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Carrigg v. Gen. R.V. Ctr., Inc. - 421 F. Supp. 3d 480 (E.D. Mich. 2019)

Rule:

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. Implied warranties may "be negated by contrary contractual terms meeting the requirements of Mich. Comp. Laws § 440.2316(2). Under Mich. Comp. Laws § 440.2316, unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like 'as is', 'with all fault' or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty. Additionally, to exclude or modify the implied warranty of merchantability the disclaimer language must mention merchantability and in case of a writing must be conspicuous. Likewise, to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous.

Facts:

In late 2016, Plaintiffs Everett Carrigg and Patsy Carrigg, a retired couple in their mid-to-late 70's, purchased a used 2013 Thor Challenger recreational vehicle ("RV") from Defendant General R.V. Center, Inc. ("General RV"). As part of the sale, Plaintiffs traded in their old RV and agreed to pay an additional $62,228.33. ("Purchase Agreement"). Along with the Thor Challenger RV, they also purchased a three-year service warranty serviced by Cornerstone United, Inc. Plaintiffs contend that throughout the process of purchasing the RV a General RV salesman, Julius "Juice" Tatum, as well as other agents of General RV—including a sales manager, financing manager, general manager, and service manager—made misrepresentations about the condition and quality of the RV, as well as the applicable warranties. The purchase agreement governing the RV's sale is a two-sided document with an "all-caps" integration clause above the purchasers' signature line explaining that the written agreement contains the entire agreement between Plaintiffs and General RV. That provision also alerts signatories to other terms and conditions contained in the agreement—including an "as is" and exclusion of warranties provision located on the reverse side of the agreement. 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 "as is" 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.” The "as is" purchase warning and express exclusion of warranties on the reverse side of the agreement. This "as is" provision is the eleventh of sixteen different terms and conditions described on the reverse side of the purchase agreement. 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 "as is" disclaimer are capitalized, and some parts both capitalized and bolded. No other provision in the purchase agreement is both capitalized and bolded. Plaintiffs also signed a separate General RV "as is" and warranty disclaimer form, thereby again acknowledging that the RV was purchased "as is" and that the two-sided purchase agreement is "the only document that contains the terms and conditions of [the] agreement with General RV." According to the amended complaint, Everette Carrigg is "not functionally literate" and therefore "could not understand the terms of the documents he signed and initialed at General RV." Patsy Carrigg apparently also has poor eyesight—she has had two surgeries on her eyes and continues to be treated for vision issues. Despite these limitations Plaintiffs signed several forms, including the purchase agreement, in the process of purchasing their RV. Everette Carrigg, the primary buyer, also signed an additional acknowledgment averring that he had received the purchase agreement, "was allowed the necessary and requested amount of time to review its contents" and "fully underst[ood] the terms and conditions." Yet Plaintiffs allege that General RV rushed them through the sales process, without any meaningful opportunity to review the paperwork or to examine the "fine print," which Patsy Carrigg found difficult to read (and Everett Carrigg apparently could not read at all). 

After purchasing the RV, Plaintiffs claim they immediately discovered it was "mechanically unsound, unsafe to drive, and did not conform to the representations that [General RV] had made." Repairs were needed at the outset, according to Plaintiffs, to address multiple problems. 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. But General RV then explained that there was in fact no manufacturer's warranty on the vehicle and apparently declined to make the repairs Plaintiffs requested, or at least to do so free of charge. Likewise, General RV refused to let Plaintiffs trade in the apparently defective RV for a different, similarly priced one. Thus, the Plaintiffs filed claims for violation of the Magnuson-Moss Warranty Act, breach of express and implied warranties, fraudulent misrepresentation, and breach of contract.

Issue:

Was there a violation of implied warranties in the instant case?

Answer:

No.

Conclusion:

The purchase agreement at issue plainly includes language—in bolded, capital letters—expressly warning that "this RV is sold 'as is' 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 disclaimer specifies the "as is" nature of the sale and, consistent with Michigan law's requirements for disclaimer of the implied warranty of merchantability, specifically mentions merchantability. Further, as required by state law to negate the implied warranties of merchantability and fitness, the disclaimer is conspicuous and in writing. The language appears on the reverse side of the relatively concise two-page purchase agreement, in bolded, capitalized, albeit small font. Further, the same "as is" sale language and exclusion of warranties appears not only in the purchase agreement, but also in the following documents signed by Plaintiffs: (1) "General RV 'As Is' and Warranty Disclaimer Form," "Delivery Receipt, Storage, Agreement and Risk of Loss Notice and Acknowledgment," and (3) "Service Call Agreement," Courts interpreting almost identical warranty disclaimers in cases applying Michigan law have found them sufficient. Michigan law allows for the disclaimer of implied warranties and the multiple disclaimers included in the purchase documents at issue (and most critically, in the purchase agreement) are effective.

Plaintiffs' 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. "It 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." "[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." Plaintiffs' alleged inability to read the purchase agreement is not a defense to enforcement of the contract against them.

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