LESLEY WELLS, District Judge.
The present dispute revolves around a 2008 Four Winds Hurricane recreational vehicle ("the vehicle" or "the RV") purchased by the plaintiff Lynda Sirlouis, an Ohio resident. Defendant Four Winds International Corporation ("Four Winds"), a Delaware corporation, whose principal place of business is in Indiana, manufactured the RV's camper shell. Defendant Ford Motor Company, whose principal place of business is in Michigan, manufactured the chassis. In her five count amended complaint, Ms. Sirlouis alleges that the RV is a "lemon" under the Ohio Consumer Sales Practices Act (OCSPA); that the defendants breached express and implied warranties under the Ohio Uniform Commercial Code; that she is entitled to a remedy under Magnuson-Moss Warranty Act; that the defendants engaged in unfair, deceptive, and/or unconscionable acts in violation of the OCSPA; and that the defendants are liable for breaches of warranty sounding in tort. (Doc. 10, amended complaint).
The parties have completed discovery. The Court is now presented with cross motions for summary judgment. In its motion, defendant Four Winds argues that Michigan law — not Ohio law — should apply in this instance, and it addresses the plaintiff's claims as such. (Doc. 26). Ms. Sirlouis filed an opposition, in which she responds to Four Winds' choice of law arguments, but does not address Four Winds' substantive arguments under Michigan law. (Doc. 39). Four Winds filed a reply. (Doc. 40). Ford also filed a motion for summary judgment, though it presents its arguments under Ohio law. (Doc. 28). Ms. Sirlouis did not respond. Four Winds, however, filed a statement of position on Ford's motion. (Doc. 38). Finally, Ms. Sirlouis filed a motion for partial summary judgment on the Lemon law claim only. (Doc. 31). Both Four Winds and Ford oppose her motion. (Doc. 36; Doc. 37).
For the reasons that follow, Four Winds' motion will be granted in part and denied in part; Ms. Sirlouis's motion will be denied; and Ford's motion will be granted.
Ms. Sirlouis and her husband
They traveled to Michigan to see the RV first hand. After looking the unit over, they decided to buy it, and Ms. Sirlouis entered into a purchase agreement with General RV, which is not a party to this suit. Ms. Sirlouis agreed to a purchase price of $62,078.90, around what was listed on the internet. (Doc. 27-1, p. 11; Doc. 32-1, p. 8). It was agreed that a number of repairs and certain "fit and finish" issues would receive attention in Michigan, before Ms. Sirlouis took delivery of the RV. (Doc. 38-1, ¶4; Doc. 33-1, pp. 13-15; Doc. 32-1, pp. 9-11). These repairs took place between 15 July 2008 and 26 July 2008. (Doc. 38-1, ¶4(a)). The dealer instructed Ms. Sirlouis and her husband to take the RV to General RV's Canton, Ohio store, if they encountered any further problems that required repair. (Doc. 32-1, p. 12). Several days later, General RV's porter delivered the vehicle to the Sirlouises' home in Ohio. (Doc. 27-2 at 6).
Ford manufactured the chassis of the vehicle, upon which Four Winds, the final stage manufacturer, mounted the RV shell. (Doc. 28-2, p. 2; Doc. 27-4, ¶4). Ford furnished Ms. Sirlouis with limited warranty which required it "without charge, [to] repair, replace, or adjust all parts on [the] vehicle that malfunction or fail during normal use during the applicable coverage period due to a manufacturing defect in factory supplied materials or factory workmanship." (Doc. 28-5, p. 11; Doc. 28-3, ¶4). Four Winds also provided a limited warranty which provided that "in the event that a substantial defect in material or workmanship, attributable to Four Winds, is found to exist during the warranty period, Four Winds will repair and replace the defective material or workmanship, at its option, at no charge to the RV owner, in accordance with the terms, conditions and limitations of this Limited Warranty." (Doc. 27-1, p. 29).
