Powell v. Airstream, Inc.

[Cite as Powell v. Airstream, Inc., 2019-Ohio-3034.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
SHELBY COUNTY
DAVID POWELL,
CASE NO. 17-18-17
PLAINTIFF-APPELLANT,
v.
AIRSTREAM, INC., OPINION
DEFENDANT-APPELLEE.
Appeal from Shelby County Common Pleas Court
Trial Court No. 17CV000145
Judgment Affirmed
Date of Decision: July 29, 2019
APPEARANCES:
Elizabeth Ahern Wells for Appellant
James L. Thieman and Cameron C. Downer for Appellee
Case No. 17-18-17
WILLAMOWSKI, J.
{¶1} Plaintiff-appellant David Powell (“Powell”) brings this appeal from the
judgment of the Court of Common Pleas of Shelby County granting summary
judgment to defendant-appellee Airstream, Inc. (“Airstream”). For the reasons set
forth below, the judgment is affirmed.
{¶2} On June 12, 2016, Powell purchased a new 2016 Airstream Flying
Cloud RV (“the RV”) that was built and warranted by Airstream in Jackson Center,
Ohio. Doc. 1. Powell purchased the RV from Airstream Adventures (“AA”) in
Covington, Washington. Id. Soon after the purchase, the RV allegedly began to
have several issues and spent a significant amount of time being repaired. Id.
Powell lost confidence in the vehicle and filed a complaint with a jury demand in
Shelby County, Ohio on July 19, 2017. Id. In the complaint, Powell alleged that
Airstream had breached the express warranties, breached the contract, violated the
Magnuson-Moss Warranty Act, and violated the Washington Consumer Protection
Act (“WCPA”). Id. On August 24, 2017, Airstream filed its answer denying the
alleged violations and raising several defenses including lack of privity of contract,
limitation of damages, and failure of conditions precedent. Doc. 7.
{¶3} On April 19, 2018, Airstream filed a motion for summary judgment.
Doc. 23. Airstream claimed that without privity of contract, the implied warranty
and breach of contract claims must fail. Id. Airstream further asserted that the
breach of the express warranties and violations of the Magnuson-Moss act must also
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fail because Airstream complied with the warranties by complying with the Repair
Remedy. Id. Airstream also alleges that Powell failed to exhaust his remedies by
not complying with the “Back-Up Remedy”. Id. Finally, Airstream claimed that
the WCPA claim fails because there was no underlying statutory violation or a
public interest to support the claim. Id. Powell filed his memorandum in opposition
to the motion on May 23, 2018. Doc. 37. Airstream then filed its reply to the
memorandum on June 19, 2018. Doc. 45. On October 1, 2018, the trial court
granted Airstream’s motion for summary judgment. Doc. 95. Powell filed a timely
notice of appeal from this judgment. Doc. 101. On appeal, Powell raises one
assignment of error.
The trial court erred when it granted Airstream’s motion for
summary judgment on all claims.
{¶4} The sole assignment of error in this case raises the question as to
whether the lower court erred in granting summary judgment.
An appellate court reviews a trial court’s summary judgment
decision de novo, independently and without deference to the trial
court's decision. Ohio Govt. Risk Mgt. Plan v. Harrison, 115 Ohio
St.3d 241, 2007-Ohio-4948, 874 N.E.2d 1155, at ¶ 5, citing Comer
v. Risko, 106 Ohio St. 3d 185, 2005-Ohio-4559, 833 N.E.2d 712, at
¶ 8. Summary judgment is appropriate only “when the
requirements of Civ.R. 56(C) are met.” Adkins v. Chief
Supermarket, 3d Dist. No. 11-06-07, 2007-Ohio-772, at ¶ 7. The
party moving for summary judgment must establish: (1) that
there are no genuine issues of material fact; (2) that the moving
party is entitled to judgment as a matter of law; and (3) that
reasonable minds can come to but one conclusion and that
conclusion is adverse to the nonmoving party, said party being
entitled to have the evidence construed most strongly in his favor.
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Id., citing Civ.R. 56(C); Horton v. Harwick Chem. Corp. (1995), 73
Ohio St. 3d 679, 653 N.E.2d 1196, at paragraph three of the
syllabus. In ruling on a motion for summary judgment, a court
may not “weigh evidence or choose among reasonable inferences
* * *.” Id., at ¶ 8, 653 N.E.2d 1196, citing Jacobs v. Racevskis
(1995), 105 Ohio App. 3d 1, 7, 663 N.E.2d 653. Rather, the court
must consider the above standard while construing all evidence in
favor of the non-movant. Jacobs, at 7, 663 N.E.2d 653.
The party moving for summary judgment must identify the basis
of the motion to allow the non-movant a “meaningful opportunity
to respond.” Mitseff v. Wheeler (1988), 38 Ohio St. 3d 112, 116,
526 N.E.2d 798. In its motion, the moving party “must state
specifically which areas of the opponent’s claim raise no genuine
issue of material fact and such assertion may be supported by
affidavits or otherwise as allowed by Civ.R. 56(C).” Id. at 115,
526 N.E.2d 798, citing Harless v. Willis Day Warehousing Co.
(1978), 54 Ohio St. 2d 64, 66, 375 N.E.2d 46, citing Hamlin v.
McAlpin Co. (1964), 175 Ohio St. 517, 519-520, 196 N.E.2d 781;
Dresher v. Burt (1996), 75 Ohio St. 3d 280, 293, 662 N.E.2d 264. If
the moving party fails to meet its burden, summary judgment is
inappropriate; however, if the moving party meets its initial
burden, the non-moving party has a “reciprocal burden outlined
in Civ.R. 56(E) to set forth specific facts showing that there is a
genuine issue for trial * * *.” Dresher, at 294, 662 N.E.2d 264.
