Martin v. Thor Motor Coach Inc.

• Decision Date: 29 September 2021
• Docket Number: 3:20-CV-13 DRL-MGG
• Parties: CLARENCE MARTIN et al., Plaintiffs, v. THOR MOTOR COACH INC., Defendant.
• Court: U.S. District Court — Northern District of Indiana

CLARENCE MARTIN et al., Plaintiffs,
v.
THOR MOTOR COACH INC., Defendant.

No. 3:20-CV-13 DRL-MGG

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

September 29, 2021

OPINION & ORDER

Daimon R. Leichty, United States District Court Judge

The court dismissed this warranty case as untimely based on the original complaint reserving for Clarence and Terri Martin the option to develop a timely cognizable theory under Indiana law that the Magnuson-Moss Warranty Act would permit in federal court. On one hand, the amended complaint merely restates the same time-barred warranty claim. The court dismisses this claim once more.

On the other hand, the amended complaint also alleges that Thor Motor Coach's warranty remedies failed of their essential purpose-an argument that the Indiana Supreme Court has suggested, albeit in a footnote in Kenworth of Indianapolis, Inc. v. Seventy-Seven Ltd., 134 N.E.3d 370, 379 n.3 (Ind. 2019), would give rise to a separate contract claim with a different statute of limitations. The court certifies these questions to the Indiana Supreme Court to acquire guidance on the scope of such a contract claim, if recognized under Indiana law, and its governing statute of limitations.

BACKGROUND

These facts emerge from the amended complaint's well-pleaded allegations. On March 24, 2018, the Martins purchased a 2018 Thor Hurricane M29 motorhome from a dealer. Thor manufactured the recreational vehicle and provided a written limited warranty [ECF 20-2].^[1]

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After receiving their vehicle, the Martins say they noticed several defects that diminished the vehicle's value and impaired their use. The defects persisted despite their exhaustion of the remedies provided by the warranty [ECF 20-2]. The Martins allege they gave Thor reasonable opportunities to repair the defects, that they exhausted the repair remedy and the back-up remedy within Thor's written warranty, and that the company's repair remedies failed of their essential purpose.

Thor moved to dismiss, which the court granted in part. Martin v. Thor Motor Coach, 474 F.Supp.3d 978 (N.D. Ind. 2020). The Martins then amended their complaint to allege a breach of the “written warranty contract” and to allege that the warranty's remedies failed of their essential purpose. Thor has now moved to dismiss the amended complaint.

STANDARD

In reviewing the motion to dismiss, the court accepts all well-pleaded factual allegations as true and draws all reasonable inferences in the plaintiff's favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The statement must contain enough factual matter, accepted as true, to state a plausible claim, not a speculative one. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim must be plausible, not probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012). Whether a claim is sufficiently plausible to survive a motion to dismiss is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal, 556 U.S. at 679).

Generally, if a party attaches evidence outside the pleadings in a motion to dismiss, “the court must either convert [the motion] into a motion for summary judgment under Rule 56 . . . or exclude the documents attached to the motion to dismiss and continue under Rule 12.” 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir. 2002) (quoting Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998)). There is a narrow exception: a dismissal motion can rest on critical documents, central to the claim and referred

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to in the complaint. Geinosky v. City of Chic., 675 F.3d 743, 745 n.1 (7th Cir. 2012); 188 LLC, 300 F.3d at 735. This allowance applies particularly in cases of contractual interpretation. Levenstein, 164 F.3d at 347. Accordingly, the court considers the written warranty.

DISCUSSION

“The MMWA operates as a gloss on . . . state law breach of warranty claims, ” Anderson v. Gulf Stream Coach, Inc., 662 F.3d 775, 781 (7th Cir. 2011), and certain contract claims, see, e.g., Priebe v. Autobarn, Ltd., 240 F.3d 584, 587 (7th Cir. 2001) (service contract). The MMWA confers federal jurisdiction over a consumer product claim when the consumer “is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under [the Act], or under a written warranty, implied warranty, or service contract.” 15 U.S.C. § 2310(d)(1). Under this “unusual jurisdictional clause, ” Miller v. Herman, 600 F.3d 726, 729 (7th Cir. 2010), the MMWA “provides for federal jurisdiction for some state claims, ” not “an independent basis for liability.” Priebe, 240 F.3d at 587; accord Schimmer v. Jaguar Cars, Inc., 384 F.3d 402, 405 (7th Cir. 2004).

