

- out mechanisms”) to manufacturers of motor homes (and other vehicles)

. HWH
do es not manufacture every p art used in its slide

- out hydraulic systems. For instance, HWH purchases hoses from Eaton Corporation and Parker Hannifin Corporation. HWH
has sold components to Country Coach for more than 20 years

. Country Coach placed purcha se orders and HWH shipped the components from Iowa to Country Coac h in Oregon by common carrier. HWH did not provide engineering services to Country Coach regarding the construction of its motor homes.

At all relevant times, Mega RV was an authorized Cou ntry Coach warranty repair and service center, but was not an authorized HWH warranty repair or service

center. Country Coach maintained a policy of requesting its warranty repair providers to send replaced parts to Country Coach, in part to effectuate re imbursement from the manufacturer of the part or component when appropriate.

The Country Coach motor home purchased by the Ertzes from Mega RV
fe atured four slideout rooms. A slide out is a box t hat extends from the motor home to

2 We reserve additional discussion of this case’s tortured procedural hist ory until the end of this opinion.8

provide additional living space. H ydraulic components sold by HWH to Country Coach were integral to the operation of the slideout rooms in the Ertzes’ motor home.

John Ertz received two written warranties from Country Coach at the tim e he purchased the motor home. There is no me ntion in John’s testimony about any warranty from HWH. Much of John ’s testimony pertains to the problems he had with his motor home and the efforts undertaken to repair his motor home. HWH is not mentioned during this testimony. John d oes not recall rec eiving any commun ications at any time
from HWH. John did not attempt to notify HWH at any time of problems with his motor
home. John filed t his lawsuit because he could not enjoy the use of his motor home as a result of problems with the slide out rooms

.

Vincent Edward Anderson is a service technician at Mega RV

. In response

to a January 2007 complaint about the slide outs, Anderson found a leaking hydraulic hose and replaced it. Anderson received permission to replace the hose from Country Coach; the wo rk was performed under the Country Coach warranty. Country Coach paid Mega RV for the repair.

Ryan Smith worked as a dealer service representative for Coun try Coach prior to its demise. There were multiple calls with regard to issues with the slide out

rooms on the model sold to the Ertzes ; “[i]t seemed like it was becoming a repetitive issue.” Smith talked to John on April 26, 200 7 about problems with the slide outs , which were not working. Smith arranged for a n unspecified repair service (not Mega RV) to perform a repair on the Ertzes’ motor home in Las Vegas. Smith also personally replaced a “solenoid” because “the pressure relief portion of the solenoid valve was bent,”
resulti ng in leaking hydraulic fluid. The slide

- out rooms continued to cause pr oblems for
the Ertzes

. Mega RV performed additional repairs in May 2007

. Smith authorized work at Temecula Valley R.V. in June 2007 because John did not want to return to Mega RV
for additional servic ing

.9 A family

- owned repair firm in Arizona also work ed on th e motor home in
November 2007. A Country Coach representative requested th e work on behalf of John

. A hydraulic hose was leaking on the passenge r rear side of the motor home. The hose
had detached from a brass fitting previously attached to the motor home at some
unknown time. This brass fitting was not on the motor home in January 2007 and should
not have been attached to the motor home and the HWH hydraulic components. The brass fitting was not manufactured by HWH. There was no direct eviden ce in the record regarding who attached the brass fitting and when it was attached. HWH argued this fitting must have been attached in April 2007 by the unspecified repair firm hired by Smith. HWH argued this show ed Mega RV’s negligence because Mega RV s hould have discovered the fitting in its May 2007 servicing of the motor home.

HWH Chief Executive O fficer Paul Hanser testified, both as a percipient and expert witness. Hanser opined that none of the HWH products were defective on the
Ertz motor home. Hanser stated, “HWH provides warranty information to Country Coach, and then they distribute it. We did not specifically h and Mr. Ertz a warranty card.” There is only one warranty provided by HWH and it pert ains to “the leveling system.” The Ertzes “ cou ld have contacted HWH for warranty service under the warranty ” if there was an issue with the leveling system. HWH did not provide an y written warranty to Mega RV. According to Hanser, Mega RV completed a normal replacement job of the hydraulic hose in J anuary 2007 and he “found nothing on the [replaced] hose that was of concern.” Instead, the fundamental problem with the motor home was the Country Coach design, which exposed hydraulic components to

t emperatures above 180 degrees.

Court’s Ruling and Ju dgment

The court ultimately ruled in favor of HWH, determining HWH had no obligation to indemnify Mega RV

. T he court also ruled that HWH was entitled to10

damages in the amount of $166,000 pursuant to the tort of another rule , based on Mega RV’s negligence “with regard to a service that it performed on the motor home owned by the plaintiffs.” 3 Based on its ruling s on HWH’s cross

- complaint , the court also granted HWH’s motion for judgment on the pleadings as to Mega RV’s cross

- complaint. T he
court entered a separate judgment on the cross

- complaints filed by Mega RV and HWH in accordance with these rulings. 4

DISCUSSION

Mega RV contends the court erred (1) in its conclusion that HWH cannot be held liable for indemnity , (2) in its award of damages to HWH, an d (3) in its decision to try HWH’s cross

- complaint separately from the rest of the case

.

HWH is Not Obligated to Indemnify Mega RV

As to whether HWH must indemnify Mega RV under section 1792, w e are presented primarily with question s of statutory interpre tation and construction

. Does the Act (and in particular § 1792) apply only to the single manufacturer occupying the terminal stage of the manufacturing process? If so , HWH cannot be liable in indemnity
under the Act to Mega RV regardless of the factual circumstances of this case.

3 Extensive portions of the record and the parties’ briefs are devoted to voluminous motion practice by the parties (e.g., wrangling as to the propriety of several different versions of the statement of decision, motion s for judgment on the pleadings, motion for a new trial). For the most part, because our analysis is driven by de novo review of the legal issues in this case, we can ignore this morass. As noted above, however, we shall return to the procedural history of the case at the end of the opinion.

