Anderson v. Gulf Stream Coach, Inc.

• Decision Date: 07 December 2011
• Docket Number: No. 11–1064.,11–1064.
• Citation: 2011 Trade Cases P 77690,662 F.3d 775,76 UCC Rep.Serv.2d 12
• Parties: Liz ANDERSON, individually and as Personal Representative of the Estate of Jeff Anderson, Plaintiffs–Appellants, v. GULF STREAM COACH, INCORPORATED, Defendant–Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

2011-2 Trade Cases P 77,690

662 F.3d 775

76 UCC Rep.Serv.2d 12

Liz ANDERSON, individually and as Personal Representative of the Estate of Jeff Anderson, Plaintiffs–Appellants,

v.GULF STREAM COACH, INCORPORATED, Defendant–Appellee.

No. 11–1064.

United States Court of Appeals, Seventh Circuit.

Argued June 10, 2011.Decided Nov. 3, 2011.Rehearing Denied Dec. 7, 2011.

Paul E. Harold (argued), Attorney, Ladue, Curran & Kuehn, South Bend, IN, for Plaintiffs–Appellants.

Charles P. Rice (argued), Attorney, Boveri Murphy Rice, LLP, South Bend, IN, for Defendant–Appellee.

Before BAUER, FLAUM and WILLIAMS, Circuit Judges.

WILLIAMS, Circuit Judge.

Plaintiffs Jeff and Liz Anderson sued Gulf Stream, the manufacturer of their 2009 model year Tourmaster RV, claiming that the Tourmaster had numerous defects and that Gulf Stream misrepresented the size of the vehicle's engine. The district court entered summary judgment in favor of Gulf Stream on all of the Andersons' claims.

We conclude that the district court erred in dismissing the Andersons' Indiana law claims for breach of express warranty and breach of implied warranty, and their federal claims under the Magnuson–Moss Act, on the ground that the Andersons did not give Gulf Stream a reasonable opportunity to cure. We find that the evidence, when viewed in the light most favorable to the Andersons, supports their contention that they gave Gulf Stream a reasonable opportunity to cure.

We also find that there is enough evidence in the record to support the Andersons' claim that Gulf Stream committed an “uncured” deceptive act under the Indiana Deceptive Consumer Sales Act in representing that the “2009” model Tourmaster featured a larger engine than the one the Andersons' “2009” Tourmaster came with. Although the pertinent federal regulations are not a model of clarity, we conclude that the regulations did not permit Gulf Stream to designate the Andersons' Tourmaster, which was completed during Gulf Stream's 2008 production cycle and had the characteristics of a 2008 model year Tourmaster, as a “2009” Tourmaster. However, because there are disputed questions of fact surrounding what information Gulf Stream disclosed to the Andersons, neither party is entitled to summary judgment on this claim.

Finally, we conclude that it was proper for the district court to enter summary judgment in favor of Gulf Stream with respect to the Andersons' claims for fraud and for the commission of an “incurable” deceptive act under Indiana law because the evidence does not support the inference that Gulf Stream acted with an intent to deceive.

I. BACKGROUND

In 2008, Jeff Anderson and his wife Liz Anderson decided to upgrade their 2008 Crescendo RV. The Andersons wanted to tour the western United States while Mr. Anderson's health still permitted it.¹ Since their Crescendo struggled up mountain roads, the Andersons decided to buy a more powerful vehicle. The Andersons were otherwise happy with their Crescendo, which had been manufactured by Gulf Stream, and so decided to look into Gulf Stream's other recreational vehicle models.

In August 2008, the Andersons contacted Mike Apple, the owner of Royal Gorge, an independent dealer of Gulf Stream vehicles. Royal Gorge had been in the business of selling recreational vehicles since 2006. On July 31, 2008, Royal Gorge had ordered a 2009 model year Tourmaster RV from Gulf Stream. Royal Gorge received several discounts on the purchase, including one for $12,500 because the vehicle had a 360 horsepower engine. Although Gulf Stream's invoice to Royal Gorge included a notation for the discount, Apple claims that he had no prior experience with the Tourmaster line, and that the Gulf Stream salesman he spoke to never mentioned the 360 horsepower engine. Rather, when Apple asked about the Tourmaster's features, the salesman referred him to Gulf Stream's website, which listed only one engine for the 2009 model: a 425 horsepower Cummins diesel engine.

When the Andersons contacted Apple in August, he suggested they consider the Tourmaster. The Andersons first reviewed Gulf Stream's website on their own, and then looked at it together with Apple. The website “had a list of options” for 2009 model year Tourmasters, but “it had no list of options available for engines.” Gulf Stream's webpage stated that the 2009 model came “standard” with a 425 horsepower Cummins diesel engine. A disclaimer at the bottom of the page stated:

For further information and available floor plan options, contact your local dealer or Gulf Stream Coach, Inc. Gulf Stream Coach, Inc., reserves the right to make changes in prices, colors, materials, components and specifications and discontinue models at any time without notice or obligation.

