Free Motion in Limine - District Court of Arizona - Arizona

1 Negatu Molla (Bar No. 006254)

2 BOWMAN AND B~OOKE LLP Suite 1600, Phoenix Plaza
3 2901 North Central Avenue

David W. Willams (Bar No. 022764)

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

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 REFERENCE TO DAMAGES EXCLUDED BY WORKHORSE'S LIMITED WARRANTY
(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.

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Workhorse Custom Chassis, LLC ("Workhorse") by and through their counsel

undersigned moves in limine to preclude reference to any damages for
incidental/consequential expenses, expenses for aggravation/inconvenience or loss
of use. This Motion is supported by the following Memorandum of Points and

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Authorities.
MEMORANDUM OF POINTS AND AUTHORITIES
I.

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FACTUAL BACKGROUND

24 As part of her damages, Plaintiff has disclosed that she is seeking damages for
25 aggravation and inconvenience in the amount of $26,100; damages for loss of use in

26 the amount of $5,400; and $269.66 for rental car and hotel expenses that Plaintiff
27 classifies as incidental and consequential damages. See Plaintiff' Initial Disclosure,

28 attached as Exhibit 1. During her deposition, Plaintiff was asked what the basis for

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her claim for $26,100 for aggravation and inconvenience. See Deposition of Lane
Sennett, p. 108:5-109:5, attached as Exhibit 2. Plaintiff was unable to say how the
number was actually determined and had no evidence to substantiate her claim. Id.

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Similarly, Plaintiff had no evidence to support her claim for loss of use damages.
These were simply numbers provided by her lawyers. The damages that Plaintiff is

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seeking are disclaimed under Workhorse's limited warranty; therefore, Workhorse
requests that the Court preclude any reference to them at triaL.
II.

WORKHORSE'S LIMITED WRITTEN WARRANTY

PLAINTIFF IS NOT ENTITLED TO ANY DAMAGES EXCLUDED BY
Plaintiff is not entitled to any incidental or consequential damages, damages for

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loss of the use of the motor home, or for any aggravation or inconvenience when the

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motor home was being serviced. Defendant's limited written warranty explicitly

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disclaims the Plaintiffs ability to recover those types of damages. Defendant's
Limited Warranty specifically provides:

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vehicle rental expense, lodging meals, or other travel costs, state or local taxes required on warranty repairs.
See Workhorse Limited Warranty, attached as Exhibit 3.

Economic loss or extra expense is not covered. Examples include: loss of vehicle use, inconvenience, storage, payment for loss of time or pay,

Disclaimers on these types of damages are enforced even in cases alleging
violation of the Magnuson-Moss Act. See KruQer v. Subaru of America. Inc., 996 F.
Supp. 451, 458 (E.D. Pa. 1998) (dismissing consequential damages claim under

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Magnuson-Moss Warranty Act in light of warranty disclaimer); Nairan Co. for General
ContractinQ and TradinQ v. Fleetwood Enterprises, 659 F. Supp. 1081, 1100 (S.D. Ga.
1986) (holding that consequential damages disclaimers are permitted under

Magnuson-Moss Warranty Act); Sorce v. Napervile Jeep EaQle. Inc., 722 N.E.2d 227,

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325-26 (III. Ct. App. 1999). In fact, a manufacturer may disclaim damages from a
limited warranty under either the common law of contracts or the Uniform Commercial

Code. SeekinQs v. Jimmv GMC of Tucson, 130 Ariz. 596, 601, 638 P.2d 210,215.

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(upholding the disclaimer of incidental and consequential damages in a non-U.C.C.
breach of warranty action by a consumer against a remote manufacturer).

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Accordingly, because these types of damages are disclaimed, Plaintiff cannot recover
these damages.
A.

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The Failure of The Essential Purpose Test Is Inapplicable Because
There Is No Privity Between Plaintiff and Workhorse.