4 By a January 10, 2014 order, this court determined that the separate judgment adjudicating the rights of HWH and Mega RV was appealable and that the case should not be dismissed for lack of jurisdiction.11

Conversely, does section 1792 potentially apply to multiple entities participating in the manufacturing chain of production ? If so , under what circumstances are component part manufacturers subject to the Act? In answering t hese questions, “our task is to ascertain the intent of the Legislature so as to effectuate the purpose of the enactment. [Citation.] We look first to the words of the statute, which are the most reliable indications of the Legislature’s intent. [Citati on.] We construe the words of a statute in context, and harmonize the various parts of an enactment by considering the provision at issue in the context of the statutory framework as a whole.” ( Cummins, Inc. v. Superior Court (2005)
36 Cal.4th 478, 487 ( Cummins ).) “[I]f the statutory language ‘is clear and unambiguous there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature . . . .’” (

Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 750.)
We thus turn to our independent interpretation and construction of section
1792

. “Unless disclaimed in the manner prescribed by this chapter, every sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer’s and the retail seller’s implied warranty that the goods are merchantable. The retail seller shall have a right of indemnity against the manufacturer in the amount of any liability under this section.” ( § 1792, i talics added.) In isolation, section 1792
does not defini tively answer the question presented. S ection 1792 uses singular nouns
when referring to “the manufacturer , ” both with regard to the provision of an implied warranty to the consumer and a n indemnity right to the retail seller. But , in interpreting
the Ci vil Code, the use of “the singular num b er” can “include [] the plural

. ” (§ 14.) Without additional context, it is unclear whether the Legislature intended section 1792 to apply to only the ultimate manufacturer, to any manufacturer playing a role in the
p roduction process, or to some but not all component manufacturers

. 5

5 The current version of section 1792 took effect after the 1978 amendment of the Act. (Stats. 1978, ch. 991, § 3, p. 3060.) The original version of section 1792 stated, “Unless disclaimed in the manner prescribed by this chapter, every sale or12 T he definition s section of the Act lends some credence to both parties ’
contentions

. “‘Manufacturer’ means any individual, partnership, corporation , association, or other legal relationsh ip that manufactures, assembles, or produces consumer goods .” (§ 1791, subd. (j) , italics added .) “‘Consumer goods’ means any new product or part thereof that is used, bought, or leased for use primarily for personal, family, or household purposes, excep t for clothing and consumables. ” ( Id

. , subd. (a), italics added.) “‘Buyer’ or ‘retail buyer’ means any individual who buys consumer goods from a person engaged in the business of manufacturing, distributing, or selling cons umer goods at retail.” ( Id

. , s ubd. (b).) “‘Retail seller’ . . . means any individual, partnership, corporation, association, or other legal relationship that engages in the business of selling or leasing consumer goods to retail buyers .” ( Id

. , subd. (l).)

Relying on these definitions , Mega RV posits HWH logically must be
classified as a manufacturer under the Act and section 1792 : (1) HWH manufactured hydraulic components ; (2) the hydraulic components became a “part” (§ 1791, subd. (a)) of the motor home upon assembly by Country Coac h ; (3) Country Coach delivered the motor home to the retail seller, Mega RV; (4) Mega RV sold the motor home, of which
the hydraulic system was a “part,” to buyers ( the Ertzes ) for their pe rsonal use as a consumer good ; and (5) a motor home is clearly a co nsumer good under the Act (see National R.V., Inc. v. Foreman (1995) 34 Cal.App.4th 1072, 1076

- 1083 ( Foreman ))

.
consignment of consumer goods in this state by a manufacturer shall be accompanied by an implied warranty that the goods are merchantable.” (Stats. 1970, ch. 1333, § 1, p. 2480.) Section 1792 was amended the next year as follows, “Unless disclaimed in the manner presc ribed by this chapter, every sale or consignment for sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer’s implied warranty that the goods are merchantable.” (Stats. 1971, ch. 1523, § 4, p. 3003.) Arguabl y, references to consignments in these earlier versions tend to suggest that section 1792 was meant to apply only to the final manufacturer (the one that had a relationship with the retail seller, to whom the goods would presumably be consigned). But this analysis of legislative history is hardly conclusive with regard to the prior versions of section 1792, let alone the current version eschewing mention of consignment.13

While not an irrefutable syllogism, Mega RV’s position is certainly a plausible reading of
the Act

. HWH , on the other hand, emphasizes the dist inction between the acquisition of the hydraulic components by Country Coach and the purchase of the motor home by the Ertzes. The HWH hydraulic components were not consumer goods when Country Coach acquired them from HWH in Iowa , both because they were n ot yet sold at retail as consumer goods and because they were not sold in California

. (See Cummins , supra , 36 Cal.4th at p. 483 [Act only applies to goods purchased in California].) The hydraulic components only became part of a consumer good once the Er tzes purchased the entire motor home from Mega RV in California

. According to HWH, it makes no sense for component part manufacturers to be included wi thin the scope of the Act, given the lack of a necessary relationship between the component manufacturer and the retail seller or buyer. By HWH’s reasoning, the inclusion of the phrase “or part thereof” in the definition of “‘ [c] onsumer goods’” (§ 1791, subd. (a)) is meant only to make clear that the Act applies to individual parts of a larger whole that ar e sold separately to a retail buyer ( i.e. , the consumer is entitled to the remedies provided by the Act even if the consumer purchases only a p art to be used in a larger item, such as a new battery for a previously purchased automobile ) , not to sweep compo nent manufacturers of parts sold within a greater whole into the reach of the Act. 6

6 This position has some support in legislative history. The original definition of “‘[c]onsumer goods’” in the Act was “any motor vehicle, machine, appliance, or like product that is used or bought for use primarily for personal, family, or household purposes.” (Stats. 1970, ch. 1333, § 1, p. 2478.) The next year, the definition of “‘[ c]onsumer goods’” was amended to “any new mobilehome, motor vehicle, machine, appliance, like product, or part thereof that is used or bought for use primarily for personal, family or household purposes. ‘Consumer goods’ also means any new good or product , except for soft goods and consumables, the retail sale of which is accompanied by an express warranty to the retail buyer thereof and such product is used or bought for use primarily for personal, family, or household purposes.” (Stats. 1971, ch. 1523, § 2, p. 3001, italics added.) Perhaps casting some light on the history of this amendment “and14 Other sections of the Act inform the debate, but not definitively. What exactly is the implied warranty of merchantability “the manufacturer ” is deemed to provide to consu mers pursuant to section 1792 absent an effective disclaimer thereof? “‘Implied warranty of merchantability’

. . . means that the consumer goods meet each of the following: [¶] (1) Pass without objection in the trade under the contract description. [¶] (2) Are fit for the ordinary purpose for which such goods are used. [¶] (3) Are adequately contained, packaged, and labeled. [¶] (4) Conform to the promises or affirmations of fact made on the container or label.” (§ 1791.1, subd. (a).) “Unlike

exp ress warranties, which are basically contractual in nature, the implied warranty of merchantability arises by operation of law . [Citation.] It does not ‘impose a general requirement that goods precisely fulfill the expectation of the buyer. Instead, i t provides for a minimum level of quality. ’ ” ( American Suzuki Motor Corp. v. Superior Court (1995) 37 Cal.App.4th 1291, 1295