In late August 2008, the Andersons flew to Colorado to inspect the Tourmaster at Royal Gorge. About a week later, the Andersons purchased the Tourmaster “as is” and “with all faults” for $223,000. They paid nearly $60,000 less than the manufacturer's suggested retail price.

Royal Gorge kept the Tourmaster for about a month before delivering it to the Andersons. During that time, Apple inspected the Tourmaster and fixed several problems with it. On September 5, 2008, Royal Gorge's technician, Jeff Rogers, drove the Tourmaster 700 miles to the Andersons in Texas. Rogers and the Andersons then spent some time going over the unit “as far as what all the buttons and bells and whistles do.” Rogers advised the Andersons that “there [were] a bunch of rattles and minor things that were irritating to him during the drive.” Mr. Anderson replied, “That's fine, we'll take care of it when we get back to Colorado.”

Mrs. Anderson then signed the rest of the paperwork. She acknowledged in writing that she had “personally inspected” the Tourmaster and found it “acceptable for delivery.” According to the Andersons, they “may have received” two Manufacturers' Certificates of Origin (“MCOs”). An MCO is required in Colorado for titling purposes. MCOs contain invoice numbers, shipping weight, and vehicle identification numbers (“VINs”), among other specifications. The Andersons' MCO included the number “360” under the notation “H.P.(S.A.E.),” indicating that the vehicle came with a 360 horsepower engine. The MCO also listed the model year of the Tourmaster as “2009.”

In addition to the MCOs, the Andersons received a Recreational Vehicle Registration Form, a Dealer's Bill of Sale, and a Pre–Delivery Inspection Checklist. None of those documents stated that the Tourmaster came with a 360 horsepower engine. The Andersons were not given the manufacturer's suggested retail price (“MSRP”) sheet, which listed the 360 horsepower engine. They also did not receive a copy of the invoice Gulf Stream gave Apple, which also stated that the vehicle came with a 360 horsepower engine. Apple later testified in deposition that he did not look at the invoice until after he sold the Tourmaster to the Andersons. The invoice was labeled “STRICTLY CONFIDENTIAL,” and Gulf Stream did not instruct Apple to share it with his customers.

The Andersons' Tourmaster came with a “Limited Warranty,” that extended: (1) a one-year warranty under normal use against defects in Gulf Stream materials and/or workmanship in the construction of the recreational vehicle; and (2) a two-year warranty under normal use against structural defects in Gulf Stream materials and/or workmanship in the construction of floors, walls, and roof. The warranty also stated in relevant part that:

If an issue occurs which the Purchaser believes is covered by this Limited Warranty, Purchaser is responsible to promptly contact Gulf Stream.... Gulf Stream reserves the right to cure all warranty claims.

The Andersons only used the Tourmaster twice. Shortly after purchasing it, they claim that they began to experience numerous problems with it, including: (1) water leaking “like crazy” from the ceiling fans and windows; (2) bowed flooring due to incorrectly installed floor joists; (3) noisy air leaks; (4) pink water coming from the kitchen tap; (5) missing slides, which allowed water to leak into the bedroom and get the carpet “absolutely soaking wet”; and (6) electrical problems with several appliances, including the television.

After discovering the problems, the Andersons took the Tourmaster to Royal Gorge for repairs, free of charge. Starting in September, Apple claims that he spent “hundreds of hours” attempting to repair all of the problems with the Tourmaster. Royal Gorge forwarded Gulf Stream warranty claims for the repairs. The record contains numerous pages of such claims dating from September 2008 to January 2009.

While Apple was performing the repairs, he examined the Tourmaster's engine in response to complaints about a lack of engine power. He claims that it was then that he “discovered” that the Tourmaster had a 360 horsepower engine. Apple also maintains that the “structural unsoundness and poor workmanship [of the Tourmaster] ... have made it impossible [to fix to an acceptable level].”

On January 23, 2009, after an alleged “back and forth” with Gulf Stream, the Andersons' attorney wrote a letter to Gulf Stream. In the letter, the Andersons listed the problems they had experienced with the Tourmaster. They also explained that they had ordered the Tourmaster, “in large part because it was advertised on Gulfstream's website as having a 425HP Diesel Motor, [but] after delivery the Andersons discovered that the RV had only a 360HP Diesel Motor.” As a result, they claimed that the Tourmaster was “underpowered.” The Andersons advised Gulf Stream that “if this matter is not resolved within ... the next 60 days, suit will be filed against Gulfstream.”

Several days later, Aaron Druesdow, a “fully authorized” representative of Gulf Stream, met Mr. Anderson at Royal Gorge to inspect the Tourmaster. According to Mr. Anderson, Druesdow acknowledged the problems with the Tourmaster and offered to take it to Gulf Stream's...