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Semitekol v. Monaco Coach Corp.

October 21, 2008

BILL AND MARIE SEMITEKOL, PLAINTIFFS,
v.
MONACO COACH CORPORATION A/K/A BEAVER MOTOR COACHES, DOMETIC CORPORATION, VEHICLE SYSTEMS, INC., NORCOLD, A SUBSIDIARY OF THETFORD CORPORATION, CATERPILLAR, INC., AND BARRINGTON MOTOR SALES, INC., DEFENDANTS.



The opinion of the court was delivered by: Judge Manning

MEMORANDUM OPINION AND ORDER

Bill and Marie Semitekol's desire for their dream motorhome turned sour when the 2006 Beaver Monterey 40 Laguna III motorhome they purchased in 2005 allegedly was beset by numerous defects and non-conformities. The plaintiffs contend that these problems substantially impaired their use and enjoyment of the motorhome. Accordingly, they have sued the various defendants, including the dealer and select manufacturers of certain motorhome parts, for breach of warranty and other causes of action under the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. (also, "the Act" or "MMWA")*fn1, as well as one state law claim for violation of the Illinois Consumer Fraud Act, 815 ILCS 505/2 et. seq.

Defendants Caterpillar, Inc., Dometic Corporation, Monaco Coach Corporation, and Barrington Motor Sales, Inc., have moved to dismiss certain of the MMWA claims against them.*fn2

For the following reasons, the motions are denied.

I. Facts

The court takes the following factual allegations from the Second Amended Complaint ("SAC").

Monaco

On or around July 14, 2005, the plaintiffs placed a special factory order with Monaco Coach Corporation ("Monaco") for a new motorhome. The plaintiffs placed the order through Barrington Motor Sales, Inc. ("BMS"), one of Monaco's authorized dealers. Monaco has given BMS authority to distribute certain materials to customers, including warranties, owners' manuals, and informational pamphlets. Indeed, BMS gave some of Monaco's pamphlets to the plaintiffs, which noted that the plaintiffs could contact either BMS or Monaco with any customer service concerns. Moreover, Monaco advertises its affiliation with BMS on its website and provides a link to the BMS sales website, which allows customers to email one of the BMS representatives from the Monaco website. Further, Monaco arranged for BMS to install certain items requested by the plaintiffs on their motorhome.

In response to the plaintiffs' July 2005 factory order, Monaco designed and produced a 2006 Beaver Monterey 40 Laguna III motorhome. Monaco provided the plaintiffs with the option of picking up the motorhome at either the dealership or Monaco's factory in Indiana.

Monaco provided a written warranty that covered the motorhome for a time period of either one year or twenty-four thousand miles. According to the plaintiffs, "[t]he warranty comprised an affirmation of fact, a promise to perform, and/or an undertaking by Monaco to correct any and all defects or non-conformities in the materials and/or workmanship of the Beaver [motorhome] through the performance of either repairs, replacements, refunds, or other corrective measures free of charge to the owner for the duration of the Warranty." At all relevant times, the written warranties provided by Monaco were marketed and sold by Monaco through various dealerships, including BMS. The plaintiffs claim that, "[b]ased on the position that Monaco put [BMS] in vis-á-vis its promotional materials such as Monaco's website, owner manuals, and brochures, the Plaintiffs reasonably believed that [BMS] was an agent of Monaco, authorized to act on Monaco's behalf."

On or about November 26, 2005, the plaintiffs purchased the motorhome from BMS for a total sale price of $514,663.37. The plaintiffs state that their purchase of the motorhome was accompanied with, induced by, and ultimately consummated due to the affirmations, promises, and/or undertakings specified in all of defendants' warranties, including Monaco's. The plaintiffs further allege that these warranties were the basis of the bargain of their contract. On or about November 26, 2005, the plaintiffs took possession of the motorhome.

Since their purchase, the plaintiffs have experienced numerous defects and non-conformities with the motorhome. According to the plaintiffs, these defects could not have been reasonably discovered by them prior to their acceptance of the motorhome. Among the problems were (1) a heating issue (the vehicle's water supply to the bathroom froze), (2) an air conditioning issue (the vehicle's air conditioning unit did not adequately cool the vehicle during normal summer weather), and (3) numerous electronic and finishing issues.

