Parsley v. Monaco Coach Corp.

327 F.Supp.2d 797

Mary Ann PARSLEY and Randy Parsley, Plaintiffs, v. MONACO COACH CORPORATION, a foreign corporation; Howard Veurink Travel Trailers, Inc., a Michigan corporation, Jointly and Severally, Defendants.

No. 1:03-CV-784.

United States District Court, W.D. Michigan, Southern Division.

June 23, 2004.

COPYRIGHT MATERIAL OMITTED

Brian P. Parker, The Law Offices of Brian P. Parker, Bingham Farms, MI, for plaintiffs.

Jeffrey Raymond Nowicki, Michael D. Dolenga, Dolenga & Dolenga, PLLC, Bingham Farms, MI, for defendants.

OPINION

ROBERT HOLMES BELL, Chief Judge.

This is an action for breach of warranty and other claims arising out of the purchase of a motor home. Defendants have filed a motion for partial summary judgment. For the reasons that follow Defendants' motion will be granted in part and denied in part.

I.

On January 9, 2002, Plaintiffs Mary Ann Parsley and Randy Parsley purchased a new 2001 Holiday Rambler Motor Home from Defendant Howard Veurink Travel Trailers, Inc. ("Veurinks") for approximately $132,725.00. The motor home was manufactured by Defendant Monaco Coach Corporation ("Monaco"). The motor home came with warranties from Monaco, Ford Motor Company and various component part manufacturers. The purchase agreement contains a disclaimer of all warranties by Veurinks.

Plaintiff has alleged that the motor home had defects including

LP gas leaks, water leaks, defective flooring, brake alarm defects, headlight defects, screen door defects, sofa defects, spider cracking on the rear exterior of the RV, slide-out defects, dash defects, generator defects, jack defects, paint chipping, back-up monitor defects, various interior drawer defects, house batteries do not hold sufficient charge, excessive saw dust in floor vents, furnace defects....

(Compl. ¶ 11). Plaintiffs allege that they notified Defendants of the defective conditions and allowed Defendants the opportunity to make repairs, but many nonconforming and defective conditions were not repaired and still exist. (Compl. ¶¶ 12, 14).

Plaintiffs filed this action in the Macomb County Circuit Court alleging 1) breach of warranty of merchantability, 2) violation of the Magnuson-Moss Warranty Act, 3) breach of warranty of fitness, 4) revocation, 5) violation of the Michigan Consumer Protection Act, 6) negligent repair, and 7) breach of express warranty. Defendants removed the case to federal court on the basis of federal question jurisdiction, 28 U.S.C. § 1331, arising from Plaintiffs' federal Magnuson-Moss Warranty Act claim. Defendants Monaco and Veurinks have moved for summary judgment as to Veurinks and partial summary judgment as to all claims except the breach of express warranty and the related Magnuson-Moss claim against Monaco. For their response, Plaintiffs rely on the response brief filed in Pitts v. Monaco Coach Corporation, Case No. 1:03-CV-618.

II.

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. In evaluating a motion for summary judgment the Court must look beyond the pleadings and assess the proof to determine whether there is a genuine need for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). If Defendants carry their burden of showing there is an absence of evidence to support a claim, then Plaintiffs must demonstrate by affidavits, depositions, answers to interrogatories, and admissions on file, that there is a genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324-25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

"On summary judgment, all reasonable inferences drawn from the evidence must be viewed in the light most favorable to the parties opposing the motion." Hanover Ins. Co. v. American Engineering Co., 33 F.3d 727, 730 (6th Cir.1994) (citing Matsushita, 475 U.S. at 586-88, 106 S.Ct. 1348). Nevertheless, the mere existence of a scintilla of evidence in support of Plaintiffs' position is not sufficient to create a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The proper inquiry is whether the evidence is such that a reasonable jury could return a verdict for Plaintiffs. Id. See generally, Street v. J.C. Bradford & Co., 886 F.2d 1472, 1476-80 (6th Cir.1989).

III.

A. Express and Implied Warranty Claims Against Veurinks

Defendant Veurinks seeks dismissal of Plaintiffs' express and implied warranty claims against it on the basis that Veurinks disclaimed all warranties. Plaintiffs contend that the disclaiming language is not valid because it was not conspicuous.

There is no dispute that a seller may disclaim implied warranties under Michigan law as long as the disclaimer is conspicuous. M.C.L. § 440.2316(2).¹ Michigan law provides that a term or clause is conspicuous "when it is so written that a reasonable person against whom it is to operate ought to have noticed it." M.C.L. § 440.1201(10). The statute clarifies that a printed heading in capital letters or language printed in larger or contrasting type or color is conspicuous. Id. The determination as to whether a term or clause is conspicuous or not is for decision by the court. Id.

The purchase agreement signed by Plaintiffs is a two-sided document. (Ex. 6). The first line on the front page of the agreement defines the terms used for the parties to the contract:

IN THIS CONTRACT THE WORDS, I, ME AND MY REFER TO THE BUYER AND CO-BUYER SIGNING THIS CONTRACT. THE WORDS YOU AND YOUR REFER TO THE DEALER.

