Free Reply to Response to Motion - District Court of Arizona - Arizona

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THE CAVANAGH LAW FIRM
A Professional Association 1850 NORTH CENTRAL AVENUE SUITE 2400 PHOENIX, ARIZONA 85004-4527 (602) 322-4000

Kerry M. Griggs, SBN 016519 [email protected] Patrick G. Rowe, SBN 018591 [email protected] Attorneys for Defendant Fleetwood Motor Homes of Indiana, Inc. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA RONALD WEBER, Plaintiff, vs. FLEETWOOD MOTOR HOMES OF INDIANA, INC., Defendant. (ORAL ARGUMENT REQUESTED) Plaintiff has not offered any adequate evidence to support his position with regard to the most fundamental issue at hand ­ whether Fleetwood breached its Limited Warranty. There are no factual disputes to be resolved with regard to breach or damages; the Plaintiff alleging there are, without offering valid supporting evidence, does not make it so. Accordingly, Fleetwood is entitled to judgment as a matter of law. This Reply is supported by the following Memorandum of Points and Authorities and the entire record in this action. MEMORANDUM OF POINTS AND AUTHORITIES I. PLAINTIFF'S CLAIM FOR BREACH OF WARRANTY FAILS AS A MATTER OF LAW.
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NO. CV 03-2606 PHX JWS DEFENDANT'S REPLY TO PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (Assigned to the Honorable John W. Sedwick)

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A.

Plaintiff's equitable estoppel allegation is not supported by the facts or the law.

Plaintiff's equitable estoppel argument must be seen for what it is ­ a thinly veiled legal maneuver by Plaintiff based not on the facts as they are but as he would hope them to be. The fact is the Plaintiff did not look at any document that he believed to be the warranty, either the MSRP or Fleetwood's Limited Warranty, prior to purchasing the vehicle, and he does not claim that anyone ever told him that Fleetwood offered a "full" warranty. Therefore, it is not possible for him to have relied on a single word in the MSRP that stated "full ownercare warranty" rather than "limited ownercare warranty" or on any such statement by a salesperson: Q.: Before taking delivery of the 2002 American Dream did you ever see a written document that you understood to be the terms of Fleetwood's written warranty on the 2002 American Dream? A.: Q.: A.: Q.: No. You never asked? I did not ask, I did not feel like I needed to. Why not?

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A.: Because of Fleetwood's reputation and because what the sales people told me. Q.: So you were comfortable with what you were told and what your research showed about the warranty such that you didn't think that you needed to see the actual written warranty before purchase? A.: I was told it had a twelve-month bumper to bumper warranty. What more is there? Q.: So based upon that you didn't think you needed to see the actual written warranty; fair? A.: The best that I can recall, yeah. I mean I didn't ask to see it so, I didn't. (See Deposition of R. Weber dated October 18, 2004, at 49-50, lines 13-10, attached to Fleetwood's Statement of Facts in Support of Motion for Summary Judgment and Motions in Limine as Exhibit "A.") From this testimony it is apparent that, even if Mr. Weber did see
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the MSRP and did notice that its stated "full ownercare warranty" he did not believe that statement constituted Fleetwood's warranty for the motor home. It is also apparent that he was never told by a salesperson that Fleetwood offered a "full" warranty for the vehicle. Thus, Plaintiff's equitable estoppel argument fails as a matter of law because he has not proven that he was even aware of a representation of a full warranty prior to purchasing the vehicle, let alone that he relied on such a representation. Furthermore, even if Mr. Weber had relied on the phrase "full ownercare warranty" in the MSRP, Plaintiff has offered absolutely no evidence that Fleetwood intended for Mr. Weber to rely on that phrase or that Mr. Weber has been injured as a result of that phrase being present in the MSRP, both of which are essential elements of an equitable estoppel claim. Accordingly, the Plaintiff's equitable estoppel allegation fails as a matter of law. See also Traynor v. Winnebago, August 3, 2005 Order, p. 3; p. 7 (attached hereto as Exhibit 2), in which the District Court of Arizona rejected a similar equitable estoppel argument.1 B. The evidence shows that Fleetwood has repaired or replaced all defective parts; Plaintiff's own allegations to the contrary are not sufficient because he is not qualified to testify regarding defects in a motor home.

