Breniser et al v. Western Recreational Vehicles, Inc.

Filing 36

Opinion & Order. Plaintiff's Supplemental Motion for Summary Judgment 33 is Denied. Signed on January 14, 2009 by Magistrate Judge Dennis J. Hubel. (hubel2, )

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Justin M. Baxter BAXTER & BAXTER LLP 8835 S.W. Canyon Lane, Suite 130 Portland, Oregon 97225 Attorney for Plaintiffs HUBEL, Magistrate Judge: Plaintiffs Jerry Breniser and Gale Thurber bring this action against defendant Western Recreational Vehicles, Inc., regarding an allegedly defective fifth-wheel trailer plaintiffs purchased in August 2005. Plaintiffs bring a single breach of warranty claim IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON JERRY BRENISER and GALE THURBER, ) ) ) Plaintiffs, ) ) v. ) ) WESTERN RECREATIONAL VEHICLES,) INC., a foreign corporation, ) ) Defendant. ) )

No.

CV-07-1418-HU

OPINION & ORDER

under the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301 - 2312 (MMWA). Both parties have consented to entry of final judgment by a 1 - OPINION & ORDER

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Magistrate Judge in accordance with Federal Rule of Civil Procedure 73 and 28 U.S.C. § 636(c). I deny the motion. BACKGROUND The background is fully set forth in my December 12, 2008 Opinion & Order. summary judgment There, I denied plaintiffs' initial motion for because, although the motion was unopposed, Plaintiffs move for summary judgment.

plaintiffs had failed to establish that they were entitled to judgment as a matter of law on the summary judgment record they had created. I allowed plaintiffs to file a supplemental motion1 addressing three deficiencies: (1) evidence showing that defendant Western

Recreational Vehicle in Delaware ("WRV-Delaware") had assumed the obligations of plaintiffs' warranty from Western Recreational

Vehicle in Washington ("WRV-Washington") in a December 2006 Asset Purchase Agreement between WRV-Delaware and WRV-Washington; (2) citation to appropriate state law establishing that plaintiffs are entitled to the remedies they seek; and (3) documentation and more detailed explanation of the amounts of damages claimed by

plaintiffs.

I address these areas in turn.

I rely on the summary judgment standards and law regarding the MMWA recited in the December 12, 2008 Opinion. DISCUSSION I. Asset Purchase Agreement As seen from reviewing the December 12, 2008 Opinion and

Although instructed to file a supplemental motion, plaintiffs filed a supplemental memorandum (dkt #33), which I construe as a motion. 2 - OPINION & ORDER

1

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Order, under the Asset Purchase Agreement, WRV-Delaware assumed liability for the warranty at issue in this case if the liability arises from product defects to products sold on or prior to the closing date of the Asset Purchase Agreement, unless the liability was the subject of a "'claim, action, suit, charge, complaint, material grievance, hearing, investigation or other proceeding (including any arbitration proceedings) . . . and is threatened or pending against the Shareholders or the Company as of the Closing date[.]'" Dec. 12, 2008 Op. at p. 12 (quoting Exh. 1 to Baxter Finally, even if the liability was subject to

Declr. at Art. VII).

such a claim, action, complaint, etc., the liability was still assumed by WRV-Delaware if it was set forth on Schedule 4.10 of the Asset Purchase Agreement. As stated in the Id. 12, 2008 Opinion, the record

December

establishes that the fifth-wheel trailer was sold before the closing date of the agreement. My review of the record also shows

that given the broad recitation in the agreement of words such as "claim, action, suit, charge, complaint," and the like, plaintiffs' repeated complaints, requests to obtain a refund, contact of the Oregon Attorney General for assistance, and threats to "follow other avenues," including contacting a lawyer, are actions

qualifying under the agreement as being an excluded liability. Thus, to be an assumed liability, the liability under the warranty at issue here must have been listed on Schedule 4.10. In the supplemental materials, plaintiffs state that defendant failed to produce Schedule 4.10 in response to plaintiffs' request. I addressed the issue of defendant's production of documents regarding WRV-Washington's purchase by WRV-Delaware in a May 27, 3 - OPINION & ORDER

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2008 hearing.

At that time, I ordered defendant to produce to

plaintiff's counsel "a copy of the entire contract for the sale of Western Recreational Vehicles to its current owners from its predecessor," no later than June 3, 2008. Dkt #20.

Although plaintiffs had not, before the May 27, 2008 hearing, filed a motion to compel production of the sale documents, I construed their production request at the May 27, 2008 hearing as a motion to compel under Federal Rule of Civil Procedure

37(a)(3)(B)(iv).

Under Rule 37(b)(2)(A), defendant's failure to

obey my May 27, 2008 Order that "a copy of the entire contract for the sale" be produced, allows the court to find as a sanction either (1) that plaintiffs have established that the liability of the warranty at issue was assumed by virtue of its presence on Schedule 4.10, or (2) that defendant is prohibited from denying that the warranty liability is not an assumed liability. Civ. P. 37(b)(2)(A)(I), (ii). Fed. R.

