Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-01798/USCOURTS-casd-3_11-cv-01798-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:2301 Magnuson-Moss Warranty Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ELECTRA CRUISES, INC., a

corporation and LYNDA M.

GUINTHER, an individual,

Plaintiff,

v.

CAMPING WORLD RV SALES, a

business entity, form unknown, et al.,

Defendants.

 

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Case No.11CV1798 AJB (DHB)

ORDER GRANTING IN PART AND

DENYING IN PART

DEFENDANT’S MOTION FOR

PARTIAL SUMMARY JUDGMENT 

Presently before the Court is Defendant Stier’s RV Centers, LLC dba Camping World

RV Sales (“Stier’s” ) and Defendant Freedom Roads LLC’s (collectively “Defendants”)

Motion for Summary Judgment orin the alternative Motion for Summary Adjudication. For

the reasons stated, the Court GRANTS in part and DENIES in part Defendant’s Motion for

Partial Summary Judgment. 

I. BACKGROUND

Plaintiffs commenced this action in the Superior Court of California, County of San

Diego, on August 11, 2011. Plaintiffs alleged violations of the Song-Beverly Consumer

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WarrantyAct, Magnuson-Moss WarrantyAct(“Magnuson-Moss Act”), and negligent repair

against Defendants and other parties who are no longer a part of this action. Defendants

removed the action pursuant to 28 U.S.C. § 1441(b). (Doc. No. 1.) Plaintiffs filed an

Amended Complaint (“FAC”) on June 12, 2012. (Doc. No. 38.) The FAC contains only the

Magnuson-Moss Act and negligent repair causes of action. 

Plaintiffs are Electra Cruises Inc. (“Electra”), a corporation that operates a fleet of

yachts for weddings and corporate events, and Lynda Guinther, the Chief Financial Officer

of Electra in her individual capacity. (Doc. No. 85 at 2.) Plaintiffs purchased the 2009

American Coach, American Heritage motor home at a recreational show in Pomona

California in October of 2008. The motor home was manufactured by American Coach, a

division of Fleetwood EnterprisesInc (“Fleetwood”). (Id. at 2-3.) Fleetwood has since filed

for bankruptcy and has liquidated. (Id. at 3.) Defendant Stier’s operates a recreational

vehicle dealership and was on site at the Pomona RV show to assist Fleetwood in sales

transactions should attendees desire to buy a motor home. (Id. at 4.)

Plaintiffs wished to purchase the motor home for business purposes, specifically as

a groom’s dressing room and wedding rental, as well as personal recreational activities. 

(Doc. No. 91 at 2). Plaintiffs were unable to identify a suitable motor home onsite, but did

identify a floor plan to their liking from an American Heritage brochure. (Id.) Specifically,

Plaintiffs desired the galley pull out feature. (Doc. No. 85 at 5.) Fleetwood representatives

located a unit at a Georgia dealership that purportedly had a galley pull out. (Id.) Relying

upon the Fleetwood representative, Plaintiffs negotiated a purchase price of $603,888.63

and made a down payment for the motor home payable to Stier’s. (Id. at 2, 5-6; Doc. No.

91 at 3.) However, when the subject motor home was delivered to a San Marcos, California

facility, the parties realized that motor home did not have the desired galley pull out. (Id. at

6-7.) Morever, according to Plaintiffs FAC the motor home was delivered with material

defects such as blown fuses, house battery not charging, defective slide-outs, defective

generator, and so forth. (Id. at 3.) Plaintiffs expressed the desire to continue with the

transaction but to have the motor home redesigned and reconfigured to meet their

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expectations. (Id. at 7.) Representatives from Fleetwood informed the parties that they

would make the necessary changes and Stier’s confirmed this promise in writing. (Id. at 7-

8.) The price settled upon for the renovations was $11,000. (Id.) Plaintiffs also requested

additional work to be completed on the motor home. (Id. at 9). Plaintiffs delivered the

motor home in December 2009 to Fleetwood for transport to the Fleetwood factory in

Indiana. (Id. at 8.) Fleetwood completed the work in two months, however it appears that

the results were lessthan satisfactory. Plaintiffs alleged a number of material defects as well

as cosmetic problems associated with the reconfiguration. (Doc. No. 38 at 3-4.) The parties

were unable to privately negotiate an acceptable arrangement, and thus the instant lawsuit. 

