With Warranties and the Discovery Rule, Details Matter

August 21, 2015
Kristine A. Tidgren

It’s a rather small detail, but those small details often make all the difference when it comes to litigation. And that’s what happened in a recent case from the Iowa Court of Appeals.

The court explained that the limitations period for claims alleging a breach of an express warranty differs from that for claims alleging a breach of an implied warranty. The difference lies not in the actual limitations period—which is five years for both types of warranties (as long as they are not written)—but in the application of the discovery rule to the underlying claim.

The case arose after the plaintiffs allegedly purchased defective windows from a supplier. Nine years after the purchase, they filed an action against the supplier and the manufacturer, seeking to recover the cost of replacing the windows.

The plaintiffs’ claim against the supplier was for breach of implied warranties of merchantability and fitness for a particular purpose. The claim against the manufacturer was for breach of an express limited warranty. The supplier immediately moved to dismiss the action for the reason that the action was time-barred. The trial court agreed and dismissed the claim.

On appeal, the plaintiffs argued that the discovery rule applied to toll the five-year limitations period[i] until the problem with the windows was discovered. The court disagreed, ruling that Iowa law clearly applies the discovery rule only to express, not implied warranties. The court said it like this:

Iowa Code §554.2725(2) plainly states that the discovery rule applies “where a warranty explicitly extends to future performance of the goods.”(Emphasis added.)The [plaintiffs] allege [the supplier] gave only implied warranties—the warranties of merchantability and fitness for a particular purpose.  Our Supreme Court has made clear that under Iowa Code §554.2725(2), “all actions for breach of implied warranty accrue at the time of delivery, not at the time the damage is discovered.”  

So there you go. And it’s good to know. Claims for the breach of an implied warranty in Iowa do not get the benefit of the discovery rule. Claims for the breach of an express warranty, however, do. It's a small detail, but it can make all the difference in how the case turns out.

The case was Kopp v. American Builders & Contractors Supply Co., Inc., No. 14-1868 (Iowa Ct. App. Aug. 19, 2015).

 

[i] Iowa Code §614.1(4).

 

CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

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