- 12 96 [discussing similar Commercial Code implied warranty of merchantability]

. ) Th e nature of th e implied warranty of merchantabil ity tends to argue against the wholesale application of the Act to component part

the arguments before the Legislature when it considered the matter” (see County of San Diego v. Superior Court (1986) 176 Cal.App.3d 1009, 1021) is March 1971
c orrespondence between Senator Alfred Song (a sponsor of the Act) and James Hamilton, the Executive Vice President of the California Automotive Wholesalers Association. Hamilton inquired as to whether “the definition of consumer goods includes the componen t parts of motor vehicles, such as engine parts, fuel pumps, starters, carburetors, brake shoes, and the thousands of other replacement parts our members handle.” (Executive Vice

- president James E. Hamilton, Cal. Automotive Wholesalers’ Assn., letter to S en. Alfred H. Song, Mar. 18, 1971.) Senator Song replied, “It was certainly our intent to include component parts of motor vehicles under the coverage of the Act when such parts are sold on a retail basis to consumers. We believe that the retail sale of such parts is presently covered by the Act, and we will shortly be introducing clarifying amendments, one a provision of which we will specifically list parts under the definition of consumer goods.” (Sen. Alfred H. Song, letter to Executive Vice

- presiden t James E. Hamilton, Mar. 26, 1971.) Our review of legislative history does not disclose any concern with the problem of manufacturers whose components had been integrated into a consumer good that was then sold at retail.15

manufacturers . S ome of the categories are not in tune with the typical role of a component part manufacturer , such as the container, packaging, and labeling of the good

. In addition, to warrant that all components are fit for an ordinary purpose would be strange, given that the components have often been utilized for a particular purpose within the larger consumer good of which they became a part. U nless it were easy to
sep arate the performance of the specific component at issue from the whole, the overall thrust of this warranty seems more suited to the final product rather than the component parts therein. Sections of the Act pertaining to express warranties 7 are problemat ic for both parties’ positions

. Entities regulated under the Act t ypically have the option of either providing an express warranty or not providing an express warranty in connection with the sale of consumer goods to retail buyers . (§ 1793 [“nothing in [ the Act] shall affect the right of the manufacturer, distributor, or retailer to make express warranties with respect to consumer goods” ] ; Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 121 [“ If a manufacturer elects to pr ovide an express warranty

. . . the Act protects buyers in a number of ways”].) Manufacturers choosing to provide an express warranty , however, are subject to specific requirements set forth in the Act. For instance, “ [e] very manufacturer . . . making express warranties with respect to consumer

7 “‘Express warranty’ means: [¶] (1) A written statement arising out of a sale to the consumer of a consumer good pursuant to which the manufacturer, distributor, or retailer undertakes to preserve or maintain the utility or performance of the consumer good or provide compensation if there is a failure in utility or performance; or [¶] (2) In the event of any sample or model, that the whole of the goods conforms to such sample or model.” (§ 1791.2, subd. (a).) “It is not necessary to the creation of an express warranty that formal w ords such as ‘warrant’ or ‘guarantee’ be used, but if such words are used then an express warranty is created. An affirmation merely of the value of the goods or a statement purporting to be merely an opinion or commendation of the goods does no t create a warranty.” ( Id

. , subd. (b).) “Statements or representations such as expressions of general policy concerning customer satisfaction which are not subject to any limitation do not create an express warranty.” ( Id

. , subd. (c).)16

goods shall fully set forth those warranties in simple and readily understood language

. . . . ” (§ 1793.1, subd. (a)(1).) Moreover, “ [e] very manufacturer of consumer goods sold in this state and for which the manufacturer has mad e an express warranty shall” maintain repair facilities or designate independent repair facilities reasonably close to the areas in which the goods are sold. (§ 1793.2, subd. (a).)

A manufacturer opting not to provide an express warranty may also
disclaim the implied warranty of merchantability by conspicuously and clearly informing the buyer of statutorily specified disclosures and limitations on liability . (See §§ 1792.4

- 1792.5.) But “ a manufacturer, distributor, or retailer, in transacting a sale in w hich express warranties are given, may not limit, modify, or disclaim the implied warranties guaranteed by this chapter to the sale of consumer goods.” (§ 1793.) Thus, “ the manufacturer’s and the retail seller’s implied warranty that the goods are mercha ntab le” (§ 1792) fits hand in glove with the Act’s regulation of the quality of express warranties. By requiring an implied warranty of merchantability to accompany any express warranties, the Act ensures that retail buyers in receipt of an express warran ty have a minimum level of substantive protection

. This statutory structure undermines the facile suggestion that the manufacture of any “part” of a consumer product subjects the component manufacturer to section 1792. Unlike the manufacturer who ships t he completed good to the retail seller, a component part manufacturer may not be in a position to craft an express warranty or disclaim an implied warranty.

But w hat if a component manufacturer provides an express warranty to the
consumer? 8 Is such an exp ress warranty governed by the Act? Section 1795 answers this question in the affirmative, even assuming a component manufacturer is not a

8 Consider the warranty commonly provided by tire manufacturers to purchasers of new cars (alongside that of the vehicle’s manufacturer). Or consider the warranty provided with regard to the “leveling system” by HWH in this case.17

“manufacturer” under the Act: “If express warranties are made by persons other than the manufacturer of the goods, t he obligation of the person making such warranties shall be the same as that imposed on the manufacturer under this chapter.” ( Ibid .) Indeed, some cases brought under the Act name multiple manufacturers as defendants . (See, e.g.,
Cummins , supra , 36 Cal. 4th at p. 483 [suit against Winnebago Industries, Inc., and Cummins, Inc

. , the engine manufacturer] ; Tiffin Motorhomes, Inc. v. Superior Court (2011) 202 Cal.App.4th 24, 27

- 28, 32

- 33 ( Tiffin ) [separate manufacturers of engine, coach, and chassis of motor h ome all provided separate warranty and were sued under the Act; HWH also mentioned as a defendant, presumably based on its provision of component parts]; Foreman , supra , 34 Cal.Ap p.4th at pp. 1074

- 1076 & fns. 3 & 4 [General Motors Corporation, which expres sly warranted the chassis portion of the motor home manufactured by National R.V., Inc., was held liable by jury under the Act; no mention of an implied warranty action under § 1792].) 9 At the very least, it seems the Act applies in some measure to compon ent manufacturers when they provide express warranties to retail buyers

. 10

9 It must be noted that these cases did not ac tually interpret the Act to apply to component manufacturers. Rather, this question was not presented for review by the appellate courts in any of the cases.

