Martin v. Thor Motor Coach Inc.
| Decision Date | 06 May 2022 |
| Docket Number | CAUSE NO. 3:20-CV-13 DRL-MGG |
| Citation | 602 F.Supp.3d 1087 |
| Parties | Clarence MARTIN et al., Plaintiffs, v. THOR MOTOR COACH INC., Defendant. |
| Court | U.S. District Court — Northern District of Indiana |
Russell S. Thompson, IV, Thompson Consumer Law Group PLLC, Scottsdale, AZ, for Plaintiff Clarence Martin.
Amorette Rinkleib, Thompson Consumer Law Group, PLLC, Mesa, AZ, Russell S. Thompson, IV, Thompson Consumer Law Group PLLC, Scottsdale, AZ, for Plaintiff Terri Martin.
Michael J. Hays, THK Law LLP, South Bend, IN, Trevor Q. Gasper, Thor Industries Inc., Elkhart, IN, for Defendant.
Novel issues under Indiana's Uniform Commercial Code (UCC) and the federal Magnuson-Moss Warranty Act (MMWA) arose in this recreational vehicle case—whether a theory that a warranty's remedies have failed of their essential purpose should be cognized as an independent claim under Indiana law, accruing on a different timeline than an express or implied warranty claim under the UCC, and permitted to proceed in federal court through the vehicle of the MMWA. Today the court answers these questions in the affirmative and lifts the stay to let this sole claim proceed.
These facts emerge from the amended complaint's well-pleaded allegations. On March 24, 2018, Clarence and Terri Martin purchased a 2018 Thor Hurricane M29 motorhome from a dealer. Thor Motor Coach, Inc. manufactured the recreational vehicle and provided a written limited warranty [ECF 20-2].1
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. The Martins alleged 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. The Martins alleged that the recreational vehicle's defects were "incurable." The Martins alleged more than $50,000 in damages, including based on diminished value, to meet the MMWA's threshold. See Schimmer v. Jaguar Cars, Inc. , 384 F.3d 402, 406 (7th Cir. 2004).
This amended complaint came after a motion to dismiss the original complaint. The court granted this opening motion in part. Martin v. Thor Motor Coach , 474 F. Supp.3d 978 (N.D. Ind. 2020). Thor had reduced the statute of limitations within its written warranty to 15 months after the breach. This enforceable statute of limitations barred a warranty claim, but not a separate claim that might exist based on the allegation that the warranty's remedies failed of their essential purpose. See id. at 984-85. The court dismissed the warranty claim and permitted the Martins to proceed on their theory that the warranty's remedies failed of their essential purpose, classified now as a contract action.
The Martins then amended their complaint to allege a breach of a "written warranty contract" and more particularly that the warranty's remedies failed of their essential purpose. Thor moved to dismiss this amended complaint. After oral argument, the court dismissed any warranty claim again as untimely. See Martin v. Thor Motor Coach , 2021 WL 4453738, *1–2, 2021 U.S. Dist. LEXIS 186781, 4 (N.D. Ind. Sept. 29, 2021).
In briefing this same motion, the parties also debated whether a separate contract claim could exist—an issue of state law growing out of a footnote from Kenworth of Indianapolis, Inc. v. Seventy-Seven Ltd. , 134 N.E.3d 370, 379 n.3 (Ind. 2019) —so the court elected to certify two questions, including whether Indiana law recognized an independent claim when a warranty's remedy fails of its essential purpose. The court stayed the case pending the Indiana Supreme Court's consideration. The Indiana Supreme Court declined (voting 3-2) to answer the certified questions. See In re Cert. Question Martin v. Thor Motor Coach , No. 21S-CQ-446 (Ind. Oct. 29, 2021).
The case thus returned here for the court to determine whether to hold to a view that Indiana law permitted a separate claim or to revisit that conclusion. Today the court adheres to its prior view that Indiana law recognizes, as an independent claim, the right to pursue a UCC-based remedy when the written warranty's remedies fail their essential purpose, and that this claim accrues under Indiana law when the breach occurs (that is, when the remedies so fail).
Because it matters today, the court recalls the precise procedural posture through which this issue was raised. Thor filed a motion to dismiss the amended complaint under Rule 12(b)(6). In reviewing such a motion, 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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 Chi. , 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ).
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 to in the complaint. Geinosky v. City of Chi. , 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.
A statute of limitations defense is an affirmative defense; a complaint need not anticipate or plead against it. See Xechem, Inc. v. Bristol-Myers Squibb Co. , 372 F.3d 899, 901 (7th Cir. 2004). Though a limitations defense isn't normally a part of a motion to dismiss, "when the allegations of the complaint reveal that relief is barred by the applicable statute of limitations, the complaint is subject to dismissal for failure to state a claim." Logan v. Wilkins , 644 F.3d 577, 582 (7th Cir. 2011) ; Small v. Chao , 398 F.3d 894, 898 (7th Cir. 2005) (). Else a Rule 12(b)(6) order isn't an appropriate response to the invocation of a statute of limitations defense because a complaint "need not contain any information about defenses and may not be dismissed for that omission." Xechem , 372 F.3d at 901.
This case comes to the court through the MMWA. "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). 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 , 384 F.3d at 405. As interpreted, the source of liability comes from state law, notwithstanding the gloss of requirements that may exist within the MMWA. See Anderson , 662 F.3d at 781 ; see, e.g., Mathews v. REV Rec. Grp., Inc. , 931 F.3d 619, 622 (7th Cir. 2019) (); Litsinger v. Forest River, Inc. , 536 F. Supp.3d 334, 364 (N.D. Ind. 2021) (). The court thus must find, as a source of liability, a claim under Indiana law today.
In addition, the MMWA lacks its own statute of limitations, so the court must borrow a limitations period from an analogous state cause of action. See N. Star Steel Co. v. Thomas , 515 U.S. 29, 33-35, 115 S.Ct. 1927, 132 L.Ed.2d 27 (1995). The court applies "any rules that are an integral part of the statute of limitations, such as tolling and equitable estoppel."
Indep. Trust Corp. v. Stewart Info. Servs. Corp. , 665 F.3d 930, 935 (7th Cir. 2012) (quoting Parish v. City of Elkhart , 614 F.3d 677, 679 (7th Cir. 2010) ). The court thus must also consider the statute of limitations that applies to this claim, as sourced from Indiana law, and when it accrues.
The court starts with the claim. In doing so, the court recalls that a "state is not without law save as its highest court has declared it," though there are often "many rules of decision commonly accepted and acted upon by the bar and inferior courts [that] are nevertheless laws of the state although the highest court of the state has never passed upon them." West v. Am. Tel. & Tel. Co. , 311 U.S. 223, 236, 61 S.Ct. 179, 85 L.Ed. 139 (1940). "State law is to be applied in the federal as well as the...
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