“Everyone has a plan ’til they get hit in the face.” – Mike Tyson

From the standpoint of manufacturers of windows and doors, few documents receive the level of analysis and critical input as their product warranty. The warranty is a deliberate statement of commitment to evaluate an unwanted condition manifest in-service which may be from a problem with material or workmanship. Even with all this intelligent attention, the more difficult work is found in the development and operation of a program which effectively implements the warranty as intended. That is, providing service as promised but declining repeated demands to give more than promised, without extraordinary circumstances.

For the luckily less experienced being served with a summons and complaint, can represent that “hit in the face” moment. Often warranty limitations appear to be disregarded in the claims asserted within a construction defect lawsuit. In our view, a manufacturer’s inclusion in a lawsuit over alleged construction defects should not routinely be treated as an “extraordinary circumstance” so as to abandon the fair limitations stated in the relevant product warranty. (With confidence, I can tell you that the claimant’s attorney and likely his/her expert do not consider the expansive and, often vague, allegations which seem satisfy the very low threshold for filing a lawsuit as extraordinary, either.) Rather, it is time to identify the strategy that will best present the argument for enforcement of those limitation, when needed most.

Undoubtedly, the lawsuit will assert claims and seek damages that are beyond the commitment within the product warranty. The strategy for enforcement of the warranty limitations in litigation must established be under the applicable facts and law, but there is a strategy. It should be apparent that this question needs to be analyzed and addressed early in the case. But, it seems the very volume of parties each with multiple claims ,and cross-claim among them tends to obscure the immediate need to understand the extent to which your warranty may serve as a shield and a sword. In other words, unless you push it may not happen.

Especially, you need to know early if and how your warranty can be used to dismiss the common claims seeking compensation for direct or indirect consequential damages. While definitions relating to “consequential damages” can vary by jurisdiction, consequential damages are losses which by their nature go beyond remediation or repair of the window or door itself. They can range from resurfacing of finishes required due to water penetration at a window or door opening to re-allocation costs incurred because of the alleged uninhabitability of living space as a result of perceived damage or its repair. Where does it stop? Good question. It is disconcerting (scary) to be at the whim of a claimant prone to push for dollar compensation for every theoretical inconvenience which could occur.

These risks a real and represent the reason that the product warranty includes limitations on the manufacturer’s liability. Making things worse, those smarter than I can readily chronicle the comparative increase in product liability risk pertaining to windows and doors with the following decrease in reasonably priced, insurer-funded product liability insurance coverage. Thankfully the market will always call for houses with windows and doors and manufacturers respond, despite the liability risk and the reduction in the protection afforded by third-party liability insurance coverage. Unchecked, this is a formula for ongoing increased prices for windows and

doors, that bear no relation to product improvement or overall inflation. Inevitably the costs are passed on inflating the already problematic cost of housing.

You know, it is important to use the tools that we have. The law in the U.S. does allow for a manufacturer to disclaim liability for most consequential damages, particularly when that manufacturer is transparent regarding the warranty and a good effort is made to communicate it downstream with the product. This limitation can also affect claims that on-their-face are not warranty-based, because a warranty is by nature a creature of contract which under the right circumstances will override the common “tort-based” claims, classically based upon the tort of negligence.

Hey, I see the conditional “wiggle words” being used here too, but there are no guarantees (ask your lawyer). Undeniably though, the longer claims seeking damage beyond the warranty remain asserted against your company, the bigger “life” they acquire with opposing experts “allocating” to the manufacturer from an inflated required scope of repairs and cost of repair estimates $$$, then becoming part of a working “case record.” At the inevitable mediation(s), the parties and mediator wrangle over that allocation of dollars claimed and rarely over legal “potential” defenses But, if at mediation the manufacturer can point to an interim court ruling, or pending motion, supporting the applicability of a warranty disclaimer, you have a comparatively objective basis to support a significantly lesser dollar allocation to the manufacturer in the inexorable movement toward a resolution of the overall litigation. At a minimum, because of the action to enforce the warranty terms, you have injected uncertainty into your opponent(s) where none existed before.

Simple message: despite the ”hit in the face,” stick with the plan and don’t give up on the terms of the product warranty because litigation has been filed. Rather, require an evaluation of the case which includes a plan of action regarding affirmative use of the warranty.