Wilson

The San Francisco Superior Court entered judgment against Brawn of California, Inc. (Brawn), a mail order company, mling that Brawn had engaged in a deceptive business practice by charging its customers an “insurance fee” of $1.48 with every order placed. The ruling presumed that Brawn, rather than its customers, bears the loss of risk in transit, so that its customers received nothing of value in return for paying the fee. The court also awarded plaintiff litigation expenses in the amount of $24,699.21 and attorney fees in the amount of $422,982.50.

We reverse, concluding that Brawn did not bear the risk of loss of goods in transit under the applicable California Uniform Commercial Code sections discussed, post.

Background

Brawn markets clothing through its catalogs and over the Internet. When a customer places an order, Brawn packages it, and holds it at its warehouse, where it is picked up by a common carrier and delivered to the customer, using an address provided by the customer. At all times relevant, the terms of Brawn’s mail order form required the customer to pay the listed price for the goods purchased, plus a delivery fee and a $1.48 “insurance fee.” As to…