Numerous cross-claims were filed then dismissed. On February 20, 2013 Defendants

filed the instant Motion for Summary Judgment seeking partial summary judgment on a

number of issues. (Doc. No. 66) Plaintiffs filed their Response on March 15, 2013. (Doc.

No. 91.) 

II. DISCUSSION

A. Legal Standard

Summary judgment is appropriate if the “pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that there

is no genuine issue as to any material fact and that the moving party is entitled to judgment

as a matter of law.” Fed. R. Civ. P. 56(e) (West 2006). A dispute about a material fact is

genuine “if the evidence is such that a reasonable jury could return a verdict for the

nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505

(1986). In considering the motion, the court must examine all the evidence in the light most

favorable to the non-moving party and “all justifiable inferences are to be drawn in his

favor.” Id. at 255, 267. 

When the moving party does not bear the burden of proof, summary judgment is

warranted by demonstration of an absence of facts to support the non-moving party's case.”

Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548 (1986). Summary judgment

must be granted if the party responding to the motion fails “to make a sufficient showing on

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an essential element of her case with respect to which she has the burden of proof.” Id. at

323. 

B. Issues for Summary Judgment

1. Stier’s Alleged Breach of Any Implied Warranty of Merchantability and/or Fitness

and Subsequently the Magnuson-Moss Act.

The Magnuson Moss Act provides that a consumer may assert a civil cause of action

to enforce the terms of an implied or express warranty. 15 U.S.C. §§ 2301-2312, et seq. 

Section 2310(d) provides that any “consumer who is damaged by the failure of a supplier,

warrantor, or service contractor to comply with any obligation under this chapter, or under

a written warranty, implied warranty, or service contract” may sue for damages and other

legal and equitable relief. Breach of an obligation imposed by state law will support a claim

under the Magnuson-Moss Act. In re Sony Grand Wega, 758 F. Supp. 2d 1077, 1101 (S.D.

Cal. 2010). Defendants contend that Plaintiffs’ Magnuson Moss Act claim must fail as a

matter of law as they were: 1) not obligated not given an opportunity to cure; and 2) any

duty owed to Plaintiffs to redesign was discharged by novation. (Doc. No. 66 at 10-15.)

a. Steier’s was not Obligated nor were they Afforded an Opportunity to Cure. 

First, Defendants argue Plaintiff’s Magnuson Moss Act claimmust fail as Defendants

are not obligated to cure nor were they afforded an opportunity to cure as required by the

Act:

“No action ... may be brought under subsection (d) of this section for failure to

comply with any obligation under any written or implied warranty or service

contract ... unless the person obligated under the warranty or service contract

is afforded a reasonable opportunity to cure such failure to comply. 

15 U.S.C. 2310(e).

Defendants contend that Fleetwood promised to redesign and reconfigure the motor

home and that Stier’s merely “memorialized this promise for Plaintiffs in writing. (Doc. No.

66 at 11). In support, Defendants attach the Work Authorization Form prepared by Stiers

confirming Fleetwood’s promise in writing. (Id. Ex. 12) However, in their Response,

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Plaintiffs repeatedly allege Stier’s asthe entity that initiallymade the promise to reconfigure

the floor plan. (See Doc. No. 91 at 3-4.) Plaintiffs further allege that all negotiations

regarding the sale of the motor home as well as the reconfiguration were with Stier’s. (Id.

at 13.) A review of the Work Authorization Form attached as Exhibit 12 does not indicate

that Fleetwood promised to do any redesign or reconfiguration. Indeed, Fleetwood is not

even mentioned on the Form. The Form bears Camping World RV Sales logo and indicates

the work to be done wasto “install galley pull out” and “replace galley sink.” (Doc. No. 66,

Ex. 12.) 