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To get around these clear disclaimers, Plaintiff may argue that the limited

warranty "fails of its essential purpose" when Workhorse allegedly failed to make
repairs to the subject motor home. The failure of the essential purpose test is a
remedy under the Uniform Commercial Code (which even Plaintiff admits). The
failure of the essential purpose test is codified in Nev.Rev.Stat. § 104.279(2) and (3)1,
which states:

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of its essential purpose, remedy may be had as provided in this title.

(2) Where circumstances cause an exclusive or limited remedy to fail

facie unconscionable but limitation of damages where the loss is
commercial is not.
There is no specific Nevada case law on the issue of whether Nevada applies

damages for injury to the person in the case of consumer goods is prima

limitation or exclusion is unconscionable. Limitation of consequential

(3) Consequential damages may be limited or excluded unless the

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the U.C.C. to cases where there is no privity between a consumer, like Plaintiff, and

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a remote seller like Workhorse. However, case law in other states shows that in
order for the U.C.C. to apply to a lawsuit involving a remote manufacturer and a

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consumer-buyer, there must be privity of contract between the two parties. For
instance, the Arizona Supreme Court has explicitly held that a consumer may not sue

a remote manufacturer under the Uniform Commercial Code due to a lack of privity,

thus the U.C.C. and its provisions are inapplicable to determining whether a breach
of limited written warranty has occurred. Florv v. Silvercrest Industries, Inc., 129 Ariz.

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1 The Court has previously determined that it would apply Nevada law to Plaintiff's

claims.
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574, 633 P.2d 383 (1981); SeekinQs v. Jimmv GMC of Tucson, Inc., 130 Ariz. 596,

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638 P.2d 210 (1981); See also Chaurasia v. General Motors Corp, 126 P.3d 165

(Ariz.App. Jan. 3, 2006) (rejecting the failure of the essential purpose and the
application of the U.C.C. in an action brought by a consumer-plaintiff against a

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remote manufacturer.)

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In this case, there is no privity between Plaintiff and Workhorse. Workhorse
did not sell the chassis to Plaintiff; instead, she bought a Fleetwood motor home that

had a Workhorse chassis for an independent Fleetwood dealership. Therefore,

because there was never an actual "sales" transaction that could give rise to a
contract, then Plaintiff has no basis for seeking to apply the U.C.C. which requires
privity between the parties to form the basis for a cause of action.
B.

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Question Of Law For The Court.

Even If The U.C.C. Applied, Plaintiff Must Show That Workhorse's Disclaimer of Incidental Damages Is Unconscionable, Which Is A

Even if this Court were to apply the failure of the essential purpose test,
Workhorse's limitation on damages is still unavailable. Even where the limited
remedy of repair and replacement fails, if a warrantor has a separate provision
limiting damages for consequential damages (i.e., aggravation and inconvenience,

loss of use, etc.), the damages disclaimer is stil valid unless it is unconscionable.
See Nev. Rev. Stat. § 1 04.2719(c); American Elect. Power Co.. Inc. v. Westinghouse

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Elec. Power Corp., 418 F.Supp. 435, 455-56 (S.D.N.Y. 1976) (holding that

consequential damage exclusion on an electric generator is treated as independent
of the repair/replace provision); S.M. Wilson & Co. V. Smith Intern'l Inc., 587 F.2d

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1363 (9th Cir. 1978) (holding that the failure of the limited repair remedy to serve its

essential purpose did not require that recovery of consequential damages be
permitted).

