Free Motion to Supplement - District Court of Arizona - Arizona

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Marshall Meyers (020584) Ian Pryor (022651) KROHN & MOSS, LTD. 111 West Monroe, Suite 711 Phoenix, AZ 85003 (602) 275-5588; (866) 385-5215 (facsimile) Attorneys for Plaintiff UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA ) ) Plaintiff, ) vs. ) ) ) FLEETWOOD MOTOR HOMES OF) CALIFORNIA INC AND) WORKHORSE CUSTOM CHASSIS,) ) LLC, ) Defendants. LANE SENNETT Case No. CV 04-0161 PHX ROS PLAINTIFF'S MOTION TO SUPPLEMENT HER RESPONSE TO DEFENDANT FLEETWOOD'S MOTION FOR SUMMARY JUDGMENT

Plaintiff Lane Sennett by and through her counsel, hereby requests leave of Court to supplement her response to Defendant Fleetwood's motion for summary judgment. This Court granted Fleetwood leave to file an additional 8 pages to thoroughly reply to its

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motion for summary judgment, to discuss Nevada, and to discuss the legal standards of the case. Plaintiff now requests leave to file approximately the same 8 pages to address many of these issues. As Defendant Fleetwood stated, all parties and the Court benefit by

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this more expansive discussion. Therefore, Plaintiff seeks this Court's approval allowing the following memorandum of points and authorities to supplement Plaintiff's response to Fleetwood's motion for summary judgment.

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MEMORANDUM OF POINTS AND AUTHORITIES I. DESPITE DEFENDANT'S ARGUMENTS, THIS IS A MAGNUSON-MOSS BREACH OF WARRANTY ACTION. THE CASE MUST BE DECIDED WITHIN THE CONFINES OF THE ACT. Plaintiff's claims are predicated on the Magnuson-Moss Warranty Act 1 , "a

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progressive federal attempt to address problems with consumer warranties." Clark v Jim Walter Homes, Inc, 719 F.Supp. 1037 (S.D. Ala 1989). Plaintiff brings these claims pursuant to the Act as opposed to the U.C.C. or common law because the Act creates causes of action otherwise unavailable under the Code against remote manufacturers offering "limited warranties." Murphy v. Mallard Coach Co., 582 N.Y.S.2d 528 (N.Y.A.D. 1992) (`[w]hile the U.C.C.'s warranty provisions on their face apply equally to consumer and mercantile transactions, various State and federal laws have been enacted which modify the applicability and operation of article 2 of the U.C.C. in an effort to protect the consumer from the obvious imbalance of bargaining power with a manufacturer in regards to the substantive content of warranties"). Thus, although the Act

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incorporates the Code and state common law, the Act itself remains supreme and any form of state law inconsistent with the Act is preempted. Walsh v Ford Motor Co., 807 F.2d 1000, 1014 (C.A. D.C. 1986) ("The Federal prescriptions apply as written; where

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the Act states no prescription, state law continues in force"); Sorce v. Naperville Jeep Eagle, Inc., 309 Ill.App.3d 313, 327, 722 N.E.2d 227 (2nd Dist. 1999) (The Act is a three tiered statute; at the top is the Act itself, in the middle is the U.C.C.; the bottom tier is state common law. Each level of the structure has supremacy over the one beneath, but

15 U.S.C. §2301 et. seq. ("MMWA") ("the Act").
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only where there exist conflicts). Bartow v. Ford Motor Co., 2003 WL 21782087 (Ill. App. 2003) (same); Davenport, Murray & Cassling, 2A Illinois Practice: Uniform Commercial Code § 5/2-313, at 168 (1997) ("To the extent of any conflict between the provisions of the Act and the U.C.C., the Act controls under the supremacy clause of the United States Constitution."). It is thus within the context of the Act Plaintiff's claims must be considered, whether the warranty is "limited" or "full" under Ninth Circuit authority. 2 Milicevic v. Fletcher Jones Imports, LTD, 402 F.3d 912 (9th Cir. 2005). This reality further shows Defendant's arguments how this is a "fully documented, integrated, commercial transaction" to be laughable in this consumer, not commercial, litigation. See e.g., S.Rep. 93-1151 at p. 6 (1973) (stating the rules of commercial sales "do no injustice to commercial buyers who are sophisticated in the ways of the marketplace and can judge the import of the express warranty and the meaning of the disclaimer of the implied warranty. Unfortunately, the ordinary purchaser of consumer products does not know . . . the meaning of words in an express warranty which . . . without his knowledge, be limited rather than expanded . . . .") (the MMWA "attempts to remedy some of the

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defects resulting from this gross inequality in bargaining power and return the sense of fair play to the warranty field that has been lost through the years . . . [and] . . . which presently exists in the relative bargaining power of consumers and suppliers of consumer

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products").