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The facts demonstrate that Fleetwood did not breach its warranty because it did repair or replace all parts of the vehicle that were found to be defective. As explained in the Motion for Summary Judgment, Mr. Weber's primary complaint was water intrusion into the motor home. Fleetwood's expert, John Mestlin, inspected the motor home, conducted a water intrusion test and determined that Fleetwood's repairs were effective. In his Response, Plaintiff doesn't even attempt to utilize the report prepared by his own expert to refute Fleetwood's expert's determination that the vehicle has been repaired and is presently in good working condition. The fact that Plaintiff's expert has never even seen the vehicle is
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It must be borne in mind that Mr. Weber, "is not a first time Motor Home owner but rather owned another Fleetwood Motor Home prior to the American Dream." Plaintiff's Response, p. 11. Given his prior experience with owning a motor home, Mr. Weber surely understood the difference between a MSRP and a warranty.
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fatal to his offering an opinion as to whether the repairs were adequate and the vehicle is working properly today. Thus, Plaintiff did the only thing he could do ­ offer his own opinions that some defects still exist. Plaintiff's Response, pp. 8-9. The Plaintiff's lay opinion as to present defects, however, is not sufficient to survive a motion for summary judgment. Expert testimony is necessary whenever the subject matter is not within the knowledge or experience of lay people (i.e., it cannot be understood by the ordinary juror without the assistance of expert testimony). Teerling v. Fleetwood Motor Homes of Indiana, Inc., 2001 U.S. Dist. LEXIS 7481, at *13-14. Plaintiff, however, has offered absolutely no evidence as to why he is qualified to opine regarding whether a motor home (or any complex machinery) contains a defective component, especially in a matter such as this one, where the primary issue is whether any present leaks are the result of a defective component or the Plaintiff's own inadequate maintenance of the vehicle. To the contrary, he has acknowledged that he has no particular training in RV maintenance and repair, nor does he have mechanical training in the automotive industry. Fleetwood's Statement of Facts, ¶ 4. As such, Plaintiff has not created a valid dispute as to whether there are any present defects in the motor home and his claim in this regard fails as a matter of law. C. A "reasonable number of repair attempts" standard does not apply to Fleetwood's Limited Warranty.

