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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
EVERETTE L. CARRIGG, 18-cv-13538
PATSY O. CARRIGG,
HON. TERRENCE G. BERG
Plaintiffs,
v.
GENERAL R.V. CENTER, INC., ORDER GRANTING
CORNERSTONE UNITED, INC., DEFENDANTSâ MOTIONS
THE HUNTINGTON NATIONAL FOR SUMMARY JUDGMENT
BANK
Defendants.
Plaintiffs Everette L. Carrigg and Patsy O. Carrigg purchased a
used recreational vehicle (âRVâ) from Defendant General R.V. Center,
Inc. (âGeneral RVâ). According to the Carriggs, shortly after they
purchased the RV, it became clear the vehicle was defective and not safe
for its intended use. Plaintiffs are now asserting claims for violation of
the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., breach of
express and implied warranties, fraudulent misrepresentation, and
breach of contract. The case is before the Court on motions for summary
judgment filed by General RV and by Defendant Cornerstone United,
Inc., a party to the service contract Plaintiffs purchased through General
RV. ECF Nos. 22, 23. For reasons explained below, the Court will grant
Cornerstoneâs and General RVâs motions for summary judgment.
BACKGROUND
In late 2016, Plaintiffs Everett Carrigg and Patsy Carrigg, a retired
couple in their mid-to-late 70âs, purchased a used 2013 Thor Challenger
recreational vehicle (âRVâ) from Defendant General R.V. Center, Inc.
(âGeneral RVâ). ECF No. 16, PageID.494 (Am. Compl.). As part of the
sale, Plaintiffs traded in their old RV and agreed to pay an additional
$62,228.33. Id. at PageID.496; ECF No. 22-1, PageID.562 (âPurchase
Agreementâ). Along with the Thor Challenger RV, they also purchased a
three-year service warranty serviced by Cornerstone United, Inc. ECF
No. 16, PageID.494. Plaintiffs contend that throughout the process of
purchasing the RV a General RV salesman, Julius âJuiceâ Tatum, as well
as other agents of General RVâincluding a sales manager, financing
manager, general manager, and service managerâmade
misrepresentations about the condition and quality of the RV, as well as
the applicable warranties. ECF No. 16, PageID.496; ECF No. 29-2,
PageID.722â23 (Patsy Carrigg Aff.). These alleged misrepresentations,
which Plaintiffs say they relied on to their detriment, form the basis of
this lawsuit.
According to Plaintiffs, representatives of General RV on multiple
occasions averred that the RV they ultimately purchased was in excellent
condition and âcame with the remainder of a 10-year manufacturerâs
bumper-to-bumper factory warranty that specifically covered any
structural defects.â ECF No. 16, PageID.496; ECF No. 29-2, PageID.722â
23. Contrary to General RVâs alleged representations that the vehicle was
âlike newâ at the time of purchase, Plaintiffs contend the RV had âmajor
structural damageâ and, as they later claim to have discovered, had
previously been totaled and its chassis replaced with a salvage chassis.
ECF No. 16, PageID.497; ECF No. 29-2, PageID.730. The advertised
âbumper-to-bumperâ manufacturerâs warranty had in fact expired in
2014, two years before Plaintiffs purchased the vehicle. ECF No. 35,
PageID.1005 (Celina Tyler Aff.). Plaintiffs further urge that
representatives of General RV misrepresented the scope of the three-year
Cornerstone warranty they purchased at the dealership, reassuring them
that the warranty would cover any needed repairs to fix structural or
mechanical problems with the vehicle. ECF No. 29-2, PageID.724.
Essentially, Plaintiffs maintain that General RVâs salesman and
managers made express oral representations to them about the condition
of the vehicle and the manufacturerâs warranty, that those
representations were false, and that Plaintiffs relied on them to their
detriment.