Soon after delivery, Ms. Sirlouis had numerous complaints about the RV. Most notably, she reported that the vehicle vibrated severely when driven at highway speeds. (Doc. 33-1, p.19; Doc. 29-9, pp. 26-27). In the months that followed the defendants addressed the vibration and a number of other issues, which are described as follows, according to a repair timeline provided by Four Winds. From 23 August 2008 to 29 August 2008, the RV was in the shop for repairs to the microwave, dining room, hallway window frame, and the rear vision camera. (Doc. 38-1, ¶4b).
Ford and a third party contractor called Mor-Ryde then addressed Ms. Sirlouis's vibration related complaints. (Doc. 38-1, ¶3). On 18 September 2008, Mor-Ryde came to Ohio and worked on the drive train. From 22 September 2008 to 25 September 2008, an Ohio Ford dealership addressed the vibration by running out and road indexing the tires. (Doc. 38-1, ¶3). On 2 October 2008, Four Winds joined in the effort to solve the vibration problem, and it received the vehicle in Indiana. After determining the problem related to the vehicle chassis, Four Winds sent the RV to an Indiana Ford dealership, which subbed the job, again, to Mor-Ryde. Repairs were completed on 8 October 2008. (Doc. 38-1, ¶3).
Then, from 9 October 2008 to 10 October 2008, the backup monitor, the radio, and the cigarette outlet were repaired. (Doc. 38-1, ¶4c). Finally, from 29 November 2008 to 10 December 2008 the RV received repairs on the side window latches, the molding, the furnace, and paint. (Doc 38-1, ¶4d).
Ms. Sirlouis alleges a different timeline. In her brief supporting her motion for summary judgment, she states that she brought the vehicle to the Ford dealership in Ohio on 19 August 2008. (Doc. 31-1, p. 2). She states that after four days the dealership told her they could not repair the vehicle. (
In one of her depositions, Ms. Sirlouis stated that most of the repairs noted above had been accomplished to her satisfaction and on the first try. (Doc. 33-1, p. 23). She continues to maintain, however, that the vibration persists despite numerous attempts at repair. (Doc. 33-1, p. 19; Doc. 29-9, pp. 26-27). After initiating this suit, Ms. Sirlouis retained Mark Sargent, a forensic mechanic, to provide his expert opinion as to whether the RV was defective. Mr. Sargent drove and examined the vehicle, and he subsequently issued a report on 25 February 2011. (Doc. 25-1, p. 35). He concluded that "the driveline vibration will eventually result in multiple failures in the vehicle, including but not limited to failure of the transmission, differential and/or engine." (Doc. 25-1, p. 41).He further opined that "[the] vehicle is not fit for its intended purpose." (
Ford retained its own expert, John Herdzik. As explained in his report, Mr. Herdzik conducted a series of tests using a MTS 4100 vibration analyzer, a device that measures the degree of vibration present in the vehicle. (Doc. 28-7, p. 1). Mr. Herdzik noted a "slight vibration" at speeds between 50 and 75 miles per hour. (
Summary judgment is proper if "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(a). "[S]ummary judgment will not lie if the ... evidence is such that a reasonable jury could return a verdict for the non-moving party."
The standard of review for cross-motions of summary judgment is the same.
Ms. Sirlouis pleaded her claims under Ohio law, but Four Winds maintains that the Court should apply Michigan law instead. A federal court exercising diversity jurisdiction must apply the law of the forum state, including that state's choice of law principles.
The discussion must begin with the observation that Four Winds does not acknowledge two threshold questions that must be answered before embarking on a choice of law analysis in Ohio. First, Four Winds fails to argue that an actual conflict exists between Ohio and Michigan law with respect to Ms. Sirlouis's various warranty claims. Under Ohio law, the party seeking application of the law of another state must show, at the outset, the existence of a genuine conflict between Ohio law and the law of the foreign jurisdiction.
The burden is on Four Winds to show that an actual conflict exists. It has not attempted to meet this burden, and the Court rejects outright the contention that Michigan law should apply to the plaintiff's warranty claims. As to the Lemon Law claim, however, Four Winds notes the existence of a genuine conflict. Under the Michigan Lemon Law, recreational vehicles, such as the one at issue here, are statutorily exempt from coverage.