The plaintiffs allege that they "delivered the motorhome to Defendants' authorized service center for repairs on numerous occasions. . .," but do not specify which "Defendants" they are referencing. The "Defendants" (again unspecified) were unable to fix or determine the cause of the problems. The plaintiffs allege that "[o]f the 341 days the vehicle was owned by Plaintiffs, prior to revocation on November 8, 2006, the vehicle was in for repairs roughly for 180 of those 341 days." On October 5, 2006, the plaintiffs sent Monaco's agent, April Klein, a detailed written account of the problems and a request to fix the situation, but they did not receive a response.

According to the plaintiffs, Monaco's failure to repair the motorhome or pay for its repair has prevented them from utilizing it for its intended use. The defects and non-conformities remain uncorrected and uncured, and the plaintiffs allege that as a result, the value and safety of the motorhome has been substantially impaired.

BMS

As noted above, the plaintiffs purchased the motorhome from BMS. According to the plaintiffs, during their negotiations with BMS, BMS made several promises regarding the motorhome at issue. First, BMS promised to install "patriot style mirrors"*fn3 on the motorhome, though patriot style mirrors are typically installed by the manufacturer rather than the retailer. This promise was recorded on a July 14, 2005 order for the motorhome in the form of a handwritten note: "Dealer to supply Patriot Style mirrors at no charge if possible." Second, the "Buyers [sic] Order" of November 26, 2005 (a document separate from the July 14, 2005 order discussed immediately above) contains a handwritten note stating "Warranty Received" in the section entitled "Dealer Installed Options or Services."

The plaintiffs further allege that BMS orally promised to the plaintiffs that the motorhome was warranted by BMS. According to the plaintiffs, BMS' putative oral warranty was important to the plaintiffs' decision to purchase the motorhome and that they "would never have ordered the motorhome from Barrington Motor had anyone from Barrington Motor told them that they would not be receiving a warranty from Barrington Motor."

Despite these alleged oral and written promises, the Buyers Order of November 26, 2005, contains several disclaimers. The disclaimers purport to nullify any implied warranties-including the implied warranty of merchantability-and purport to limit consequential and incidental damages. The plaintiffs noticed the disclaimers during negotiations, but the plaintiffs "did not believe that the disclaimer clauses applied to their transaction given that it*fn4 was left blank on the Illinois Standard Buyers Order, and such a disclaimer would have been contrary to all representations that [BMS] made to Plaintiffs regarding the existence of the warranties." SAC at ¶ 232. In addition, the plaintiffs state that at no time prior to finalizing the purchase of the motorhome did anyone from BMS inform them that they were purchasing the motorhome "as is."

As noted above, after the purchase, the plaintiffs experienced numerous problems with the motorhome. The plaintiffs allege that they discussed the motorhome's problems with BMS on multiple occasions but BMS has not cured the problems with the motorhome.

Caterpillar and Dometic

The plaintiffs allege that Dometic designed, produced, and installed the air conditioning units in their motorhome and provided one or more written warranties covering the air conditioners. As to Caterpillar, the plaintiffs allege that it designed, created and produced the engine installed in the motorhome and provided one or more written warranties for the engine. According to the plaintiffs, these warranties from Caterpillar and Dometic (as well as those received from the other defendants) induced the plaintiffs to purchase the motorhome and provided a basis of the bargain. After purchasing the motorhome, the plaintiffs experienced problems with the motorhome, including the air conditioning units and the engine. According to the plaintiffs, they "delivered the motorhome to Defendants' [unspecified] authorized service centers for repair" but "Defendants were unable to establish that they had fixed the problem." SAC at ¶ 97. As to Caterpillar, the plaintiffs allege that it has failed to repair the motorhome or provide payment for such repair.

Notice of Revocation

On November 8, 2006*fn5, the plaintiffs (through counsel) sent BMS and defendants Monaco, Caterpillar, Vehicle Systems, and Norcold, among others, a notice stating that the plaintiffs were revoking their acceptance of the motorhome and that the plaintiffs would be filing a lawsuit prior to the expiration of Monaco's one-year warranty of the motorhome.

The defendants Caterpillar, Dometic, Monaco and BMS have each filed motions to dismiss, which the court addresses in turn.

