Merchain v. Thor Motor Coach Inc.

577 F.Supp.3d 886

Blanca MERCHAIN, et al., Plaintiffs,

v.THOR MOTOR COACH INC., et al., Defendants.

Case No. 3:20-CV-827 JD

United States District Court, N.D. Indiana, South Bend Division.

Signed December 28, 2021

Joshua J. Youssefi, PHV, Pro Hac Vice, Brian J. Bickel, Bickel Law Firm Inc., San Diego, CA, for Plaintiffs.

Erin V. Bolden, Trevor Q. Gasper, Thor Industries Inc., Elkhart, IN, Dolores E. Gonzales, James Robertson, Bravo Law Group APC, San Diego, CA, for Defendant Thor Motor Coach Inc.

OPINION AND ORDER

JON E. DEGUILIO, Chief Judge Plaintiffs Blanca and Philip Merchain purchased a new Thor Motor Coach-manufactured RV that proved to have a host of defects. The Merchains made efforts to get the defects fixed, but after repairs proved fruitless, they sued Thor for failing to live up to the limited warranty that had come with the RV. Thor responded to the Merchains’ lawsuit by moving the Court for judgment on the pleadings, arguing that the Merchains brought suit after the statute of limitations period on their claim had expired. (DE 38.) The Merchains oppose Thor's motion and maintain they filed on time. For the following reasons, the Court grants Thor's motion.

I. Factual Background

The Merchains are California residents who purchased a new, Thor-manufactured RV from a California RV dealer on August 28, 2018. (DE 28 ¶ 4.) The RV came with a limited warranty in which Thor stated it would repair defects in workmanship performed and/or materials used to assemble the RV for twelve months or 15,000 miles, whichever came first, after the Merchains took delivery of the RV. (DE 39-1 at 2–3.)

In addition to setting out the length of its coverage, the warranty included provisions that detailed the extent of the warranty, the timeline in which the Merchains had to bring any claims for breach of the warranty, and the legal standards that would govern any future causes of action arising from the warranty. Specifically, the warranty stated in bolded, capitalized letters that the warranty was "not a warranty that promises or extends to future performance because the warranty does not make a representation on how [the] motorhome will perform in the future but instead represents only what the remedy will be if a defect exists." (DE 39-1 at 4.) It also stated in bolded, capitalized letters that any action for breach of the limited warranty had to be commenced not more than fifteen (15) months after the breach occurred (DE 39-1 at 3), that exclusive jurisdiction for deciding legal disputes related to breach of the warranty rests in Indiana, that Indiana law would apply to all disputes, including any over statutes of limitations, and that no effect would be given to a conflict of law rule that would result in the application of the laws of a jurisdiction other than Indiana's (DE 39-1 at 5).

The Merchains found a host of problems with their RV after purchasing and taking possession of it. The problems included issues with the fresh and wastewater tanks that led to overflowing, plumbing defects, water heater problems, and chassis failures. (DE 28 ¶ 8.) The Merchains delivered their RV to Thor and Thor's authorized repair facilities to attempt to have these problems fixed, although it is not clear based on the pleadings when those deliveries and attempted repairs were made. What is clear is that the Merchains found the repairs unsatisfactory and untimely, which they viewed as not living up to the promises Thor had made through the limited warranty. (DE 28 ¶ 9.) The Merchains thus sued Thor on May 26, 2020, seeking restitution and costs for the damage they allegedly suffered from Thor's failures to fix or replace the RV. They originally brought several claims but have since clarified they are only proceeding with a claim under California's Song-Beverly Warranty Act ("SBWA") for Thor's failure to conform to the limited warranty. (DE 43 at 2 n.1.)

II. Standard of Review

Federal Rule of Civil Procedure 12(c) permits a party to move for judgment on the pleadings after the parties have filed a complaint and answer. Fed. R. Civ. P. 12(c). Judgment on the pleadings is appropriate when there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Unite Here Loc. 1 v. Hyatt Corp. , 862 F.3d 588, 595 (7th Cir. 2017). A moving party is entitled to judgment on the pleadings when it appears beyond doubt that the non-moving party "cannot prove any facts that would support his claim for relief." N. Ind. Gun & Outdoor Shows v. City of South Bend , 163 F.3d 449, 452 (7th Cir. 1998).