Lillie v. Meachem, 3d Dist. Allen No. 1-09-09, 2009-Ohio-4934, ¶21-22. This court
notes that the parties agree that Washington law applies to the substantive
arguments. As the standard of review is de novo, we will review whether reasonable
minds could reasonably reach a verdict in favor of Powell based upon the claims set
forth in the complaint.
{¶5} A review of the repair records for this RV provided as exhibits for
Powell’s memorandum contra the motion for summary judgment show the
following history of repairs. See Doc. 27, Ex. 8, 10, and 11. Prior to the delivery
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of the vehicle, AA conducted a pre-delivery inspection report and repaired or noted
issues found. See also Lamb Dep. at 32. The inspection noted eight issues: 1)
rock dings on the rock guard, 2) a rivet missing about the entry door, 3) chips in
bedroom closet door, 4) gaps in the sealant in various locations, 5) a scratch in the
wall by the bathroom door, 6) a scratch on the range cover, 7) a noisy bathroom fan,
and 8) a small divot in the linoleum at the entrance. The records produced by Powell
indicate that new rock guards were ordered, the missing rivet was replaced, the chips
in the bedroom door were repaired, the areas missing sealant were resealed, the
scratch on the range cover was removed and repolished, and the bathroom fan was
adjusted to run properly. The scratch on the wall and the divot in the linoleum had
no noted repairs.1 Powell was notified on June 20, 2016, that the vehicle was ready
for pickup.
{¶6} On July 21, 2016, Powell’s son Dan and sister-in-law Teresa
(collectively known as “the customers”), who were the ones using the RV, took the
vehicle to George Sutton RV (“Sutton”) claiming six alleged issues: 1) the Velcro
was pulling off the seat cushions, 2) the dinette table was not releasing from the
brackets, 3) the Sothco had pulled out of the cabinet door below the stove, 4) the
shower leaked at the bottom of the door when used, 5) the USB port was pushed in
at the bedroom cabinet, and 6) the rear awning arm was hard to retract. Sutton
1
Although there was no noted repair to the linoleum, the warranty claim to Airstream showed that AA billed
them for labor in regard to the linoleum. Doc. 37, Ex. 11.
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aligned the tabs on the dinette table so that it worked properly, replaced a stripped
screw on the cabinet door to resolve the second and third issue. The shower was
repaired by replacing the wipe seal. Upon testing, there was no more leak. Nothing
was done about the cushion, the USB ports, or the awning at that time and the RV
was returned to Dan and Teresa that same day. On July 27, 2016, the customers
returned to AA to have these issues resolved. AA replaced the USB port and
adjusted the awning arm to function smoothly. AA also requested approval from
Airstream to replace the cushions. The vehicle remained with AA for two days.
{¶7} On August 29, 2016, the customers brought the RV back to AA with
three new complaints: 1) water was pooling in the corner of the shower cabinet
when attached to city water; 2) the shower door was leaking again, and 3) a drawer
in the bedroom opened in transit. The customers also requested that a multi-point
inspection (“MPI”) be completed and requested a status check on the replacement
of the cushions. The water in the shower cabinet was caused by a loose fitting at
the water pump, which went away when tightened. The shower door was leaking
because the frame and threshold were not square. AA sought to fix this issue by
ordering replacements. The drawer issue was resolved by replacing the 5 lb. latch
with a heavy duty 10 lb. latch. The status check on the cushions showed that
replacements had been approved and ordered. The MPI showed that 1) a 30 amp
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inlet LED light2 was not working, 2) the bathroom fan was rattling, 3) the shower
fan was hitting the housing, 4) the deadbolt was loose in the door, 5) the screen door
gasket was torn in the corner, 6) the screen door latch was hitting the frame, and 7)
a rivet head had popped off by the entry door during transit. AA resolved these
issues by replacing the bad outlet, moving wires to resolve the noisy bathroom fan,
replacing a missing screw in the shower fan allowing it to function as designed,
tightening the screws in the deadbolt to allow it function as designed, removing the
torn gasket on the screen door and replacing it with a new one, realigning the screen
door to allow it to function properly, and drilling out the old rivet to replace it with
a new one. The time out for these repairs is not clear from the record, but part of
the time also included the installation of a satellite dish per the request of the
customers.
{¶8} On October 3, 2016, the customers returned the RV to AA to allow AA
to install the new shower assembly and to replace the covers on the cushions. An
MPI was completed at that time as well, which showed that the bolt nuts on the rock
guard were stripped. AA remedied this problem by replacing the bracket and
riveting it into place. The customers also complained that the bedroom drawer
would still open during transit and that the toilet was leaking at its base. AA’s
inspection showed that the drawer was functioning as designed. AA could not
2
This is a small light on the outlet showing that it is receiving power. The light not working may indicate
the outlet was not working or that the light itself was bad.
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reproduce the leak at the base of the toilet and saw no issues, so no repair was
attempted at that time. The RV was undergoing repairs for seven days this time.
