Jury Sides With Course In Cart Warranty Case

by Mike Bailey, August, 2007

Textron Inc. has paid nearly $1.7 million to a California company after a 12-person jury found that its golf car division misrepresented the warranty on a fleet of golf cars.

In a six-week trial that ended in June, a Superior Court of California jury found that E-Z-GO, a division of Textron, was guilty of two counts of breaching its warranty and two counts of fraud in its dealings with Ridgetop Ranch Properties, former owner of Lake Elizabeth (Calif.) Golf and Ranch Club.

Kathy Searle, vice president of the communications for E-Z-GO, said Textron is not planning to appeal, but is disappointed with the decision.

“We maintain the lawsuit is simply a matter of the plaintiff’s attempt to profit from a well-managed, market leader who has a well-documented record of providing high-quality golf cars and exceptional service,” she said.
Searle said Ridgetop Ranch’s claims are inconsistent with what really happened.

“The plaintiff clearly is blaming E-Z-GO for their lack of executing fundamental golf-car maintenance practices,” she said. “We did everything in our power to help the customer resolve the issues they were experiencing due to their lack of maintenance on the vehicles. Our focus always remained on ensuring a wonderful experience for the plaintiff’s course customers.”

According to the complaint, over a period from 1997 to 2001, Lake Elizabeth’s 80 E-Z-GO golf cars broke down, failed, or were inoperable on a weekly basis, rendering numerous golf cars unfit for use. The alleged problems included trouble with their speed controls, which was particularly problematic on Lake Elizabeth’s elevation changes of up to 190 feet.

Ridgetop Ranch officials said in the complaint that E-Z-GO misrepresented claims that the speed controls could be set specifically for Lake Elizabeth. They also said that E-Z-GO employees told them that the golf cars were not defective – but knew all along that the speed controllers on the cars were defective, as they sought reimbursement and credit from Curtis Instruments Inc., which makes the speed controllers. Lake Elizabeth officials also said that E-Z-GO replaced failed speed controllers with similarly defective ones.

According to the complaint, rounds at Lake Elizabeth declined as it gained a reputation as a course that was “unreliable and dangerous,” and, as a result, the course closed in December 2001. The course and another 15 acres were sold six months later for $5.5 million, a figure Ridgetop Ranch officials said was far lower than it would have commanded had the course’s reputation not suffered from the faulty golf cars.

The jury awarded $1.67 million, plus legal fees and 10 percent post-judgment interest. The award compensated for lost rounds and the devaluation of the course, said Stephen Jamieson, lead attorney for Ridgetop Ranch and partner in the Los Angeles law firm Solomon, Saltsman & Jamieson.

“I think the biggest factor was that the jury decided that during the process of selling the cars, E-Z-GO lied to them,” Jamieson said. “I think the jury felt that during the process of the cars breaking down that E-Z-GO didn’t tell them the truth, and I think it also made a difference during the trial that E-Z-GO had tried to conceal things.”

Another reason for the large award, Jamieson said, is the ruling that E-Z-GO did not deliver its limited warranty when Ridgeview Ranch signed the contract in 1997. The limited warranty could have protected E-Z-GO against incidental and consequential damages.

“The lesson learned for our company is that we need to maintain better records of the vehicle-care training and service we provide to our customers,” Searle said. “Unfortunately, the plaintiff presented information about our customer-focused activities that was misinterpreted by the jury many years after the fact. Unfortunately we did not have all of the records to back up what truly happened.”

Solomon, Saltsman & Jamieson are attorneys practicing in the areas of ABC law, ABC Appeals Board cases, and all related Land Use Matters such as City and County Conditional Use Permits, Variances, Police and Fire permits, Entertainment law, and Gambling Law; as well as Business and Personal Injury litigation. Solomon, Saltsman & Jamieson can be reached at 800 405 4222.”