Smith v. Nexus RVS, LLC

• Decision Date: 19 June 2020
• Docket Number: CAUSE NO. 3:17-CV-00815 DRL-MGG
• Parties: Linda SMITH and Ken Smith, Plaintiffs, v. NEXUS RVS, LLC, and Ally Financial, Inc., Defendants.
• Court: U.S. District Court — Northern District of Indiana

468 F.Supp.3d 1012

Linda SMITH and Ken Smith, Plaintiffs,
v.
NEXUS RVS, LLC, and Ally Financial, Inc., Defendants.

CAUSE NO. 3:17-CV-00815 DRL-MGG

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

Signed June 19, 2020

468 F.Supp.3d 1017

Scarlett M. Steuart, Ronald L. Burdge, Burdge Law Office Co., LPA, Dayton, OH, for Plaintiffs.

Georgianne M. Walker, Katlyn M. Foust Hunneshagen, May Oberfell Lorber, Mishawaka, IN, for Defendant Nexus RVs, LLC.

Alan S. Brown, Jenai M. Brackett, Frost Brown Todd LLC, Indianapolis, IN, Georgianne M. Walker, Katlyn M. Foust Hunneshagen, May Oberfell Lorber, Mishawaka, IN, for Defendant Ally Financial, Inc.

OPINION & ORDER

Damon R. Leichty, Judge

Before Linda and Ken Smith purchased a recreational vehicle from Nexus RVs, LLC, they confirmed with Nexus the vehicle's carrying capacity and weight. Reassured it could hold a certain amount of cargo, they decided on the 2018 Nexus Phantom. The Smiths received a written one-year limited warranty. If the Smiths discovered a defect in the vehicle's materials or workmanship, Nexus would repair or replace the defective part.

Shortly after the sale, the Smiths decided to weigh the vehicle; and, to their surprise, it weighed more than Nexus allegedly told them. They claim the RV's weight or carrying capacity constitutes a defect covered by the limited warranty. But that isn't all—the Smiths also say they experienced water running down the hallway, propane leaks, missing seals, an inoperable refrigerator, and other defects. They presented only certain of these to Nexus for repair.

Unsatisfied with the vehicle, the Smiths asserted several claims against Nexus: breach of express and implied warranties, breach of contract, violations of the Magnuson-Moss Warranty Act, and violations of the Indiana Deceptive Consumer Sales Act. Nexus and its affiliated financing company now request summary judgment on all claims. The court grants the summary judgment motion only in part.

BACKGROUND

Nexus manufactures recreational vehicles, including the 2018 Nexus Phantom purchased by the Smiths. Ally Financial, Inc. provided the financing for the sale, and Nexus assigned its rights under the retail installment contract and security agreement to Ally.

In 2017, the Smiths researched RV companies on the internet to buy an RV with a larger carrying capacity. Two Nexus vehicles caught their eye—the Viper and the

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Phantom. After a back and forth exchange via email and telephone with a Nexus employee, Dave Middleton, the Smiths decided on the Phantom, as it could "carry a lot more weight" than the Viper. To confirm the cargo carrying capacity, the Smiths sent Justin Nagel, Nexus salesman, an article discussing the Phantom's specification of only 760 pounds. The Nexus salesman told the Smiths the cargo capacity "as is" for their Phantom model would be 1,550 pounds or 1,450 pounds with entertainment centers.

Immediately before signing the sales paperwork on April 17, 2017, the Smiths asked Kelli McClanahan, Nexus finance representative, to confirm how much the RV weighed. She responded saying 17,950 pounds, which included full tanks of fuel, propane, and water. The Smiths proceeded with the sale and purchased a 2018 Nexus Phantom directly from Nexus.

Nexus provided the Smiths a one-year limited warranty. ECF 43-6. It covered "normal use against defects in Nexus materials and/or workmanship in construction of the recreational vehicle." Id. "All obligations of Nexus [were] limited to replacing or repairing the defective part of component ." Id. The warranty also included disclaimers: "This Limited Warranty is expressly IN LIEU of any other express warranty and is further IN LIEU of any implied warranty including, but not limited to, any implied WARRANTY OF MERCHANTABILITY or FITNESS for a particular purpose. " Id. But, "[t]o the extent that applicable state and/or federal law prohibits the exclusion of any remedy ... any such remedy ... is limited to one (1) [sic ], but not limited to, any implied WARRANTY OF MERCHANTABILITY or FITNESS for a particular purpose. " Id.

