Harnden v. Ford Mtr Co ( 2007 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 07a0289p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiff-Appellant, -
GLENN HARNDEN,
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No. 06-1661
v.
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JAYCO, INC., an Indiana Corporation, -
Defendant-Appellee, -
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FORD MOTOR COMPANY, a Delaware Corporation,
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and LLOYD BRIDGES TRAVELAND, INC., a Michigan
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Corporation,
Defendants. -
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Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 04-72036—Nancy G. Edmunds, District Judge.
Argued: April 17, 2007
Decided and Filed: July 31, 2007
Before: MARTIN and DAUGHTREY, Circuit Judges; SCHWARZER, District Judge.*
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COUNSEL
ARGUED: Karl P. Heil, CONSUMER LEGAL SERVICES P.C., Garden City, Michigan, for
Appellant. Michael D. Dolenga, DOLENGA & DOLENGA, PLLC, Farmington, Michigan, for
Appellee. ON BRIEF: Karl P. Heil, Mark P. Romano, CONSUMER LEGAL SERVICES P.C.,
Garden City, Michigan, for Appellant. Michael D. Dolenga, Jeffrey R. Nowicki, DOLENGA &
DOLENGA, PLLC, Farmington, Michigan, for Appellee.
*
The Honorable William W Schwarzer, United States District Judge for the Northern District of California,
sitting by designation.
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No. 06-1661 Harnden v. Jayco, et al. Page 2
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OPINION
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BOYCE F. MARTIN, JR., Circuit Judge. Plaintiff Glenn Harnden appeals the district
court’s order granting summary judgment to defendant Jayco as to Harnden’s claims based on
alleged defects in a Jayco-manufactured Recreational Vehicle. For the reasons below, we AFFIRM
the judgment of the district court.
I. Factual and Procedural Background
On June 15, 2002, Harnden purchased a new 2001 Jayco Eagle Recreational Vehicle (“RV”).
The total purchase price of the RV was $51,451.22. The chassis of the RV was manufactured by
Ford Motor Company and the “home” portion of the RV was manufactured by Jayco. When Ford
completed its part of the RV, it sent it to Jayco, which completed the assembly. Jayco sold the RV
to Lloyd Bridges, an independent dealer, which in turn sold it to Harnden. Following his purchase
of the RV, Harnden returned it several times to Ford and Jayco for repair of various defects.
On April 14, 2004, Harnden filed a complaint in Michigan state court against Ford, Jayco,
and Lloyd Bridges, alleging (1) breach of contract; (2) violation of the Michigan Consumer
Protection Act (“MCPA”), Mich. Comp. Laws § 445.901 et seq.; (3) breach of written warranty
under the Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. § 2301 et seq.; (4) revocation of
acceptance; (5) breach of implied warranty under the MMWA; (6) breach of express warranty;
(7) breach of implied warranty of merchantability; and (8) violation of the Motor Vehicle Service
and Repair Act (“MVRSA”), Mich. Comp. Laws § 257.1301 et seq. On May 28, 2004, the
defendants removed the case to federal court based on Harnden’s federal claim under the MMWA.
Harnden did not move to remand the case to state court.
On March 30, 2005, the district court granted Lloyd Bridges’s motion for summary
judgment. Harnden v. Ford Motor Co., 408 F. Supp. 2d 309 (E.D. Mich. 2005). Lloyd Bridges was
subsequently dismissed from the suit and thus is no longer a party. On July 8, 2005, Jayco moved
for summary judgment on all claims against it, relying in part on an expert report prepared by Randy
Zonker, a Jayco employee. On October 19, 2005, Harnden informed the court that he was
dismissing his revocation-of-acceptance and breach-of-contract claims. On October 25, 2005, the
district court granted Jayco’s motion for summary judgment on all remaining claims. Harnden v.
Ford Motor Co., 408 F. Supp. 2d 315 (E.D. Mich. 2005). On April 10, 2006, summary judgment
was entered in favor of Ford, and Ford was subsequently dismissed from the suit. Harnden v. Ford
Motor Co., No. 04-72036, 2006 WL 931946 (E.D. Mich. Apr. 10, 2006). Harnden now appeals the
district court’s order granting Jayco summary judgment on Harnden’s breach-of-express-warranty
claim and his claims under the MMWA and MCPA.
II. Jurisdiction
We sua sponte raised the issue of jurisdiction with the parties and requested additional
briefing, despite the fact that the district court stated it had jurisdiction based on Harnden’s MMWA
claim. See Kentucky Press Ass’n, Inc. v. Kentucky, 454 F.3d 505, 508 (6th Cir. 2006) (explaining
that a Court of Appeals has “an independent duty ‘to inquire sua sponte whenever a doubt arises as
to the existence of federal jurisdiction.’” (quoting Mt. Healthy City Sch. Dist. Bd. of Ed. v. Doyle,
429 U.S. 274, 278 (1977))).
Twenty-eight U.S.C. § 1441(b) provides, in pertinent part, that “[a]ny civil action of which
the district courts have original jurisdiction founded on a claim or right arising under the
Constitution, treaties or laws of the United States shall be removable without regard to the
No. 06-1661 Harnden v. Jayco, et al. Page 3
citizenship or residence of the parties.” The removing party bears the burden of demonstrating
federal jurisdiction, and all doubts should be resolved against removal. Eastman v. Marine Mech.