{¶9} On November 18, 2016, a tree branch came down on the RV causing
damage to it. The customers took the RV to AA on December 3, 2016, to have an
estimate done for the cost of repairs and presented a lengthy list of issues with the
RV that they believed to be covered by the warranty. This list included the
following issues: 1) the deadbolt was loose, 2) USB port had no power, 3) ceiling
covers falling off, 4) hinge on wardrobe door pops off, 5) toilet won’t hold water,
6) no warm air in front vents, 7) beds not level, 8) 30 amp outlet LED lights not
working, 9) burners on stove will not light, 10) cabinet door by DVD player was
hard to open, 11) refrigerator seal falling off, 12) a rivet was pulled down in the
bathroom ceiling, 13) the entry door was leaking on the interior side of the door, 14)
the fantastic fan3 was not working, and 15) the entry door was hard to open and
close. Over six days, AA repaired the problems by 1) tightening the screws in the
deadbolt and verifying it was functioning; 2) replacing the bad USB port; 3)
replacing all the vent covers with new ones and verifying that they snapped into
place tightly; 4) resetting the hinges on the wardrobe door and screwing them into
place; 5) removing and replacing the bowl seal on the toilet; 6) installing additional
supports to the bed frame to level the mattresses; 7) replacing the 30 amp outlet
3
The fantastic fan appears to be the vent fan over the stove.
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lights on both receptacles and testing to make sure they were functioning; 8)
replacing the left rear wire to the stove burners and testing to insure they were
functioning properly; 9) resetting the screws in the cabinet door to allow it to open
and close correctly; 10) realigning the refrigerator seal and refastening it into the
proper place; 11) drilling out the damaged rivet and installing a new one; 12)
cleaning and resealing around the entry handle where it was leaking; 13) securing
the ground switch to the fantastic fan to allow it to function properly; and 14)
shimming the door frame catch out with a washer to allow it to function correctly.
AA was not able to resolve the furnace problem because the same air flow was
coming out of the front and rear vents, so the problem could not be replicated.
Additionally, during the time the RV was there, AA performed an MPI, winterized
the vehicle and installed a customer supplied vent fan in the bathroom as well as
completing the insurance estimate.
{¶10} On December 13, 2016, the customers returned the RV to AA due to
water pooling in the shower and a drawer opening in the bedroom during transit.
The water issue was found to be caused by a loose fitting behind the wall. The
fitting was tightened and no leaks were found when tested under pressure. The 5
lb. drawer catch was replaced with a 10 lb. drawer catch to remedy the problem. At
that same time, another MPI was conducted and revealed more issues: 1) a 30 amp
inlet light was not working; 2)the bathroom fan was rattling when it hit wires; 3) the
deadbolt needed tightened; 4) the screen door gasket was torn and the door was not
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closing correctly; and 5) a rivet head had popped off in transit. The inlet light was
removed and replaced, the wires in the fan were moved out of the way and secured
to not interfere with the function of the fan, the deadbolt was tightened, the damaged
seal on the screen door was removed and a new one installed, the screen door was
realigned, and the old rivet was removed and a new one was installed. This was
completed on that same date.
{¶11} On January 5, 2017, the customers brought in the RV for repairs due
to the damage from the tree branch. In addition to those repairs, the customers
informed AA that 1) water was coming in the dinette window, 2) air was coming in
the bedroom window and there was a water stain on the curtain, 3) the left rear
burner on the stove would not light, 4) the grey and black valves were sticking, 5) a
blind clip had cracked, and 6) weather stripping was coming off the entry door. The
first two issues were resolved by tightening the latch to provide a better seal and
checking the sealants. AA noted that there was a condensation issue in the trailer
due to improper venting. AA fixed the stove by tightening the burner springs for
better contact. Valve lube was added to the sticking valves. The damaged blind
was removed and replaced with a new one. The weather stripping coming off the
entry door was removed and replaced with new. Although the repair records do not
indicate how long these repairs, as well as the accident damage, took, Powell claims
that the RV was returned to them on January 12 for seven days.
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{¶12} On January 19, 2017, a repair order was created indicating that the
shower fan and the fantastic fan were inoperable. AA replaced the motor in the
shower fan allowing it to work correctly. The fantastic fan was not inoperable, but
the issue was the result of user error, so proper use was explained to the customers.
This took one day.
{¶13} On January 26, 2017, the RV was brought in to AA due to a claim that
the toilet was leaking at the base. AA replaced the valve and no leak was found at
that time. The RV was returned that same day. Later, AA received a call from the
customers indicating that it was leaking again. AA sent a technician to the
customers’ location. The technician then replaced the toilet. On February 10, 2017,
AA was notified that the furnace was inoperable. When checked by AA, the furnace
seemed to be working properly. The outside temperature was 47, but the inside
temperature was 75. This also took one day.
{¶14} On February 15, 2017, the customers brought in the RV and claimed
that 1) the furnace was not putting out hot air, 2) the toilet was not getting water,
and 3) the toilet was leaking. They also requested that an MPI be performed. The
MPI showed that the RV was in good working order. The furnace was fixed by the
installation of a new ignitor board and sail switch. The toilet began to receive water
once the valve was properly seated. The toilet was not the source of the water leak,
but AA found the leak was coming from a fitting on the inlet side of the water heater.
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AA fixed this problem by installing a new cone washer. All of this was done in one
day.
{¶15} On April 28, 2017, the customers brought in the RV claiming that 1)
the 30 amp LED light was not working, 2) a light switch was pushed in, 3) the
bathroom fan was rubbing on the housing, 4) the refrigerator light was inoperable,
5) there was a squeak in the floor between the beds at the rear of the RV, 6) the
water heater was leaking again, and 7) the black tank would not zero out when
dumped. The plugs with the 30 amp LED lights were removed and replaced. The
light switch and the housing was removed and replaced. The bathroom fan was
removed and a new fan was installed with new set screws to allow it to function
properly. The refrigerator light was working properly, the bulb just needed
replaced. The squeak in the floor was noted, but no issue was found. The leak at
the water heater was a drip at the city fill inlet, which was replaced. The sensor in
the black tank needed cleaning. This was all completed within a day or two.