10 Section 1793.05 is another interesting provision of the Act for our interpretive purposes: “Vehicle manufacturers who alter new vehicles into housecars shall, in addition to any new product warranty, assume any warranty responsibility of the original vehicle manufacturer for any and all components of the finished product which are, by virtue of any act of the alterer, no longer covered by the warranty issued by the original vehicle manufacturer.” Section 1793.05 (without distinguishing between express and implied warranties) illustrates that in at least some circumstances, there can be two manuf acturers providing warranties to consumers under the Act (the “housecar” alteration vehicle manufacturer and the original vehicle manufacturer with regard to any warranty responsibilities that have not been revoked by reason of the alterations). But by
ex plicitly providing for the party making the alterations to the finished vehicle to step into the shoes of the “original vehicle manufacturer” in the case of warranties voided through alteration, does section 1793.05 suggest that the ordinary state of affai rs would18 Although yielding important insights, neither the structure of the Act nor legislative history definitively answers whether and in what circumstances section 1792 applies to componen t part manufacturers. Without careful analysis, a federal district court suggested a computer chip manufacturer (NVIDIA Cor poration) might be subject to section 1792 breach of implied warranty claims based on the presence of its allegedly defective chips in Hewlett Packard personal computers sold to consumers in California. ( In re NVIDIA GPU Litig. (N.D. Cal. Nov. 19, 2009 , No. C 08

- 04312 JW ) 2009 U.S.Dist.
Lexis 108500 [granting motion to dismiss but allowing leave to amend to limit class allegations to p urchases in California].) Outside of this case (which is of little help) , there is no guidance in case law applying the Act with regard to the specific question presented

. Hav ing failed to discover a clear rule in the language of the Act or case authority , w e shift our focus to the purposes of the Act. ( Foreman , supra , 34 Cal.App.4th at p. 1077.) The Act “was enacted to address the difficulties faced by consumers in enforcing express warranties. Consumers frequently were frustrated by the
inconvenience of having to return goods to the manufacturer for repairs and by repeated unsuccessful attempts to remedy the problem. [Citation.] The Act protects purchasers of consumer goods by requiring specified implied warranties, placing strict limitations on
how and when a manufacturer may disclaim those implied warranties, and providing mechanisms to ensure that manufacturers live up to the terms of any express warranty.” ( Cummins , supra , 36 Cal.4th at p. 484.) “[T]he Act is manifestly a remedial measure,
inten ded for the protection of the consumer; it should be given a construction calculated to bring its benefits into action.” ( Kwan v. Mercedes

- Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 184.)

be for a single manufacturer to provide warranties with regard to any and all components of the finished product or the opposite?19 The Act consists of enhancements to the rights of consu mer purchasers of goods. (See Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 213 [“The Act regulates warranty terms, imposes service and repair obligations on manufacturers, distributors, and retailers who make express warranties, requ ires disclosure of specified information in express warranties, and broadens a buyer’s remedies to include costs, attorney’s fees, and civil penalties”].) But th e California
Uniform Commercial Code still governs other sales of goods issues. (See § 1790.3 ; Cal.
U. Com. Code, § 2101 et seq.) I t would be misguided to view non consumer transactions (e.g., the sale of hydraulic parts by HWH to Country Coach) through the prism of the Act
rather than the California Uniform Commercial Code. It would also be misg uided to overstate the extent to which the Act changes sales of goods law even in consumer transactions. (§ 1790.3 [“The provisions of this chapter shall not affect the rights and obligations of parties determined by reference to the Commercial Code excep t that, where the provisions of the Commercial Code conflict with the rights guaranteed to buyers of consumer goods under the provisions of this chapter, the provisions of this chapter shall prevail”].) 11

11 Of relevance here, “[u]nder California Commercial Code section 2314, the implied warranty provision . . . , a pla intiff asserting breach of warranty claims must stand in vertical contractual privity with the defendant. [Citation.] A buyer and seller stand in privity if they are in adjoining links of the distribution chain.” ( Clemens v. DaimlerChrysler Corp. (9th C ir. 2008) 534 F.3d 1017, 1023.) Mega RV typically would not be entitled to sue HWH under the California Uniform Commercial Code for breach of an implied warranty because the two parties are not in privity with regard to the Ertzes’ motor home. ( Ibid ; but see Jimenez v. Superior Court (2002) 29 Cal.4th 473, 481 [“manufacturers of component parts, here windows, that are installed in mass

- produced homes can be subject to strict products liability in tort when their defective products cause harm”].) Of cours e, under the Act, the buyer can sue “the manufacturer” for breach of the implied warranty of merchantability despite a lack of privity. ( Gusse v. Damon Corporation (2007) 470 F.Supp.2d 1110, 1116, fn. 9.)20 Considering the policies, purposes , and scope of the Act , there is no obvious, non speculative benefit to including every component or part supplier within the scope of section 1792 . To the contrary, the suggestion that section 1792 refers to every manufacturer contributing a “part” to the finished product would at best create confusion
for the consumer , the retail seller, and the various entities playing a role in the manufacturing process . At worst, such an interpretation would create legal uncertainty as to the liability of the ultimate manufacturer for component part defects , based on the theory that if the component is considered a separable consumer good for purposes of imposing liability on a component manufacturer, it could also be considered a separable consumer good for purposes of not imposing lia bility on the ultimate manufacturer

. 12

Moreover, interpreting section 1792 to apply to every component part manufacturer would be impractical and unfair. In some cases, application of the Act by
California courts to component part suppliers w ould be fore closed by lack of personal jurisdiction. (See Dow Chemical Canada ULC v. Superior Court (2011) 202 Cal.App.4th 170, 172

- 173.) And even if personal jurisdiction existed, it would be unfair in some circumstances to apply consumer protection laws to compone nt manufacturers playing only an indirect role in the provision of consumer goods to California buyers , without regard to the substantiality of the component contributed to the consumer good , the component manufacturer’s knowledge that its goods would ulti mately be utilized in this way , or the component manufacturer’s opportunity to disclaim potential liability
under section 1792. (Cf. Cummins , supra , 36 Cal.4th at pp. 492

- 493 [Act does not apply

12 This case hints at one possible benefit to bu yers in light of Country Coach’s bankruptcy. Had Mega RV suffered the same fate, the Ertzes might have been left in the lurch. A rule that extends the applicability of section 1792 to every component manufacturer might aid a hypothetical consumer in this circumstance, if the defect complained of could be linked to a component produced by a particular manufacturer. But this speculative benefit to consumers does not overcome the problems with imposing such liability as discussed in the preceding and follow ing paragraphs.21

to sales of consumer goods outside California].) We will no t presume the Legislature
intended an absurd result in its drafting of section 1792 and the definition of “‘[c]onsumer goods’” to include “any new product or part thereof” in section 1791, subdivision (a)

. We therefore hold that the section 1792 “manufact urer” does not include every component manufacturer contributing parts or components to a consumer good.

