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Iwoi, LLC v. Monaco Coach Corp.

October 9, 2008

IWOI, LLC, PLAINTIFF,
v.
MONACO COACH CORP., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

Defendants Monaco Coach Corporation and its two unincorporated divisions, Beaver Motor Coaches and Roadmaster Chassis (collectively referred to as "Monaco"), move to dismiss [51] Counts I, II, IV, V, and VI of Plaintiff's second amended complaint for failure to state a claim under Rule 12(b)(6). Defendant Barrington Motor Sales and Services, Inc. ("BMS") moves to dismiss [54] Counts III, IV, V, and VI of Plaintiff's second amended complaint for failure to state a claim. For the following reasons, the Court grants in part and denies in part Monaco's motion to dismiss [51] and denies BMS's motion to dismiss [54].

I. Background*fn1

On June 21, 2006, Plaintiff IWOI, LLC--a Montana limited liability company formed by Robert Woischke--purchased a new 2006 Beaver Monterey motor home (built on a Roadmaster chassis) from Defendant BMS for $222,500.00. According to Plaintiff, it purchased the motor home (or "RV") from BMS for cash and intended to use it for recreational purposes. Monaco manufactured the motor home at its plant in Oregon and shipped it to BMS's lot in Illinois.

Plaintiff alleges that the RV left Monaco's facility and arrived at BMS in a severely defective condition and that immediately upon the RV's delivery, these various defects became apparent and have not been satisfactorily repaired despite numerous service attempts.

According to Plaintiff, at the time Defendants sold Plaintiff the RV, Defendants knew and actively concealed that the vehicle contained material manufacturing defects, including a twisted frame, which caused the vehicle to vibrate even at a low speed and lean heavily to its right side, resulting in the need for constant steering correction. Plaintiff alleges that Defendants knew that the material defects could not be repaired and that the repair warranty provided to Plaintiff could never be honored. According to the complaint, since the pre-existing material defects could never be repaired, both the vehicle's safety and its value have been substantially diminished, reducing the value of the recreational vehicle to less than half the sales price.

On June 22, 2006, after possessing the RV for one day, Woischke returned the RV to BMS for repair. BMS delivered the RV to an authorized Monaco repair facility in Indiana. On July 18, 2006, BMS notified Woischke that the RV's rear wheels had been realigned and that the RV was ready for pick-up. Woischke retrieved the RV the next day, but on July 20, he notified BMS that the repairs were unacceptable. On August 16, BMS once again delivered the RV to a Monaco repair facility in Indiana. On September 6, Woischke drove to the plant to test drive the RV and determined that the RV exhibited the same problems that it exhibited prior to August 16. On September 9, Plaintiff informed Monaco in writing that the RV had not been repaired to his satisfaction. Monaco again attempted to remedy the problems, and on October 20, BMS delivered the RV to Plaintiff.

On October 27, 2006, Woischke sent Roger Morgan (Monaco's Customer Service Coordinator Supervisor, with whom Woischke previously had been in communication) another letter detailing Woischke's view of the RV's defects and his dissatisfaction with the multiple attempts to repair the RV. On December 22, Woischke sent Monaco a notice of revocation of acceptance. On March 1, 2007, Woischke allowed representatives from Monaco and Beaver to inspect the RV at Plaintiff's storage facility. According to Plaintiff, the defects in the RV remain uncorrected, rendering it unusable. Plaintiff alleges that Defendants have refused or are unable to repair or compensate Plaintiff for the RV's defects and have refused to refund Plaintiff's purchase money in exchange for return of the RV.

Plaintiff alleges that BMS is an authorized Monaco dealer and franchisee and acted as Monaco's authorized agent in connection with the sale of the RV. According to Plaintiff, a franchise agreement exists between BMS and Monaco, giving Monaco control over BMS with respect to various aspects of its business.

At the time of purchase, Plaintiff was given various warranties. In relevant part, the Beaver and Roadmaster warranties state:

Warrantor's Limited Warranty covers defects in the manufacture of your motorhome and defects in the materials used to manufacture your motorhome. "Defect" means the failure of the motorhome and/or the materials used to assemble the motorhome to conform to Warrantor's design and manufacturing specifications and tolerances.

Warrantor will repair and/or replace, at its option, any covered defect if: (1) you notify Warrantor or one of its authorized servicing dealers of the defect within the warranty coverage period and within (5) days of discovering the defect; and (2) you deliver your Motorhome to Warrantor or Warrantor's authorized servicing dealer at your cost and expense * * *. * * * If either three or more unsuccessful repair attempts have been made to correct any covered defect that you believe substantially impairs the value, use or safety of your motorhome, have taken 30 or more days to complete, you must, to the extent permitted by law, notify Warrantor directly in writing of the failure to successfully repair the defect(s) so that Warrantor can become directly involved in exercising a final repair attempt for the purpose of performing a successful repair to the identified defect(s).

DE 50 at 21. On June 21, 2006, Woischke also executed an "Acknowledgement of Receipt of Motorized Warranty/Product Information" which stated:

I have completed the above inspection of this recreational vehicle and have taken the test drive at the time of purchase. I noted:

I received and read a copy of the Monaco Coach Corporation Limited Warranty and the Chassis Limited Warranty before I purchased the vehicle * * * I also understand that the selling dealer is not an agent for Monaco Coach Corporation but is an independent company with no authority to make any representation or promise for Monaco Coach Corporation. I acknowledge that the chassis, component parts and appliances that are separately covered by another manufacturer's warranty are excluded from the Monaco Coach Corporation Limited Warranty * * *.

DE 50, Ex. B3. IWOI did not note any problems or concerns on the Warranty Acknowledgment. Id.

IWOI purchased the RV under an Illinois Standard Buyers Order, which was signed by Woischke. Immediately above his signature is the following provision:

PURCHASER AGREES THAT THIS ORDER INCLUDES ALL OF THE TERMS AND CONDITIONS ON BOTH THE FRONT AND BACK SIDE HEREOF AND THAT THIS CONTRACT CANCELS AND SUPERCEDES ANY ...


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