The purchase agreement governing the RVâs sale is a two-sided
document with an âall-capsâ integration clause above the purchasersâ
signature line explaining that the written agreement contains the entire
agreement between Plaintiffs and General RV. ECF No. 22-1,
PageID.562. That provision also alerts signatories to other terms and
conditions contained in the agreementâincluding an âas isâ and
exclusion of warranties provision located on the reverse side of the
agreement. Id. The integration clause reads:
THIS PURCHASE AGREEMENT CONTAINS THE ENTIRE
UNDERSTANDING BETWEEN GENERAL RV AND
PURCHASER. NO ONE HAS AUTHORITY TO MAKE ANY
REPRESENTATION BEYOND THIS AGREEMENT. NO
OTHER REPRESENTATIONS OR INDUCEMENTS,
VERBAL OR WRITTEN HAVE BEEN MADE, WHICH ARE
NOT CONTAINED ON THIS DOCUMENT. PURCHASER
HAS NOT RELIED ON ANYTHING NOT WRITTEN INTO
THIS PURCHASE AGREEMENT SUCH THAT NOTHING
ELSE IS THE BASIS OF THE BARGAIN OR IS
ENFORCEABLE AGAINST GENERAL RV, EVEN IF
ALLEGED TO BE A MISREPRESENTATION. BY SIGNING
BELOW, PURCHASER ACKNOWLEDGES THAT
PURCHASER HAS RECEIVED A COPY OF THIS
AGREEMENT AND THAT PURCHASER HAS READ AND
UNDERSTANDS THE TERMS OF THIS AGREEMENT,
INCLUDING THOSE PRINTED ON THE REVERSE SIDE,
WHICH INCLUDE AN âAS ISâ CLAUSE, A NON-
REFUNDABLE DEPOSIT STATEMENT, AND A CHOICE
OF LAW AND FORUM SELECTION CLAUSES
INDICATING THAT MICHIGAN LAW APPLIES TO ALL
POTENTIAL DISPUTES AND THAT ALL CLAIMS MUST
BE FILED IN MICHIGAN.
ECF No. 22-1, PageID.562.
The âas isâ purchase warning and express exclusion of warranties
on the reverse side of the agreement states:
EXCLUSION OF WARRANTIES, âAS ISâ PURCHASE
PURCHASER UNDERSTANDS THAT THERE MAY BE
WRITTEN WARRANTIES COVERING THIS RV, BUT
THAT THESE WARANTIES ARE OFFERED BY THE
MANUFACTURER OF THE RV....PURCHASER
UNDERSTANDS THAT DEALER OFFERS NO
WARRANTIES, EXPRESS OR IMPLIED, ON THIS RV.
THIS RV IS SOLD âAS ISâ BY DEALER, AND DEALER
DISCLAIMS ALL WARRANTIES EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. This
document is not a warranty and nothing that Dealer says or
does creates a warranty.... This is true even if Purchaser
purchases a service contract .... Also, since Dealer provides
no warranties from Dealer, any written warranty from a
manufacturer of the vehicle or its components is Purchaserâs
sole and exclusive remedy for any problem that Purchaser
may have with the vehicle or any appliance or component.
ECF No. 22-1, PageID.563. This âas isâ provision is the eleventh of
sixteen different terms and conditions described on the reverse side of
the purchase agreement:
â. EXCLUSION FwaRaaNries =Agis pure ase be vert WARRANTIES caverns fv, eur Teme ae ARE
OFFERED BY THE MANUFACTURER OF THE RV, ITS COMPONENTS AND/OR ITS APPLIANCES. THESE WARRANTIES HAVE BEEN PROVIDED TO
PURCHASER, AND PURCHASER HAS READ AND UNDERSTANDS THESE WARRANTIES. PURGHASER UNDERSTANDS THAT DEALER OFFERS NO
WARRANTIES, EXPRESS OR. IMPLIED, ON THIS RV, THIS RV IS SGLD "AS [S" BY DEALER, AND DEALER DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, This. document is not a warranty and nothing that Dealer says or does creates @ waitanly, including any pre-delivery Inspection, This is true
even If Purchaser purchases a service contract, and Paragraphs 11-19 apply fully even If Purchaser purchases a service contract. Also, alnce Dealer
provides no warranties from Dealer, any written warranly from a manufacturer of the vehicle or its components is Purchaser's sole and exclusive remedy for
any probiem that Purchaser may have wih the vehicle or any eppance or component.
The font, which is small and somewhat difficult to read, appears to be no
larger than that used for other provisions on this same page of the
purchase agreement, though portions of the âas isâ disclaimer are
capitalized, and some parts both capitalized and bolded. ECF No. 22-1,
PagelD.563. No other provision in the purchase agreement is both
capitalized and bolded. See id.
Plaintiffs also signed a separate General RV âas isâ and warranty
disclaimer form, thereby again acknowledging that the RV was
purchased âas isâ and that the two-sided purchase agreement is âthe only
document that contains the terms and conditions of [the] agreement with
General RV.â ECF No. 22-1, PageID.565. The form uses the phrase âas
isâ in its title and capitalizes, bolds, and underlines that term:
GENERAL RV âAS ISâ and WARRANTY DISCLAIMER FORM, and AGKNOWLEDGMENT OF
MICHIGAN LAW AND MICHIGAN FORUM CONTROLLING
âAS 1Sâ: | understand that | am purchasing this vehicle âAS 1Sâ from General RV. understand that the 2-
sided Purchase Agreement | signed with General RV is the only document that contains the terms and
cenditions of my agreement with General RV, even though | may have executed a financing agreement,
Additionally, | understand that | do not have the right to revoke or rescind this contract or return the RV and
receive my money back, as | purchased the RV âAS ISâ from General RV with an âAS ISâ Purchase
Agreement.
