In Arthur Glick Leasing, Inc. v. William J. Petzold, Inc. , after Glick Leasing acquired a 52-foot yacht -- manufactured by Ocean Yachts, Inc. -- from William J. Petzold, Glick decided to upgrade to a twin diesel Caterpillar engine.
After Glick began having problems with the boat's acceleration and temperature controls, suit was filed against Petzold, Ocean Yachts , and Caterpillar alleging misrepresentation, breach of contract, negligence, breach of implied and express warranties, and violation of the Magnuson-Moss Warranty Act (MMWA) -- a federal law which governs warranties on consumer products.
The Sullivan County Supreme Court dismissed everything but those claims made against Caterpillar for breach of implied and express warranties and MMWA violations and, after trial, a jury awarded Glick $130,400 in damages.
On appeal, the Appellate Division, Third Department, vacated the award and dismissed Glick's case in its entirety.
As to the express warranties, Caterpillar merely promised that their engines would be "free from defects in material or workmanship." It was Ocean Yachts who advertised that Caterpillar 's engines delivered "exceptional power with excellent acceleration response."
Since Glick's complaints about the engines were "performance-based," and had nothing to do with technical defects, Caterpillar hadn't breached any express warranties. Further, there was no breach of "implied warranties" because Glick and Caterpillar weren't in "privity of contract" -- meaning that Glick was a "remote purchaser" of the upgraded engine since it was purchased through Ocean Yachts . Finally, since privity of contract was a necessary element for a MMWA violation, that claim also couldn't survive.
In other words, Glick's case got sunk.
To download a copy of the Appellate Division's decision, please use this link: Arthur Glick Leasing, Inc. v. William J. Petzold, Inc.