Schroeder v. Barth, Inc.

Decision Date24 July 1992
Docket NumberNo. 91-1868,91-1868
Citation969 F.2d 421
Parties1992-2 Trade Cases 69,906, 18 UCC Rep.Serv.2d 781 Lester SCHROEDER and Viola Schroeder, Plaintiffs-Appellants, v. BARTH, INCORPORATED, Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

Robert J. Palmer (argued), E. Spencer Walton, Jr., and Wendell Walsh, May, Oberfell & Lorber, South Bend, Ind., for plaintiffs-appellants.

David R. Kibbe, Barnes & Thornburg; and John T. Mulvihill (argued), South Bend, Ind., for defendant-appellee.

Before BAUER, Chief Judge, POSNER, Circuit Judge, and FAIRCHILD, Senior Circuit Judge.

BAUER, Chief Judge.

Lester and Viola Schroeder, an elderly couple, wanted nothing more than a reliable, comfortable motor home to provide them with transportation and housing on their leisurely travels around the country. With that in mind, on March 13, 1981, they bought a 1981 Barth MCC Model 35 motor home from Motor Vacations Unlimited, of Elgin, Illinois, for $146,705.00. The Schroeders took delivery of the vehicle in July 1981. It came with a manufacturer's one year limited warranty. Barely 2,600 miles and five months later, on December 3, 1981, Lester Schroeder wrote a letter to Charles Dolan of Motor Vacations Unlimited cataloguing sixty-one separate problems he had experienced with the motor home since taking delivery. Dolan sent a copy of the letter and list to Richard Bibler, Assistant to the President of Barth, Incorporated ("Barth"), the manufacturer. Bibler, on June 24, 1982, wrote to Schroeder to inform him that Barth would extend its warranty to January 27, 1983. The Schroeders continued to experience a multitude of problems with the motor home, however, well beyond the extended warranty date. Lester attempted to remedy some of the problems himself. On some occasions he sought the assistance of others, Barth included. But the motor home never operated to the Schroeders' satisfaction, so they gave up trying to get it repaired.

On March 7, 1985, the Schroeders, citizens of Florida, filed a complaint against Barth, an Indiana corporation, in the United States District Court for the Northern District of Indiana. Based on the Magnuson-Moss Warranty Act, (d)(1)(B), and and , the complaint alleges breach of express and implied warranties, and breach of contract. On their breach of warranty claims, the Schroeders pray for judgment "in the amount of One Hundred Forty-Six Thousand Seven Hundred Five Dollars ($146,705); reasonable attorneys' fees; interest from the date of payment; expenses reasonably incurred by the plaintiffs; costs of this action; and all other just and proper relief in the premises." Complaint, Record Document ("Rec. Doc.") No. 1, at 3 & 5. On May 21, 1986, Barth filed a motion to dismiss for failure to state a claim on which relief can be granted under Rule 12(b)(6). The motion contended that the Schroeders' claims were fatally defective for lack of privity because the Schroeders bought the motor home from Motor Vacations Unlimited of Elgin, Illinois, and were time-barred as well. Barth filed a second motion to dismiss under Rule 12(b)(1) on June 15, 1986, asserting that the Schroeders' claims failed to meet the jurisdictional amount required by and .

The district court, in its January 5, 1987, Memorandum and Order, agreed with Barth that privity is an essential element to recovery under Indiana law for breach of implied warranty. As a consequence, the court noted, any claims the Schroeders have against Barth for breach of implied warranty must sound in tort. Indiana's statute of limitations for tort breach of warranty actions is two years. IND.CODE Sec. 34-1-2-2. Because the Schroeders filed their claim for breach of implied warranty almost four years after it accrued, the court dismissed it as time-barred. Further, the court granted Barth's motion to dismiss the Schroeders' breach of contract claim, also for lack of privity. But it denied the motion as to their claim for breach of express warranty. Finally, it deferred ruling on Barth's motion to dismiss for want of subject matter jurisdiction in order to allow the Schroeders more time to submit information concerning the sufficiency of the amount in controversy.

The only further information the Schroeders provided the court regarding the amount in controversy was the affidavit of Lester, wherein he recounted many of the problems he had experienced with the motor home, and stated, "Since I took delivery of [the motor home] in July 1981, the 1981 Barth MCC Model 35 Motor Home has been worthless to me and to my wife; the motor home has had absolutely no value whatsoever." Affidavit of Lester J. Schroeder, Rec. Doc. No. 19, at 4. Barth then filed an additional memorandum in support of its 12(b)(1) motion, appending thereto the affidavit of Richard A. Bibler attesting to the cost to repair the Barth-warranted defects alleged by the Schroeders. The court, however, denied Barth's 12(b)(1) motion.

After the case was set for trial, the Schroeders moved for a continuance for additional time within which to locate an expert to support their theory of damages. The motion was granted. The Schroeders then hired Dr. Thomas A. Natiello to render an expert opinion as to the value of the motor home. Barth objected to Natiello on the grounds that he is a health care specialist with no experience or training in the valuation of motor homes, and renewed its motion to dismiss for lack of subject matter jurisdiction because the Schroeders failed to establish the $50,000 jurisdictional amount. In reply, the Schroeders relied on both Natiello's valuation of the motor home and Lester's affidavit. In its Memorandum and Order of January 8, 1991, the court sustained Barth's objection to Natiello's testimony for lack of the expert qualifications necessary to state an opinion as to the market value of motor homes, and because Natiello's opinion failed to address any proper measure of damages for breach of warranty. It further ruled that Lester Schroeder's testimony regarding the value of the motor home was sufficient to withstand Barth's 12(b)(1) motion to establish federal jurisdiction. Thus, at a status conference on January 25, 1991, the case was set for trial.

At the suggestion of the district court, Barth then filed a motion for summary judgment seeking to limit the Schroeders' damages to $2,211.25, the cost averred in the Bibler affidavit to repair the Barth-warranted defects. Barth contended that the Schroeders wholly failed to present evidence to allow them to carry their burden at trial. The court agreed. In open court, on March 15, 1991, nearly ten years after the Schroeders purchased the motor home, the court granted Barth's motion for summary judgment on damages, and entered judgment for the Schroeders in the amount of $2,113 plus costs.

The Schroeders filed a timely notice of appeal. They argue that the district court erred in ruling that there was no genuine issue of material fact regarding the value of the motor home and the measure of damages, and in failing to award them either incidental or consequential damages. We affirm.

To succeed on a motion for summary judgment, the movant bears the burden to identify for the court, from among all the material of record, which includes the pleadings and affidavits on file, the absence of any genuine issue of material fact. (1986).

Once the movant has made a properly supported motion, the nonmovant has the responsibility of going forward beyond the pleadings and setting forth specific facts demonstrating the existence of a genuine issue of fact for trial. A material fact must be "outcome determinative under the governing law." The fact is genuinely disputed when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Thus, the nonmovant must produce proper documentary evidence to support his contentions.

(7th Cir.1990) (citations omitted). This court reviews de novo a district court's grant of summary judgment, drawing all reasonable inferences in favor of the nonmoving party.

Because there is no dispute that a breach of Barth's express warranty occurred, and that the Schroeders sustained damages as a result of that breach, the only issue is the amount of...

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