Four Winds also does not answer the second threshold question, which is how the Lemon Law claim should be classified. Under Ohio law, a given cause of action must be classified as sounding in contract or tort, because different considerations apply, depending upon the classification.
Four Winds' choice of law argument is as follows. It contends that under Ohio law, "the general rule is that the law of the place where the sale occurred controls a plaintiff's claims that they [sic] were economically injured by the sale of a defective product." (Doc. 26-1 at 5). Four Winds says that "this rule is departed from only where `another jurisdiction has a more significant relationship to the lawsuit.'" (
Restatement (Second) of Conflict of Law § 145.
Four Winds evaluates these contacts and states that the first two weigh in favor of Michigan law, because the plaintiff's injury and the conduct giving rise to it both occurred in Michigan. Four Winds sees the third contact as relatively insignificant because the parties' domiciles are spread out over several states. As to the fourth factor, Four Winds perceives no true center to the parties' relationship, because the vehicle chassis came from Michigan and the rest of the RV came from Indiana. Further, some repairs occurred in Indiana, and some in Ohio. Four Winds concludes that because the first two contacts favor Michigan and the last two favor no state in particular, Michigan law must apply. In support of this argument, Four Winds relies heavily on two Ohio district court cases,
Before considering whether there is merit to the contention that Michigan has the most significant relationship to this suit, the Court must express its disagreement with the legal framework Four Winds employs in addressing the issue. Ohio has adopted a "flexible case by case approach" to solving a conflict of laws problem, as set forth in the Restatement (Second) of Conflict of Laws.
Four Winds seems to believe that the determination whether another state has a more significant relationship to the suit depends solely on consideration of the Section 145 contacts. However, the Supreme Court of Ohio has stated that the more significant relationship test depends on consideration of both the contacts under Section 145 and the principles under Section 6.
Restatement (Second) of Conflict of Laws § 6.
Not only are these principles essential to the choice of law analysis, their application guides the determination as to which state has the most significant relationship to the lawsuit, with respect to the particular issue.
On the other hand, the Section 145 contacts, upon which Four Winds relies almost exclusively, are only to be "taken into account in applying the principles of § 6 to determine the law applicable to an issue." Restatement (Second) of Conflict of Laws § 145. In a tort case, those contacts are as follows:
Before applying the above described principles to this case, the Court addresses
Unlike
Four Winds' reliance on
At this point, it bears repeating that the choice of law question depends on which state, Michigan or Ohio, with respect to the Lemon Law claim, has the most significant relationship to the occurrence and the parties under the principles stated in Section 6.
First, the Court considers the respective policies underlying the Lemon Laws of Ohio and Michigan, along with the policy underlying the field of law generally.
The Court also considers the relative interests of Ohio and Michigan in determination of the issue. Restatement (Second) of Conflict of Laws § 6(c). Ohio certainly has an interest in providing Ms. Sirlouis, a resident of Ohio, with a statutory remedy for having allegedly purchased a lemon. That interest is not diminished by the fact that she purchased the vehicle in Michigan. The Ohio Lemon Law, unlike that of some states, contains no statutory requirement that a vehicle be purchased in state to invoke the law's protection.
Ohio has an additional interest because the parties' relationship was, at least in part, centered there. At the time of purchase, General RV instructed Ms. Sirlouis to take the vehicle to its Canton, Ohio dealership, if any warranty repairs were required. (Doc. 32-1, p. 12). The record indicates that a number of warranty repairs took place in Ohio. (Doc. 38-1, ¶3; Doc. 32-1, p. 13). These allegedly failed repairs form the basis of Ms. Sirlouis's Lemon Law claim. (
On the other hand, Four Winds does not explain what interest, if any, Michigan would have in providing it, a Delaware company operating principally out of Indiana, with a shield from Lemon Law liability. Assuming Michigan had an interest in protecting a foreign entity that was not a party to the sale, that interest would not outweigh Ohio's interest, since the Michigan Lemon Law was enacted for the purpose of protecting consumers and not for providing loopholes to manufacturers. And, to be clear, it is not that Four Winds seeks application of a law that works to its advantage, since, generally, this is always the case in a choice of law dispute; rather, it is that the law it invokes was not designed for this purpose. This factor weighs in favor of applying Ohio law.