But , as discussed above , there are tangible benefit s to retail buyers in applying the Act to component manufacturers that provide express warranties to buyers

. ( See Cummins , supra , 36 Cal.4th at p p . 484

- 485 .) In light of the purposes of the Act and consistent with the language of relevant portions of the Act , we hold an implied warranty of merchantability accompanies any express warranty provided by a component manufacturer to a retail buyer

. ( See §§ 179 2 , 1795.) The Act’s requirement of an implied warranty of merchantability is part and parcel of the Act’s regulation of express
warranties . If a component manufacturer provides an express warranty, i t cannot disclaim the implied warranty of merchantability. (§ 1793.) Once section 1792 is interpreted to require a component manufacturer’s implied warranty of merchantability in certain circumstances, it follows that a retail seller has a right to indem nity from the component manufacturer in those same circumstances.

Just as the scope of the express warranty provided by a component
manufacturer would undoubtedly be limited to the component part at issue, the implied warranty of merchantability (and acc ompanying retail seller’s right to indemnification) would likewise be adapted to the scope of the “part” provided by the component
manufacturer. (See Tiffin , supra , 202 Cal.App.4th at p. 33 [in multiple defendant warranty claim under Act, court observes d efendants’ “will rarely[] have caused the same harm to the plaintiffs. Each will, however, be liable for the contract damages stemming from the breach of the contract into which that defendant entered. These obligations are neither ‘joint’ nor ‘joint and several’ and, therefore, do not give rise to any right of contribution”].)22 In sum, c ontrary to the parties’ positions, the best interpretation of the Act is that some (but not all) component manufacturers (i.e., those providing express warranties to the buyer) are subject to the Act , including section 1792

. If component manufacturers provide an express warranty to buyers of consumer goods under the Act, they will also be deemed to have provided an implied warranty of merchantability. In turn, such comp onent manufacturers potentially will be liable in indemnity to retail
sellers under section 1792. If a component manufacturer does not provide the consumer with an express warranty, neither the consumer nor the retail seller can seek recovery
from the com ponent manufacturer under section 1792.

Our interpretation of the Act is supported by reference to comparable interpretations of the Uniform Commercial Code in certain federal courts . P utting to one side the question of privity (as some states other than California have done) , a buyer ordinarily does not have an implied warranty claim against a manufacturer of an integrated component part

. ( Hininger v. Case Corp. (5th Cir. 1994) 23 F.3d 124, 125 [affirming judgment on implied warranty claim in favor of co mponent manufacturer , whose wheels were incorporated into agricultural combines].) This is because, unlike the buyer’s relationship with “the manufacturer of the finished product,” buyers of goods generally have “no expectation that . . . manufacturers of unbranded components would resolve any problem they might experience

. ” ( Id . at p. 128.) It “may be difficult or even impossible for a component supplier to disclaim its warranty liability,” which places component suppliers in a difficult position compar ed to manufacturers of finished products. ( Id . at p. 129 ; see In re General Motors Corp. Anti

- Lock Brake Products Liability Litigation (E.D. Mo. 1997) 966 F.Supp. 1525, 1533

- 1534 [dismissing breach of implied warranty claim against manufacturer of brake s ystem in General Motors vehicles; “none of the states in this action have specifically extended liability for breach of implied warranty to manufacturers of component parts”] .)23 T his does not mean , however, that a self

- described component part manufacture r is always immune from breach of warranty claims. C omponent part manufacturers of goods that could “easily be considered a stand

- alone product,” like a refrigerator attached to a motor home , can be held liable for breach of warranty . ( Teague v. Norcold, Inc. (N.D. Tex. 2011) 774 F.Supp.2d 817, 821.) The Teague court denied a
motion to dismiss a n undifferentiated breach of warranty claim (i.e., the pleading did not specify whether it included implied warranties) brought by the motor home purchaser agains t the refrigerator manufacturer (Norcold). ( Id . at p p. 822

- 823.) The allegations in the complaint suggested Norcold was in communication with its customers regarding a defect in its product; moreover, there were factual questions in the complaint regardi ng “the extent to which the [refrigerator] was a selling point of the RV, the extent to which the [refrigerator] was a stand

- alone product from the RV, and the nature of and the extent
to which Norcold warranted the Unit.” ( Id . at p. 822 , italics added ; s ee also Metro Nat ’l Corp. v. Dunham

- Bush, Inc. (S.D. Tex. 1997) 984 F.Supp. 538, 558

- 559 [component compressors were “centerpiece of the ice harvesters” sold to the plaintiff and component manufacturer was directly involved in design of final product and c ommunication with customers, including delivery of written warranty] .) 13

T he results in these federal cases hinge in large measure on the existence of component manufacturer express warranties received by the ultimate purchasers of the goods

. One practic al lesson from these cases is that a pplication of the Act (including § 1792) to component part manufacturers will likely occur with readily identifiable and

13 These cases do not necessarily hold that the component part manufacturers provided implied warranties of merchantability to the ultimate purchaser of the product. (See Metro Nat ’l Corp. v. Dunham

- Bush, Inc. , supra , 984 F.Supp. at p. 56 1, fn. 50 [implied warranty of fitness for a particular purpose but not merchantability applied in this case because of specialized design of product; unstated implication is that an implied warranty of merchantability would be appropriate in other circums tances].)24

relatively important compo nent parts, often featuring the brand name of the component part manufact urer on the component even when sold to the buyer as part of an integrated consumer good

. This is because, as a matter of common sense, component part manufacturers will only provide express warranties to consumers in these circumstances.

