Free Motion in Limine - District Court of Arizona - Arizona

1 Negatu Molla (Bar No. 006254)

2 BOWMAN AND BROOKE LLP Suite 1600, Phoenix Plaza
3 2901 North Central Avenue

David W. Williams (Bar No. 022764)

Phoenix, Arizona 85012-2761
4 (602) 643-2300

Attorneys for Defendant Workhorse Custom Chassis
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UNITED STATES DISTRICT COURT
DISTRICT OF PHOENIX

LANE SENNETT,
Plaintiff,
v.

No. CV04 0161 PHX ROS
DEFENDANT WORKHORSE CUSTOM CHASSIS, LLC'S MOTION TO PRECLUDE NEW LEGAL THEORIES RAISED AFTER THE CLOSE OF DISCOVERY
(Assigned to Honorable Roslyn O. Silver)

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FLEETWOOD MOTOR HOMES OF CALIFORNIA, INC. and

WORKHORSE CUSTOM CHASSIS;
INC.,

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Defendants.

16 Defendant Workhorse Custom Chassis ("Workhorse") moves in limine for an

17 order precluding any testimony or reference to any claims regarding the implied

18 covenant of good faith and fair dealing and revocation of acceptance because
19 Plaintiff has failed to timely amend her complaint to add such these claims and they

20 have never been disclosed as possible causes of action against Workhorse.
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MEMORANDUM OF POINTS AND AUTHORITIES

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ON THE EVENING BEFORE THE PRETRIAL MATERIALS ARE DUE TO THE COURT, PLAINTIFF HAS ATTEMPTED TO ADD TWO NEW CAUSES

OF ACTION THAT HAVE NEVER BEEN DISCLOSED. BECAUSE
SHOULD BE PRECLUDED FROM ASSERTING NEW LEGAL CLAIMS AT
TRIAL.

PLAINTIFF HAS FAILED TO TIMELY AMEND HER COMPLAINT, SHE

26 At 6:30 p.m. on August 24, 2006, the evening before the joint pretrial order
27 was due to the Court, Workhorse's counsel received from Plaintiff's counsel various

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order, despite numerous requests in the preceding two weeks for the requested
materials. See email correspondence from Ryan Lee, dated August 24, 2006,
attached as Exhibit 1. In the process of reviewing these materials, Workhorse's

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counsel became aware that Plaintiff was attempting to add two new legal theories

despite the fact she has never amended her complaint. These new causes of
action are for a breach of the covenant of good faith and fair dealing and seeking to

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revoke acceptance of the entire motor home. Essentially, on the eve of trial,
Plaintiff is attempting to add additional causes of action against Workhorse without

properly moving to amend her complaint and long after the dispositive motion
deadline and close of factual discovery.
A. Plaintiff Has Failed To Timely Amend Her Complaint

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Pursuant to the Court's Case Management Order, the Court ordered the
parties to file motions for leave to amend pleadings no later than November 10,
2004. Now almost 18 months after the deadline to amend the pleadings, Plaintiff is

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attempting to amend her complaint by adding new claims for a breach of the

implied covenant of good faith and fair dealing and for revocation of acceptance.

The Court even admonished the parties about respecting the deadlines in the Court's scheduling order and timely supplementing their legal theories and
discovery responses. The Case Management Order issued by the Court instructs

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the parties that "failure to timely supplement pursuant to Rule 26(e), including
attempts to include witnesses and exhibits in the Proposed Final Pretrial Order or at

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trial that were not previously disclosed in a timely manner may result in the
exclusion of such evidence at trial or the imposition of other sanctions including
dismissal and the imposition of default pursuant to FRCP 37, the Local Rules of the
District Court, and the inherent power of the Court." Docket 123, p. 3:2-11.

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Workhorse would certainly be prejudiced if Plaintiff were allowed a jury
instruction on the implied covenant of good faith/fair dealing and revocation of
acceptance or even allowed to present these previously undisclosed causes of

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action to the jury. This lawsuit has been ongoing since January 26, 2004 when
Plaintiff filed her initial complaint. Further, Plaintiff was even allowed to amend her
complaint, and failed to add either new legal theory. See PI.'s Amended Complaint,

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Docket 72. Plaintiff has never indicated that she intended to seek damages for
Workhorse allegedly violating any implied covenant of good faith and fair dealing or
that she would attempt to revoke acceptance of the motor home against

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Workhorse. Workhorse has been unable to conduct any discovery into these
belated causes of action and develop any factual affrmative defenses to the claim.
Plaintiff should not be allowed to belatedly add new claims when she failed to

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timely amend her complaint. The causes of action that were properly pled were
limited to the legal theory of a breach of the limited written warranty and the implied

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warranty of merchantabilty. It was that legal theory that Workhorse has prepared
its legal and factual defenses since the filng of this case in January 2004. Allowing
this belated amendment of the pleadings would severely prejudice Workhorse long

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after the expiration of the deadline to amend the pleadings, the close of discovery

and the dispositive motion deadline. Therefore, Workhorse requests that the Court

preclude any reference or testimony into Plaintiffs new legal theories concerning
the covenant of good faith and fair dealing and revocation of acceptance.
B. Even If Allowed To Assert A Claim For A Breach of The Covenant

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A Breach of Warranty Action.

of Good Faith and Fair Dealing, It Is Not Recognized In Nevada In

Even if Plaintiff were allowed to add the claim of the breach of the covenant

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of good faith and fair dealing, she would be precluded from recovery by a lack of

privity between Plaintiff and Workhorse. The covenant of good faith and fair
dealing is part of the Uniform Commercial Code, which is as an underlying

assumption is based upon the idea that their must be privity between the
contracting parties. See Nev. Rev. Stat. § 104.1201 (t) ("'Good faith'," except as
otherwise provided in Article 5, means honesty in fact and the observance of reasonable

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commercial standards of fair dealing"). Here, there was no privity of contract between

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Plaintiff and Workhorse. In fact, Plaintiff bought the subject motor home from
Michael Holhl RV, who bought the motor home from Fleetwood. Workhorse sold
Fleetwood a chassis, which Fleetwood then used to build its motor home on.