Defendants next argue that Plaintiffs failed to give them an opportunity to cure the

defect. (Doc. No. 66 at 11.) Notice and an opportunity to cure are required to state a claim

under the Magnuson Moss Act. A plaintiff must provide a defendant with an opportunity

to cure the alleged breach and the defendant itself must have refused directly to provide a

cure. Tietsworth v. Sears, 720 F. Supp. 2d 1123, 1143 (N.D. Cal. 2010) (citation omitted). 

As expected, Plaintiffs beg to differ. First, Plaintiffs contend that they did indeed give

Stier’s an opportunity to install the desired galley pull once the parties realized the motor

home purchased and delivered lacked the desired feature. According to Plaintiffs, Stier’s

initially took responsibility and claimed it was going to order the necessary parts and

contract out the labor. (Doc. No. 91 at 4.) However, Stier’s later recanted as it did not have

the capability to make the necessary modifications and Fleetwood stepped in and agreed to

modify the motor home. (Id.) Mr. Randall Goodman, president of Electra, testified that a

sales representative from Stier’s, Mr. Rocky Eldridge, assured him that “we’re going to

change the motor home.” (Doc. No. 91, Ex. 8, Goodman Dep. at 16.) 

Accordingly, a material issue of genuine fact exists as to whether Defendants are

obligated to cure and whether Plaintiffs provided Defendants a reasonable opportunity to

cure exists. The Court cannot grant summary judgment on this basis. 

b. Stier’s Has No Duty to Plaintiffs by Novation

A novation is a substitution by agreement of a new obligation for an existing one with

the intent to extinguish the latter. Davies Machinery Co. v. Pine Mountain Club, Inc., 39

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Cal. App. 3d 18, 24, 113 Cal. Rptr.784 (Cal. Ct. App. 1974). Whether or not a novation

exists depends primarily upon the individual facts of each case. Olympic Finance Co. v.

Thyret, 337 F.2d 62, 66 (9th Cir. 1964). To constitute novation, there must be some

evidence of an agreement or contract to substitute and the intent of the parties is a

controlling factor. See Aetna Cas. & Sur. Co. of Hartford, Conn. v. Bettens, 111 F. Supp.

111, 113 (S.D. Cal. 1953).

The Court cannot as a matter of law determine that a valid novation occurs. There is

insufficient evidence in the record to indicate the intent of the original parties to create a

new agreement. Plaintiffs’ action of delivering the motor home to Fleetwood does not

suffice to show a new agreement. Furthermore, Defendants’ arguments are contradictory. 

On the one hand Stier’s claims it was never under a duty to redesign or reconfigure the

motor home. (Doc. No. 66 at 11.) Then on the other hand, by claiming a discharge of duty

by novation, Stier’s implies they indeed owed some duty to Plaintiffs to redesign or

reconfigure the motor home. (Id. at 13.) Thus, by Defendants’ own admissions, a genuine

issue of material fact exists precluding the Court from granting summary judgment on this

basis. 

c. Motor Home has been Modified 

Finally, Defendants argue Plaintiffs’ Magnuson Moss claim fails as a matter of law

as the motor home was “in a different condition from when Plaintiffs purchased ... [and no]

warranty from Stier’s attached to any work that Fleetwood performed ...” (Id. at 15.) In their

response, Plaintiffs do not dispute that Stier’s does not owe a warranty for work by a third

party. Instead, Plaintiffs repeatedly contend that Stier’s breached an implied warranty by

supplying a motor home that required subsequent modifications to meet Plaintiffs’

expectations. (Doc. No. 91 at 18.) 

It would then appear that the parties agree Stier’s warranty does not cover work

performed by Fleetwood. However, the a genuine issue of contention still remains, whether

or not Stier’s breached an implied warranty at the time of sale for supplying a product that

did not meet Plaintiffs’ expectation. 