Id. The same warranty disclaimer former also includes an additional
exclusion of warranties provision which Plaintiffs signed, affirming:
âT understand that GENERAL RV OFFERS NO
WARRANTIES, EXPRESS OR IMPLIED, ON THIS RV
AND THAT I AM PURCHASING THE RV âAS ISâ FROM
GENERAL RV. GENERAL RV DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.â
ECF No. 22-1, PageID.565; see also ECF No. 22-1, PageID.569â70
(General RV Service Call Agreement) (âGeneral RV Center has sold the
unit to you âAS ISâ and does not issue any warranties whatsoever either
express or implied. All warranties received by you are solely issued by
the manufacturer of your recreational vehicle/unit.â).
According to the amended complaint, Everette Carrigg is ânot
functionally literateâ and therefore âcould not understand the terms of
the documents he signed and initialed at General RV.â ECF No. 29-2,
PageID.722. Patsy Carrigg apparently also has poor eyesightâshe has
had two surgeries on her eyes and continues to be treated for vision
issues. ECF No. 29-2, PageID.721. Despite these limitations Plaintiffs
signed several forms, including the purchase agreement, in the process
of purchasing their RV. ECF 22-1, PageID.4â5. Everette Carrigg, the
primary buyer, also signed an additional acknowledgment averring that
he had received the purchase agreement, âwas allowed the necessary and
requested amount of time to review its contentsâ and âfully underst[ood]
the terms and conditions.â ECF No. 22-1, PageID.571. Yet Plaintiffs
allege that General RV rushed them through the sales process, without
any meaningful opportunity to review the paperwork or to examine the
âfine print,â which Patsy Carrigg found difficult to read (and Everett
Carrigg apparently could not read at all). ECF No. 16, PageID.499; ECF
No. 29-2, PageID.722, 724.
After purchasing the RV, Plaintiffs claim they immediately
discovered it was âmechanically unsound, unsafe to drive, and did not
conform to the representations that [General RV] had made.â ECF No.
16, PageID.503; ECF No. 29-2, PageID.726â27. Repairs were needed at
the outset, according to Plaintiffs, to address the following problems:
broken driverâs seat; defective step control modules; seeping jack seals;
malfunctioning R/R thermistor, camera, radio and monitors; and an
unsealed or leaking toilet. ECF No. 16, PageID.503; ECF No. 29-2,
PageID.726â27. Plaintiffs also brought their recently purchased RV back
to the General RV service department to address a litany of more serious
structural and mechanical problems, including a windshield that popped
out of the vehicle, a defective leveling device, a malfunctioning awning
system, and unstable interior walls. ECF No. 16, PageID.504; ECF No.
29-2, PageID.727. But General RV then explained that there was in fact
no manufacturerâs warranty on the vehicle and apparently declined to
make the repairs Plaintiffs requested, or at least to do so free of charge.
ECF No. 16, PageID.505â06. Likewise, General RV refused to let
Plaintiffs trade in the apparently defective RV for a different, similarly
priced one. ECF No. 16, PageID.506.
Plaintiffs assert they have been left with a worthless RV along with
an equally ineffective manufacturerâs warranty and service contract.
ECF No. 29-02, PageID.26. Seeking relief from this court, they now claim
that: (1) General RV breached implied warranties inherent in the sale of
any good; (2) General RV breached express warranties it made to
Plaintiffs about the condition of the Thor RV, the existence of a
manufacturerâs warranty, and General RVâs commitment to fulfilling the
Cornerstone service contract; (3) General RV breached warranties and
employed deceptive practices in violation of the Magnuson-Moss
Warranty Act, 15 U.S.C. § 2301 et seq.; (4) General RV made fraudulent
misrepresentations to them regarding the condition of the Thor RV; and
(5) Cornerstone breached its service contract by failing to repair the RV.
ECF No. 16, PageID.19-27.
DISCUSSION
Summary judgment is appropriate âif 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.â See Fed. R. Civ. P. 56(a). A fact is
material only if it might affect the outcome of the case under the
governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249
(1986). On a motion for summary judgment, the Court must view the
evidence and any reasonable inferences drawn from the evidence in the
light most favorable to the non-moving party. Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citations omitted);
Redding v. St. Edward, 241 F.3d 530, 531 (6th Cir. 2001).