Next, the Court considers the "protection of justified interests." Restatement (Second) of Conflict of Laws § 6(d). Under this factor, the comments explain that "it would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to conform to the requirements of another state." Restatement (Second) of Conflict of Laws § 6 cmt. g. In the present case, Four Winds presents no evidence that it justifiably expected to be free from Lemon Law liability under Michigan law. To the contrary, not only did the warranty issued to Ms. Sirlouis contain no choice of law provision, it states that "[t]his warranty gives you specific legal rights. You may have other rights that vary from state to state," which further belies any justifiable expectation that Michigan law, in particular, would apply. (Doc. 27-1, p. 32). This factor also weighs in favor of applying the Ohio Lemon Law.
Another relevant factor, "the needs of the interstate and international system" favors a choice of law rule that "further[s] harmonious relations between states and [ ] facilitates commercial intercourse between them." Restatement (Second) of the Conflict of Laws § 6(a) cmt. d. If it were determined that Michigan law applied in this instance, there is a risk that commercial intercourse between Ohio and Michigan would be impeded, based on the Court's precedent. An Ohio consumer might hesitate to purchase an RV in Michigan, knowing that she may not have a Lemon Law to protect her. On the other hand, there would be little risk of disrupting commercial intercourse if Ohio law applied, since the RV consumer would have no such disincentive in making an out of state purchase. Therefore, this factor weighs in favor of the application of Ohio law.
Finally, the Court considers the "ease in the determination and application of the law to be applied." Restatement (Second) of Conflict of Laws § 6(g). "Ideally, choice-of-law rules should be simple and easy to apply. This policy should not be overemphasized, since it is obviously of greater importance that choice-of-law rules lead to desirable results."
In light of the particular issue and the constellation of facts in this case, the Court concludes that the Section 6 factors weigh in favor of applying the Ohio Lemon Law. This conclusion would not be altered if the Court were to construe the Lemon Law claim as a contract issue for choice of law purposes. In a contract case, the Court considers
Restatement (Second) Conflicts § 188. Given the particular issue, none of these contacts would tip the scales in favor of Michigan law. The fact that Ms. Sirlouis entered a sales contract in Michigan does not diminish Ohio's interest in providing her with a Lemon Law remedy. Conversely, Michigan would have no greater interest in giving Four Winds the benefit of the RV exemption, especially seeing that Four Winds was not a party to the sale. Further, the record indicates that repairs were performed in Ohio and that the subject of the contract, the RV, was situated in Ohio. These contacts, in light of the Section 6 principles, favor Ohio law. Therefore, because Ohio has the most significant relationship to this lawsuit, with respect to the particular issue, the Ohio Lemon Law applies. Further, Ohio law applies with respect to the plaintiff's warranty claims, because Four Winds did not demonstrate the existence of a genuine conflict thereto.
With respect to Ms. Sirlouis's Lemon Law claim, her express and implied warranty claims, and her Magnuson-Moss claims, Four Winds bases its motion for summary judgment on Michigan law, which does not apply in this instance. On these claims, Four Winds has presented no meaningful arguments under Ohio law, and Ms. Sirlouis has not had a proper opportunity to respond under the applicable law. Summary judgment is merited "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P 56(a). Because it has not met this burden, Four Winds' motion for summary judgment will be denied as to Ms. Sirlouis's Lemon Law and warranty claims.
While Four Winds vigorously contended that Michigan law should apply to the above noted claims, it asks the Court to examine the applicability of the Ohio Consumer Sales Practices Act on its face. This statute forbids a supplier from engaging in "unfair or deceptive act[s] or practice[s] in connection with a consumer transaction." Ohio Rev. Code Ann. § 1345.01,
Four Winds says that summary judgment is appropriate on this count because the sale of the RV and all negotiations relating to it occurred in Michigan. It argues that the statute, on its face, applies only to an alleged deceptive or unfair sales act or practice occurring in Ohio. It further maintains that "[a]n allegedly unfair or deceptive sales practice occurs `in this State' only if the sale occurs in Ohio," relying on
The Court will nonetheless rule in Four Winds' favor on this count, based on its alternative argument that there is no evidence that it did anything wrong, deceptive, unconscionable, or otherwise actionable under the Ohio CSPA. In order to prevail on a claim under the Ohio Consumer Sales Practices Act, a plaintiff must establish that "a material misrepresentation, deceptive act or omission" impacted her decision to purchase the item at issue.