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Mr. Weber cannot rely upon allegations that items in the motor home have been defective in the past to support a breach of warranty claim. Plagens v. National RV Holdings, 328 F.Supp.2d 1068, 1076 (D. Ariz. 2004) (holding that alleged defects that had been repaired could not support plaintiff's breach of warranty claim). Nevertheless, in attempting to support his claim for breach of warranty in the Response, he focuses almost exclusively on whether Fleetwood repaired the vehicle in a timely manner. The number of repair attempts or amount of time Mr. Weber's vehicle was out of service is not relevant to determining whether Fleetwood breached its Limited Warranty
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because Fleetwood's Limited Warranty does not restrict either the dealer or Fleetwood to a certain time period or number of opportunities within which a repair must be made. Fleetwood's Statement of Facts, ¶ 3. See also, Cippolone, 505 U.S. 504, 525 (1992) ("A manufacturer's liability for breach of an express warranty derives from, and is measured by, the terms of that warranty"). Surprisingly, Plaintiff attempts to support his "reasonable number of repair attempts" allegation through reliance on Traynor v. Winnebago and the unpublished Soldinger decision, the latter of which clearly does not apply to this matter because Fleetwood provided a limited warranty, not a full warranty. (Plaintiff's Response, pp. 5-6). In Larry J. Soldinger Associates, Ltd. v. Ashton Martin Lagonda of N. Am., Inc. No. 97 C 7792, 1999 WL 756174, (N.D. Ill. Sept. 13, 1999), the court held that, under 15 U.S.C. § 2304, a warrantor must repair a defective product within a reasonable time and free of charge and that "the statute allows only a 'reasonable number of attempts' to fix a defective or malfunctioning product." Id. at *3. Any attempt by Plaintiff to apply 15 U.S.C. § 2304 to this matter is not appropriate because Winnebago provided a limited warranty and only full warranties are required to meet the minimum standards set forth in § 2304.2 See Bailey v. Monaco, 350 F.Supp.2d 1036, 1042 (N.D. Ga. 2004); Razor v. Hyundai Motor America, 813 N.E.2d 247, 258 (Ill. App. Ct. 2004). The 1973 United States Senate Report summarizing the MMWA further
Under the MMWA , a written warranty can either be designated a "full" or "limited" warranty; 15 U.S.C. § 2303(a) clearly indicates that the requirements of § 2304 only apply to full warranties: (a) Full (statement of duration) or limited warranty: Any warrantor warranting a consumer product by means of a written warranty shall clearly and conspicuously designate such warranty in the following manner, unless exempted from doing so by the Commission pursuant to subsection (c) of this section: (1) If the written warranty meets the Federal minimum standards for warranty set forth in section 2304 of this title, then it shall be conspicuously designated a "full (statement of duration) warranty." (2) If the written warranty does not meet the Federal minimum standards for warranty set forth in Section 2304 of this title then it shall be conspicuously designated a "limited warranty." 15 U.S.C. § 2303(a) (emphasis added). :1187870-1 5 Case 2:03-cv-02606-JWS Document 111 Filed 08/15/2005 Page 5 of 13
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drives this point home, demonstrating that Congress specifically intended to impose the reasonable number of repair attempts requirement only upon manufacturers offering full warranties: This title applies to warranties which are given in connection with consumer products. . . . It would require written warranties on consumer products (other than those exempted by the FTC) to be designated as either "full" or "limited" warranties and would specify the duties of a warrantor under a "full" warranty. These provisions would only apply to consumer products costing more than $10. Under a "full" written warranty of a consumer product the warrantor would be (a) required to remedy the consumer product within a reasonable time and without charge in case of a defect, malfunction, or failure to conform with such written warranty, . . . . (emphasis added). 1974 U.S.C.C.A.N. 7702, 7703 (attached hereto as Exhibit 1). The Court of Appeals of Georgia also rejected this same Soldinger/§2304 argument when Plaintiff's counsel presented it to that tribunal. In Knight v. American Suzuki, 612 S.E. 2d 546, 550 (Ga. Ct. App. 2005) the court held as follows: [T]he Soldinger analysis has no application here. The MagnusonMoss Act requires that a warrantor specify whether a written warranty is a full or limited warranty, 15 U.S.C. § 2303(a) . . . And '[o]nly full warranties are required to meet the minimum standards set forth in 15 U.S.C. § 2304. Therefore, because the law relating to limited warranties is not expressly modified, limited warranties, such as [Suzuki's], are not governed by Magnuson-Moss but by the Uniform Commercial Code. Id., citing Bailey, 350 F.Supp.2d at 1042. Therefore, in Georgia, when determining whether a warrantor has breached a warranty, the courts turn first to the terms of the warranty itself (see Hines, discussed above), and then to Georgia's adoption of the U.C.C. Id. Finally, Plaintiff's reliance on Judge Campbell's rejection of Winnebago's Motion to Dismiss in Traynor v. Winnebago, 2004 WL 1146077 (D. Ariz. 2004), is wholly inappropriate because Judge Campbell recently granted Winnebago's Motion for Summary Judgment in that case and in so doing, stated as follows: Winnebago argues that the [Magnuson-Moss Warranty] Act's reasonable attempts and time standards do not apply in this case because Winnebago gave Plaintiff only a limited warranty. The Court agrees. In compliance with § 2303(a), Winnebago's warranty states on its face that it is a "Limited Warranty," . . . and Winnebago
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therefore is not required by § 2304 of the Act to refund the purchase price if it fails to repair the Sunova within a reasonable number of attempts. . . . In summary, the Court concludes that Winnebago gave Plaintiff a limited rather than a full warranty. The Act's minimum standards regarding completing repairs within a reasonable number of attempts do not apply to the limited warranty. See Exhibit 2, at p. 3, lines 11-16; p. 5, lines 5-7. Therefore, the number of repair attempts or amount of time Mr. Weber's vehicle was out of service is not relevant to determining whether Fleetwood breached its Limited Warranty; rather the appropriate test is whether Fleetwood has repaired or replaced any defective parts. D. Even applying a "reasonable number of repair attempts" standard, the Court can find as a matter of law that Fleetwood did not breach its Limited Warranty.