The moving party has the initial burden of demonstrating an
absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477
U.S. 317, 325 (1986). If the moving party carries this burden, the party
opposing the motion âmust come forward with specific facts showing that
there is a genuine issue for trial.â Matsushita, 475 U.S. at 587. The trial
court is not required to âsearch the entire record to establish that it is
bereft of a genuine issue of material fact.â Street v. J.C. Bradford & Co.,
886 F.2d 1472, 1479â80 (6th Cir. 1989). Rather, the ânonmoving party
has an affirmative duty to direct the courtâs attention to those specific
portions of the record upon which it seeks to rely to create a genuine issue
of material fact.â In re Morris, 260 F.3d 654, 655 (6th Cir. 2001). The
Court must then determine whether the evidence presents a sufficient
factual disagreement to require submission of the challenged claims to
the trier of fact or whether the moving party must prevail as a matter of
law. See Anderson, 477 U.S. at 252.
I. Cornerstoneâs motion for summary judgment
Plaintiffsâ only claim against Cornerstone is for breach of contract
in connection with Cornerstoneâs alleged failure to repair their RV. They
assert that Cornerstone was required to make these repairs under the
service contract they purchased through General RV. But the plain
language of the contract provides that Cornerstone was only obligated to
pay authorized service centers to make covered repairs to the RVânot to
make those repairs itself. See ECF No. 30-3, PageID.830 (Cornerstone
Contract). Even if the Court construes Plaintiffsâ âfailure to repairâ claim
as one for failure or refusal by Cornerstone to pay for needed repairs
(rather than to make repairs itself), as Plaintiffs request, the record
shows Cornerstone in fact paid each claim it received related to Plaintiffsâ
RV. Because the undisputed material facts demonstrate that
Cornerstone performed its obligations under the service contract, the
Court must grant summary judgment in favor of Cornerstone on
Plaintiffsâ claim for breach of contract.
The elements of a claim for breach of contract under Michigan law
are: â(1) that there was a contract, (2) that the other party breached the
contract and, (3) that the party asserting breach of contract suffered
damages as a result of the breach.â Lossia v. Flagstar Bancorp, Inc., No.
15-12540, 2016 WL 520867, *2 (E.D. Mich. Feb. 10, 2016) (quoting AFT
Mich. v. Michigan, 846 N.W.2d 583, 590 (Mich. Ct. App. 2014)). Plaintiffs
purchased their Cornerstone service contract from General RV the same
day they purchased their vehicle. ECF No. 23-1, PageID.630. Although
the contract was purchased through General RV, it makes clear that it is
an agreement between Plaintiffs and Cornerstone only. See ECF No. 23-
1, PageID.630 (âThis Contract is between You and the Obligor
(hereinafter referred to as We, Us, and Our) â Cornerstone United
Administrative Services, Inc.â). General RV is not a party to the contract
and the contract did not establish any warranty by or service contract
with General RV. See ECF No. 30-3; Chaudoin v. Thor Motor Coach, Inc.,
No. 15-13871, 2017 WL 3485803, at *14 (E.D. Mich. Aug. 15, 2017)
(examining an apparently identical Cornerstone service contract in a
similar case and determining that it established no obligation on the part
of General RV). Under the service contract Plaintiffs signed, Cornerstone
was required only to reimburse Plaintiffs for covered repairs to the RV
completed by authorized service centers. See ECF No. 30-3, PageID.830â
35. Plaintiffs were not required to have their RV serviced at General RV
and in fact could have gone to any authorized service dealer for repairs.
See ECF No. 35, PageID.1002. The record is unclear as to why Plaintiffs
did not seek to have repairs performed by other service centers under the
Cornerstone warranty, if General RV refused to help them.
Four different claims were submitted to Cornerstone for repairs to
Plaintiffsâ vehicle, all of which were completed at General RV. ECF No.
23-1, PageID.632â39. Claim detail summaries produced by Cornerstone
establish that it in fact paid each of these four claims. See ECF No. 23-1,
PageID.632â39; ECF No. 35, PageID.1001 (Frank Caballero Aff.)
(âCornerStone had performed under the service contract on each occasion
where a claim for benefits was made to CornerStone on behalf of Mr. and
Mrs. Carrigg.â). Cornerstone paid each of Plaintiffsâ claims in full, minus
a $150 deductible. ECF No. 23-1, PageID.632â39. Though Plaintiffs
contend that âCornerstone failed or refused to pay for the needed repairs
to the RV,â they have produced no evidence to support this assertion. ECF
No. 30, PageID.800. The evidentiary record therefore does not suggest
that Cornerstone in any way breached its obligations to Plaintiffs under
the service contract.
Another argument Plaintiffs raise in opposition to Cornerstoneâs
summary judgment motion is that the service contract âappears to be void
ab initioâ because it states that coverage will not be available â[i]f the
original warranty has ever been voided by the manufacturer.â ECF No.