After signing the sales documents, the Smiths decided to stay in their RV for the next couple days while parked in Nexus’ lot. During this time, they discovered a weight sticker inside a door panel that said the RV had a cargo capacity of 1,550 pounds with no cargo, occupants, or water. Concerned with the vehicle's weight, the Smiths drove it to a gas station to weigh it. The unit weighed 19,620 pounds with full tanks of propane and water, 125 pounds of cargo, their dog, and themselves. They returned to Nexus and spoke with the general manager, Richard Potter. He reweighed the vehicle without disclosing the results to the Smiths. When the Smiths later met with Dave Middleton, he told the Smiths that it was overweight because they added optional features such as the recliners and entertainment center. The Smiths asked Nexus to cancel the deal, but the company declined.

Before the Smiths left the property, they noticed employees running out of their RV with wet towels. They asked the Nexus employees what they were doing, and they said the hose in the water tank had a leak. The employees said they put clamps on it to remedy the leak. The only concern the Smiths had leaving the facility was the weight of the vehicle.

On their way home, the Smiths noticed water running down the hallway due to a water leak in the bathroom. They could not reach anyone at Nexus. When they arrived home, they discovered holes in the water tank hose. They contacted Nexus who told them that the company would reimburse them for the hose, which they then purchased from a local RV store and installed.

The RV remained parked at the Smiths’ home until June 2017. At that time, they began to smell propane emanating from the area between their RV and house. They called the fire department, which determined that the RV was dangerous and needed to be repaired. The Smiths called Nexus about scheduling a time to

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repair the vehicle, but Nexus could not schedule them until August. So instead, Nexus said the Smiths could go to Fabel RV, a local repair facility, and get it fixed. While the RV was at Fabel, the following issues were repaired: propane hose leak; front end alignment; missing passenger side outer slide out seals; and deformed passenger side slide out window seal. Additionally, the Smiths decided to have tires with a higher rating installed on the RV because of their concerns with its weight.

After picking up the RV from Fabel, the Smiths packed the RV for their first trip in it to South Dakota. They began experiencing issues with their RV, including an inoperable refrigerator, leaking propane tank, and black water tank that would not go back into place. The Smiths called Nexus immediately about the propane. On August 14, 2017, the Smiths took the RV back to Nexus and had several repairs done under the warranty: LP lines; water pump; mud flap; refrigerator venting; main sensor on refrigerator; heater vent in bedroom; lower right drawer in bedroom; and black tank pipe. The Smiths had no concerns with any of the repairs conducted by Nexus, except a few broken screws.

On September 11, 2017, the Smiths sent a letter informing Nexus of the RV's warranty and its covered defects, along with Nexus’ alleged deceptive acts. ECF 53-16. They requested that Nexus repurchase the RV from them, refund their expenses, pay damages, and take the vehicle back. The Smiths filed suit on October 31, 2017 alleging breach of warranty and/or contract, a violation of the Magnuson Moss Warranty Act, and a violation of the Indiana Deceptive Consumer Sales Act.

The Smiths retained an opinion witness, Philip Grismer, who inspected the vehicle, weighed it, and offered several opinions on its weight and defects. He weighed the vehicle twice: first, the total weight of the RV was 18,440 pounds with a carrying capacity of 1,060 pounds; second, the total weight of the vehicle was 19,160 pounds, exceeding the front axle weight rating. He opined that "the RV was poorly built and was defective from the manufacturer." He said the unit was "built on a chassis that was too lightly suspended with too low a weight rating on the tires equipped from manufacture to handle the weight normally accompanying an RV usage." In addition to the alleged overweight defect, Mr. Grismer discovered other defects in the RV during his inspection, including inoperable entry steps, an inoperable headlight, distorted and buckling laminated floors, gaps in slide out seals, distorted slide out wiper seals, broken screws in the bottom slide out siderails, sloppy sealer application, and binding bedroom drawers. He viewed all these defects, along with the weight of the vehicle, to be covered under the warranty.

STANDARD

Summary judgment is warranted when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The non-moving party must present evidence on which a reasonable jury could rely to find in its favor. Goodman v. Nat'l Sec. Agency, Inc. , 621 F.3d 651, 654 (7th Cir. 2010). The court must deny a summary judgment motion when there is...