Plaintiff has always conceded implied warrantires arise under State law except as modified by the Act. 15 U.S.C. §2301(7).
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II.

IMPLIED WARRANTIES MAY NOT BE MODIFIED OR DISCLAIMED. Defendant devotes a large portion of its reply discussing whether an implied

warranty arose and how it was modified. This entire argument fails as an implied warranty always arises unless expressly excluded, N.R.S. §104.2314, and cannot be modified or disclaimed (excluded) if a written warranty is provided. 15 U.S.C. §2308. This federal law controls Defendant's arguments which omit reference to this statute. In clarifying this issue to the Court, Plaintiff does not address Defendant's arguments that a warranty breach never entitles a Plaintiff to damages if a warrantor provides an adhesion warranty that says so as this merit-less argument was thoroughly addressed in Plaintiff's response with full citation to black letter law and authority from both United the States Supreme Court and Ninth Circuit. III. THE ONLY "HOLLOW" ARGUMENT HERE IS THAT DEFENDANT IS ABOVE THE LAW. Rather than confronting, admitting and correcting the deficiencies in its written

warranty, Defendant argues Plaintiff's position warrantors are obligated to describe in
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detail that which they warrant and that which they don't is "hollow." Actually, Plaintiff's position mirrors binding federal regulations. 16 C.F.R. § 701.3(a) (obligates warrantors to "clearly and conspicuously disclose warranty terms in a single document in simple and

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readily understood language"); 16 C.F.R. § 701.3(a)(2) (requires "[a] clear description and identification of the products, or parts, or characteristics, or components or properties covered by and where necessary for clarification excluded from the warranty") (emphasis added). Given Defendant's promise "[y]our new motor home, including the structure, plumbing, heating, and electrical systems, all appliances and equipment installed by the

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manufacturer, is warranted under normal use to be free from manufacturing defects in material and workmanship" (emphasis added), it was especially important for Defendant to follow federal law on warranty disclosures and disclaimers given its new, litigation based position it warranted essentially nothing. Nonetheless, Defendant chooses not to follow these regulations despite their strictly binding nature, Ford Motor Credit Co. v. Cenenace, 452 U.S. 155, 158 (1981); Household Credit Servs. v. Pfennig, 124 S. Ct. 1741, 1748 (2004), and instead chooses to denigrate Plaintiff's counsel for simply reading and applying a binding statute. 3 Further, Defendant's reply illustrates that which Plaintiff called to the Court's attention during a recent discovery dispute concerning warranty terms where Defendant promised to this Court it would accede not only that ambiguities would be construed against it, but that it would not argue as to what constitutes an ambiguity. See Exhibit O in Plaintiff's Statement of Facts at p. 15, lines 14-18; p. 15, line 20 ­ p.17, line 9. To this end, although Defendant purports to provide evidence outside its warranty as to why it is responsible for nothing, it points to nothing in its own warranty to support this argument.

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This is because Defendant's warranty uses ambiguous, vague terms to define itself, only so Defendant can argue later what those terms mean. This is the precise evil the Act

Gilbert v Monaco Coach Corporation, 352 F.Supp.2d 1336 (N.D. Ga.) ("The Court also notes that while defendant focuses its argument on the fact that Safari did not manufacture the parts believed to be the sources of many of the problems alleged, the Limited Warranty also explicitly covers `portion[s] of the vehicle and any of its parts supplied or manufactured by Safari Motor Coaches.' Because Safari supplied plaintiffs with parts of the vehicle, such as headlights, the inverter, the air conditioning and satellite television systems, the Court finds defendant's argument that these parts were not manufactured by Safari and are therefore excluded from warranty coverage unpersuasive").
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intends to combat, Richardson v. Palm Harbor Homes, Inc., 254 F.3d 1321 (11th Cir. 2001) ("[o]verwhelming focus of the drafters of Magnuson-Moss Warranty Act was dispelling the deceit that was then common in manufacturers' written warranties on new products"), it is thus unclear why Defendant refuses to accept this and instead focuses its argument on denigrating Plaintiff's counsel. IV. THE PORTION OF THE WARRANTY EXCLUDING COVERAGE IS SUBSERVIENT TO THE PORTION PROMISING COVERAGE. IN CASE OF CONFLICT, CONTRA PROFERENTUM APPLIES. As a threshold matter, it is ironic Defendant argues the warranty must be read in