{¶16} On June 7, 2017, the customers brought in the RV and requested and
MPI be completed. The Customers alleged the following complaints: 1) the
mattress was moldy, 2) the floor squeaked, 3) the toilet was not getting or retaining
water, 4) the bedroom window was hard to open, 5) the window in the dining area
would not pull in all the way, 6) the air conditioning was not cold enough, 7) the
license plate light was loose, 8) the kitchen floor area was soft, 9) the latch cap had
come off the cabinet door under the bed, 10) the molding trim was loose in the
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bedroom, 11) the entry door latch was hard to open, and 12) the furnace was
inoperable. The mattress was replaced by Airstream at no cost. The squeaky floor
and the alleged soft area in the floor of the kitchen were checked, but no problem
was found. The toilet was replaced and tested to insure the new one was working.
A check of the bedroom window showed the brackets were too low, so they were
moved up ¼ inch and then worked correctly. The window in the dining room had
a broken latch, so the latches on all the windows in the dining area were replaced so
they would match. The air conditioning system was checked and found to be
working as designed. The connections on the license plate light were tightened. A
new latch cap was installed on the cabinet door. The molding trim was glued to the
wall and new seam trim was installed. The door latch was corrected by lubing the
lock and latch assembly. The furnace could not be repaired at that time because the
issue was a bad board and a replacement had to be ordered. The repair records of
AA show that the repairs, except for the furnace, were completed in one day.
{¶17} On August 2, 2017, the customers brought the RV back to AA to
complete the repair on the furnace and the toilet, which was not filling with water.
On that day, the bad board on the furnace was replaced and the air gap on the ignitor
was adjusted to allow the furnace to function correctly. The toilet was repaired.
AA’s records show that the customers were notified it was ready after one day,
however the customers did not pick up the RV until October.
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Breach of Warranties
{¶18} The first claim in the complaint alleges that Airstream breached the
manufacturer’s warranties. Powell claims that Airstream violated not only the
express warranties, but the implied warranties as well.
Implied Warranties
{¶19} Powell argues that the RV breached the implied warranties of
merchantability. Article 2 of the UCC, as adopted in Washington, provides an
implied warranty of merchantability that assures that goods sold are fit for the
ordinary purposes for which such goods are used as long as the seller is a merchant
of goods of that kind and the warranty is not specifically excluded by contract.
RCW 62A.2-314. However, a “lack of privity has historically been a defense to
claims of breach of warranty.” Tex Enterprises, Inc. v. Brockway Standard, Inc.
149 Wash.2d 204, 209, 66 P.3d 625 (2003).
There are two types of plaintiffs for whom lack of privity has been
a concern. A “ ‘horizontal’ non-privity plaintiff” is not a buyer
of the product in question, but is one who consumes or is affected
by the goods. * * * The “ ‘vertical’ non-privity plaintiff” is a
buyer who is in the distributive chain, but who did not buy the
product directly from the defendant.
Id. (citations omitted). Although the Washington Legislature chose to eliminate the
privity requirement for horizontal non-privity plaintiffs under certain
circumstances, it was silent in regard to vertical privity. Id. The Supreme Court of
Washington held that absent privity or an underlying contract to which the remote
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purchaser is a third-party beneficiary, there can be no recovery for a vertical non-
privity plaintiff based upon breach of an implied warranty. Id. at 214.
{¶20} In this case, Powell purchased the RV from AA. The Vehicle Purchase
Order identified the seller as AA. Doc. 37 at Ex. 3. Additionally, the Retail
Installment Sales Contract specifically identifies the seller as AA. Id. at Ex. 4.
Neither of the documents indicates that Airstream was the merchant selling the RV
to Powell. The deposition testimony of Richard March (“March”), the General
Manager of the Customer Relations Group of Airstream, indicated that the RV was
sold by them to AA and paid for by AA before it was delivered. March Dep. 30-
31. Daniel Lamb (“Lamb”), the Parts and Service Manager for AA, testified in his
deposition that although AA is an authorized dealer of Airstream’s products, it is a
separate entity from Airstream and is neither owned nor controlled by Airsteam.
Lamb Dep. 95. Given this evidence, there is no question that pursuant to
Washington law, Powell is a vertical non-privity plaintiff as he is in the distributive
chain, but did not buy the RV directly from Airstream.
{¶21} Since Powell is a vertical non-privity plaintiff, the only way that an
implied warranty would apply would be if Powell was an intended third-party
beneficiary of the contract between Airstream and AA. Babb v. Regal Marine
Industries, Inc. 186 Wash.App. 1003 (2015). Washington courts “have allowed a
remote purchaser to pursue claims for breach of implied warranties of
merchantability notwithstanding lack of vertical privity when the remote purchaser
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can show that it was an intended third-party beneficiary of a contract involving the
manufacturer.” Id. (citing Touchet Valley Grain Growers, Inc. v. Opp & Seibold
Gen. Constr., Inc., 119 Wash.2d 334, 347, 831 P.2d 724 (1992)).
Our Supreme Court first applied the test to a claim for a breach
of an implied warranty of merchantability in Touchet Valley.