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Even if this Court were to consider "reasonable number of repair attempts" in determining whether Fleetwood breached its Limited Warranty, the Court can still determine, as a matter of law, that Plaintiff's breach of warranty claim fails. Accepting as accurate Mr. Weber's allegation that he brought the motor home to repair facilities on eight occasions over the course of 12 months, this does not constitute a breach of warranty because, as explained in the Motion for Summary Judgment, Fleetwood repaired Mr. Weber's main concern (water intrusion) in three visits to repair facilities and repaired the other allegedly defective items in one or two attempts. (See Declaration of John C. Mestlin, attached as Exhibit "O" to Fleetwood's Statement of Facts in Support of its Motion for Summary Judgment). No reasonable jury could find that to be an unreasonable number of repair attempts. Plaintiff has not offered any evidence to refute this. Rather, Plaintiff alleges that the Court should assess the number of repairs to the vehicle as a whole, rather than the individual items that were subject to repair. Such a holding would lead to ridiculous results. A consumer could claim the warranty has been breached because he took the vehicle in for repairs three or four different
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times over the course of his first year of ownership, even if those items were all different and all very minor in nature. For example, a loose mirror in January, a wobbly dinette table in May, unglued wallpaper in August, and a damaged blind in December could feasibly lead to a claim for breach of a limited warranty, under such an untenable standard. Surely this is not what Congress intended when it specifically allowed for the creation of full, versus limited, warranties and imposed certain requirements, including repair within a reasonable number of attempts, only on manufacturers who chose to offer full warranties. Congress intended to give the term "full warranty" meaning and ensure that consumers could rest assured that a full warranty meant they were getting the coverage established in law, while at the same time allowing manufacturers the option of providing a limited warranty (or no warranty), the very name of which informs the consumer that full coverage is not being provided. In this matter, three or fewer repair attempts hardly constitute a failure to repair or replace a defective part to any type of vehicle, let alone a motor home.3 In Hines v. Mercedes-Benz, 358 F.Supp.2d 1222 (N.D. Ga), numerous items were repaired in one attempt (as is the case here); two items (tire pressure monitor and seat back) were repaired in two attempts; and two items (driver's seat and alarm system), required three attempts. Id. at 1231. The court granted summary judgment in favor of Mercedes, noting: This Court disagrees with Plaintiff that the question of whether repairs were made within a reasonable time always requires a jury determination. Though genuine issues of fact with regard to this question can and do exist, in such a case as this, no reasonable jury could find that Defendant . . . required an unreasonable amount of time to complete the repairs on any of the defects. Id. at 1232. (A copy of the Hines decision is attached hereto as Exhibit 3). Compared to the automobile in Hines, components in Mr. Weber's motor home appear to have undergone a
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Because recreational vehicles are obviously more complex and include far more components than a typical consumer product, including automobiles, there is a greater likelihood that any given item 26 in a recreational vehicle may need to be repaired. Even the Arizona legislature has recognized this 27 distinction, exempting recreational vehicles from the state's so-called "Lemon Law." A.R.S. § 441261(C). :1187870-1 8 Case 2:03-cv-02606-JWS Document 111 Filed 08/15/2005 Page 8 of 13

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comparable number of single repairs and fewer multiple repair attempts. Therefore, if this Court first holds that reasonable number of repair attempts is an applicable standard to apply in determining breach of limited warranty, this Court can determine, as a matter of law, that Mr. Weber's motor home was not subject to an unreasonable number of repairs. II. PLAINTIFF'S CLAIMS FOR BREACH OF IMPLIED WARRANTIES FAIL. A. Plaintiff's common law implied warranty of merchantability claim fails.