Accordingly, I conclude that WRV-

Delaware assumed the liability of the warranty at issue under the Asset Purchase Agreement with WRV-Washington. II. State Law Remedies As explained in the December 12, 2008 Opinion, this was a limited warranty, not a full warranty under the MMWA. 2008 Op. at pp. 9, 15. Dec. 12,

As such, plaintiffs' remedies are provided Id. at p. 15; see also Clemens v.

under state law, not the MMWA.

DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) (when no allegation that manufacturer otherwise failed to comply with MMWA, federal MMWA warranty claims hinged on state warranty law) (citing Schimmer v. Jaguar Cars, Inc., 384 F.3d 402, 405 (7th Cir. 2004) (MMWA allows consumers to enforce written warranties in federal 4 - OPINION & ORDER

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court, borrowing state law causes of action)), DeShazer v. National RV Holdings, Inc., 391 F. Supp. 2d 791, 794 (D. Ariz. 2005) ("while MMWA creates additional requirements for consumer protection

warranties and creates a private cause of action for breach of a warranty, state warranty law lies at the bsae of all warranty claims under [the MMWA]") (internal quotation omitted). Plaintiffs, however, in their original summary judgment

motion, failed to cite to or discuss any Oregon law regarding remedies for breach of warranty. Id. at pp. 15-16. I ordered

plaintiffs to address the issue in the supplemental motion. In the supplemental materials, plaintiffs cite to Oregon Revised Statutes §§ (O.R.S.) 72.8010 - 72.8200, governing the sale of consumer goods. I agree with plaintiff that the fifth-wheel O.R.S. 72.8010(1) (citing O.R.S.

trailer is a consumer good. 79.0102). Plaintiffs then cite to

O.R.S.

72.8130,

which

provides

remedies for a manufacturer's breach of express warranty when the manufacturer does not provide a service or repair facility within the state. The record in the case demonstrates that defendant's

service and repair facility was in the State of Washington, not Oregon. Thus, plaintiffs correctly cite to O.R.S. 72.8130.

However, this statute does not provide a remedy to plaintiffs, because it makes the manufacturer liable only to a retail seller who has incurred obligations in giving effect to the express warranty. O.R.S. 72.8130. There is nothing in O.R.S. 72.8130

which gives the buyer of the consumer good a remedy directly as to the manufacturer. O.R.S. 72.8130 should be read in conjunction with O.R.S. 5 - OPINION & ORDER

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72.8110, which states that if the manufacturer expressly warranting a good does not provide service and repair facilities within the state, the buyer may return the good to the retail seller for replacement or for service and repair in conformance with the express terms of the warranty. O.R.S. 72.8110(1). If the retail

seller does not effect sufficient service or repair, and does not replace the defective good, the retail seller shall reimburse the buyer in an amount equal to the purchase price paid, less a reasonable charge for beneficial use by the buyer. together, breaches the an two statutes suggest on a that when a Id. Read

manufacturer and the

express

warranty

consumer

good,

manufacturer does not maintain an in-state service and repair facility, the buyer's remedy is against the retailer under O.R.S. 72.8110, and the retailer may then pursue its remedies as to the manufacturer under O.R.S. 72.8130. While O.R.S. 72.8190 makes clear that the remedies under the statutes governing the sale of consumer goods are cumulative to any other remedy provided by O.R.S. Chapter 72, plaintiffs fail to identify any other statute under which they may obtain remedies for the breach of an express warranty directly from the manufacturer as opposed to the seller of the good. See, e.g., O.R.S. 72.7140

(governing a buyer's remedies for seller's breach); O.R.S. 72.7150 (governing buyer's incidental and consequential damages for

seller's breach). A seller is defined as a person who sells or contracts to sell goods. O.R.S. 72.1030(1)(e). "A 'sale' consists in the passing of title from the seller to the buyer for a price." O.R.S.

72.1060(1).

Under these definitions, the retail seller of the

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fifth-wheel trailer, Highway Trailer Sales in Salem, is, on the present record, the seller and thus, the Oregon commercial code remedy for the buyer of nonconforming goods is unavailable to plaintiffs in this case where they have sued only the manufacturer. E.g., Clark v. Ford Motor Co., 46 Or. App. 521, 526-27, 612 P.2d 316, 319 (1980) (plaintiff could not invoke O.R.S. 72.6080

governing revocation of acceptance by the buyer, because the statute allows buyer to revoke acceptance only as to his seller and under Oregon commercial code definition of seller as "a person who sells or contracts to sell goods," manufacturer of car did not sell or contract to sell to plaintiff). In sum, the remedies plaintiffs identify as being against the manufacturer do not apply under the specific wording of the Oregon statutes. Plaintiffs have failed to explain what Oregon-based remedy they are entitled to for the MMWA claim of the breach of the limited warranty. III. Evidence of Damages In their original motion, plaintiffs sought damages of

$88,623.68. 5.