There, the [Court] examined Kadiak Fisheries Co. v. Murphy
Diesel Co., 70 Wash. 2d 153, 422 P.2d 496 (1967). In Kadiak, our
Supreme Court held that a purchaser of a specially-built marine
diesel motor could sue the manufacturer for breach of implied
warranties even though the purchaser bought the diesel motor
from a retail dealer. * * * The Kadiak court relied on the sum of
the interaction and the expectations between the purchaser and
the manufacturer: (1) the manufacturer knew the identity,
purposes, and requirements of the purchasers’ specifications; (2)
Kadiak had communicated its needs to the manufacturer, not
only directly, but also through its agent, the supplier; (3) although
the manufacturer invoiced the supplier, the manufacturer
delivered the motor directly to Kadiak; (4) the manufacturer’s
representatives attended installation of the motor; and (5) after
difficulties developed, the manufacturer tried to fix the motor’s
problem. * * *
Applying Kadiak’s reasoning, the Touchet Valley court concluded
that the owner of a collapsed grain-storage facility could maintain
an implied warranty action against a subcontractor with whom
there was no privity because the owner was the intended third-
party beneficiary of the contract between the general contractor
and the subcontractor. * * * In so holding, the [Court]
determined that the subcontractor knew Touchet Valley’s
identity, its purpose, and its requirements for the storage
building. * * * The subcontractor had also designed the building
to the purchaser’s specifications and delivered components to the
construction side. * * * And when the building first began to
collapse, the subcontractor helped to attempt repairs.
In contrast, in Urban Development, Inc. v. Evergreen Building
Products, LLC, * * * Division One of this court declined to extend
implied warranties of merchantability to a general contractor of
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a leaking condominium complex when there was no privity of
contract between the general contractor and the manufacturer of
the building’s siding. The court there so held because the general
contractor had no interaction with the siding manufacturer and
because the manufacturer did not design the siding system
specifically for the contractor’s requirements.
Babb, supra. The Babb court then went on to note that in the case before it, the
manufacturer did not know the purchaser’s identity or purpose and did not
specifically build the boat with the purchaser’s requirements in mind. Instead, the
boat was merely an ordinary model built at the manufacturer’s factory and then sold
and shipped to a dealer. The dealer then sold the boat to the purchaser. When the
dealer went bankrupt and the purchaser had issues with the boat, the manufacturer
attempted to assist after the sale. The court then went on to find that the only
interaction was a series of post-sale contacts “related to the repair of a boat that [the
manufacturer] did not build specifically for [the purchaser].” Id. Based upon the
facts of that case, the court found that the purchaser was not an intended third-party
beneficiary of the contract between the manufacturer and the dealer and that the
implied warranty of merchantability failed for lack of privity of contract. Id.
{¶22} In short, to be a third-party beneficiary, the purchaser must show that
the manufacturer was involved in the transaction, knew the purchaser’s identity and
purpose, communicated with the purchaser regarding the purchase, or delivered the
goods to the purchaser. See Johnson v. Metro-Goldwyn-Mayer Studios Inc., W.D.
Washington No. C17-541 RSM, 2017 WL 3313963 (Aug. 3, 2017). A third-party
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beneficiary is not entitled to coverage pursuant to an implied warranty when a
manufacturer is unaware of the party’s identity or did not intend to sell to that
specific party. Id. at *6. Here, the undisputed facts show that Airstream made a
standard model RV and sold it to AA. Prior to the manufacture or sale of the RV at
issue, there is no evidence presented of any contact between Airstream and Powell.
This was not a special order and there is no evidence that Airstream knew who
would purchase this RV. After the sale, most of the communication about the issues
with the RV were between AA and Powell. March testified that he knew of one
post-sale email and only a few phone calls. Most of the communication was
between AA and Powell and then between AA and Airstream. The record does not
support the conclusion that Powell was a third-party beneficiary of the sales contract
between AA and Airstream. Since Powell lacks privity of contract with Airstream
and is not a third-party beneficiary, he cannot avail himself of the implied warranty
of merchantability against Airstream.
{¶23} Express Warranties
{¶24} Powell also argues that Airstream violated the express warranty.
Express warranties are any affirmation of fact or promise, any description, or any
sample or model by a seller relating to or describing the goods when such
representation forms the basis of the bargain. RCW 62A.2–313. At the time of
purchase, Powell was provided with a limited warranty on the travel trailer. This
warranty provided as follows in pertinent part.
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THIS LIMITED WARRANTY COVERS: (i) ONLY the first
retail owner and any second owner (ii) ONLY those portions of a
NEW travel trailer not excluded under the section “What is Not
covered”, when sold by an authorized dealership; and (iii) ONLY
defects in workmanship performed and/or materials used to
assemble those portions of your travel trailer not excluded under
the section “What is Not Covered”. “Defect” means the failure of
the workmanship performed and/or materials used to conform
with the design and manufacturing specification and tolerances of
Airstream. * * *
***
LIMITATION OF IMPLIED WARRANTIES
IMPLIED WARRANTIES ARISING UNDER APPLICABLE
LAW, IF ANY INCLUDING BUT NOT LIMITED TO IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, ARE HEREBY LIMITED IN
DURATION TO THE TERM OF THIS LIMITED WARRANTY
AND ARE LIMITED IN SCOPE OF COVERAGE TO THOSE
PORTIONS OF THE TRAVEL TRAILER COVERED BY THE
LIMITED WARRANTY. THERE ARE NO EXPRESS
WARRANTIES OR ANY IMPLIED WARRANTIES OF
MERCHANTABILITY ON THOSE PORTIONS OF THE
TRAVEL TRAILER EXCLUDED FROM COVERAGE. There
is no warranty of any nature made by Airstream beyond that
contained in this Limited Warranty. * * *
REPAIR REMEDY: Airstream’s sole and exclusive obligation is
to repair any covered defects discovered within the warranty
coverage period if: (1) within 10 days of your discovery of a defect
you notify Airstream OR an authorized dealership of the defect;
AND (2) you deliver your travel trailer to Airstream OR an
authorized dealership at your cost and expense.
