Pitts v. Monaco Coach Corp.

• Decision Date: 21 June 2004
• Docket Number: No. 1:03-CV-618.,1:03-CV-618.
• Citation: 330 F.Supp.2d 918
• Parties: James Reed PITTS, Plaintiff, v. MONACO COACH CORPORATION, a foreign corporation; George Ewing, Inc., a Michigan corporation; and Bank One, a foreign corporation, Jointly and Severally, Defendants.
• Court: U.S. District Court — Western District of Michigan

330 F.Supp.2d 918

James Reed PITTS, Plaintiff, v. MONACO COACH CORPORATION, a foreign corporation; George Ewing, Inc., a Michigan corporation; and Bank One, a foreign corporation, Jointly and Severally, Defendants.

No. 1:03-CV-618.

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

June 21, 2004.

Brian P. Parker, The Law Offices of Brian P. Parker, Bingham Farms, MI, for James Reed Pitts, plaintiff.

Jeffrey Raymond Nowicki, Dolenga & Dolenga, PLLC, Michael D. Dolenga, Dolenga & Dolenga, PLLC, Bingham Farms, MI, for Monaco Coach Corporation, a foreign corporation, George Ewing, Inc., a Michigan Corporation, Bank One, a foreign corporation, Jointly and Severally, defendants.

OPINION

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 March 1, 2003, Plaintiff James Reed Pitts purchased a new 2001 Holiday Rambler Motor Home from Defendant George Ewing, Inc. ("George Ewing") for approximately $70,000. 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 George Ewing.

Plaintiff has alleged that the motor home had defects including

water leak/ceiling discoloration, defective awning, defective trim, defective washer door, defective bathroom door, defective entry door, defective bathroom sink, defective kitchen chair, inoperable CB antenna, defective tv antenna....

(Compl.¶ 11). Plaintiff alleges that he 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).

Plaintiff filed this action in the Calhoun 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, 7) breach of express warranty, and 8) financier liability.¹ Defendants removed the case to federal court on the basis of federal question jurisdiction, 28 U.S.C. § 1331, arising from Plaintiff's federal Magnuson-Moss Warranty Act claim. Defendants Monaco and George Ewing have moved for summary judgment as to George Ewing and partial summary judgment as to all claims except the breach of express warranty and the related Magnuson-Moss claim against Monaco.

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 Plaintiff 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 Plaintiff's 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 Plaintiff. 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 George Ewing

Defendant George Ewing seeks dismissal of Plaintiff's express and implied warranty claims against it on the basis that George Ewing disclaimed all warranties. Plaintiff contends 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).² 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 Plaintiff³ 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 print,⁴ is the following:

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

Immediately 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.... THIS AGREEMENT CONTAINS THE ENTIRE UNDERSTANDING BETWEEN YOU AND ME AND NO OTHER REPRESENTATION OR INDUCEMENT, VERBAL OR WRITTEN, HAS BEEN MADE WHICH IS NOT WRITTEN HERE.

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 MERCHANT ABILITY 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 COMPONENTS(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).

Plaintiff contends that the disclaimer is not conspicuous because it is found on the back of the purchase agreement in virtually non-distinguishing print. According to Plaintiff 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, and in bold print. 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., Case No. 03-70729 (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) (Quist, J.) (...