its entirety and that this comprehensive reading results in the exclusion of coverage rather than the inclusion ­ i.e., what happens to the rest of the warranty if we just read the exclusions, and is it not just as probable that under this analysis, the parts providing coverage trump those that don't? The answer to this question lies both in the Commercial Code which supports inclusion not exclusion 4 and the Act's legislative history indicating

N.R.S. §104.2316 ("(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this article on parol or extrinsic evidence (§2-202) negation or limitation is inoperative to the extent that such construction is unreasonable"); N.R.S. § 104.2313 note 4 ("In view of the principle that the whole purpose of the law of warranty is to determine what it is that the seller has in essence agreed to sell, the policy is adopted of those cases which refuse except in unusual circumstances to recognize a material deletion of the seller's obligation. Thus, a contract is normally a contract for a sale of something describable and described. A clause generally disclaiming `all warranties, express or implied' cannot reduce the seller's obligation with respect to such description and therefore cannot be given literal effect under Section 2-316"); N.R.S. §104.2313 Note 1 ("`Express' warranties rest on `dickered' aspects of the individual bargain, and go so clearly to the essence of that bargain that words of disclaimer in a form are repugnant to the basic dickered terms").
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the Act was intended to prevent warrantors from giving in one breath and taking away in the next5 , much like Defendant's warranty does here. Even though this federal legislation (intended amongst other things to clarify warranties) proves Plaintiff's position that inclusion is the rule except where clearly excluded, this Court has a fall back position: the doctrine of contra proferentum. Specifically, both parties here argue in favor of the language they self servingly consider operative, and this language is plainly in conflict. The rule of law is thus to construe the ambiguity against the drafter, as Judge Martone recently recognized. In this regard, Plaintiff does not misrepresent the DeShazer opinion as Defendant's argue. Rather, and without retort to this personal attack, Plaintiff herein simply quotes Judge Martone for this Court to decide what exactly the opinion holds. National RV next argues that fourteen of Plaintiff's alleged defects are specifically excluded from coverage under its limited warranty including, 1) defective refrigerator, 2) defective water heater, 3) defective electrical system, 4) defective water pump, 5) defective toilet, 6) defective generator, 7) defective engine, 8) defective heater, 9) defective brakes, 10) defective leveling jacks, 11) defective air-conditioner, 12) defective shower, 13) defective sink, and 14) defective passenger seat. NSOF ¶ 9. Plaintiff responds that each of these defects are listed as "Standard Features" of the Tradewinds Motor Home and thus should be covered under National's warranty that covers "your motor home." The language of National RV's limited

1974 U.S.C.C.A.N. 7702, 7706 ("Another growing source of resentments has been the inability to get many [warranted products] properly repaired and the developing awareness that the paper with the filigree border bearing the bold caption `Warranty' or `Guarantee' was often of no greater worth than the paper it was printed on. Indeed, in many cases, where a warranty or guarantee was ostensibly given the old saying applied `The bold print giveth and the fine print taketh away.' For the paper operated to take away from the consumer the implied warranties of merchantability and fitness arising by operation of law leaving little in its stead).
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warranty classifies 1) refrigerator, 2) water heater, and 3) generator as "items covered under separate warranties," but not as "items not covered." Additionally, the warranty specifically covers plumbing systems (water pump, toilet, shower, sink), electrical systems, and air-conditioning/heating systems fabricated, assembled or installed by National RV. National RV's warranty does not exclude the engine, brakes, leveling jacks, and passenger seat defects. Any uncertainty is resolved against the drafter and in favor of coverage. There are issues of material fact on these defects. (emphasis added). This holding is especially relevant to the instant case as in DeShazer, the defendant made the same chassis based arguments as Defendant does here 6 yet Judge Martone held that defendant responsible for everything it did not expressly and clearly exclude ­ just like the federal Act requires. V. THE PLAIN LANGUAGE OF DEFENDANT'S WARRANTY PROMISES A DEFECT-FREE MOTOR HOME. IT WASN'T DEFECT-FREE. THERE IS NOTHING "GROSSLY OVERSTATE[D]" ABOUT THESE FACTS. Defendant's warranty promises a defect-free Motor Home, plain and simple: "

your new motor home . . . is warranted under normal use to be free from manufacturing defects in material and workmanship." The warranty repair records prove this promise