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D. Implied Warranties

“Merchantability” generally has been construed as a requirement that a product

conforms to its ordinary and intended use. Stearns v. Select Comfort Retail Corp., No. 08-

2746 JF, 2009 WL 1635941, at *7-8 (citing Am. Suzuki Motor Corp. V. Super. Ct. 37 Cal.

App. 4th 1291, 1295, 44 Cal. Rptr. 2d 526 (Cal. Ct. App. 1995). Under California law, a

breach of implied warranty of merchantability means the product does not possess even the

most basic degree of fitness for ordinary use. Cal. Comm. Code § 2314(2). This implied

warranty does not “impose a general requirement that goods precisely fulfill the expectation

of the buyer. Instead, it provides for a minimum level of quality. Stearns, 2009 WL

1635941, at *8. However, this does not mean the alleged defect must preclude any use of

the product itself. See Isip v. Mercedes-Benz USA, LLC, 155 Cal.App.4th 19, 26, 65 Cal.

Rptr. 3d 685 (2007). 

In addition to an implied warranty of merchantability, the California Commercial

Code imposes an implied warranty of fitness for a particular purpose. “Where the seller at

the time of contracting has reason to know any particular purpose for which the goods are

required and that they buyer is relying on the seller’s skill or judgment to select or furnish

suitable goods, there is. . . an implied warranty that the goods shall be fit for such purpose.”

Cal. Comm. Code § 2315. A particular purposes “envisages a specific use by the buyer

which is peculiar to the nature of his business.” Mills v. Forestex Co., 108 Cal.App.4th 625,

635 n.4, 134 Cal.Rptr.2d 273 (2003). 

Defendants argue no evidence of a defect existed in the motor home at the time ofsale

that renders it unfit for ordinary use. (Doc. No. 66 at 17.) Plaintiffs, on the other hand,

contend that there were “numerous defects that were present at the time of sale and that

arose during the first year of ownership.” (Doc. No 91 at 15.) The implied warranty of

merchantability only requiresthat the good is “substantially free of defects.” Mexia v. Rinker

Boat Co., Inc., 174 Cal.App.4th 1297, 1303 (Cal. Ct. App. 2009). The analysis is

complicated by the fact that Plaintiffs’ motor home was repaired by third party, Fleetwood,

after the sale which may have resulted in new defects and/or exacerbated alleged existing

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defects. There are inconsistencies in the parties’ briefs as to when the Fleetwood Indiana

repairs occurred. The UMF states that repairs started in December 2009. (Doc. No. 85.) 

Some portions of Plaintiffs’ Response state the repairs started in late November and

December 2009 while other portions imply the repairs started in December 2008. (See Doc.

No. 91 at 5-7.) The exact date of the Fleetwood repairs, which parties contend created or

exacerbated defects, is important for the Court to determine exactly what alleged defects

existed before to implicate Stier’s breach of any implied warranty. The parties’ typos and

inconsistencies have made it difficultfor the Court to analyze thisissue. Plaintiffs state that 1

during their first year of ownership, seventeen (17) repair attempts were made to fix an

estimated fifty (50) alleged defects. (Doc. No. 91 at 15-16.) However, because of Plaintiffs’

own negligence in preparing their briefs, the Court could not determine from the pleadings

whether these repair attempts are for defects that existed prior to or after the Fleetwood

Indiana repair and renovation to install Plaintiffs’ galley pull. Based upon a review of the

record and work orders from Fleetwood, the Court determined the repairs occurred from

December 2008 to January 2009. (Def. Mot. Ex. 19-20.)