The Court is confined to the matters addressed in the pleadings and must review allegations in the light most favorable to the non-moving party. See Kiddy-Brown v. Blagojevich , 408 F.3d 346, 355 (7th Cir. 2005). The pleadings include "the complaint, the answer, and any written instruments attached as exhibits." N. Ind. Gun & Outdoor Shows, Inc. , 163 F.3d at 452 (citing Fed. R. Civ. P. 10(c) ). The Court may also consider documents attached to the motion for judgment on the pleadings provided they are referred to in the plaintiffs’ complaint and are central to the plaintiffs’ claim. Adams v. City of Indianapolis , 742 F.3d 720, 729 (7th Cir. 2014).

III. Discussion

Thor argues that judgment on the pleadings is appropriate here because the Merchains filed their claim outside the relevant statute of limitations period and are thus legally barred from proceeding with the claim. The Merchains countered that Thor's motion should be denied because Thor's argument is premised on both an incorrect statute of limitations period and the incorrect accrual date for the claim. Deciding whether to grant Thor's motion based on the statute of limitations requires the Court to first answer two preliminary questions. First, the Court must determine which state's law applies to the statute of limitations question on which the motion is based, and second, the Court must determine how long the statute of limitations period for the Merchains’ SBWA claim actually ran. Only then can the Court determine whether the Merchains filed within the required period and whether Thor is entitled to judgment on the pleadings. The Court relies to some extent on the text of Thor's limited warranty covering the RV, which Thor attached to its briefing on the motion, to answer these questions. See Adams , 742 F.3d at 729.

1. Choice of Law

The Court first looks to whether it must apply Indiana or California law. At the outset, the Court notes that although neither party raised this point, there appears to be a valid choice of law provision in the limited warranty on the Merchains’ RV that clearly indicates Indiana law applies to the statute of limitations question. The provision in the warranty states that any causes of action arising out of or relating to the limited warranty must be governed by Indiana law, including statute of limitations questions, and that no conflict of law rule that would result in the application of a state's law other than Indiana's should be given any effect. (DE 39-1 at 5.) The Court finds that warranty language compels application of Indiana law to the statute of limitations question here as the Merchains’ claim premised on Thor's failure to conform the RV to the warranty arises out of or relates to the limited warranty.

But even if the warranty did not have such a clear choice of law provision and the Court was bound to a more traditional choice of law analysis like the parties explored in their briefing, the Court would still find Indiana law governs the statute of limitations question. Both parties appeared to agree that this Court, sitting in Indiana, must apply Indiana law when conducting a traditional choice of law analysis. (DE 39 at 3; DE 43 at 3.) Under Indiana law, statute of limitations questions are considered to be procedural in nature and the state's choice of law rules generally instruct that Indiana's statute of limitations law will thus apply. See Shearer v. Thor Motor Coach, Inc. , 470 F. Supp. 3d 874, 879 (N.D. Ind. 2020). There is an exception to that general rule, however, when the statute underlying the cause of action both created a right where none existed at common law and placed a time limitation on the assertion of that right. Horvath v. Davidson , 148 Ind.App. 203, 264 N.E.2d 328, 334 (1970). If that exception applies, a court should apply the law of the state in which the claim arose. The Merchains argued that exception applies here because their claim arises under California's SBWA and is not a standard breach of express warranty claim. (DE 43 at 2.)

But the SBWA is not a statute that qualifies for the exception described in Horvath . First, the SBWA did not create a distinct right of action where none existed at common law. Instead, it was enacted to supplement common law breach of warranty claims. See Krieger v. Nick Alexander Imports, Inc. , 234 Cal. App. 3d 205, 213, 285 Cal.Rptr. 717 (Ct. App. 1991) (holding the SBWA "supplements, rather than supersedes" the breach of warranty provisions in the Uniform Commercial Code ("UCC")); Shearer , 470 F. Supp. 3d at 879 (recognizing that "a breach of warranty claim is at its heart a breach of contract claim and suit for breach of contract existed at common law") (internal quotations omitted). Second, even if the SBWA had created a distinct right, both the Merchains and Thor agree that the statute itself does not impose a time limitation on the assertion of that right. (DE 43 at 4; DE 46 at 4–5.) It was instead the California courts, in the absence of specific statute of limitations language in the SBWA, that decided what the statute of limitations period for an SBWA claim should be. See Krieger , 234 Cal. App. 3d at 218, 285 Cal.Rptr. 717. Therefore, the Court finds the exception discussed in Horvath does not apply and that a traditional choice of law analysis would also lead the Court to apply Indiana law to decide the statute of limitations question.

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