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Long v. Monaco Coach Corp.

August 31, 2006


The opinion of the court was delivered by: Thomas W. Phillips United States District Judge



The matter before the Court involves an allegedly defective motorhome. The plaintiffs' claims are based upon causes of action created by the Magnuson-Moss Warranty Act ("MMWA") and the Tennessee Consumer Protection Act ("TCPA"). The defendant has filed a motion for partial summary judgment [Doc. 72] and a motion to dismiss [Doc. 91], while the plaintiffs have filed a motion to dismiss defendant's counterclaim [Doc. 96]. Parties have been given sufficient time to file responses and replies. For the reasons that follow, defendant's motion for partial summary judgment is GRANTED in part and DENIED in part. Defendant's motion to dismiss is GRANTED, and plaintiffs' motion to dismiss the defendant's counterclaim is DENIED.

I. Summary of the Facts

As the law requires, all disputed facts and inferences are resolved most favorably for the movant. Furthermore, the Court merely provides an abridged summary of facts for the purposes of this opinion.

On or about April 15, 2002, plaintiffs Randolph and Gloria Long ("the Longs") purchased the subject motorhome, a 2002 Monaco Windsor, from Buddy Gregg Motor Homes, Inc. in Knoxville, Tennessee. The cost of the motorhome, including registration charges, document fees, and sales tax, and excluding other collateral charges, such as bank and finance charges, totaled more than $233,600.00.

The motorhome was accompanied by a limited warranty from Monaco Coach Corporation ("Monaco"). According to the limited warranty, Monaco agreed to cover the motorhome for the first twelve months after the original retail purchase date or the first 24,000 miles of use, whichever occurred first. The warranty also states that any implied warranty, including any implied warranty of fitness for a particular purpose and any implied warranty of merchantability, are limited in duration to the term of the limited warranty and are limited in scope of coverage to those portions of the motorhome covered by the limited warranty. Further, the limited warranty recites: "Warrantor's Limited Warranty covers defects in the manufacture of your motorhome and defects in material used to manufacture your motorhome. Also see the section 'What the Warranty Does Not Cover' set out below*fn1 .... Warrantor will repair and/or replace, at its option, any covered defect ...." Additionally, the limited warranty disclaims any and all incidental and consequential damages resulting from any defect in the motorhome. The warranty states that the exclusion of consequential and incidental damages shall be deemed independent of, and shall survive, any failure of the essential purpose of any limited remedy. However, Monaco states in its warranty that in some states the exclusion is not permitted by law and therefore may not be applicable to a motorhome warranty.

The Longs began experiencing problems with the motorhome almost immediately after the purchase date. They allege that a variety of defects put the motorhome out of service, by reason of repair, for a total of 5 months (excluding 60 days awaiting repairs) in the first year of use and that the motorhome required nine separate service dates for repairs. In the complaint, the plaintiffs assert defects, conditions, and/or non-conformities in the motorhome, including but not limited to: defective engine, defective electrical system, defective windshield, defective water pump, defective interior trim, defective exterior trim, defective satellite, defective instrument panel, defective ceiling, defective air coupler, defective steering/suspension, defective bedroom slide out, defective air conditioning, defective kitchen slide, defective brake system, defective frame, defective kitchen faucet system, defective tail lights, defective fresh water tank, defective entry door, defective entertainment system, defective engine access panel, defective fuel leak, defective carpet, defective rear driver slide, defective block heater, defective leveling system, defective toilet, persistent recall, persistent vibration, persistent no crank condition, and any other complaints actually made, whether contained in the Warrantor's invoices or not.

Eventually, the limited warranty expired. Plaintiffs assert Monaco did not successfully repair the defects during the limited warranty period; that the motorhome continues to develop defects; and that they have essentially bought a "lemon."

On February 6, 2004, the Longs instituted this lawsuit against Monaco in the Northern District of Georgia, Atlanta division. Thereafter, the case was transferred to this federal court. The plaintiffs' second amended complaint filed with this Court alleges eight counts against the defendant: (1) written breach of warranty pursuant to 15 U.S.C. §2310; (2) breach of implied warranty of merchantability pursuant to 15 U.S.C. §2310(d); (3) breach of implied warranty of fitness for a particular purpose pursuant to 15 U.S.C. §2310(d); (4) breach of implied warranty of habitability and workmanship pursuant to 15 U.S.C. §2310(d); (5) violation of 16 C.F.R. §700.5 pursuant to 15 U.S.C. §2310(d); (6) violation of 16 C.F.R. §701.3 pursuant to 15 U.S.C. §2310(d); (7) violation of T.C.A. 47-18- 104 and T.C.A. § 47-18-109 regarding unfair deceptive acts or practices; and (8) T.C.A. 47-18-104 and T.C.A. § 47-18-109 (b) regarding injunctive relief.

