Pack v. Damon Corp.

Page 810

434 F.3d 810

Alvery PACK, Plaintiff-Appellant, v. DAMON CORPORATION, Defendant-Appellee General R.V. Center, Defendant.

No. 04-2163.

United States Court of Appeals, Sixth Circuit.

Argued September 19, 2005.

Decided and Filed January 5, 2006.^*

COPYRIGHT MATERIAL OMITTED

ARGUED:

Mark P. Romano, Consumer Legal Services, Garden City, MI, for Appellant. Keith A. Wuotinen, Dolenga & Dolenga, Bingham Farms, MI, for Appellee.

ON BRIEF:

Mark P. Romano, Karl P. Heil, Consumer Legal Services, Garden City, MI, for Appellant. Michael D. Dolenga, Dolenga & Dolenga, Bingham Farms, MI, for Appellee.

Before DAUGHTREY and MOORE, Circuit Judges; ALDRICH,^** District Judge.

MOORE, Circuit Judge.

This case involves state and federal claims for breach of express and implied warranties on a 2002 Damon Intruder Motor Home ("the motor home" or "the RV") manufactured by Defendant-Appellee Damon Corporation ("Damon") and purchased by Plaintiff-Appellant Alvery Pack. Primarily the parties dispute whether defects in the motor home continued to exist during the period under warranty, whether the claimed defects were covered under Damon's warranty, and the length of time the motor home was out of service for repairs.

Pack appeals the district court's order granting Damon's motion for summary judgment on his express- and implied-warranty claims under both state law and the Magnuson Moss Warranty Act ("MMWA"), as well as his claims under the Michigan Consumer Protection Act ("MCPA"). On appeal, Pack argues that the district court erred in granting summary judgment in favor of Damon (1) as to his state-law express-warranty claim because the evidence he has put forth creates a question of fact as to Damon's failure to cure defects under warranty and as to the failure of the essential purpose of the warranty because Damon failed to make repairs within a reasonable time; and (2) as to his state-law implied-warranty claim because Michigan law does not require privity to maintain an implied-warranty claim against a remote manufacturer. Pack further asserts that if this court reverses on either of these claims, it will be necessary to reverse the dismissal of his MMWA and MCPA claims.

For the reasons set forth below, we REVERSE IN PART the district court's judgment with regard to the express-warranty claim and REVERSE the district court's judgment with regard to the implied-warranty claim. We REMAND to the district court for further proceedings consistent with this opinion.

I. BACKGROUND

On September 13, 2002, Plaintiff Alvery Pack purchased the subject motor home from General RV Center ("GRVC") in Brownstown, Michigan. The cost of the RV, including financing, totaled $226,435.60.

The RV was accompanied by a limited warranty from Damon, under which Damon

warrants that this recreational vehicle. . . will be free from defects in material and workmanship attributable to Damon for a period of one (1) year or 12,000 miles. . . . This Limited Warranty covers only materials, components or parts of the RV manufactured and finally assembled by Damon. . . . In the event that a defect in materials or workmanship is found to exist, Damon will provide for the repair or replacement of such defective material(s) or workmanship at no charge. . . . Damon's obligation to repair or replace defective materials is the sole obligation of Damon under this Limited Warranty.

J.A. at 53 (Damon Warranty). The RV was under warranty from September 13, 2002 until September 12, 2003.

Pack began experiencing problems with the motor home immediately after the purchase date. He alleges that a variety of defects put the RV out of service for a total of 168 days in the first year and that it required nine separate service dates for repairs.

On September 19, 2003, Pack instituted this lawsuit against Damon and GRVC in Wayne County Circuit Court in Michigan, alleging breach of express and implied warranties under state law and the MMWA, violations of the MCPA, revocation of acceptance, breach of contract, and rescission. Defendants removed the case to the Eastern District of Michigan on the basis of the federal claim. The district court dismissed the claims against GRVC because Pack had a valid arbitration agreement with that defendant and granted both of Damon's motions for summary judgment, dismissing the claims against Damon as well. Plaintiff then timely commenced this appeal.

II. ANALYSIS

Plaintiff appeals the grant of summary judgment to Damon on his express- and implied-warranty claims under state law and the MMWA and his claims for violations of the MCPA.