The second line states:

SUBJECT TO THE TERMS AND CONDITIONS ON BOTH SIDES OF THIS AGREEMENT YOU AGREE TO SELL AND I AGREE TO PURCHASE THE FOLLOWING DESCRIBED UNIT.

Toward the bottom of the front page in all capital letters, and in bold white lettering on a dark background, is the following:

NOTE: WARRANTY AND EXCLUSIONS AND LIMITATIONS OF DAMAGES ON THE REVERSE SIDE.

Above the signature block, on the left hand side of the page, is a block which states the following in capital letters:

YOU AND I CERTIFY THAT THE ADDITIONAL TERMS AND CONDITIONS PRINTED ON THE BACK OF

THIS CONTRACT ARE AGREED TO AS PART OF THIS AGREEMENT, THE SAME AS IF PRINTED ABOVE THE SIGNATURE.

Above the signature line, in bold print, underlined, and in all capital letters, is the following:

I, OR WE, ACKNOWLEDGE RECEIPT OF A COPY OF THIS ORDER AND THAT I, OR WE, HAVE READ AND UNDERSTAND THE BACK OF THIS AGREEMENT.

The disclaimer is found on the back-side of the purchase agreement under the heading "10. WARRANTIES AND EXCLUSIONS." The pertinent language in that paragraph is as follows:

(i) I UNDERSTAND THAT THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL OTHER WARRANTIES EXPRESSED OR IMPLIED ARE EXCLUDED BY YOU FROM THIS TRANSACTION AND SHALL NOT APPLY TO THE UNIT OR ANY COMPONENT OR ANY APPLIANCE CONTAINED THEREIN; (ii) I UNDERSTAND THAT YOU MAKE NO WARRANTIES WHATSOEVER REGARDING THIS UNIT OR ANY COMPONENT OR ANY APPLIANCE CONTAINED THEREIN, AND (iii) I UNDERSTAND THAT YOU DISCLAIM AND EXCLUDE FROM THIS TRANSACTION ALL WARRANTY OBLIGATIONS WHICH EXCEED OR EXIST OVER AND ABOVE THE LEGAL WARRANTIES REQUIRED BY APPLICABLE STATE LAW.

(Ex. 6).

The disclaimer section also provides

(i) DELIVERY BY YOU TO ME OF THE WARRANTY BY THE MANUFACTURER OF THE UNIT PURCHASED, OR ANY COMPONENT(S), OR ANY APPLIANCE(S) DOES NOT MEAN YOU ADOPT THE WARRANTY(S) OF SUCH MANUFACTURER(S), (ii) I ACKNOWLEDGE THAT THESE EXPRESS WARRANTIES MADE BY THE MANUFACTURER(S) HAVE NOT BEEN MADE BY YOU EVEN IF THEY SAY YOU MADE THEM OR SAY YOU MADE SOME OTHER EXPRESS WARRANTY, AND (iii) YOU ARE NOT AN AGENT OF THE MANUFACTURER(S) FOR WARRANTY PURPOSES EVEN IF YOU COMPLETE OR ATTEMPT TO COMPLETE REPAIRS FOR THE MANUFACTURER(S).

(Ex. 6).

Plaintiffs contend that the disclaimer is not conspicuous because it is found on the back of the purchase agreement in virtually non-distinguishing print. According to Plaintiffs, it suffers from the same defects as the disclaimers that the court held were not conspicuous in Krupp PM Eng. v. Honeywell, Inc., 209 Mich.App. 104, 530 N.W.2d 146 (1995), and Gorelik v. Mercedes-Benz of North America, Inc., No. 03-048957 (Oakland Co. Cir. Ct. Dec. 10, 2003). In Krupp the court held that a disclaimer on the back of the invoice was not conspicuous where the only reference to the backside of the invoice appeared in "small italicized print at the bottom of the front of the invoice." Id. at 109, 530 N.W.2d 146. Only part of the disclaimer language on the back of the form was in capital letters. Id. at 108, 530 N.W.2d 146. In Gorelik, the court held that the disclaimers on the order, lease and statement of vehicle sale were not conspicuous because the print was smaller than most of the other print on the documents. Slip Op. at 4.

The purchase agreement in this case differs materially from the documents at issue in Krupp and Gorelik. In this case there are multiple references to the exclusions on the front page of the purchase agreement in capital letters, bold print, and in contrasting color. The disclaimer on the back of the form is in all capital letters which sets it apart from most of the other language on the back. Upon review of the purchase agreement, this Court finds that a reasonable person against whom the disclaimer is to operate ought to have noticed it, and that it is therefore conspicuous as a matter of law. See M.C.L. § 440.1201(10). See also Ducharme v. A & S RV Center, Inc., 321 F.Supp.2d 843 (E.D.Mich.2004) (unpublished) (Cohn, J.) (holding that notice of disclaimer in all capital letters in contrasting color on front of purchase agreement and disclaimer on back side in all capital letters and in bold print was conspicuous); Watson v. Damon Corp., No. 1:02-CV-584, 2002 WL 32059736, at *5-6 (W.D.Mich. Dec.17, 2002) ...