Plaintiffs allege the defects included: 1) the house batteries not charging; 2) a

defective rear awning; 3) malfunctioning grey and black water tank gauges; 4) outside light

failure ... (Doc. No. 91 at 4.) However, Stier’s failed to address most of the items Plaintiffs

cited to. (Id. at 5.) Based on the Fleetwood work order, there also appeared to be issues with

unsecured wires and minor cosmetic problems. (Def. Mot. Ex. 19.) While most of these

defects would not render the motor home unfit for intended use or unable to provide a

minimum level of quality, the Court does note the concern with the house batteries which

would severely hinder the use of the motor home. Stier’s contends that its technicians

replaced the transfer switch which resolved the house battery problems. (Doc. No. 66 at 17.) 

Plaintiffs argue the problem still exists and have proffered expert testimony that the

 The Court takes this opportunity to remind parties to proofread briefs submitted. 1

Defendants’ briefs were also full of spelling errors and inconsistencies, for example the

table of contents did not match the actual page numbers. Such simple mistakes detracts

from the substance of the briefs and wastes the Court’s time in trying to determine

exactly what the parties’ meant. (Doc. No. 66.) 

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charging problem still persists. (Doc. No. 91 at 5.) Moreover, there is also a dispute with

regards to how the Aqua Hot system was damaged, with experts on both sides arguing

different theories. As there are two opposing views on these problems, each supported by

expert opinion, the Court is precluded from granting summary judgment on whether Stier’s

breached an implied warranty of merchantability. 

Plaintiffs also allege Stier’s breached the implied warranty of fitness. According to

Plaintiffs, they communicated their intent to use the motor home for their business as a

groomsmen dressing room and rental. From the record, it is clear that the primary source

of Plaintiffs’ dissatisfaction was the lack of galley pull in the motor home purchased. 

Defendants argue that Plaintiffs’ inspection of the motor home precludes an implied

warranty except asto latent defects unrevealed by a reasonable examination. (Doc. No. 19). 

Because the existence of a galley pull isso obvious that means Plaintiffs waived the implied

warranty. 

The Court partly agrees with Defendants argument. The Court fails to see how the

lack of a galley pull would severely inhibit the motor home’s use as a groomsmen dressing

room. A groomsmen dressing room only needs privacy, adequate space, storage, and the

like. A galley pull, indeed an entire kitchen, would appear unnecessary to serve as a

changing space. However, there is a genuine issue of material fact asto whether the implied

warranty of fitness was breached with regards to Plaintiffs’ use of the motor home as a

wedding rental. Plaintiffs have alleged they represented that particular purpose to Stier’s

representatives and Plaintiffs have pled they relied upon Stier’s to locate a motor home that

would serve this commercial purpose. Thus, there is a genuine issue of material fact as to

whether the latent defects rendered the motor home unsuitable for rental purposes. 

Thus, the Court DENIES summary judgment on whether Stier’s breached and implied

warranties and subsequently the Magnuson Moss Act. 

2.Whether Subsequent Modification Bars Plaintiffs’ Claims

Defendants next seek summary judgment on whether a third party’s modification of

the motor home bars Plaintiffs from revoking acceptance and claiming for damages. 

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Furthermore, Defendants argues that Plaintiffs’ post revocation use of the motor home

nullifies and claim for damages. (Doc. No. 66 at 19-20). 

Under the California Commercial Code, revocation of acceptance must occur within

a reasonable time after the buyer discovers or should have discovered the ground for it and

before any substantial change in condition of the goods which is not caused by their own

defect. Cal. Comm. Code §2608(2). Plaintiffs attempted to revoke acceptance on March 29,

2011. (Def. Mot. Ex. 1.) Plaintiffs learned the motor home did not have the galley pull upon

inspection in October 2008. Based on Plaintiffs’ own pleadings, they discovered the

existence of material defects by November 2008 when Plaintiffs returned the motor home

to Stier’s for repair, including the house battery defect. (See Doc. No. 91 at 4.) After the

Fleetwood repairs, Plaintiffs again had to make several repairs and at least by April 2009,

discovered additional issues that allegedly severely limited their use of the motor home,

such as the major damage to the Aqua Hot system, water flooding, and so forth. (Doc. No.

8.) However, Plaintiffs waited almost two years before attempting to revoke and rescind. 