II. Motion to Dismiss Standard

Rule 12(b)(6) permits a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. To state a claim, the complaint need only contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). As noted by the Seventh Circuit:

The Supreme Court has interpreted that language to impose two easy-to-clear hurdles. First, the complaint must describe the claim in sufficient detail to give the defendant "fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007)(quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)) (alteration in Bell Atlantic ). Second, its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a "speculative level"; if it does not, the plaintiff pleads itself out of court. Bell Atlantic, 127 S.Ct. at 1965, 1973 n.14. E.E.O.C. v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007). See also Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618-19 (7th Cir. 2007) (observing that Supreme Court in Bell Atlantic "retooled federal pleading standards" such that a complaint must now contain "enough facts to state a claim to relief that is plausible on its face.").

On a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the court accepts the allegations in the complaint as true, viewing all facts, as well as any inferences reasonably drawn therefrom, in the light most favorable to the plaintiff. See Marshall-Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic, 127 S.Ct. at 1964-65 (citations omitted).

III. Analysis

A. Caterpillar

Caterpillar has moved to dismiss Count VI of the SAC, the only count stated against it, which alleges a claim under the MMWA that Caterpillar breached its written warranty to the plaintiffs. The parties agree that Caterpillar provided a written limited warranty to the plaintiffs upon their purchase of the motorhome, which states that:

Caterpillar Inc. or any of its subsidiaries ("Caterpillar") warrants new C9 engines powering on-highway vehicles and operating within the geographic area serviced by authorized Caterpillar dealers located in USA, Canada or Mexico, to be free from defects in material and workmanship.

The warranty states that Caterpillar has several responsibilities "[i]f a defect in material or workmanship is found during the warranty period. . . ." including providing parts and reasonable and customary labor necessary to correct the defect. The warranty also contains a disclaimer of any other warranties including implied warranties of merchantability and fitness for a particular purpose as well as any responsibility for incidental or consequential damages. According to the SAC, the plaintiffs' "purchase of the motorhome was accompanied with, induced by, and ultimately consummated due to the affirmations, promises, and/or undertakings specified in all of Defendants' warranties, including Caterpillar's warranty." SAC at ¶ 185.

Caterpillar asserts that the claims against it should be dismissed because the plaintiffs have failed to specifically allege any defect in the material or workmanship of the engine, which is the only part that Caterpillar's warranty covers.*fn6 The court disagrees. The plaintiffs allege that they had a warranty from Caterpillar for, "among other things," the engine installed in the motorhome. SAC at ¶ 181. They furtherallege that "[t]he warranty comprised an affirmation of fact, a promise to perform, and/or an undertaking by Caterpillar to correct any and all defects or non-conformities in the materials and/or workmanship of the engine installed in the motorhome. . . ." Id. at ¶ 182. According to the plaintiffs, as soon as they took possession of the motorhome, numerous defects and non-conformities became apparent, including that the "check engine" light flashed when the plaintiffs engaged the cruise control function in the motorhome. The plaintiffs further allege that they sent a notice of revocation of acceptance to Caterpillar and since that time Caterpillar has refused to "take responsibility for any problems with the motorhome," "refuses to repair or pay for the repair of the defective parts," and the "defects and non-conformities remain uncorrected and uncured. . . ." Id. at ¶¶ 191, 195.

The court finds that these allegations are sufficient to state a plausible claim for relief for a breach of warranty under the MMWA and to put Caterpillar on notice of the claim against it.

Contrary to Caterpillar's assertion that the plaintiffs must plead the details of any defects with the engine, the plaintiffs have alleged that the engine had problems. The specifics regarding the alleged defects in the motorhome's engine can be obtained during discovery. Bell Atlantic, 127 S.Ct. at 1964-65 (a complaint "does not need detailed factual allegations") (citations omitted). Finally, Caterpillar asserts that their motion should be granted because nowhere do the plaintiffs allege that they complied with their obligations under the warranty, including timely notification to Caterpillar of a warrantable failure and delivery of the motorhome to an appropriate repair shop. Again, however, the plaintiffs need not plead all of the factual details or elements of their claim. Moreover, the SAC alleges that "Plaintiffs have met all obligations and preconditions as provided in the Warranty prior to filing the instant suit." Id. at ¶ 201. Accordingly, Caterpillar's motion to dismiss is denied.

B. Dometic

Dometic designed, manufactured, and warranted the two roof-top air conditioning units that were on top of the plaintiff's motorhome. The plaintiffs allege a breach of warranty claim against Dometic asserting that soon after taking delivery of the motorhome, they experienced problems with the air conditioning. The plaintiffs further allege that they delivered the motorhome to "the Defendants' authorized service centers ...


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