Numerous courts in the District of Arizona have held that a claim for breach of implied warranty of merchantability 1) arises under state law and 2) fails as a matter of law where there is no privity of contract between the plaintiff and defendant. Plagens v. National RV Holdings, 328 F. Supp. 2d 1068, 1073-74 (Ariz. 2004); Haugland v. Winnebago Industries, 327 F. Supp. 2d 1092, 1096 (Ariz. 2004); and Hyatt v. Monaco Coach, CV 04-524 TUC DCB. (A copy of the Hyatt decision is attached hereto as Exhibit 4). Plaintiff acknowledges that there is no privity between him and Fleetwood but argues that is irrelevant because New Mexico law applies because the vehicle was delivered to Plaintiff in New Mexico. Plaintiff's Response, p. 15. This argument fails for at least two reasons. First, any argument by the Plaintiff that New Mexico law should apply has been waived. Where a party has represented to the district court that the law of the forum stated is applicable and intentionally delays in raising a choice of law challenge, such a challenge is waived. Klaxon Co. v. Stentor Elect. Mfg. Co., 313 U.S. 487, 489 (1941); General Signal Corp v. MCI Telecommunications Corp., 66 F.3d 1500, 1505 (9th Cir. 1995). Plaintiff has represented to this Court throughout this litigation that his claims arise under Arizona law. See, e.g. Plaintiff's Third Amended Compliant, ¶ 2, "Plaintiff . . . is an individual who was at all times relevant hereto in the State of Arizona"). Only now, when faced with a dispositive motion, does Plaintiff attempt to apply law other than Arizona law. Such an egregious delay should not be rewarded. Second, Plaintiff has alleged a claim for breach of the common law implied
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warranty of merchantability. Plaintiff's Third Amended Compliant, ¶ 24. However, the case Plaintiff cites, Perfetti v. McGhan Medical, 99 N.M. 645, 662 P.2d 646 (N.M. App. 1983), establishes that in New Mexico privity is not required to bring a claim for breach of the implied warranty of merchantability under the UCC. Because Plaintiff is alleging a breach of common law implied warranty of merchantability, he cannot rely on case law that holds privity is not required under the U.C.C. He would have to show that, in New Mexico, there is a common law implied warranty of merchantability but he has offered no support for such an argument. B. Plaintiff's implied warranty of habitability claim also fails.

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Fleetwood does not respond well to Plaintiff's allegations of "hypocrisy" in its Fleetwood's legal arguments. Plaintiff himself claims that "New Mexico law controls implied warranties as that is the State of delivery" while two paragraphs later he alleges that "Arizona law makes it clear implied warranties of habitability and workmanship arise against both the home builder and to site builders upon which homes are constructed." Plaintiff's Response, pp. 15-16. Plaintiff would have this Court apply New Mexico law to his implied warranty of merchantability claim but Arizona law to his implied warranty of habitability claim. Plaintiff offers no explanation as to why the Court should do this. Putting aside such questions of "hypocrisy," what matters is that Arizona law has only recognized the implied warranty of habitability in the context of realty. Columbia Western Corp. v. Vela, 592 P.2d 1294 (Ariz. App. 1979). Other plaintiffs counsel have attempted to make this unprecedented claim against motor home manufacturers in other cases and have been consistently rejected. See also Exhibit 4, at pp. 6-7. This Court should do the same. III. PLAINTIFF CANNOT PREMISE A CAUSE OF ACTION BASED ON AN ALLEGED "VIOLATION" OF 16 C.F.R. § 700.5. Plaintiff is attempting to fashion a cause of action where one does not exist because 16 C.F.R. § 700.5 does not impose any requirements on warrantors such that Fleetwood
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could be deemed to have violated this regulation. Rather, it clarifies that "statements or representations of general policy concerning customer satisfaction . . . are exempt from the requirements of sections 102, 103, and 104 of the Act" but ". . . remain subject to the enforcement provisions of section 110 of the Act, and to section 5 of the Federal Trade Commission Act, 15 U.S.C. 45. Further, in making this allegation, Plaintiff is simply attempting to rely on a different regulation to bring the same fraud or deceptive practices argument that has been made and rejected time and again in other cases. Even if 16 C.F.R. § 700.5 did form the basis for a cause of action, Mr. Weber could not pursue such an action because, as Fleetwood pointed out in the Motion for Summary Judgment, he has not plead any claim for deceptive trade practices. Bailey v. Monaco, 350 F.Supp.2d 1036, 1041 (N.D. Ga. 2004). IV. PLAINTIFF HAS NOT PROVEN DAMAGES. A. If the Court were to measure damages in the manner that Plaintiff suggests, consumers such as the Plaintiff would suffer far more harm than good because manufacturers would have no incentive to even attempt to repair defects in a consumer product.