Instead, Plaintiffs attempted numerous subsequent repairs at different facilities and even

took the motor home on an 8,000 mile trip to Alaska after attempting to revoke. (Doc. No.

91 8-9; Def. Mot. Ex. 51.) 

Generally, the effect of a delay and the corresponding waiver of the right to rescind

is a question of fact. See Mobley v. Richfield Oil Corp., 53 Cal. App. 2d 406, 411, 128 P.2d

105 (Cal. Ct. App. 1942). However, a Court may rule as a matter of law on the issue when

the delay is so palpably unreasonable. Cf. Garetto v. Almaden Vineyards, 118 Cal.App.2d 

99, 102, 257 P.2d 477 (Cal. Ct. App. 1953). In the instant case, Plaintiffs notified Stier’s

of their intent to revoke and rescind a full two years after discovery of all the defects that

allegedly existed at the time of sale. Though Plaintiffs were in fact attempting to repair the

problems (first through Stier’s, then Fleetwood, then numerous other facilities), the fact

remains that Plaintiffs waited a full two years before notifying Stier’s of any attempt to

revoke and rescind. Moreover, the Plaintiffs’ action after attempting to revoke and rescind

is inconsistent with any intent to do so. The Court agrees with Defendants that the delay of

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two years was unreasonable and would find that a rational trier of fact could not disagree.

However, the Court cannot conclude as a matter of law that any subsequent post revocation

use or subsequent repairs by a third party completely cuts off Stier’s liability for the defects

Plaintiffs allege existed at the time of sale. 

Finally, although Defendants argue that the substantial modification made to the

motor home bars Plaintiffs’ claims for damages, they have failed to cite to any case law that

so establishes this rule. (Doc. No. 66 at 19.) Although Defendants cite to the California

Commercial Code, this only supports their contention that Plaintiffs’ have effectively

waived revocation by substantially changing the motor home’s condition. (Id.) The Court

agrees that Plaintiffs have waived their right to revoke and rescind based on the unreasonable delay in notifying Stier’s as well as their actions, inconsistent with the intent to revoke

or rescind. However, the Court cannot make the next inferential leap Stier’s argues for to

find that Plaintiffs have also effectively waived their right to claimfor damages arising from

alleged defects existing at the time of sale. 

Accordingly, the Court GRANTS summary judgment finding that Plaintiffs waived

revocation but DENIES granting summary judgment asto whether subsequent modification

completely cuts of Stier’s liability for alleged defects that existed prior to the repairs. 

3. Stier’s Alleged Negligent Repair

Lastly, Defendants seek summary judgment to declare Stier’s did not negligently

repair the motor home. Defendants argue that Stier’s only performed one repair on the

motor home, replacing the transfer switch, and that no problem exists with the transfer

switch today. (Doc. No. 66 at 22.) However, Plaintiffs argue that the initial problem was

the battery charging issue which Stier’s attempted to fix by repairing the transfer switch. 

Plaintiffs contend that Stier’s negligently diagnosed the repair asthe battery charge problem

still persists. As stated above, both parties have proffered differing expert testimony as to

the cause and remedy of the battery problem. Thus a genuine issue of material fact exists

as to whether or not Stier’s negligently repaired the motor home. Based on the record, the

Court is precluded from granting summary judgment on this issue. 

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CONCLUSION

The Court:

1. DENIES Defendants’ summary judgment motion on whether Stier’s breached any

implied warranties and subsequently the Magnuson Moss Warranty Act. 

2. DENIES Defendants’ summary judgment on whether a third party’s repairs cuts

off Stier’s liability as to alleged defects existing at the time of sale. 

3. GRANTS summary judgment on whether Plaintiffs may revoke acceptance and

rescind the transaction. 

4. DENIES summary judgment on whether Stier’s negligently repaired the motor

home. 

IT IS SO ORDERED.

DATED: October 25, 2013

Hon. Anthony J. Battaglia

U.S. District Judge

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