30, PageID.799â800 (Plaintiffsâ Resp. Br.); ECF No. 30-3, PageID.831
(Cornerstone Contract). Plaintiffs assert that the original manufacturerâs
warranty on Plaintiffsâ RV had in fact been voided. ECF No. 30,
PageID.799â800 (Plaintiffsâ Resp. Br.). But Plaintiffs have not produced
evidence in support of their argument that the manufacturerâs warranty
or Cornerstone service contract was ever voided. According to the text of
the service contract, the agreement with Cornerstone remains in force
and will not expire until November 20, 2019. ECF No. 30-3, PageID.830
(Cornerstone Contract); ECF No. 35, PageID.1002 (Frank Caballero Aff.).
Further, General RV has provided an affidavit by a consumer affairs
manager at Thor Motor Coach, Inc., manufacturer of the RV at issue,
averring that the manufacturerâs warranty was provided only to the RVâs
initial purchaser and was valid just âfor 12 months or 15,000 miles on the
covered portions of the house portion of the motorhome, and for 24
months or 24,000 miles on the steel or aluminum frame structure, only.â
ECF No. 35, PageID.1004â05 (Celina Tyler Aff.). The manufacturerâs
warranty thus had expired before Plaintiffs purchased the RV. Id. It was
not voided. Id. Besides, if the Cornerstone service contract was void ab
initio, as Plaintiffs argue, their claim for breach of contract against
Cornerstone would necessarily fail. The existence of a contract is a
required element for breach of contract. AFT Mich., 846 N.W.2d at 590.
Because the undisputed material facts demonstrate that
Cornerstone paid in full each of the claims it received for covered repairs
to Plaintiffsâ RV and thereby fulfilled its obligations under the service
contract, Plaintiffs have failed to establish a genuine issue of material
fact as to whether Cornerstone breached the terms of the contract. ECF
No. 23-1, PageID.632â39. On this basis, summary judgment will be
granted in favor of Cornerstone on Plaintiffsâ breach of contract claim.
II. General RVâs motion for summary judgment
Plaintiffs assert several claims against Defendant General RV for
breach of implied and express warranties, related violations of the
Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., and for
fraudulent misrepresentation. General RV asserts that it is entitled to
summary judgment on these claims because Plaintiffs purchased the RV
âas is,â with all warranties disclaimed by the purchase agreement. The
Court agrees and will accordingly grant General RVâs motion for
summary judgment.
A. Violation of implied warranties
Every contract for the sale of goods includes implied warranties of
merchantability and fitness for a particular purpose, unless the warranty
is excluded or modified. Lumber Mut. Ins. Co. v. Clarklift of Detroit, Inc.,
569 N.W.2d 681, 682 (Mich. Ct. App. 1997) (per curiam) (citing Mich.
Comp. Laws §§ 440.2314, 440.2315); Davis v. LaFontaine Motors, Inc.,
719 N.W.2d 890, 895 (Mich. Ct. App. 2006). Implied warranties may âbe
negated by contrary contractual terms meeting the requirements of
[Mich. Comp. Laws § 440.2316(2), (3)].â Rokicsak v. Colony Marine Sales
and Serv., Inc., 219 F. Supp. 2d 810, 815 (E.D. Mich. 2002) (quoting
McGhee v. GMC Truck & Coach Div., 296 N.W.2d 286, 289 (Mich. Ct.
App. 1980)). Under Mich. Comp. Laws § 440.2316, âunless the
circumstances indicate otherwise, all implied warranties are excluded by
expressions like âas isâ, âwith all faultâ or other language which in common
understanding calls the buyerâs attention to the exclusion of warranties
and makes plain that there is no implied warranty.â Additionally, â[t]o
exclude or modify the implied warranty of merchantability . . . the
[disclaimer] language must mention merchantability and in case of a
writing must be conspicuous.â Mich. Comp. Laws § 440.2316(2).
Likewise, âto exclude or modify any implied warranty of fitness the
exclusion must be by a writing and conspicuous.â Id. â[A] printed heading
in capitals is conspicuous and language in the body of a form is
conspicuous if it is larger or in contrasting type or color.â HRL Land or
Sea Yachts v. Travel Supreme, Inc., No. 1:07-cv-945, 2009 WL 427375, *3
(W.D. Mich. Feb. 20, 2009) (citing Mich. Comp. Laws § 440.1201(j)). The
statute goes on to expressly state that language is sufficient to exclude
all implied warranties of fitness âif it states, for example, that âThere are
no warranties which extend beyond the description on the face hereof.ââ
Id.