The question of unconscionability is a question of law for the Court. See
Nev.Rev.Stat. §104.2302(1); Nelson V. Rice, 198 Ariz. 563, 568, 12 P.2d 238, 243

(App. 2000); Patterson v. ITT Consumer Financial Corp., 14 Cal.AppAth 1659, 1663,
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18 Cal.Rptr.2d 563, 565 (CaI.App. 1 Dist., 1993). In order to find that Workhorse's

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damages disclaimer is invalid, Plaintiff must show both substantive and procedural
unconscionability. Burch v. Second Judicial Dist. Court of State ex rel. County of

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Washoe, 118 Nev. 438, 443, 49 P.3d 647, 650 (Nev., 2002). ("Generally, both
procedural and substantive unconscionabilty must be present in order for a court to
exercise its discretion to refuse to enforce a contract or clause as unconscionable").
'''Unconscionabilty includes both procedural unconscionabilty, i.e., something wrong

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in the bargaining process, and substantive unconscionability, i.e., the contract terms

per se.''' Nelson v. Rice, 198 Ariz. 563, 568, 12 P.2d 238, 243 (App. 2000). The
burden of proving unconscionability lies with Plaintiff. Bil Stremmel Motors. Inc. v.
IDS LeasinQ Corp., 89 Nev. 414, 418,514 P.2d 654, 657 (1973) citing Nev.Rev.Stat.

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§104.2719(3).
A disclaimer of incidental and consequential damages is not substantively
unconscionable where the provision is standard in the industry where the disclaimer

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is used. Southwest Pet Products, Inc. v. Koch Industries, Inc., 107 F.Supp.2d 1108,

1114 (D. Ariz. 2000). Further, a warranty disclaimer is not unconscionable when the
disclaimer is no different than those used in other similar consumer or commercial
transactions. SeekinQs v. Jimmv GMC of Tucson, Inc., 130 Ariz. 593, 602, 638 P.2d

210,216 (1981).

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Because Workhorse's damages exclusion is independent of its limitation to
repair or replace defective components, unless Plaintiff can show that the provision is

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unconscionable, the damages exclusion is still valid even if the repair-replace
provision is determined to be invalid. Workhorse's limited warranty is no different

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than limited warranties provided by other manufacturers, and in fact contains many
identical terms. See Limited Warranties of General Motors Corporation, MercedesBenz, and Fleetwood, attached as Exhibits 3, 4, and 5. Therefore, because

Workhorse's warranty disclaimer is no different than other manufacturers, it cannot
be unconscionable. See SeekinQs, 130 Ariz. at 602, 638 P.2d at 216. Further,

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Plaintiff has shown no evidence that the disclaimer is unconscionable, therefore,
Plaintiff is not entitled to recover any damages excluded by Workhorse's limited
warranty.

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Even if these damages were recoverable, Plaintiff has no evidence to
substantiate the damages. Plaintiff has disclosed that she was seeking damages for
aggravation and inconvenience in the amount of $26,100; damages for loss of use in

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the amount of $5,400; and incidental and consequential damages in the amount of
$269.66. However, Plaintiff admitted in his deposition that he has no receipts or
paperwork to substantiate any of these monetary amounts, other than a few receipts

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for hotel bils and a rental car. In fact, Plaintiff admitted that she had no idea how the

amounts for aggravation and inconvenience and loss of use were computed, and had
no evidence other than the opinion of her lawyers to support the amounts claimed.

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Therefore, assuming Plaintiff would be entitled to recover those damages, Plaintiff
has no evidence to establish what those damages are or that Workhorse caused any
of them.

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II.

CONCLUSION

For the reasons set forth above, Workhorse requests that the Court exclude
any evidence of damages that are excluded by Workhorse's limited warranty.

RESPECTFULLY SUBMITTED this ;(5'f1day of August, 2006.
BOWMAN AND BROOKE LLP

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By: /s/ David W. Williams Negatu Molla David W. Willams

2901 North Central Avenue

Suite 1600, Phoenix Plaza

Attorneys for Defendant Workhorse Custom Chassis

Phoenix, Arizona 85012-2761

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CERTIFICATE OF SERVICE

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I hereby certify that on the.+t, day of August, 2006 I caused the attached
document to be electronically transmitted to the Clerk's Offce 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:
KROHN & MOSS, L TD

6 Jennifer Basola

7 111 W. Monroe, Suite 711

Phoenix, AZ 85003 8 Attorney for Plaintiff
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s/ Judv Kaelin

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