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was not kept, in other words, it was breached (Defendant likewise admits the existence of defects). This is simple fact. As stated in Plaintiff's response, this breach became
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In other words, there the defendant argued the term "chassis" excluded everything it claimed during summary judgment was part of the chassis, but Judge Martone looked to the warranty itself and held anything not specifically disclaimed was not disclaimed as that defendant's warranty stated everything it "fabricated, assembled or installed" was warranted, just like Defendant's warranty here. The Court here will note that of the complaints at issue here, not one is identified anywhere in the record (other than Defendant's Motion) as being part of the "automotive chassis system (including the chassis and drive train), tires and batteries," the only chassis-based disclaimer found in Defendant's warranty. See Defendant's Reply at page 11, lines 4-7. Again, Defendant could have drafted a warranty that meets its arguments now, it chose not to do so and instead draft a warranty that attempts to disclaim half the Motor Home with a few simple, non-descript words.
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actionable upon the failure to honor this promise within a reasonable opportunity. 15 U.S.C. §2310(d)(1) and (e). This is black letter law. Questions of fact exist as to when, if ever, the voluminous defects were cured. VI. PLAINTIFF'S GLOBAL POSITION IS REASONABLE. Defendant argues Plaintiff's position would lead to "ridiculous results." Let's

analyze this argument. Plaintiff's position is that the instant motor home bearing Fleetwood's name only and placed into the stream of commerce by Fleetwood only is a Fleetwood, Defendant's position is it is a bag of unidentified parts. Plaintiff's position is a warranty breach can entitle a consumer to damages, Defendant's is there are no damages ever. Plaintiff's position is Defendant must honor its repair promise reasonably, Defendant's is it has an infinite amount of time to tinker and if it fails, too bad. Plaintiff's position is if the Motor Home is out of service by reason of defect the entire Motor Home is out of service, Defendant's is the history should be reviewed piecemeal even though this is one unit that can't be used piecemeal. Which position here is unreasonable?

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VII.

CONCLUSION. Despite Defendant's best protestations, the law is clear: every limited remedy

(repair/replace) comes with a reasonableness requirement and every breached promise comes with a remedy. The wheels of commerce could not operate if this were not the case. This does not mean 15 U.S.C. §2304 applies and in fact, Plaintiff has never argued

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as such. That §2304 does not apply because this warranty is limited does not mean the Act doesn't apply, as recently held by the 9th Circuit. This means where the Act speaks it reigns supreme (e.g., the Act's disclosure requirements, the Act's rule prohibiting implied warranty disclaimers and modifications). Finally, and despite Defendant's desire to

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"clarify" the facts, there are genuine issues of material fact here, issues as to defect, repair opportunity, and damages. It is irrefutable these factual issues exist and that factual issues preclude judgment. Summary Judgment is not appropriate. Plaintiff also incorporates the prior Response to summary judgment into this supplement. RESPECTFULLY SUBMITTED on this 8th day of December 2005. By: _s/Marshall Meyers_________ Marshall Meyers Ian Pryor KROHN & MOSS, LTD. 111 West Monroe, 711 Phoenix, AZ 85003 Attorney for Plaintiff(s) Filed electronically on this 8th day of December 2005, with: United States District Court CM/ECF system Copy mailed on this 8th day of December 2005, to: Hon. Roslyn O Silver 401 West Washington Street Phoenix AZ 85003-2118 Notification sent electronically via the Court's ECF system and mailed on this 8th day of December, 2005 to: Mr. Kerry M. Griggs The Cavanagh Law Firm 1850 North Central Avenue, Suite 2400 Phoenix AZ 85004 Mr. David Williams Bowman & Brooke, LLP 2901 N. Central, Suite 1600 Phoenix AZ 85012 s/Ian Pryor

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Ian Pryor

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