Ms. Sirlouis maintains that she is entitled to summary judgment on her Lemon Law claim. Under the Ohio Lemon Law, a consumer is entitled to a remedy, provided all other requirements are met, "[i]f the manufacturer, its agent, or its authorized dealer is unable to conform the motor vehicle to any applicable express warranty by repairing or correcting any nonconformity after a reasonable number of repair attempts." Ohio Rev. Code Ann. § 1345.72(B). It is presumed that a reasonable number of attempts have occurred if "[t]he vehicle is out of service by reason of repair for a cumulative total of thirty or more calendar days." Ohio Rev. Code Ann. § 1345.73(B).
Ms. Sirlouis states that because "the motor home was out of service because of repairs and repair attempts under the Four Winds International and Ford Motor Company warranties for more than 30 days,"
First, Four Winds states that in the case of a recreational vehicle, repairs to camper shell parts of the vehicle do not count toward the total. Indeed, the Ohio Lemon law excludes from coverage those parts of the RV that are "part of the permanently installed facilities for cold storage, cooking and consuming of food, and for sleeping." Ohio Rev. Code. Ann. § 1345.71(D). Therefore, "days out of service by reason of repair of such parts do not count toward the required thirty days."
Four Winds also notes that under the statute, the time period to be examined is "one year following the date of original delivery." Ohio Rev. Code. Ann. § 1345.73(A). Thus, Four Winds maintains that any repairs that took place before delivery do not count toward the 30 day total.
Four Winds also states that for a defect or condition to qualify as a "non-conformity" under the Lemon Law, it must "substantially impair[ ] the use, value or safety of a motor vehicle to the consumer and [fail to] conform to the express warranty of the manufacturer or distributor." Ohio Rev. Code Ann. § 1345.71(E). The term non-conformity does not include a "intermittent groaning or grinding noise . . . without evidence of any functional impairment."
In light of these qualifications, Four Winds contends that 33 of the 45 days out of service are not covered under the statute. It states that the 12 days between 15 July 2008 and 26 July 2008 are not covered because they took place before Ms. Sirlouis took delivery of the vehicle. Four Winds further states that these repairs were either "fit and finish" issues or adjustments that did not substantially impair the use of the RV. (Doc. 38-1, ¶4(a)).
Four Winds also states that the 7 days from 23 August 2008 to 29 August 2008 are not covered by the statute because they related to the "camper shell," i.e. a defect involving "the permanently installed facilities for cold storage, cooking and consuming of food, and for sleeping." These repairs included the microwave, and the dining room and hallway window frame. (Doc. 38-1, ¶4(b)).
Four Winds states that repairs to the backup monitor, the radio, and cigarette outlet, which took place on 2 days from 9 October 2008 to 10 October 2008 are not covered, because they were minor issues that did not substantially affect the use of the RV. (Doc. 38-1, ¶4(c)).
Finally, Four Winds states that the 12 days from 29 November 2008 to 10 December 2008 do not count, because they involved repairs to camper shell parts, such as window latches, molding, the furnace, and paint. (Doc. 38-1, ¶4(d)).
Viewing the evidence in light most favorable to the non-moving party, the Court concludes that Four Winds has raised a genuine factual issue as to the number of days that the RV was out of service. The Court accordingly will deny Ms. Sirlouis's motion for partial summary judgment.
