Zylstra v. DRV, LLC

• Decision Date: 10 August 2021
• Docket Number: No. 20-1949,20-1949
• Citation: 8 F.4th 597
• Court: U.S. Court of Appeals — Seventh Circuit
• Parties: Beverly ZYLSTRA and Bernard Zylstra, Plaintiffs-Appellants, v. DRV, LLC, Defendant-Appellee.

8 F.4th 597

Beverly ZYLSTRA and Bernard Zylstra, Plaintiffs-Appellants,

v.DRV, LLC, Defendant-Appellee.

No. 20-1949

United States Court of Appeals, Seventh Circuit.

Argued December 11, 2020

Decided August 10, 2021

Elizabeth Ahern Wells, Attorney, BURDGE LAW OFFICE, Dayton, OH, for Plaintiffs-Appellants.

Trevor Q. Gasper, Attorney, THOR INDUSTRIES, INC., Elkhart, IN, for Defendant-Appellee.

Before Rovner, Hamilton, and Scudder, Circuit Judges.

Rovner, Circuit Judge.

Bernard and Beverly Zylstra spent close to $100,000 on a brand-new recreational vehicle in order to enjoy travel and recreation during their retirement years. One can imagine their disappointment when they began to collect a long list of defects, large and small, as they began their adventures. As the list grew, so did their frustration until, on August 27, 2018, they filed suit against the manufacturer, DRV, LLC, for breach of express and implied warranties under state law, violation of the federal Magnuson-Moss Warranty Act (MMWA), and violation of state deceptive practices acts. Although we sympathize with the frustrations the Zylstra's experienced trying to rectify the long list of problems, we uphold the district court's grant of summary judgment for DRV, as even in the light most favorable to the Zylstras, DRV never had a reasonable opportunity to repair the defects as required under the warranty and therefore the Zylstras’ claims cannot survive.

I.

The Zylstras purchased their RV from non-party Bradley Bourbonnais Chevy Hundai RV in Bourbonnais, Illinois for $91,559.15. The RV came with a one-year warranty that warranted that the portions of the RV manufactured by DRV that were not otherwise excluded would be "free from defects in material and workmanship supplied and attributable to DRV during normal use." R. 28-8. Under the terms of the warranty, "[w]ritten notice of defects subject to warranty coverage must be given to the selling dealer or DRV ... within 30 days after the defect is discovered ... no later than 30 days after [the warranty] expiration." Id. In addition, "the owner shall contact the selling dealer or the Factory if a problem occurs which may be directly covered by this warranty with sufficient information to resolve the matter," and the owner is required to take the RV to the selling dealer or factory for repair. Id.

Unlike an automobile, each DRV vehicle is custom built for the purchaser. Consequently, as with a custom-built home, there are almost always adjustments and repairs to be made after the sale. Thus, after the Zylstras purchased the RV, but before delivery, the dealer performed some of these tweaks while waiting for the Zylstras to pick up the vehicle. The Zylstras neither requested nor knew about these pre-pick-up repairs and adjustments. The Zylstras assert that a Bradley salesman later informed them that the vehicle had been "cannibalized" while on the Bradley lot, but they do not assert any claims about specific items that were missing or replaced with inferior items. R. 28-3 at 13.

Once the Zylstras retrieved the RV, they went for a two-day camping trip to put the vehicle to the test. During that trip, they made a punch list of about seventeen items, most of which were relatively minor, ranging from items like a missing screw in an overhead compartment to a leaky toilet valve. Less than a week after dropping off the RV at the dealer for those repairs, the Bradley service manager called the Zylstras to inform them that the technicians had discovered damage to the roof. A dispute ensued over who was responsible for the roof damage, and ultimately the Zylstras decided to make an insurance claim and have the roof repaired at the DRV factory, as it had quoted a price for the repair that was almost half of the quote from Bradley. The dealer did not perform any warranty repairs while awaiting the outcome of the roof dispute.

When the Zylstras took the RV to the factory repair shop in Indiana for the roof repair, they learned that they could take the RV to any DRV authorized dealer for warranty repairs. On June 27, 2017, they did just that—bringing the RV to Plaza RV, another authorized dealer. This was the first time after they picked up the vehicle that any technicians put their hands on it to make warranty repairs, which by this point numbered about eighteen. The Zylstras picked up the RV fifty-one days later, on June 27, 2017, and took it on an eleven-day camping trip to make sure all the repairs had been successful. During that trip, the Zylstras made a new punch list of fifteen items. Only two of the items on the new list also had been on the previous list—a missing overhead cabinet screw that may have been mis-identified the first time, and an antenna, manufactured by a separate company, that was displaying error codes. The remaining sixteen items included two new items that will become important to this case. The Zylstras identified them as "Black Holding Tank Leaks" and "Black Holding Tank Hard to Close." R. 28-3 at 9.

