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This section contains the nature of the case and procedural background.

Pierce (P) purchased a forty-two-foot sailboat from Catalina Yachts. P got a limited warranty, promising to repair or pay for repair of any below-waterline blisters that might appear in the gel coat-a smooth outer layer of resin on the boat's hull. The warranty expressly disclaimed D's responsibility for consequential damages. In June 1994 P discovered gel-coat blisters on its hull and rudder. P submitted a repair estimate of $10,645, which included the cost of removing and replacing the gel coat below the waterline. D refused to accept this estimate, insisting that the hull only needed minor patching. P eventually sued the company, claiming tort and contract damages and later amended their complaint to allege a separate claim for unfair trade practices. The court ruled that the limited warranty's provision barring consequential damages was not unconscionable. The jury awarded $12,445 as the reasonable cost of repair, and that D acted in bad faith in failing to honor its warranty obligations. P appealed the denial of consequential damages.

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