As an initial matter, the Court notes that Ford contests Mr. Sargent's qualifications as an expert. As described above, Mr. Sargent examined the RV on Ms. Sirlouis's behalf and concluded that it was not fit for its intended purpose. Ford urges the Court to discount his opinion. However, whether Mr. Sargent's experience and qualifications pass muster under Rule 702 and
Ford maintains that it cannot be held liable under the Ohio Lemon law because it is not a "manufacturer," as that word is defined under the statute. Ms. Sirlouis has not responded to this argument, but Four Winds has provided a statement of position on the question and argues that Ford is a "manufacturer" under the Lemon Law.
The Ohio Lemon Law imposes liability on the "manufacturer, its dealer, or its authorized agent" of the "motor vehicle." Ohio Rev. Code Ann. § 1345.73. Under the statute, a "manufacturer" is defined as a "person who manufactures, assembles, or imports motor vehicles, including motor homes." Ohio Rev. Code Ann. § 1345.71(B) (incorporating the definition set forth in Ohio Rev. Code Ann. § 4517.01(R)). A number of courts have considered the breadth of this definition in relation to facts similar to those presently before the Court. There appears to be consensus that when defective component parts come from remote manufacturers, the final assembler of the vehicle may be held liable as the "manufacturer."
Ford and Four Winds reference the three above cited cases in an effort to answer the question. First, in
In the present case, it is undisputed that Ford is a component manufacturer and that Four Winds is the final manufacturer of the RV. (Doc. 28-2 at 2; Doc. 27 at 5, ¶19; Doc. 27-4, ¶4). Based on the language of the statute and the above case law, the Court concludes that the Lemon Law claim cannot proceed against Ford. As the manufacturer of the chassis specifically, Ford does not fit the description of "manufacturer," since it did not manufacture, assemble, or import the RV. Further, as noted in
The Magnuson-Moss Act is the federal statute that sets forth guidelines, procedures and requirements for warranties, written or implied, on consumer products.
Ford's limited warranty requires it, "without charge, [to] repair, replace, or adjust all parts on [the] vehicle that malfunction or fail during normal use during the applicable coverage period due to a manufacturing defect in factory supplied materials or factory workmanship." (Doc. 28-5 at 11). Ford maintains that Ms. Sirlouis provides no evidence that Ford breached its limited warranty. The Court agrees. Based on the facts as presented, Ford took steps to abide by its warranty obligations by repairing the drive train and running out and road indexing the tires. (Doc. 38-1, ¶3). Ford's expert, Mr. Herdzik, conducted an examination of the vehicle and concluded that the vibration is "within [a] commercially acceptable range."
Ms. Sirlouis insists that the vibration persists, but she provides no evidence to counter Mr. Herdzik's conclusions. Nor does she present evidence to support her claim that the vibration results from a defect that Ford is obligated to repair. As Ford points out, "[n]oise and vibration are not defects themselves. . . . [Rather], they are symptoms of a defect."
Ford argues that it is entitled to judgment as a matter of law on the plaintiff's implied warranty claims because she is not in privity with Ford. Under Ohio law, "purchasers of automobiles may assert a contract claim for breach of implied warranty of merchantability, only against parties with whom they are in privity of contract."
Ford maintains that it is entitled to summary judgment on Ms. Sirlouis's implied warranty in tort claim because she has alleged no injury. "Implied warranty in tort" is a common-law cause of action that imposes liability upon a manufacturer or a seller for breach of an implied representation that a product is "of good and merchantable quality, fit and safe for its ordinary intended use."
Ford argues that summary judgment is proper on Ms. Sirlouis's Ohio CSPA claim, because Ford never made a representation to her that impacted her decision to purchase the vehicle. In order to prevail on a claim under the Ohio CSPA, a plaintiff must establish that "a material misrepresentation, deceptive act or omission" impacted her decision to purchase the item at issue.
For the reasons stated above, the Four Winds' motion for summary judgment is granted in part and denied in part; Ms. Sirlouis's motion for summary judgment is denied; Ford's motion for summary judgment is granted. Four Winds, at its option, may submit a renewed, properly supported motion for summary judgment based on Ohio law. The Court extends the same invitation to Ms. Sirlouis. The parties are ordered to submit their motions within 30 days of the issuance of this order. Responses are due 15 days later.
IT IS SO ORDERED.