BACK-UP REMEDY: If the primary repair remedy fails to
successfully cure any defect after a reasonable number of repair
attempts, your sole and exclusive remedy shall be to have
Airstream pay an Independent service shop of your choice to
perform repairs to the defect OR if the defect is incurable, have
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Airstream pay diminution in value damages. The repair remedy
and the back-up remedy MUST both be exhausted AND those
remedies must fail to fulfill their essential purpose before you can
seek any legal or equitable relief.
***
WHAT IS NOT COVERED
1. Tires, batteries, stereo, television, range/stove, furnace,
refrigerator, air conditioner, toilet, water heater, microwave
generator, glass breakage, and other materials, parts and
component warranted by persons or entities other than
Airstream. Please refer to the warranties of component
manufacturers for terms and conditions of coverage;
2. Accessories and equipment that are working as designed,
but which you are unhappy because of the design
3. Any part or component of the travel trailer that was not
manufactured or installed by Airstream;
4. Normal deterioration due to wear or exposure, including
but not limited to upholstery, flooring rust, corrosion, oxidation,
and cosmetic blemishes.
5. Normal maintenance and service items, including but not
limited to light bulbs, fuses, lubricants, sealants and seals, door
adjustments, and awning tension;
6. After market equipment or accessories installed on the
travel trailer after completion of manufacture by Airstream, or
any defects or damage caused by such items;
***
8. Defects or damage caused by, in whole or in part, or in any
way related to: Accidents, misuse (including off-road use), or
negligence; Failure to comply with the instructions set forth in
any owner’s manual provided with the travel trailer; Alteration
or modification of the travel trailer except such alterations or
modifications approved in writing by Airstream; Acts of God or
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other environmental conditions, such as lightning, hail, salt
causing rust, or other chemicals in the atmosphere; De-icing
agents or other chemicals applied to the travel trailer; Failure to
properly maintain or service the travel trailer, including but not
limited to the maintenance of lubricants, sealants, and seals;
Condensation and the results of condensation including water
damage and the growth of mold or mildew. Mold and mildew are
natural growths given certain environmental conditions and are
not covered by the terms of this Limited Warranty; The addition
of weight to the travel trailer that causes the total weight to exceed
applicable weight ratings, or additions of weight causing
improper distribution of the weight of the travel trailer; Failure
to seek and obtain repairs in a timely manner; Failure to use
reasonable efforts to mitigate damage caused by defects; Failure
to properly ventilate the travel trailer; Improper electric power
supply or improper travel trailer hookup to other facilities; Acts
or omissions of any person or entity other than Airstream.
DISCLAIMER OF INCIDENTAL AND CONSEQUENTIAL
DAMAGES
Airstream disclaims any and all incidental and consequential
damages, including but not limited to expenses such as
transportation to and from dealerships and Airstream repair
facilities, loss of time, loss of pay, loss of use, inconvenience,
commercial loss (including but not limited to lost profits), towing
charges, bus fares, vehicle rental, service call charges, gasoline
expenses, incidental charges such as telephone calls and facsimile
transmissions, and expenses for lodging and moisture damages
such as mold and mildew as well as rust and corrosion. This
disclaimer is independent of any failure of the essential purpose
of any warranties provided with the travel trailer, and shall
survive any determination that a warranty failed of its essential
purpose. * * *
***
If you believe a defect covered by this Limited Warranty still
exists after an attempted repair by an authorized Airstream
dealer, you must contact Airstream at the following address,
specifying:
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1. The complete serial number of the travel trailer;
2. The date of original purchase and the date of original delivery;
3. The name of the selling dealer; and
4. The nature of the problem and the steps or service which has
been performed.
***
Airstream may direct you to an authorized Airstream dealer, or
may request that you bring your travel trailer to the Airstream
factory in Jackson Center, Ohio for repairs.
Airstream does not control the scheduling of repairs at its
authorized Airstream dealers, and repairs at the Airstream
factory may not be immediately available. Therefore, you may
encounter delays in scheduling repairs and/or completion of
repairs. All costs associated with transporting the travel trailer
for any warranty service shall be the sole responsibility of the
owner.
Doc. 7, Ex. A.
{¶25} Powell claims that Airstream breached its express warranty by failing
to correct the issues with the RV within a reasonable time and with a reasonable
number of repair attempts. As noted by the trial court, there were many issues with
the RV. However, a review of the warranty shows that many of these issues were
not warranty issues. The warranty specifically excluded issues with the furnace,
toilet, stove, air conditioner, refrigerator, and doors, including the door adjustments.
Additionally, issues with the awning were excluded as it was a component covered
by a third party warranty and only installed by Airstream. March Dep. 27. Although
AA and Airstream addressed many of these issues for the benefit of the customers,
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the warranty coverage was provided by third parties. Excluding the issues clearly
excluded under the warranty, a view of the evidence in a light most favorable to
Powell shows the following repeat problems: 1) bath fan rattling; 2) drawer in the
bedroom opening in transit; 3) 30 amp outlet lights going out on the receptacles; 4)
water pooling in the shower; 5) rivet head popping out in transit;4 and 6) a squeaky
floor.5 The record shows that most of these issues were corrected each time they
were brought in, however some of them came back. The bath fan rattling resulted
from wires coming loose or a screw coming loose allowing the fan to hit the housing.