Pltfs' Mem. at p. 4; Pltfs' Concise Stmt of Fact at ¶

These damages were itemized in Breniser's September 23, 2008 There, he provided the following list, but no other

Declaration. information:

$15,000 $1350 $1280.18 $69,976.82 $269.48 $618.20 $129 $88,623.68

-Trade -Down Payment -Monthly Payments -Payoff Balance -Tires -Storage -Dehumidifier -Total

Sept. 23, 2008 Breniser Declr. at ¶ 6. 27 In the December 12, 2008 Opinion, I noted that the record 28 7 - OPINION & ORDER

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failed to explain exactly what these damages were and why or how they were recoverable. Dec. 12, 2008 Op. at p. 16.

The supplemental materials filed by plaintiffs include a Declaration of Gale Thurber which attaches documentation in the form of letters, canceled checks, and receipts, to support the actual damages claimed. Exhibit 2 is a copy of part of the initial

Retail Installment Contract showing plaintiffs as the buyer and Highway Trailer Sales as the creditor/seller, in the purchase of the fifth-wheel by plaintiffs. Exh. 2 to Thurber Declr. It is

dated August 26, 2005, and shows the original cash sale price of $85,333.69. Id. It also reflects a cash down-payment of $1,350 Id.

and a credit of $15,000 for the trade-in of a 1996 camper.

Thus, the unpaid balance of the cash price at the time of sale was $68,983.69. Id.

Exhibit 2 supports plaintiffs' assertion that they put $1,350 cash down at the time of sale, and were credited $15,000 for the trade-in. The unpaid balance of $68,983.69 differs somewhat from The basis of

Breniser's stated $69,976.82 as the payoff balance. the approximate $993 discrepancy is unclear. Exhibit plaintiffs 1 is a copy of to an October 11,

2005

letter

to

from,

according

Thurber,

Citizen's

Automobile

Finance, Inc., informing them that they have paid off the loan for the fifth-wheel trailer in full. Exh. 1 to Thurber's Declr. The

exhibit also includes a copy of the check signed by Thurber to Citizen's Bank, dated September 30, 2005, for $71,135.35. Id.

Thurber states that prior to paying off the loan, they made two payments of $640.09, for a total of $1,280.18. ¶ 2. 8 - OPINION & ORDER Thurber Declr. at

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Thurber's statement in her declaration supports the assertion that plaintiffs paid $1,280.18 in monthly payments before paying off the loan. It is unclear how the payoff letter and check in

Exhibit 1 relate to an item of claimed damages. Exhibit 3 is a November 29, 2006 receipt from Lowe's for $129 for dehumidifier bags that plaintiffs contend they continually needed to absorb moisture in the fifth-wheel. Id. at ¶ 3; Exh. 3

to Thurber Declr. This supports the claim for $129 in dehumidifier expenses. Exhibit 4 is an October 6, 2006 receipt for $269.48 from Exh. 4 to Thurber Declr. Exhibit 4 supports

Les Schwab for tires.

the claim for the amount spent on tires. Thurber also states that plaintiffs incurred $618.20 in

storage costs.

Thurber Declr. at ¶ 6.

This supports the amount

claimed for storage. At this point, although the amounts of these damages are, for the most part, adequately supported by the record, plaintiffs are not entitled to them for the reason explained above they have

failed to cite to an Oregon remedy allowing them to recover from the manufacturer under the facts of this case. that even if plaintiffs were successful in I note, however, showing their

entitlement to a remedy under O.R.S. 72.8110 (as to the retailer when the manufacturer does not maintain an in-state service and repair facility), or O.R.S. 72.8100 (if the manufacturer maintains a service and repair facility within the state), the remedy is the service or repair of the good in compliance with the warranty, replacement of the good, or the reimbursement to the buyer of the purchase price less a reasonable charge for beneficial use by the buyer. Additionally, in the event of the replacement of the good

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or refunding of the purchase price, the buyer must return the defective good to the warrantor. Notably, these statutes do not provide for consequential damages such as storage fees and the dehumidifier. And, inasmuch

as the manufacturer is not the seller as explained above, O.R.S. 72.7150 does not apply as to the manufacturer. Additionally, there is no evidence in the record of the value of the beneficial use to plaintiffs, if any. Thus, while plaintiffs have submitted

documentation of the monetary amounts claimed, they still fail to show that they are entitled to the damages sought. IV. Procedural Posture Currently, this case is set for a three-day jury trial

beginning on March 17, 2009.

A pretrial conference is set for

March 9, 2009, with a pretrial order due on February 9, 2009. Plaintiffs should proceed with the same exhibits they have submitted at summary judgment, and with the supplemental materials they filed, and prepare witness statements based on the

declarations they have already submitted.

If, at the pretrial

conference, plaintiffs are unable to articulate a viable legal theory entitling them to judgment as a matter of law on the facts established, the Court will discuss with plaintiffs why a judgment dismissing the case should not be entered. /// /// /// /// /// /// 10 - OPINION & ORDER

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CONCLUSION Plaintiffs' supplemental motion for summary judgment (#33), is denied. IT IS SO ORDERED. Dated this 14th day of January , 2009.

/s/ Dennis James Hubel Dennis James Hubel United States Magistrate Judge