In defendant's dispositive motions, it asserts several bases for dismissal of plaintiffs' claims for damages. The bases are as follows: (1) the remedy of revocation of acceptance under the MMWA is not available absent privity and/or with regard to limited warranties; (2) the diminution in value with regard to economic loss is not recoverable absent privity of the parties, and incidental and consequential damages can be and were successfully disclaimed in the limited warranty; (3) plaintiffs' claim for damages due to breach of implied warranty of merchantability, fitness for a particular purpose, and habitability are not available; (4) plaintiffs' claims for damages due to alleged defects arising after April 15, 2003 are not recoverable because they are outside the limited warranty period; (5) plaintiffs' claims for damages due to defects that were successfully repaired and accepted by the plaintiffs should be dismissed; and (6) plaintiffs have not proven the requisite malice or reckless conduct to sustain a claim for punitive damages. In the subsequent motion to dismiss, the defendant asserts that T.C.A. §47-18-1402, which allows extensions of limited warranties due to repairs, is not applicable to the instant matter because the statute specifically excludes "new or used motor vehicles."

In response, the plaintiffs argue that the MMWA creates a cause of action for consumers damaged by a warrantor's breach, abolishes any privity requirement for written (express) warranty, and wholly relies on state law in regards to the issue of implied warranties and privity, which in Tennessee is abrogated by statute. The plaintiffs assert that because the federal MMWA provides for limitless equitable remedies, revocation is available despite the absence of privity. Additionally and alternatively, the plaintiffs assert that diminished value is the standard measure of damages for breach of warranty. Plaintiffs argue that damage of diminished value is not considered an incidental and/or consequential damage. The plaintiffs further state that the defendant is obligated to make the motorhome defect free within a reasonable opportunity and that its failure to do so constitutes a failure of the essential purpose of the warranty/remedy, rendering invalid its disclaimer of incidental and consequential damages. Also, the plaintiffs argue that the defendant does not specifically identify any defects that have been purportedly cured and that even if such defects are somehow identified, the unreasonable repair history and plaintiffs' testimony are still evidence of breach of warranty. Additionally, plaintiffs assert that punitive damages may be awarded in that the defendant's business practices/decisions and advertisements*fn2 may be considered punitive behavior. Lastly, the plaintiffs state that the warranty should be extended under T.C.A. §47-18-1402 in that other sections of the Tennessee Code exclude a motorhome from the definition of "motor vehicle."

As to the dispositive motion filed by the plaintiffs, the plaintiffs argue that the defendant's counterclaim should be dismissed. Defendant filed a counterclaim pursuant to T.C.A. § 47-18-109(e) essentially asserting that plaintiffs' claims regarding alleged deceptive, unfair actions and/or practices in violation of TCPA, as well as plaintiffs' claims regarding injunctive relief against Monaco, are without legal merit and are brought for the purposes of harassment. Thus, Monaco asserts that it should be indemnified for all damages, including reasonable attorney fees and costs pursuant to T.C.A. § 47-18-109(e)(2). In plaintiffs' motion to dismiss, the Longs argue that if such assertions are pled, the averments should be in the form of a motion for sanctions, rather than a counterclaim. Additionally, although defendant's counterclaim concerns the plaintiffs' claim for alleged deceptive, unfair acts/practices and injunctive relief, the plaintiffs re-argue their assertions related to an extension of the limited warranty due to repairs pursuant to T.C.A. §47-18-1402 as stated in their response to defendant's dispositive motion. However, in plaintiffs' reply, plaintiffs state that Monaco's business practices and actions are deceptive and unfair, warranting claims under the TCPA. The plaintiffs assert that Monaco invoked undisclosed warranty disclaimers and a fraudulent warranty registration card that falsely alleged consent to those disclaimers. Plaintiffs also assert that the use of deceptive advertisements regarding the scope of Monaco's warranty coverage, as well as the deposition testimony of Monaco's representatives allegedly admitting deceptive practices in companion cases, warrant claims under the TCPA regarding deceptive practices by Monaco and injunctive relief.

II. Motion for Summary Judgment Standard

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment will be granted by a court only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. The burden is on the moving party to conclusively show that no genuine issue of material fact exists. A court must view the facts and all inferences to be drawn therefrom in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Morris v. Crete Carrier Corp., 105 F.3d 279, 280-81 (6th Cir.1997); 60 Ivy Street Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir.1987).

Once the moving party presents evidence sufficient to support a motion under Rule 56 of the Federal Rules of Civil Procedure, the nonmoving party is not entitled to a trial simply on the basis of allegations. The non-moving party is required to come forward with some significant probative evidence, which makes it necessary to resolve the factual dispute at trial. Celotex Corp. v. Catrett, 477 U.S. 317 (1986). The moving party is entitled to summary judgment if the non-moving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof. Celotex, 477 U.S. at 323; Collyer v. Darling, 98 F.3d 220 (6th Cir.1996).

III. Motion for Summary Judgment and Applicable Law

A. Revocation of Acceptance is not available under the ...

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