Thus, having con strued section 1792 to apply to component manufacturers under certain circumstances, we must re turn to the record in this case. Country Coach finalized the assembly and manufacture of the motor home at issue under its brand name, but others (including HWH ) manufactured components and parts utilized in the final product delivered by Country Coach to Mega RV. D id the court correctly conclude
HWH was not subject to section 1792 obligations under the specifi c circumstances of this
case? The answer to this qu estion is an unequivocal yes. The appellate record contains

no evidentiary document, trial exhibit or otherwise, suggesting HWH provided an express warranty to the Ertzes (or even Mega RV or Country Coach ) with re gard to the hydraulic system at issue in t his case (i.e., the mechanism whereby the slide

- out rooms were manipulated)

. Nor is there trial testimony establishing such a n express warranty. 14 Indeed, Mega RV’s appellate briefs are silent as to th is factual question. Mega RV’s entire theory of the c ase on appeal is that a component part manufacturer is subject to section 1792 as a matter of law once it has been determined it manufactured a component comprising a “part” of the consumer good in question. We reject this position. HWH was not subject t o section 1792 indemnity obligations

. Any defect in the court’s reasoning on this point in the statement of decision is beside the point, as there is no
evidence to support finding HWH provided warranties to the Ertzes with regard to the hydraulic system operating the slide

- out rooms

.

14 HWH’s chief executive officer testified that a warranty was provided to the consumer with regard to the leveling system but that this was the only warranty provided by HWH. The evidence does not suggest there was any problem with the leveli ng system in the motor home.2 5

Tort of Another Doctrine

The court erred as a matter of law in awarding damages ( consisting of
HWH’s attorney fees ) to HWH pursuant to the tort of another doctrine. Ordinarily, pursuant to the American Rule , a party must pay for its own attorney fees unless a contract or statute provides authority for recovery of attorney fees from a litigation opponent

. The tort of another doctrine holds that “ [ a ] person who through the tort of another has been required to act in the protec tion of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney ’ s fees, and other expenditures thereby suffered or
incurred. ” ( Prentice v. North Amer. Title Guar. Corp. (1963) 59 Cal.2d 618, 620 ( Prentice ) .) The tort of another doctrine is not really an exception to the American Rule, but simply “an application of the usual measure of tort damages.” ( Sooy v. Peter (1990) 220 Cal.App.3d 1305, 1310 [equa ting recovery of attorney fees as damages to medical fees recovered in personal injury action]; see § 3333 [“the measure of damages . . . is the amount which will compensate for all the detriment proximately caused thereby, whether
it could ha ve been antic ipated or not”].)

HWH premises its claim on the notion that Mega RV (the “other” party) was negligent (the “tort”) in its servicing of the Ertzes’ motor home, thereby causing HWH to incur damages (its attorney fees in this action). Even assuming the propr iety of allowing HWH to raise this claim through the backdoor, 15 HWH’s position fails as a matter of law because there was no tort in this case. (See Behniwal v. Mix (2005) 133 Cal.App.4th 1027, 1043 [“The problem we now have is, ‘where’s the tort?’”].)

We must first clarify the alleged tort at issue. T here was no tort committed by any defendant vis

- à

- vis the Ertzes. The Ertzes never sued Mega RV or any other party

15 To wit, HWH’s negligence allegations were only present in an indemnity cause of action in its cross

- complaint, in a case in which there was nothing to indemnify because the Ertzes paid HWH pursuant to the settlement agreem ent.26

for negligence (or any other tort) , and never alleged they suffered any personal injury or damages to other property (besides the portions of the motor home that were alleged to be
defective ) as a result of the alleged defects in the motor home. “It appears doubtful that a
cause of action could be stated in tort [under these circumstances ], as a claim based on negligence or even strict liability will not lie where the wrong has resulted only in
economic loss rather than actual damage to person or property.” ( Tiffin , supra , 202 Cal.App.4th at p. 31, fn. 11 ; see Robinson Helicopter Co., Inc. v. D ana Corp. (2004) 34
Cal.4th 979, 988

- 993 [discussing economic loss rule generally] .) As made clear in a case holding that statutory good faith settlement rules do not apply in pure warranty actions brought under the Act, HWH’s pleading of the case as one sounding in tort for purposes of indemnity did not change the essential nature of this warranty dispute. (See Tiffin , at
pp. 32

- 33 [c ross

- complaint seeking indemnity did not convert defendants into tortfeasors].) HWH alleges Mega RV was negligent to HWH i n its servicing of the Ertzes’ motor home. Like the Ertzes, HWH did not suffer personal injury or injury to other property as a result of Mega RV’s alleged tort

. HWH alleges it suffered consequential economic damages (its attorney fees incurred in this c ase , allegedly as a result of negligent repair of the motor home by Mega RV years earlier ). U nlike the Ertzes and Country Coach, HWH did not have a contractual relationship with Mega RV.
HWH essentially contends this court should recognize HWH’s right to recover its
economic losses from Mega RV in tort

.

T he most fundamental problem with this line of argument is that Mega RV did not owe a duty of care to HWH in connection with its servicing of the Ertz e s ’ motor home

. 16 “Duty . . . is a legal issue and must be determined by the court. [Citation.] A

16 We reject HWH’s contention that Mega RV “abandoned or waived” the argument that it had no duty to HWH. We also note that by limiting our analysis to the question of duty, we by no means endorse the notion that HWH’s attorney fees in this27

duty of care may arise through statute, contract, the general character of the activity, or the relationship between the parties.” ( Ratcliff Architects v. Vanir Construction Management, Inc. (2001) 88 Cal.App. 4 th 595, 604 .) “[E]ntities generally have no duty to prevent purely economic loss to a potential plaintiff. [Citation.] Under the common law, it is only where a ‘special relationship’ exists, giving rise to such a duty [citation], that a plaintiff may re cover purely economic loss.” ( Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1215.) “Courts are reluctant to impose duties to prevent economic harm to third parties because ‘[a]s a matter of economic and social policy, third parties s hould be encouraged to rely on their own prudence, diligence and contracting power, as well as other informational tools.’” ( Ratcliff Architects , at p. 605.)

The tort of another doctrine applies to economic damages (i.e., attorney
fees incurred in litigat ion with third parties ) suffered as a result of an alleged tort

. 17 As

action w ere caused by Mega RV’s repair of the vehicle. Nor do we agree with the amount of attorney fees awarded by the court even if this were a proper tort of another case in the abstract (i.e., most of HWH’s attorney fees were actually incurred in connection wi th litigation against Mega RV, not against third party, the Ertzes).