Here, the purchase agreement at issue plainly includes languageâ
in bolded, capital lettersâexpressly warning that âthis RV is sold âas isâ
by dealer, and dealer disclaims all warranties express or implied,
including, but not limited to any implied warranty of merchantability or
fitness for a particular purpose.â ECF No. 22-1, PageID.563 (Purchase
Agreement). This disclaimer specifies the âas isâ nature of the sale and,
consistent with Michigan lawâs requirements for disclaimer of the
implied warranty of merchantability, specifically mentions
merchantability. See Mich. Comp. Laws § 440.2316(2). Further, as
required by state law to negate the implied warranties of merchantability
and fitness, the disclaimer is conspicuous and in writing. Id. The
language appears on the reverse side of the relatively concise two-page
purchase agreement, in bolded, capitalized, albeit small font. ECF No.
22-1, PageID.563. Further, the same âas isâ sale language and exclusion
of warranties appears not only in the purchase agreement, but also in the
following documents signed by Plaintiffs: (1) âGeneral RV âAs Isâ and
Warranty Disclaimer Form,â ECF No. 22-1, PageID.565; (2) âDelivery
Receipt, Storage, Agreement and Risk of Loss Notice and
Acknowledgment,â ECF No. 22-1, PageID.567; and (3) âService Call
Agreement,â ECF No. 22-1, PageID.569. Courts interpreting almost
identical warranty disclaimers in cases applying Michigan law have
found them sufficient. See, e.g., Dolores v. General R.V. Center, Inc., No.
19-10413, 2019 WL 2601311, at *3 (E.D. Mich. June 25, 2019); Rokicsak,
219 F. Supp. 2d at 815; Pidcock v. Ewing, 371 F. Supp. 2d 870, 880 (E.D.
Mich. 2005); HRL Land or Sea Yachts, 2009 WL 427375 at **1â3.
Michigan law allows for the disclaimer of implied warranties and the
Courts finds that the multiple disclaimers included in the purchase
documents at issue (and most critically, in the purchase agreement) are
effective.1
Plaintiffsâ contention that they were unable to read the text of the
purchase agreement and related documents, and were therefore unaware
of the warranty disclaimers, will not prevent summary judgment in favor
of General RV. âIt is well established that failure to read an agreement
is not a valid defense to enforcement of a contract. A contracting party
has a duty to examine a contract and know what the party has signed,
and the other contracting party cannot be made to suffer for neglect of
that duty.â Montgomery v. Fid. & Guar. Life Ins. Co., 713 N.W.2d 801,
804 (Mich. Ct. App. 2005) (citations omitted). â[I]n Michigan, a party who
signs a document is deemed to know the contents of those documents and
may not claim ignorance to avoid enforcement of the instrument.â HRL
Land or Sea Yachts, 2009 WL 427375 at *4 (citing Scholz v. Montgomery
Ward & Co., Inc., 468 N.W.2d 845, 848 (Mich. 1991)). Plaintiffsâ alleged
inability to read the purchase agreement is not a defense to enforcement
of the contract against them.
The contents of the purchase agreement and related sale documents
1 To the extent Plaintiffs are arguing that the Magnuson-Moss Warranty Act, 15
U.S.C. § 2308(a), does not permit disclaimer of implied warranties where a written
warranty is provided, it is clear from the record that no written warranty was
provided by General RV. The purchase agreement plainly states that General RV
disclaimed all express and implied warranties, and that any written warranties âare
offered by the manufacturer of the RV.â ECF No. 22-1, PageID.563. Moreover, âan
MMWA claim for breach of warranty depends on the plaintiff having a valid state law
implied warranty claim,â which Plaintiffs have not presented. HRL Land or Sea
Yachts, 2009 WL 427375 at *5 (citing Harnden v. Ford Motor Co., 408 F. Supp. 2d
300, 308 (E.D. Mich. 2004)).
are not in dispute. The Court finds that the implied warranty disclaimers
contained therein meet the requirements for disclaimers established by
Michigan law. General RVâs disclaimer of any implied warranties was
effective and, as a result, Plaintiffsâ claim for violation of implied
warranties fails as a matter of law. Summary judgment in favor of
General RV is warranted on this claim.
B. Violation of express warranties
Under Michigan law, a seller who makes â[a]n affirmation of fact or
promise . . . to the buyer which relates to the goods and becomes part of
the basis of the bargainâ creates an express warranty that âthe goods
shall conform to the affirmation or promise.â Mich. Comp. Laws
§ 440.2313(1)(a). Likewise, a seller who gives the buyer â[a] description
of the goods which is made part of the basis of the bargain creates an
express warranty that the goods shall conform to the description.â Mich.