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The Nevada Supreme Court has not directly addressed the issue of privity
between a consumer and a remote manufacturer, however, the Arizona Supreme
Court's holding in Florv v. Silvercrest succinctly sets forth that there must be privity

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between a remote manufacturer and a consumer in order to maintain a cause of
action under the U.C.C. Florv v. Silvercrest Industries. Inc., 129 Ariz. 574, 633 P.2d

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383 (1981); Ariz. Rev. Stat. §§ 47-2102; 2103.

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In any case, Plaintiff's argument is spurious because no Nevada case,

including the ones cites by Plaintiff in his proposed jury instructions about the
implied covenant of good faith has ever applied the implied duty of good faith and

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fair dealing to a breach of warranty claim. As there is no privity between Plaintiff
and Workhorse, there can be no breach of contract claim based on breach of the
implied duty of good faith and fair dealing.

Therefore, Workhorse requests that the Court preclude any reference or

testimony into Plaintiffs new legal theory concerning the covenant of good faith and
fair dealing.
C.

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Circumstances Involving A Remote Component Manufacturer.

Plaintiff's Revocation of Acceptance Is Not Recognized In

Despite Plaintiffs failure to timely amend her complaint to add a cause of
action for revocation of acceptance, she still cannot set forth a valid cause of action

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against Workhorse. There is no case law in Nevada that directly addresses
whether a consumer may bring a cause of action against a remote component
manufacturer for revocation of acceptance. The Nevada Supreme Court recently
addressed the applicability of a claim for revocation of acceptance in the context of

the purchase of a motor home. See Waddell v. L.V.R.V. Inc., 125 P.3d 1160, 1163
(Nev. 2006). In Waddell, the owner of a motor home sought to revoke acceptance

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of the motor home directly against the sellng dealer. Id. The entire basis for the
claim for revocation of acceptance was found in the Nevada Uniform Commercial

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Code at Nev. Rev. Stat. § 104.2608. Id. at 1168. As explained above, Workhorse

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did not sell a motor home to Plaintiff. It sold a chassis to Fleetwood who then
constructed the motor home on the chassis, and sold it to Michael Hohl RV, who

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sold it Plaintiff. Therefore, the Waddell case is distinguishable because it only
addresses the applicabilty of the remedy of revocation of acceptance in the context
of a direct contract between a buyer and a seller.

Other states have held that there can be no revocation of acceptance when
there is no privity of contract between the parties. See Seekings v. Jimmv GMC of

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Tucson, 130 Ariz. 596, 600, 638 P.2d 210,214 (Ariz. 1981); Hardv v. Winnebago

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Industries, Inc. 120 Md. App. 261, 706 A.2d 1086 (1998). The Arizona Supreme
Court set forth the logic of not allowing a consumer to revoke acceptance against a
remote manufacturer:

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to return the buyer and seller to their presale positions. In general, the buyer is entitled to recovery of the purchase price plus all damages
caused by the seller's failure to deliver conforming goods; the seller can recover the goods sold. But a manufacturer does not receive the buyer's purchase price and no longer has an ownership interest in the
goods sold.

The remedies associated with revocation of acceptance are intended

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In this case, the logic is even stronger because Workhorse did not construct a
motor home, which Plaintiff seeks to revoke acceptance of. Because Workhorse
did not construct the motor home, it would be forced to absorb the cost of a product

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that is 5 times the value of the chassis that it sold to Fleetwood. Plaintiff would get

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a windfall, and Workhorse would be stuck with a product that it neither
manufactured, warranted nor sold. Further, had Workhorse known that it may be

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forced to pay Plaintiff for a vehicle that it did not construct, Workhorse would have

employed a different legal strategy and possibly sought some legal recourse
against Fleetwood or another component manufacturer, which it cannot due on the

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eve of trial if Plaintiff is allowed to add this new cause of action. Therefore,
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Workhorse requests that the Court preclude Plaintiff from being able to assert a
claim for revocation of acceptance.

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RESPECTFULLY SUBMITTED this tl5.., day of August, 2006.
BOWMAN AND BROOKE LLP

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By: /s/ David W. Williams

Negatu Molla

2901 North Central Avenue

David W. Willams Suite 1600, Phoenix Plaza

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Attorneys for Defendant Workhorse Custom Chassis

Phoenix, Arizona 85012-2761

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CERTIFICATE OF SERVICE
I hereby certify that on the ,)+11 day of August, 2006 I caused the attached

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document to be electronically transmitted to the Clerk's Office using the CM/ECF

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System for filing and transmittal of a Notice of Electronic Filing to the following
CM/ECF registrants:

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Jennifer Basola
KROHN & MOSS, LTD

111 W Monroe, Suite 711 Phoenix, AZ 85003
Attorney for Plaintiff

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sf Judv Kaelin

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