17 The tort of another doctrine is not particularly relevant in cases involving physical injury or property damage. To state the obvious, a tortfeasor who causes physical damage to a p erson or property (for instance, in a car accident) would be subject to a negligence lawsuit by the affected individual. The plaintiff in this hypothetical case could not recover her attorney fees from the tortfeasor under the tort of another doctrine. T he attorney fees in this straightforward negligence case would be “attorney fees qua attorney fees.” ( Sooy v. Peter , supra , 220 Cal.App.3d at p. 1310.) To hold otherwise would obliterate the American Rule in tort cases. Nor does the tort of another doct rine apply as between multiple alleged tortfeasors (e.g., what if our hypothetical plaintiff unsuccessfully sued additional defendants in the car crash case, who sought recovery of their attorney fees from the true tortfeasor?). “ The extension of the Pren tice rule to the commonplace case of an exonerated alleged tortfeasor would go a long way toward abrogation of the American rule . . . . It would substantially expand the notion of duty under the law of torts to compensation of the litigation expenses inc urred by all persons, however connected to any tortious event, whom the injured plaintiff elects to sue who succeed in establishing lack of liability. ” ( Watson v. Department of Transportation (1998) 68 Cal.App.4th 885, 894.)28

such, “ nearly all of the cases which have applied the [tort of another] doctrine involve a clear violation of a traditional tort duty between the tortfeasor who is required to pay the

at torney fees and the person seeki ng compensation for those fees.” ( Sooy v. Peter , supra , 220 Cal.App.3d at p. 1310 ; id . at pp. 1311

- 1312 ; see also , e.g., Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 502, 507

- 508 [ real estate broker breach es fiduciary duty to buyer]; Prentice , supra , 59 Cal.2d at pp. 619

- 621 [ escrow agent breaches duty of due care to seller] ; Heckert v. MacDonald (1989) 208 Cal.App.3d 832, 834

- 835, 837

- 838 [ real estate broker breaches fiduciary duty to seller] .) We are unawar e of any authority for the existence of a special relationship or traditional tort duty between a retail
seller /servicer of consumer goods and a component part manufacturer.
N ever theless, HWH contends general principles of negligence law (e.g., § 1714, sub d. (a)) require this court to impose a duty on Mega RV. 18 Thirty

- five years ago, our Supreme Court analyzed the circumstances in which a party has a duty of care to avoid imposing economic losses on third parties . (See J’Aire Corp. v. Gregory (1979) 24
Ca l.3d 799 (

J’Aire ).) In J’Aire , a commercial lessee alleged it suffered $50,000 in lost profits as a result of unreasonable delay in completing construction at the tenant’s
business location by a contractor hired by the landlord. ( Id . at pp. 802

- 803.) Th e trial court sustained the contractor’s demurrer to a negligence cause of action, but our Supreme Court reversed. ( Id . at p p. 802

- 803, 808 [“a contractor owes a duty of care to the tenant of a building undergoing construction work to prosecute that work in a manner

18 Tellingly, in making its a rgument, HWH’s brief relies primarily on tort cases involving physical harm to plaintiffs. It is one thing to impose routinely a duty of care when physical harm is at stake. (See Rest.3d Torts, Liability for Physical and Emotional Harm, § 7(a) [“An actor ordinarily has a duty to exercise reasonable care when the actor’s conduct creates a risk of physical harm”].) It is quite another to apply an identical rule to cases involving only economic loss. (See Rest.3d Torts, Liability for Economic Harm (Tent. D raft No. 1, Apr. 4, 2012) § 1(a) [“An actor has no general duty to avoid the unintentional infliction of economic loss on another”].)29

which does not cause undue injury to the tenant’s business, where such injury is reasonably foreseeable”].) 19 In doing so, the J’Aire court observed that its holding was “consistent with the Legislature’s declaration of the basic principle of t ort liability, embodied in . . . section 1714, that every person is responsible for injuries caused by his or her lack of ordinary care. [Citation.] That section does not distinguish among injuries to one’s person, one’s property or one’s financial inter ests. Damages for loss of profits or earnings are recoverable where they result from an injury to one’s person or property caused by another’s negligence. Recovery for injury to one’s economic interests, where it is the foreseeable result of another’s wa nt of ordinary care, should not be foreclosed simply because it is the only injury that occurs.” ( Id . at p. 806 , f n. omitted .)
J’Aire set forth six “criteria” for determining whether a special relationship
exists pursuant to which a tort duty should be im posed: “(1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to the plaintiff, (3) the degree of certainty that the plaintiff suffered injury, (4) the closeness of
the connection between the defendan t’s conduct and the injury suffered, (5) the moral blame attached to the defendant’s conduct and (6) the policy of preventing future harm.” ( J’Aire , supra , 24 Cal.3d at p. 804 ; see also Biakanja v. Irving (1958) 49 Cal.2d 647,
648

- 651 [ applying these fact ors and holding that notary public who prepared defective will had duty to intended beneficiary] .) 20 “Ultimately, duty is a question of public policy.

19 The statement of facts indicated that “[u]nder the terms of the lease the [landlord] was to provide heat and air co nditioning.” ( J’Aire , supra , 24 Cal.3d at p. 802.) Left unsaid in J’Aire was why this dispute was not better left to the realm of landlord

tenant law. (See Rest.3d Torts, Liability for Economic Harm (Tent. Draft No. 1, supra ) § 1, com. e, illus. 3 HR [“ [Tenant] can readily enough seek protection against the cost of delays in its contract with [landlord] or by other means”]; id . at reporter’s note e, illus. 3 HR [“ J’Aire has not been overruled, but the extent of its vitality in California is questionable . . . and it has not been influential elsewhere”].)

20 These duty factors are similar to, but not identical with, the duty factors identified by our Supreme Court in cases involving physical injuries rather than purely30

[Citation.] When determinin g whether a duty of care exists ” in a purely economic loss

case, courts exam ine and balance the factors set forth above . ( Ratcliff Architects v. Vanir Construction Management, Inc. , supra , 88 Cal.App.4th at p. 605.)

Applying the J’Aire factors, Mega RV did not owe a duty of care to HWH in servicing the Ertzes motor home

. Mega RV was performing its repair services on behalf of the Ertzes and Country Coach; as such, there is no indication the transaction
was intended to affect HWH. It was not foreseeable that a component manufacturer like
HWH would ultimately become involved in li tigation between a buyer, retail seller, and
manufacturer of a motor home , particularly when the component manufacturer had not provided an express warranty with regard to the allegedly defective components of the motor home or taken any direct or indirect part in the repair of the motor home. It took Country Coach’s bankruptcy and creative lawyering on the part of Mega RV to pull
HWH into the case. 21 As suggested by this analysis, t he harm ultimately suffered by

economic loss: “‘the foreseeabilit y of harm to the plaintiff, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to the defendant’s conduct, the policy of preventing f

uture harm, the extent of the burden to the defendant and consequences to the community of imposing a duty to exercise care with resulting liability for breach, and the availability, cost, and prevalence of insurance for the risk involved.’” ( Cabral v. Ra lphs Grocery Co. (2011) 51 Cal.4th 764, 771, quoting Rowland v. Christian (1968) 69 Cal.2d 108, 113.) The main difference between the two sets of factors is the absence of the first J’Aire factor (“the extent to which the transaction was intended to affec t the plaintiff”) in the physical injury context. ( J ’ Aire , supra , 24 Cal.3d at p. 804.) This makes sense. Recall our hypothetical negligent driver from footnote 17. His lack of intent to affect the particular victim of the car crash should have no bear ing on the question of whether he had a duty to drive with due care and avoid injuring other drivers. But what if the accident caused a traffic jam on the freeway? Should our driver (who we are positing had a duty of care as to the victim who suffered ph ysical injury and property damage in the crash) have a duty to the occupants of vehicles behind the traffic jam, such that any economic damages they suffer as a result of the traffic jam are recoverable? The introduction of this additional factor into the economic loss criteria is useful in avoiding such a result.