A. Standard of Review

We review a grant of summary judgment de novo. DiCarlo v. Potter, 358 F.3d 408, 414 (6th Cir.2004). Summary judgment is appropriate "[i]f the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The movant has the burden of establishing that there are no genuine issues of material fact, which may be accomplished by demonstrating that the nonmoving party lacks evidence to support an essential element of its case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Barnhart v. Pickrel, Schaeffer & Ebeling Co., 12 F.3d 1382, 1388-89 (6th Cir.1993). "In response, the non-moving party must present `significant probative evidence' to show that `there is [more than] some metaphysical doubt as to the material facts.'" Hopson v. Daimler-Chrysler Corp., 306 F.3d 427, 432 (6th Cir.2002) (quoting Moore v. Philip Morris Cos., 8 F.3d 335, 339-40 (6th Cir.1993)). Summary judgment is inappropriate where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In evaluating a motion for summary judgment, the evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The nonmoving party, however, "may not rest upon [its] mere allegations. . . but . . . must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); see Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Searcy v. City of Dayton, 38 F.3d 282, 286 (6th Cir.1994). "[T]he mere existence of a scintilla of evidence" that supports the nonmoving party's claims is insufficient to defeat summary judgment. Hopson, 306 F.3d at 432.

B. Express Warranty

1. A Repair-or-Replace Warranty Is an Express Warranty under the Michigan Uniform Commercial Code

As the Michigan Supreme Court has not ruled on whether a repair-or-replace warranty constitutes an express warranty under the Michigan Uniform Commercial Code ("MUCC"), we look to decisions of the Michigan Court of Appeals, "which are binding authority in federal courts in the absence of any Michigan Supreme Court precedent." Hampton v. United States, 191 F.3d 695, 702 (6th Cir. 1999). In several cases, the Michigan Court of Appeals has assumed without discussion that a repair-or-replace warranty constitutes an express warranty under the MUCC. See, e.g., Krupp PM Eng'g, Inc. v. Honeywell, Inc., 209 Mich.App. 104, 530 N.W.2d 146, 148-49 (1995); Severn v. Sperry Corp., 212 Mich.App. 406, 538 N.W.2d 50, 53-55 (1995); Kelynack v. Yamaha Motor Corp., 152 Mich.App. 105, 394 N.W.2d 17, 19-20 (1986).

The Michigan Supreme Court would likely also interpret a repair-or-replace warranty extended by a remote manufacturer to be an express warranty under the MUCC. Under the MUCC, an express warranty is created by "[a]n affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain." MCL § 440.2313(1)(a). This does not limit the extension of express warranties to direct sellers, and the MUCC definition of a seller — one "who sells or contracts to sell goods" — does not indicate that a seller is restricted to one who directly sells goods to the consumer. Id. § 440.2103(1)(d). Moreover, Damon refers to its warranty as an "EXPRESS WRITTEN LIMITED WARRANTY." J.A. at 54 (Damon Warranty). Given this, the warranty likely formed part of the basis of the bargain, and thus it qualifies as an express warranty.

2. Breach of the Express Warranty

Pack alleges several continuing defects for which Damon is responsible and which Damon failed to repair or replace, as well as one defect, the leaning of the motor home, that was not repaired within a reasonable time, thus causing the warranty to fail of its essential purpose.

a. A question of material fact exists as to Damon's failure to cure several defects.

Damon's limited warranty on the RV ran for one year from the date of purchase, September 13, 2002. Pack claims that there were eight defects that arose during this period that remained uncorrected: rust; loose slide-out gasket; rear monitor malfunctions; dashboard clock and cigarette lighter malfunction; outside shower does not work properly; fog light fills with water and is corroded; bedroom slide-out does not close completely; and abnormal popping noise from front end while driving.¹ At his deposition, Pack testified that both the clock and the fog light had been corrected.² As to the other problems, namely the rust, loose slide-out gasket, rear monitor, outside shower, bedroom slide-out, and the popping noise, Pack's deposition testimony and affidavit indicate that these defects persisted despite Damon's repairs.

To rebut these contentions, Damon puts forth an affidavit from Jason Quillen, GRVC Service Manager, and an expert report from Michael Bukowski, GRVC Service Shop Foreman. Although the district court relied on both the Bukowski Report and the Quillen Affidavit, the Bukowski Report is unsworn and thus is hearsay, which may not be considered on a ...