Corp., 438 F.3d 544, 549-50 (6th Cir. 2006). “The existence of subject matter jurisdiction is
determined by examining the complaint as it existed at the time of removal.” Harper v.
AutoAlliance Intern., Inc., 392 F.3d 195, 210 (6th Cir. 2004).
The MMWA provides for federal jurisdiction over certain claims. 15 U.S.C.
§ 2310(d)(1)(B). This jurisdiction, however, is subject to an amount-in-controversy requirement.
The relevant part of the MMWA provides, “No claim shall be cognizable in a suit brought under
paragraph (1)(B) of this subsection . . . (B) if the amount in controversy is less than the sum or value
of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined
in this suit.” 15 U.S.C. § 2310(d)(3)(B). In response to our request for supplemental briefing,
Harnden argues that the requisite amount in controversy cannot be met and therefore we should find
that jurisdiction is lacking, or alternatively, we should remand the case to the district court so that
the total sum in controversy can be decided. Jayco, on the other hand, argues that the amount in
controversy exceeds $50,000, and therefore, jurisdiction is proper. We agree with Jayco, and hold
that we have jurisdiction to entertain this claim.
In support of his argument that he does not satisfy the $50,000 amount-in-controversy
requirement, Harnden relies on our decision in Golden v. Gorno Bros., Inc., 410 F.3d 879 (6th Cir.
2005). In Golden, we confronted the question of whether, based on a plaintiff’s claim for revocation
of acceptance, a court must use the entire amount of the contract—including finance charges—to
determine whether the $50,000 amount-in-controversy requirement is satisfied. We rejected the
plaintiff’s argument that finance charges should be considered and held that where a plaintiff claims
revocation of acceptance, the amount in controversy is determined by the following formula: “the
price of a replacement vehicle, minus both the present value of the allegedly defective car and the
value that the plaintiff received from the use of the allegedly defective car.” Id. at 883 (quoting
Schimmer v. Jaguar Cars, Inc., 384 F.3d 405-06 (7th Cir. 2004)) (additional citations omitted).
Golden used the pre-tax purchase price as the “price of the replacement vehicle.” Id.
Golden decided only whether a plaintiff’s revocation-of-acceptance claim met the amount-in-
controversy requirement. Moreover, the court rejected Golden’s argument that his revocation-of-
acceptance claim should be analyzed in the same way as a rescission claim, so that the full value of
the contract, without offset, should be the amount in controversy. 410 F.3d at 884. First, the court
noted that the case that Golden cited in support of this argument, Rosen v. Chrysler Corp., 205 F.3d
918 (6th Cir. 2000), “relies in part on Jadair, Inc. v. Walt Keeler Co., 679 F.2d 131, 133 n.5 (7th Cir.
1982) for the proposition that the contract’s entire value, without offset, is the amount in controversy
in a diversity case when a plaintiff seeks rescission.” Golden, 410 F.3d at 884 (citing Rosen, 205
F.3d at 921). Golden then explained that based on the damages formulas employed by the Seventh
Circuit in determining jurisdiction in MMWA cases, and given the fact that the Seventh Circuit had
not overruled Jadair, “it is clear that the Seventh Circuit does not determine the amount in
controversy in rescission cases in the same manner as it does in cases involving revocation of
acceptance.” 410 F.3d at 884. To be sure, Golden did not instruct courts precisely how to analyze
rescission claims when determining whether the MMWA’s amount-in controversy requirement is
met, nor did it expressly hold that rescission claims in this context should be analyzed differently,
as Rosen and Jadair were diversity cases that did not concern the MMWA and thus were not entirely
on point. However, it is clear that Golden was distinguishing rescission claims from revocation-of-
acceptance claims, and did not endorse the argument that the two types of claims should be analyzed
in the same manner.
With this in mind, we find that if only Harnden’s revocation-of-acceptance claim were at
issue, the formula laid out in Golden would clearly control. However, Harnden asserts other
relevant claims that were not addressed by the Golden court. In particular, Harnden’s complaint
No. 06-1661 Harnden v. Jayco, et al. Page 4
alleges breach of contract and requests cancellation of his contract; thus, the remedy he seeks is
more akin the rescission claim described by Golden. See Golden, 410 F.3d at 884. We may
consider this state-law claim in computing whether the amount-in-controversy requirement is met.