The problem with the bedroom drawer was resolved by changing the 5 lb. catches
to 10 lb. catches, which allowed for more pressure during transit. AA noted during
one repair that the catches were working as designed, but were not strong enough
for the customers’ purposes. The 30 amp outlet lights did keep going out and were
repeatedly replaced. The new one would work for a while, but the light in the new
ones would eventually fail as well. The issue with the shower was completely
resolved when the shower was replaced and all the fittings were tightened. The rivet
4
Without knowing exactly which rivets were coming loose, it is difficult for this court to know if it is a repeat
issue as in the same rivet, or is in a different location. However the undisputed testimony is that frequently
rivets do come loose during transit and have to be replaced. As we are viewing the evidence in a light most
favorable to Powell, we will treat this as a repeat issue.
5
This Court notes that there were other issues that repeated according to the customers, but some of these,
such as the fantastic fan becoming inoperable or issues with the air conditioning fan and furnace running at
the same time were due to user error. Some other issues listed showed that the component was functioning
as designed. The customer just did not like that aspect. However, this type of issue is specifically excluded
by the warranty. The remaining issues were either repaired the first time or were for a component excluded
by the terms of the warranty. Additionally, in its motion opposing summary judgment, Powell listed
additional complaints such as “excessive mold growth on the exterior of the RV.” However, these alleged
additional issues were not brought to the attention of Airstream and thus cannot be considered when
determining whether Airstream breached the terms of its express warranty.
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heads were resolved by drilling out the old rivets and replacing them with new ones.
Although the squeaky floor was noted, it was checked and no issues were found.
{¶26} Even if Airstream failed to repair everything according to the
warranty, Powell failed to follow the terms of the warranty. The Back Up Remedy
of the warranty provides that if Airstream has not successfully repaired the issue
after a reasonable attempt, the purchaser has the right to take the RV to an
independent repair facility to get the issue resolved and that Airstream will pay for
the repairs. If the issue cannot be remedied, Airstream will then pay diminution in
value. This is the sole and exclusive remedy permitted under the terms of the
warranty. Instead of trying to get a third party to repair the RV and have Airstream
pay for those repairs, Powell instead chose to request to rescind the sales contract
and have Airstream give him his money back.6 This is not a remedy offered under
the warranty. The warranty specifically provides that “the repair remedy and the
back-up remedy MUST both be exhausted AND those remedies must fail to fulfill
their essential purpose before you can seek any legal or equitable relief.” This
portion of the warranty was listed in bold print and was not hidden. Powell has not
exhausted his remedies under the warranty. Thus, pursuant to the terms of the
warranty, he is not entitled to seek legal or equitable relief at this time.
6
This court notes again that Powell did not purchase the RV from Airstream, but from AA. AA purchased
the RV from Airstream.
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{¶27} Powell also argues that the terms of the limited warranty should not be
applied because it failed of its essential purpose.
Under the Uniform Commercial Code, a limitation of remedy
clause is ineffectual when it deprives a party of the substantive
value of its bargain. Wash.Rev.Code § 62A.2–719. Limited
remedies clauses fail of their essential purpose in two situations,
one of which is “when the seller or other party required to provide
the remedy, by its action or inaction, causes the remedy to fail.”
Marr Enterprises, Inc. v. Lewis Refrigeration Co., 556 F.2d 951,
955 (9th Cir.1977). Typically, cases in this category are those in
which the plaintiff's remedy was limited solely to repair or
replacement of defective parts and the seller failed to replace or
repair in a reasonably prompt and non-negligent manner.
Polygon Northwest Co. LLC v. Louisiana-Pacific Corp., W.D. Wash No. C11-620
MJP, 2012 WL 2504873 (June 28, 2012). “When there are alternate exclusive
limited remedies, such as repair or refund, the exclusive remedies have been held
not to fail of their essential purposes, although there was a failure to repair or replace
the defective parts.” American Nursery Products, Inc. v. Indian Wells Orchards,
115 Wash.2d 217, 229, 797 P.2d 477 (1990).
{¶28} Pursuant to the language of the warranty, the purpose in this case was
to 1) allow an Airstream dealer to repair any alleged covered defects, 2) if the dealer
could not successfully repair the alleged covered defect, permit the owner to take it
to a third party for repair at Airstream’s cost, and 3) if the alleged defect was not
curable, allow the owner to receive the diminution in value. As discussed above,
the repairs were all successfully completed within one to three attempts excluding
those for which the problem could either not be duplicated or no issue could be
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found. Although Powell and the customers did take the RV to AA, an authorized
dealer for repairs, when those repairs did not meet their expectations, they did not
attempt to arrange for a third party to repair the RV at Airstream’s expense.
Airstream gave Powell an alternative to continuing to allow Airstream’s dealers to
attempt to repair the issues, but Powell did not avail himself of this option. As there
were alternatives, the warranty did not fail of its essential purpose.
{¶29} Powell also argues that the back up remedy should fail because he
would not have purchased the RV if he had known about the “secret” back up
remedy provision prior to the purchase. This court notes that even assuming that
Powell did not receive a copy of the warranty until he picked up the RV, he did
receive a copy of it.7 The customers then proceeded to use the RV for more than a
year after receiving the warranty. The customers even took advantage of the
warranty by having items repaired at no charge. Even assuming that the purchase
contract was voidable because Powell did not know all of the terms, i.e. the back up
remedy in the limited warranty, a party ratifies those terms if he or she remains silent
or continues to accept the benefits of the contract after discovering the unknown
provisions. Ward v. Richards & Rossano, Inc., P.S., 51 Wash.App. 423, 433, 754
P.2d 120 (1988). By using the RV and the warranty, Powell ratified the provisions
in the limited warranty, including the back up remedy.