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The manner in which the Plaintiff has attempted to demonstrate damages is insufficient as a matter of law. Plaintiff again offers his own speculation, this time opining that the value of the vehicle, as of the date that he purchased it, was worth 25% less than what he paid for it. Plaintiff's Response, p. 11. Measuring damages by determining diminished value as of the date of purchase, as Plaintiff now suggests, would cause consumers substantial harm because a manufacturer could promptly and successfully repair a vehicle, yet the consumer would still have a cause of action if the defect was present as of the date of purchase. Under such circumstances, manufacturers would have no incentive to address a vehicle's alleged defect, or even provide a warranty in the first place. To the contrary, a disincentive would exist because, by covering the cost of a repair the manufacturer would potentially be exposing itself to having
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to pay twice for the same problem, first for the repair itself and second, for the cost of compensating the plaintiff for the defect that was the subject of the repair, assuming it existed at the time of the plaintiff's purchase of the vehicle. Further, measuring damages as of the date of purchase in not appropriate because it does not account for the beneficial use of the vehicle at issue. In this matter, Mr. Weber has driven the motor home extensively, including to Oregon, Louisiana, Colorado, Arizona, Wyoming, Texas, and Nevada. Fleetwood's Statement of Facts, ¶ 19. The only conceivably workable measure of damages, given how Plaintiff has framed his case, is the difference between current market value and depreciation attributable to the alleged defects. This is supported by simple logic and generally-accepted principles of damages analysis. After all, a party should not be entitled to a windfall just because he has chosen to file suit. In fact, Plaintiff's own expert recognizes the viability of this approach. Even giving Plaintiff the benefit of every doubt, and ignoring how he framed his case, the most generous measure of damages that Plaintiff could plausibly argue is the price of a replacement vehicle, minus both the present value of the allegedly defective vehicle and the value that the plaintiff received from the use of the allegedly defective vehicle. Schimmer v. Jaguar Cars, Inc., 384 F.3d 402, 406 (7th Cir. 2004); Golden v. Gorno Bros., Inc., 410 F.3d 879, 885 (6th Cir. 2005). V. CONCLUSION. For the reasons stated above, Fleetwood respectfully moves this Court for the entry of summary judgment, dismissing all of the Plaintiff's claims against it and awarding Fleetwood its attorneys' fees pursuant to A.R.S. § 12-341.01. RESPECTFULLY SUBMITTED this 15th day of August, 2005. THE CAVANAGH LAW FIRM, P.A. By: s/Patrick G. Rowe Kerry M. Griggs Patrick G. Rowe Attorneys for Defendant Fleetwood
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CERTIFICATE OF SERVICE I hereby certify that on August 15, 2005, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF Registrants: Marshall Meyers, Esq. Krohn & Moss, Ltd. 111 West Monroe, Suite 711 Phoenix, AZ 85003 Attorneys for Plaintiff

s/Sandy Lunsford

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