Comp. Laws § 440.2313(1)(b). As explained by the Michigan Court of
Appeals, however, âany alleged oral statements made by [a sellerâs]
representatives about the reliability of the [product] . . . are subject to the
UCC statute of frauds and are therefore excluded to the extent they are
inconsistent with the partiesâ written expressions.â Rodger v. Ford Motor
Co., No. 275578, 2008 WL 4646140, *5 (Mich. Ct. App. Oct. 21, 2008)
(citing Mich. Comp. Laws § 440.2202) (âTerms . . . to which . . . the
parties agree or which are otherwise set forth in a writing intended by
the parties as a final expression of their agreement with respect to those
terms . . . may not be contradicted by evidence of any prior agreement or
of a contemporaneous oral agreement.â)). Accordingly, where a written
agreement exists between the parties and that agreement is clear and
unambiguous, âparol evidence of prior negotiations and representations
cannot be adduced to create an express warranty and thereby vary the
terms of the contract.â Heritage Res., Inc. v. Caterpillar Fin. Serv. Corp.,
774 N.W.2d 332, 342 (Mich. Ct. App. 2009) (quoting Salzman v.
Maldaver, 24 N.W.2d 161, 165 (Mich. 1946)).
It is undisputed that the partiesâ agreement was put into writing in
the form of the fully executed purchase agreement. See ECF No. 22-1,
PageID.562â63. That agreement also contains an integration clause
explicitly acknowledging that the purchase agreement âcontains the
entire understanding between General RV and Purchaserâ and that no
other representations, verbal or written, had been made by General RV
or relied on by Plaintiffs in entering into the agreement. Id. at
PageID.562; Wonderland Shopping Ctr. Venture Ltd. Pâship v. CDC
Mortg. Capital, Inc., 274 F.3d 1085, 1095 (6th Cir. 2001) (â[A]n
integration clause in a written contract conclusively establishes that the
parties intended the written contract to be the complete expression of the
agreement.â) (applying Michigan law). Plaintiffs are therefore precluded
from suing General RV under a theory of violation of express warranties
not contained in the purchase agreement. See Irwin Seating Co. v. Intâl
Bus. Mach. Corp., No. 1:04CV568, 2005 WL 1475390, at *9 (W.D. Mich.
June 22, 2005) (explaining that plaintiff was precluded from suing on a
theory of violation of express warranties because the agreement
contained a conspicuous disclaimer of any prior statements to the
contrary and an integration clause). Summary judgment on Plaintiffsâ
claim for breach of express warranties must be entered in General RVâs
favor.
C. Magnuson-Moss Warranty Act
Plaintiffs next assert that General RV violated the Magnuson-Moss
Warranty Act, 15 U.S.C. § 2308, by attempting to disclaim the implied
warranties of fitness and merchantability within 90 days of selling them
a service contract. The Act creates a private right of action for âa
consumer who is damaged by the failure of a supplier, warrantor, or
service contractor to comply with any obligation under this chapter, or
under a written warranty, implied warranty, or service contract.â 15
U.S.C. § 2310(d)(1). It âserves to supplement state-law implied
warranties only by prohibiting their disclaimer in certain
circumstancesââspecifically, when the seller disclaims an implied
warranty while either making a written warranty to the consumer or
entering into a service contract. Pidcock, 371 F. Supp. 2d at 878â79
(emphasis omitted) (quoting Rokicsak, 219 F. Supp. 2d at 817â18).
Again, the record in this case establishes that General RV did not
enter into any service contract with Plaintiffs or provide a written
warranty. Although Plaintiffs purchased a service contract through
General RV, that agreement was a contract between Plaintiffs and
Cornerstone only. See ECF No. 23-1, PageID.630 (âThis Contract is
between You and the Obligor (hereinafter referred to as We, Us, and Our)
â Cornerstone United Administrative Services, Inc.â). General RV is not
a party to the contract nor did the contract establish any warranty by or
service contract with General RV. See ECF No. 30-3; Chaudoin, 2017 WL
3485803 at *14; supra at 11. Because General RV neither made any
express warranty to Plaintiffs nor entered into a service contract with
them, Plaintiffs cannot sustain a claim for breach of 15 U.S.C. § 2308
against General RV. See HRL Land or Sea Yachts, 2009 WL 427375 at
*6 (explaining that the Magnuson-Moss Warranty Act âmerely provides
a federal cause of action when a supplier disclaims an implied warranty
while making either a written warranty or entering into a new service
contract.â). The Court will accordingly enter summary judgment in favor
of General RV on Plaintiffsâ claims for violation of the Act.