21 To the extent HWH finds actionable fault with Mega RV’s litigation31

HWH (i.e., its costs of dealing with this l awsuit , including attorney fees ) was extremely speculative at the time Mega RV committed its supposed tort of failing to notice the installation of an improper part on the motor home during servicing. Of course, it is certain that HWH actually suffered ha rm in the form of attorney fees as a result of this litigation. But t he connection between HWH’s harm and Mega RV’s servicing of the motor home is extremely attenuated. There is no moral blame attached to Mega RV’s servicing repair failures, even assumin g failures occurred; there was certainly no
evidence of reckless or purposeful behavior , or of anything other than economic damages suffered by anyone involved in this case . Imposing a duty on retail sellers to component part manufacturers like HWH would not reduce the likelihood of future harm; retail
sellers like Mega RV already ha ve strong incentives (relationship with retail buyers, relationship with manufacturers, financial liability , reputation ) to perform adequate repair and warranty services.

In su m, because Mega RV had no duty to HWH with regard to the servicing of the Ertzes’ motor home, there was no tort. And because there was no tort,
the tort of another doctrine cannot apply

.

Court Did Not Abuse Its Discretion in Trying These Issues Separatel y Finally, Mega RV contends the court abused its discretion by trying the
HWH cross

- complaint separately from and prior to the rest of the case. (See General Motors Corp. v. Superior Court (1966) 65 Cal.2d 88, 91 [“related disputes should be
heard and dec ided in one proceeding whenever possible”].) Obviously, determining questions of indemnity between Mega RV and HWH before the plaintiffs’ complaint was

choices (i.e., moving to join HWH as a defendant and filing a cross

- complaint against HWH), the appropriate remedy is a mal icious prosecution cause of action, pursuant to which HWH’s attorney fees in this case could be recovered if liability were established. The tort of another doctrine cannot be used to escape the strict limits placed on the tort of malicious prosecution.32

adjudicated was an interesting choice by the trial court. It must be remembered, however, that Mega RV contributed to this situation by agreeing to arbitrate the Ertzes ’
claims on the eve of trial.

In between the beginning of trial and the entry of judgment, unfortunate procedural quirks multiplied. First, on September 20, 2011, after the close of HWH’s

c ase, the court initially ruled in favor of Mega RV on its motion for directed verdict as to HWH’s equitable indemnity claim (which, as noted above, somehow encompassed a negligence claim for attorney fee damag es). Although the court indicated it would rul e against Mega RV as to the question of indemnity under the Act , Mega RV opted not to put on any additional witnesses. Counsel for HWH requested a statement of decision.

On November 18, 2011, the court granted the Ertzes ’ motion to return their complai nt “to the civil active list.” Apparently, the arbitrator selected by the parties could not participate and the court concluded the agreement to arbitrate was contingent
on the satisfaction of this condition

.

On December 9, 2011, the court suggested that , in the course of preparing its statement of decision, it was reconsider ing its ruling granting judgment to Mega RV on HWH’s third cause of action. On January 13, 2012 , the court reversed its prior ruling. The court denied Meg a RV’s request for a mistrial

. Instead, the court reopene d the trial to allow Mega RV to call additional witnesses. In its ultimate , 62

- page statement of
decision filed in July 24, 2012 , the court made a variety of factual findings pertaining to the causes of the motor home’s malfun ctions and ruled in favor of HWH in all respects

. O n September 7, 2012, the court then granted HWH ’s motion to sever Mega RV’s cross

complaint and HWH’s motion for judgment on the pleadings with regard to Mega RV’s

cross

- complaint.

Mega RV represents in its brief that plaintiffs (the Ertzes) now seek to use the statement of decision as establishing facts against Mega RV in the pending trial.33

Apparently, the trial is stayed pending the outcome of this appeal. HWH explicitly states
in its brief that colla teral estoppel should apply agai nst Mega RV in the Ertz trial.

In our view, the court did not abuse its discretion in allowing a scheduled trial to proceed (even though some of the claims were moved to arbitration) and completing a trial it had already be gun under unfortunate circumstances that were created by the parties. But as established in our analysis of the substantive issues above, the court’s analysis went far afield by reaching issues unnecessary to the adjudication of the dispute between the pa rties. There are three str aightforward r ulings the court should have
made

. First, Mega RV was not entitled to indemnity from HWH under the Act because HWH was a component part manufacturer that did not provide a n express warranty to the Ertzes with regar d to the slide

- out hydraulic components at issue in this case. Second,
HWH was not entitled to equitable indemnity from Mega RV under any circumstances because HWH had already obtained a dismissal (and cash settlement) from the Ertzes. Third, Mega RV had no duty to HWH with regard to the repair of the Ertzes’ motor
home ; the tort of another doctrine therefore does not apply to the attorney fees incurred by HWH. Any factual findings about defects in the motor home or the causes of such
defects were unnece ssary to the adjudication of the issues between HWH and Mega RV. (See First N.B.S. Corp. v. Gabrielsen (1986) 179 Cal.App.3d 1189, 1196 [“When determination of an issue was entirely unnecessary to the former judgment, it will not have collateral estoppel effect”].)

DISPOSITION

The award of $166,000 in damages to HWH and against Mega RV , as well as language in the judgment contemplating the award of additional attorney fee damages
to HWH for post

judgment proceedings , are stricken. Declaratory relief in t he judgment indicating that HWH is entitled to recover attorney fees is stricken. The prospective34

award of costs to HWH in the judgment pursuant to Code of Civil Procedure section
1032 is stricken. The judgment is affirmed as modified. The parties shall bear their own costs on appeal.

IKOLA, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

THOMPSON, J.