Chicago Business Litigation Lawyer Blog
A couple purchased an RV from a retailer in 2014. The RV came with a warranty from the manufacturer that limited the warranties to one year from the date of purchase. The warranty required that the purchasers notify the manufacturer or an authorized dealer within five days of discovering any defect. The purchasers experienced continual problems with the RV over the time that they owned it. The RV was repaired multiple times, but the service technicians were never able to fully resolve the defects. The purchasers asked the manufacturer to repurchase the RV from them. When the manufacturer refused, the purchasers sued, claiming the manufacturer breached its warranties. The district court granted summary judgment to the manufacturer. The appellate panel affirmed, finding that the purchasers had not given the manufacturer enough chances under Indiana law to cure the defects with the RV.
Vanessa and Randy Mathews purchased a Holiday Rambler Presidential RV in May 2014 from Mellott Brothers Trailer Sales, Inc. The RV came with a warranty from the manufacturer, REV Recreation Group. The warranty limited both express and implied warranties to one year from the purchase date. To take advantage of the warranty, the Mathews had to notify REV or an authorized dealer within five days of discovering a defect.
The Mathews alleged that they encountered problems with the RV almost as soon as they drove it off the lot. They called the dealership to report that there were issues with the interior lights, the refrigerator, and the leveling system. A month later, the Mathews encountered further difficulty: the converter was blowing fuses, the leveling jacks worked only intermittently, the curbside slide cable broke, and there were problems with the TV and the DVD player. After calling the dealer again, the Mathews were given the number for REV so that they could locate an authorized repair center.
Despite getting the RV fixed multiple times, the Mathews continued to encounter issues. Eventually, the Mathews asked REV to buy back the RV. REV refused. In July 2015, the attorney for the Mathews sent REV a letter alleging that it had breached its warranties. Soon after, the Mathews filed suit, alleging breach of warranties, as well as violations of the Indiana Deceptive Consumer Sales Act. REV moved for summary judgment on all counts, and the district court granted the motion. The Mathews then appealed.
The appellate panel began by stating that the district court had found that while the facts supported the Mathews contention that the RV had numerous problems, they did not support the allegation that REV failed to honor its warranties. The panel agreed with the district court. The panel stated that REV was given only two opportunities to fix the defects identified by the Mathews, and that under Indiana law, two chances were not a reasonable opportunity to cure defects. Therefore, the panel determined, REV’s warranty did not fail its essential purpose.
The panel then stated that even if the Mathews could show that REV had a reasonable opportunity to repair the RV’s defects, the limited warranty did not fail in its essential purpose because the Mathews did not avail themselves of the contract’s back-up remedy. This remedy required that if REV failed to cure a defect, the Mathews sole remedy would be limited to REV paying them the costs of having an independent third party perform repairs to the defects. Finally, the panel found that the Mathews had not alleged circumstances sufficient to make the warranties unconscionable. The panel, therefore, affirmed the decision of the district court.
You can view the court’s opinion here.
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