D. Fraudulent misrepresentation
Plaintiffsâ final claim is that General RV and its representatives
knowingly made false statements about the quality and condition of the
RV they purchased, and that these false statements induced Plaintiffs to
purchase the RV, and thereby to suffer damages. Under Michigan law, to
prove fraudulent misrepresentation a plaintiff must establish six
elements: â(1) the defendant made a material representation; (2) the
representation was false; (3) when the defendant made the
representation, it knew that it was false, or made the representation
recklessly, without any knowledge of its truth, and as a positive
assertion; (4) the defendant made the representation with the intention
that it should be acted on by the plaintiff; (5) the plaintiff acted in reliance
on the representation; and (6) the plaintiff suffered injury due to his
reliance on the representation.â MacDonald v. Thomas M. Cooley Law
School, 724 F.3d 654, 662 (6th Cir. 2013) (citing Hord v. Envtl. Research
Inst. of Mich., 617 N.W.2d 543, 546 (Mich. 2000) (per curiam)). Further,
the plaintiffâs reliance on the alleged representation must have been
reasonable. Novak v. Nationwide Mut. Ins. Co., 599 N.W.2d 546, 553â54
(Mich. Ct. App. 1999).
The Michigan Supreme Court has expressly held that â[r]eliance on
pre-contractual representations is unreasonable as a matter of law when
the contract contains an integration clause.â N. Warehousing, Inc. v.
State, Depât of Educ., 714 N.W.2d 287, 287 (Mich. 2006). Further, âwhen
a contract contains a valid merger clause, the only fraud that could vitiate
the contract is fraud that would invalidate the merger clause itself, i.e.,
fraud relating to the merger clause or fraud that invalidates the entire
contract.â UAW-GM Human Res. Ctr. V. KSL Recreation Corp., 579
N.W.2d 411, 503 (Mich. Ct. App. 1998)2. Plaintiffs have made no express
2 The holding in UAW-GM is not without its critics. A commentator in the Michigan
Bar Journal criticized this and other Michigan cases for creating a rule that
effectively makes it possible for a seller to get away with knowingly fraudulent
allegations and presented no evidence that would tend to show that
General RV made false representations about the integration clause,
such as a specific false statement to the effect that some precontract
agreement or representation was actually meant to be incorporated
within the written agreement when it was not, or that an agreement
which was not really complete actually wasâso that the incorporation
clause was false. Id. at 505. To the contrary, the purchase agreement
contains clear and express disclaimers of all warrantiesâexpress and
impliedâby General RV. Under Michigan law, because the purchase
agreement contains a valid integration clause expressly disavowing
reliance on any previous representations by General RV, and Plaintiffs
have not alleged or shown that General RV made any fraudulent
representations that would undermine the validity of the integration
clause or that of the entire agreement, General RV is entitled to summary
judgment as a matter of law on Plaintiffsâ claim for fraudulent
misrepresentation.
CONCLUSION
While the Court is constrained by its duty to apply governing law,
which will result in summary judgment for General RV, this ruling
should not be taken as judicial approval of the near-predatory business
conduct as long as he or she can get the purchaser to sign an agreement with a broad
integration clause disclaiming the impact of any statements not explicitly included in
the contract. See Lederman, Freedom to Defraud: Making Michigan Safe for Fraud,
87 MICH. B.J. 19 (Mar. 2008).
practices alleged in the complaint against General RV and recounted in
the factual background of this order. Everett and Patsy Carrigg were 79
and 74 years old at the time they purchased their RV. Mr. Carrigg is
allegedly functionally illiterate and Mrs. Carrigg has poor eye-sight.
These contracts had small print. The âaggressiveâ salespersons allegedly
made oral statements that there was a 10-year manufacturerâs warranty
still in effect, when the warranty had in fact already expired at the time
of the sale. The Carriggs, however, signed document after document
acknowledging there were no promises made outside of the purchase
agreement. Such broad âas isâ disclaimers and integration clauses, as
they are enforced under Michigan law, may have enabled General RV to
prevail in this litigation and in other similar cases. But these victories
should not be seen as granting a license to dealerships to make
outlandishly false promises knowing they will be protected against any
liability once the customer signs on the dotted line. The Michigan
Legislature should consider beefing up this stateâs consumer-protection
laws to prevent the kind of conduct described in Plaintiffsâ amended
complaint.
Nevertheless, for the reasons set out in detail above, the motion for
summary judgment of Defendant Cornerstone United, Inc. will be
GRANTED. Defendant General R.V. Center, Inc.âs motion for summary
judgment will also be GRANTED. Plaintiffsâ request for leave to once
again amend their complaint is DENIED. See Yuhasz v. Brush Wellman,
Inc., 341 F.3d 559, 569 (6th Cir. 2003) (explaining that âleave to amend
may be denied where the amendment would be futileâ). The Court will
address Defendantsâ request for sanctions in a separate order.
Dated: September 30, 2019 s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
Certificate of Service
I hereby certify that this Order was electronically filed, and the
parties and/or counsel of record were served on September 30, 2019.
s/A. Chubb
Case Manager