See 15 U.S.C. § 2310(d)(3)(B) (expressly providing that federal jurisdiction is not proper “if the
amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs)
computed on the basis of all claims to be determined in this suit”) (emphasis added). As noted
above, Golden does not apply the formula to rescission claims.1 What is truly in dispute is
$51,451.22 — the amount of Harnden’s contract, without offset. Therefore, we hold that the
MMWA’s amount-in-controversy requirement is met. It was proper for the district court to exercise
jurisdiction.
III. Admissibility of Randy Zonker’s Report
A report detailing a series of tests performed by Jayco employee Randy Zonker was
submitted along with Jayco’s Motion for Summary Judgment on July 8, 2005. See Joint App’x at
20-27. Based on these tests, Zonker ultimately concluded that in his expert opinion the RV was in
good condition. He noted just two minor leaks, neither of which was a substantial defect. Zonker
reported that neither defect substantially impaired the value of the RV and that both were common
in the RV industry. Further, one leak did not affect a Jayco-manufactured part and thus was not
covered by the warranty. Zonker concluded that repairing a leaky compartment manufactured by
Jayco would be easy, in that “[m]ost likely, the compartment just needs some more sealant at the lip,
where the door closes.” See id. at 25. Zonker recommended that in order to be sure the problem was
fixed, he would remove some of the molding in the exterior of the compartment and then clean and
seal the entire compartment. Id. He claimed that this repair, plus re-testing, would cost no more
than $250. Harnden has offered no evidence rebutting Zonker’s conclusions that these were the
only defects, that these defects were insubstantial, and that these defects were easily repairable for
little cost.
Jayco and Harnden dispute the admissibility of this report. At the summary judgment
hearing conducted on October 19, 2005, Harnden’s attorney objected to the admission of the expert
report because it was not in the form of an affidavit or sworn statement, as required under Fed. R.
Civ. P. 56(e). Thus, according to Harnden, Zonker’s report was inadmissible hearsay. Jayco’s
attorney responded that he was willing to submit the report in an admissible form, but the district
court did not take him up on his offer. The district court considered Zonker’s report in conducting
its analysis. See Harnden, 408 F. Supp. 2d at 319-21.
Even if Zonker’s unsworn testimony was in the form of inadmissible evidence for purposes
of Rule 56, thus rendering its consideration to be in error, such error may be considered harmless
if it “does not affect the substantial rights of the parties.” See Fed. R. Civ. P. 61; United States v.
Markwood, 48 F.3d 969, 981 (6th Cir. 1995) (holding that reversal is required only where the district
court’s error affected a party’s substantial rights and the party was prejudiced by the district court’s
error).
We hold that admission of this report was harmless error. Notably, sending this case back
to the district court will simply result in the affidavit being re-submitted in admissible form, and the
district court granting summary judgment again. We reject Harnden’s contention that if Jayco were
given the opportunity to re-file its motion with the report in admissible form, Harnden would have
the opportunity to “present additional evidence showing that summary judgment is improper that
is not currently part of the record.” Appellant’s Reply Br. at 11. First, this argument implies that
1
Golden holds that finance charges should never be included in computing the amount in controversy under
the MMWA because such charges are “interest” under § 2310. 410 F.3d at 883. Therefore, we will only consider the
purchase price of Harnden’s RV—$51,451.22—and not the finance charges.
No. 06-1661 Harnden v. Jayco, et al. Page 5
Zonker’s report was a surprise for which Harnden did not have adequate time to prepare; but, in fact,
Jayco submitted this report along with its motion for summary judgment on July 8, 2005. Harnden
knew of the content of Zonker’s report well in advance, and had ample time to procure his own
expert report and/or evidence.2 Thus, Harnden appears to be arguing that had Jayco submitted this
same report at the same time, but in admissible form, Harnden would have obtained an expert of his
own. Given that Harnden had advance warning of Zonker’s testimony, we cannot find that the
district court’s error affected Harnden’s substantial rights, and most certainly, Harnden was not
prejudiced by this error.
IV. Breach of Express Warranty, Michigan Consumer Protection Act and Magnuson-Moss
Warranty Act
As explained above, the district court had jurisdiction to hear this case and properly
considered Randy Zonker’s report. Having had the benefit of oral argument, and having considered
the record on appeal and the parties’ briefs, we have conducted a de novo review and conclude that
the district court’s order granting summary judgment to Jayco was correct. The district court
thoroughly and accurately set forth the undisputed facts and the governing law. Issuing an opinion
conducting a complete analysis of these claims would serve no jurisprudential purpose and would
be duplicative. Therefore, we affirm the grant of summary judgment on the basis of the district
court’s well-reasoned opinion of October 25, 2005. See Harnden, 408 F. Supp. 2d 315.
V. Conclusion
For the foregoing reasons, we AFFIRM the judgment of the district court.
2
Harnden’s response to Jayco’s motion for summary judgment, dated September 26, 2005, does not contain
any expert evidence.