7
The back up remedy was not hidden amongst the fine print of the limited warranty. The copy of the warranty
provided by Powell shows that the back up remedy was labeled in bold print and all capital letters on the first
page right under the repair remedy. It was clearly placed for anyone to view.
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{¶30} Powell also argues three other issues: 1) Airstream waived the back
up remedy, 2) the back up remedy left him with no remedy, and 3) the back up
remedy was against public policy. A review of the record shows that these issues
were neither raised in the initial complaint nor in the response to the motion for
summary judgment. This Court has long held that issues that were not, but could
have been, raised in the trial court may not be raised for the first time on appeal.
Cortez v. Smith, 3d Dist. Defiance No. 4-95-5, 1995 WL 505928 (Aug. 10, 1995).
Powell could have argued these claims in the trial court, but did not. Thus, we will
not address them on appeal.
Magnuson-Moss Warranty Act
{¶31} The third claim raised in the complaint was that Airstream violated the
Magnuson-Moss Warranty Act. The “Act limits the ability of manufacturers to
disclaim or modify implied warranties in cases where they have offered express
warranty protection.” Curl v. Volkswagon of Am. Inc., 114 Ohio St. 3d 266, 2007-
Ohio-3609, ¶ 10, 871 N.E.2d 1141. It does not create new implied warranties or
otherwise modify the implied warranties existing according to state law. Id. Rather,
the Act adopts the implied warranty protections previously established under the
governing state law. Id. “Claims under the Magnuson–Moss Act stand or fall with
[the] express and implied warranty claims under state law.” Clemens v.
DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008). The outcome of the
state law warranty claims determines the disposition of the Magnuson-Moss Act
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claims. Id. If the underlying state warranty claims are dismissed, the Magnuson-
Moss Act claims must also be dismissed. Id.
{¶32} Here, Powell brought the Magnuson-Moss Act claims based on
violation of the limited and express warranties pursuant to the law in the state of
Washington. This Court addressed the alleged breaches of the express and limited
warranties above. The conclusion reached was that Airstream did not breach the
express warranty and that Powell lacked privity to contract to recover on the theory
of implied warranties. Since the underlying state warranty claims fail, as a matter
of law the federal claims under the Magnuson-Moss Act must also fail.
Washington Consumer Protection Act
{¶33} Powell also claims that Airstream violated the Washington Consumer
Protection Act (“CPA”) by violating the warranties and the Moss-Magnuson Act
and by deceiving the general public. “To prevail on a CPA action, the plaintiff must
prove an ‘(1) unfair or deceptive act or practice; (2) occurring in trade or commerce;
(3) public interest impact; (4) injury to plaintiff in his or her business or property;
(5) causation.’ ” Klem v. Washington Mut. Bank, 176 Wash. 2d. 771, 782, 295 P.3d
1179, (2013) (quoting Hangman Ridge Training Stables, Inc. v. Safeco Title Ins.
Co., 105 Wash.2d 778, 780, 719 P.2d 531 (1986)). If a plaintiff does not satisfy
each of these elements, the CPA claim must fail. Rush v. Blackburn, 190 Wash.
App. 945, 961, 361 P.3d 217 (2015). The determination of whether an act is unfair
or deceptive is a question of law, not fact. Id.
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{¶34} The purpose of the CPA is to address acts injurious to the public.
RCW 19.86.920. Thus, a plaintiff bringing a cause of action pursuant to the CPA
must show that there was a public interest impact resulting from the alleged
deceptive act. Id. To determine if the act affects the public, courts should look to
see if the acts form a pattern, whether they have been repeated, or if the alleged
deceptive acts affected many consumers. McLaughlin v. Watercraft International,
Inc., 87 Wash.App.1051 (1997).
{¶35} Here, Powell claims that there was deceptive acts by Airstream when
it breached its warranty. This court has already determined that there was no breach
of warranty, so it cannot be a deceptive act. Powell also claims that by advertising
that the RV was well made and would last a long time, Airstream was deceptive.
However, the only evidence of this was that this specific RV had many issues and
was not up to the quality expected by Powell. Powell presented no evidence that
there was a pattern of behavior or that it affected many consumers. An isolated
incident, i.e. putting a subpar RV into the commerce stream, while it may affect a
few consumers catastrophically, does not necessarily affect a large number of
consumers as is necessary to establish a claim under the CPA. McLaughlin, supra.
Without any evidence that an allegedly deceptive or unfair act is likely to be
repeated or has affected a large number of consumers, there is no public impact as
is required for a claim under the CPA. Id. Since the undisputed evidence does not
show that there was a public impact in this case, the CPA claim must fail.
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{¶36} Having reviewed all of the claims raised in the complaint and the
arguments raised in the memorandum contra to the motion for summary judgment,
the undisputed evidence shows that there are no material issues of fact. Viewing
the evidence in a light most favorable to the nonmoving party, reasonable minds can
only reach one conclusion and that conclusion is adverse to the nonmoving party.
The motion for summary judgment was properly granted and the assignment of error
is overruled.
{¶37} Having found no error in the particulars assigned and argued, the
judgment of the Court of Common Pleas of Shelby County is affirmed.
Judgment Affirmed
SHAW and PRESTON, J.J., concur.
/hls
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