The court has already held that the statute of limitations bars the traditional warranty claim, leaving only the prospect of a contract claim. See Martin, 474 F.Supp.3d at 986; see also Kenworth, 134 N.E.3d at 379 n.3; Perry v. Gulf Stream Coach, Inc., 814 N.E.2d 634, 643-44 (Ind.Ct.App. 2004). In an amended complaint, the Martins recast the theory as Thor breaching its “written warranty contract, ” but this is their time-barred warranty claim in contract language. Merely adding the word “contract” changes nothing. See Martin, 474 F.Supp.3d at 986-87; see also Smith v. Nexus RVs LLC, 468 F.Supp.3d 1012, 1024 (N.D. Ind 2020); Zawistoski v. Gene B. Glick Co., 727 N.E.2d 790, 792 (Ind.Ct.App. 2000). This claim remains untimely.

That said, the question remains whether the Martins may pursue a contract claim under state law, based on the allegation that their warranty's remedies failed of their essential purpose, and then pursue that claim under a different statute of limitations. It is this question that the court certifies to the Indiana Supreme Court-with due regard for the State of Indiana's right to define its own commercial law. That

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is no less true when the MMWA-through which this case pends here-merely serves as a vehicle for state-defined claims.

Warranty law contemplates a remedy-phrased in the Uniform Commercial Code as some minimum or fair quantum of a remedy. See Ind. Code § 26-1-2-719(2) cmt. 1. When a warranty's remedy fails its essential purpose, a buyer often gains access to other remedies under the UCC. See Ind. Code § 26-1-2-719(2) (“Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in IC 26-1.”); but see Rheem Mfg. Co. v. Phelps Heating & Air Conditioning, Inc., 746 N.E.2d 941, 947 (Ind. 2001) (limitation on recovery of consequential damages remained enforceable, even when warranty remedy failed its essential purpose, so long as not unconscionable).

A warranty's remedy will rarely fail its essential purpose. See Rheem Mfg., 746 N.E.2d at 954 (citing authorities). It does so only “when an unexpected circumstance arises and neither party accepted the risk that such circumstance would occur.” Id. at 955. The UCC's relief in this regard “is not concerned with arrangements [that] were oppressive at the [contract's] inception” (a question of unconscionability), but instead “with the application of an agreement to novel circumstances not contemplated by the parties.” Martin Rispens & Son v. Hall Farms, Inc., 621 N.E.2d 1078, 1085 (Ind. 1993) (quotations and citation omitted); see also White & Summers, Uniform Commercial Code § 13:20 (2020). The UCC's relief is “triggered when the remedy fails of its essential purpose, not the essential purpose of the UCC, contract law, or of equity.” Martin Rispens, 621 N.E.2d at 1085 (emphasis omitted). Pragmatically, warranties often provide multiple exclusive remedies-for instance, repair, replacement, and pro rata refund-so even when one remedy might fail its essential purpose, others exist to prevent the warranty from being viewed as remedyless. This is part of its rarity in the law.

Thor says this argument that a remedy has failed of its essential purpose remains confined to a warranty claim-just now with added UCC remedies rather than the exclusive remedies within the written warranty. If merely a warranty claim, or another way to express a breach of a warranty, then the allegations

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by the Martins that their warranty's remedies failed of their essential purpose would likewise be time-barred. Of note, a warranty can be breached under Indiana law when “an exclusive or limited remedy fail[s] of its essential purpose.” Ind. Code § 26-1-2-791(2); accord Zylstra v. DRV, LLC, 8 F.4th 597, 601 (7th Cir. 2021). That claim isn't the issue.

Instead, does that failure of the remedies support a contract claim under Indiana law? When a buyer has been deprived of an exclusive remedy (e.g., repair or replacement) because the seller incompetently repairs or...