On September 11, 2017, the Zylstras dropped the RV off at Plaza RV once again to repair the new punch list items, and to add some after-market items that were outside of the warranty claim and not directly relevant to the case. The Zylstras informed Plaza RV that they would need the vehicle by January 1 for a long trip to Texas, and, in fact, they were able to retrieve the vehicle on December 21, 2017. From there it went into storage for a week until they left for their trip.

A week into the Texas trip the Zylstras started to smell a strong odor after dumping the black sewage tank—the tank on an RV that holds waste from the toilet. A few weeks later, Mr. Zylstra discovered that the black tank valve was leaking at the flange connections and that sewage had been leaking from the tank into the insulation throughout the underbelly of the RV. He could not find a DRV authorized dealer to repair the leak, but an independent mobile technician came and completed the repair. The technician removed the valve gaskets, cleaned the valve seals, cleaned the valve, and replaced the valve gaskets between the two flanges.

Soon after that event, the Zylstras contacted Greg Weldon from DRV to discuss the black tank repairs and who would shoulder the bill. We describe this dispute further within, but in the end, the Zylstras did not take the RV to the dealer or any authorized DRV repair shop to remedy the leaking black tank or the damage it caused. To this day, the black tank and related issues have not been presented to DRV or the dealer to repair.

After the leak, the Zylstras stopped using the RV out of concern for their health. They contend that it is not, and never has been, fit for its ordinary purpose of recreational use. Consequently, on August 27, 2018, they filed a complaint alleging breach of express and implied warranty, violation of the Magnuson-Moss Warranty Act (MMWA), and violation of state consumer protection laws. The district court granted DRV's motion for summary judgment on all claims on May 18, 2020. On appeal the Zylstras allege that (1) the district court improperly made factual determinations as to disputed issues of material fact when granting summary judgment to DRV; (2) reasonable minds could conclude that DRV breached its express warranty under state law and violated the MMWA; (3) the district court committed reversible error when it failed to conduct a choice of law analysis regarding the Zylstras’ breach of implied warranty claim under state law; and (4) reasonable minds could conclude that DRV violated Indiana's Deceptive Consumer Sales Act.

II.

The parties presented dozens of pages of specific and detailed facts. The presentation of so many seemingly disputed facts generally prompts us to pause and ask whether such a case is one to resolve on summary judgment. See Payne v. Pauley , 337 F.3d 767, 770 (7th Cir. 2003). In this case, however, the disputed facts are not material to the outcome. We review the district court's grant of summary judgment de novo and will affirm only if we find that there are no genuine issue of material fact and DRV is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) ; Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Although we take the facts in the light most favorable to the plaintiff, those facts must be supported by sufficient record evidence. Lujan v. Defs. of Wildlife , 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

A. Breach of warranty.

1. Opportunity to remedy defects.

We begin with the Zylstras’ primary claim that DRV breached the express warranty under state law. Both parties contend that Indiana law governs this claim. Under Indiana law, to prevail on a breach of warranty claim, the Zylstras must prove "(1) the existence of a warranty, (2) a breach, (3) causation, and (4) damages." Mathews v. REV Recreation Grp., Inc. , 931 F.3d 619, 622 (7th Cir. 2019), citing Peltz Const. Co. v. Dunham , 436 N.E.2d 892, 894 (Ind. Ct. App. 1982). A warranty can be breached, under Indiana law, where "an exclusive or limited remedy fail[s] of its essential purpose." Ind. Code § 26-1-2-719(2) ; Perry v. Gulf Stream Coach, Inc. , 814 N.E.2d 634, 643 (Ind. Ct. App. 2004). "Timely notice of a breach of warranty is a substantive condition precedent to recovery." McClure Oil Corp. v. Murray Equip., Inc. , 515 N.E.2d 546, 554 (Ind. Ct. App. 1987).

In order to make a claim of breach of warranty, the purchaser must give the warrantor a reasonable opportunity to repair the defects. Mathews , 931 F.3d at 622. The Zylstras contend that this is only true if the warranty specifically imposes that requirement. In this case, the warranty requires the purchasers to notify DRV or a selling dealer of any warrantable issue and to take the RV to DRV or an authorized dealer for repairs. R. 28-8 at 2. It also requires an owner to notify DRV if the selling dealer is unwilling to resolve a problem covered by the warranty. Id....