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Patricia Miller and Marcia Parker v. Four Winds International Corporation

October 25, 2011

PATRICIA MILLER AND MARCIA PARKER,
PLAINTIFFS,
v.
FOUR WINDS INTERNATIONAL CORPORATION, A DELAWARE CORPORATION; AND DOES I THROUGH V, DEFENDANTS.



The opinion of the court was delivered by: Honorable Candy W. Dale Chief United States Magistrate Judge

MEMORANDUM DECISION AND ORDER

INTRODUCTION

Plaintiffs Patricia Miller and Marcia Parker bring this breach of warranty action under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., against Four Winds International Corporation ("Four Winds").*fn1 Plaintiffs allege that the motor home they purchased in 2008, which was manufactured and warranted by Four Winds, suffers from numerous defects and that Four Winds failed to repair the motor home under the terms of a limited warranty. Plaintiffs claim that the motor home has no value due to its numerous defects and seek a refund of the purchase price.

Four Winds has filed a Motion for Partial Summary Judgment, (Dkt. 64), arguing that the remedy Plaintiffs seek -- a refund of the purchase price of the motor home -- is not available under the Magnuson-Moss Warranty Act or Idaho's version of the Uniform Commercial Code. Four Winds also has filed a Motion for Spoliation Sanctions, (Dkt. 55), alleging that Plaintiffs lost relevant evidence after Four Winds repeatedly requested production of the evidence. On August 23, 2011, the Court conducted a hearing during which the parties presented oral arguments on the motions. Following the hearing on the motions, Four Winds filed a Motion to Defer Ruling on Motion for Partial Summary Judgment (Dkt. 85) and a Motion to Certify a Question to the Idaho Supreme Court. (Dkt. 86.) All the motions have been fully briefed and are ripe for adjudication.

Having fully reviewed the motions, the parties' memoranda and supplemental materials filed in support of each party's position, and for the reasons discussed below, the Court will make the following rulings. First, the Court finds that Four Winds has sufficiently demonstrated spoliation and that an adverse inference jury instruction may be an appropriate sanction in this case. Therefore, Four Winds' Motion for Spoliation Sanctions (Dkt. 55) will be granted in part. However, the propriety of such an instruction will depend upon the evidence offered at trial, and, as such, the Court will defer ruling on the jury instruction issue until the appropriate time at trial.

Second, Four Winds is correct that Plaintiffs may not seek a refund of the purchase price of their motor home for the alleged breach of a limited warranty under the Magnuson-Moss Warranty Act or under the applicable provisions of the Idaho Code. Therefore, Four Winds' Motion for Partial Summary Judgment (Dkt. 64) will be granted in part. This ruling, however, will not preclude Plaintiffs from attempting to prove "special circumstances" within the meaning of Idaho Code § 28-2-714, or establishing damages through a measure other than diminution in value, which is the ordinary measure of damages for breach of warranty under Idaho law.

Finally, concerning Four Winds' motion to defer ruling on its motion for summary judgment and motion to certify a question to the Idaho Supreme Court, the Court finds that the question at issue in this case, which is essentially evidentiary in nature, is not appropriate for certification. Therefore, Four Winds' Motion to Certify a Question to the Idaho Supreme Court, (Dkt. 86), will be denied and Four Winds' Motion to Defer Ruling on Motion for Partial Summary Judgment, (Dkt. 85), will be denied as moot.

BACKGROUND

In June of 2008, Patricia Miller and Marcia Parker purchased a new Presidio model motor home from a dealer named Blue Dog RV in Post Falls, Idaho. Plaintiffs purchased the vehicle for $239,628.00. The motor home was manufactured and assembled by the Mandalay Luxury Division of Four Winds International Corporation.*fn2

When they purchased the motor home, Plaintiffs received a manufacturer's limited warranty, which obligated Four Winds to repair or replace defective material or workmanship at no charge to the owner for a one year period of time. The limited warranty contains the following provision:

In the event that a substantial defect in material or workmanship, attributable to Presidio, is found to exist during the warranty period, Presidio will repair or replace the defective material or workmanship, at its option, at no charge to the RV owner, in accordance with the terms, conditions and limitations of this Limited Warranty. (Dkt. 67-3.) The warranty expressly does not cover any materials or components of the motor home that are warranted by another entity, such as the engine, drive train, batteries, gauges, generator, hydraulic jacks, audio/video equipment, etc. (Id. at 4.) The warranty also excludes from coverage "[i]tems that are working as designed but that you are unhappy with because of the design." (Id.)

Plaintiffs allege in their complaint that they began experiencing serious problems with the motor home shortly after they purchased it. When Plaintiffs first "leveled" the vehicle after taking it home from the dealer, "the front windshield cracked from top to bottom, and a latch on an outside cabinet broke, evidencing structural stress issues." (Dkt. 1 at 3.) This was the first of many problems Plaintiffs experienced with the motor home.

In July of 2008, Ms. Miller took the motor home on a trip to Oregon during which she experienced problems with the motor home's "slide outs." When she contacted Four Winds about the issue, she was told that the factory would not be able to repair the motor home until five or six months of time expired. (Id.) The delay in fixing the motor home caused Ms. Miller to miss a family reunion and from visiting her ailing mother, who passed away on October 1, 2008. Plaintiffs allege that, due to the unreliability of the motor home, Ms. Miller was forced to travel by airplane to attend her mother's funeral.

Plaintiffs allege that Four Winds made arrangements to repair the motor home, but required Plaintiffs to deliver the motor home to a site in Fontana, California. "During the trip to the repair facility the large slide dislodged with the bottom of the slide sticking out about a foot . . . prevent[ing] Ms. Miller from driving the RV, and she was stuck in the middle of Montana without food, heat or even the ability to access her bedroom due to the malfunctioning slide." (Dkt. 1 at 3-4.) The dealer sent employees to temporarily fix the motor home and Ms. Miller eventually arrived in California, where she found the repair site closed due to the owner being on vacation in Mexico. Ms. Miller alleges she was forced to make alternative arrangements both for storing the motor home and for housing herself until the motor home was fixed. At one point, when Ms. Miller attempted to retract the slide on the motor home so she could drive to the repair facility, one of the hydraulic lines burst, causing a mist of hydraulic fluid to spray throughout the interior of the vehicle. (Id. at 4.) Ultimately, the motor home was in California for almost six months of time until the repairs were completed.

Plaintiffs allege that, in May of 2009, the tile floor of the motor home began to lift, causing Ms. Miller to cut her foot. Additionally, the bathroom and kitchen walls began to bow. Then in July of 2009, Ms. Miller took the motor home to the dealer for a final check before she started a long trip in the vehicle. "The mechanics at the dealership checked the slide several times to make sure it was operating correctly [but] [t]he slides again became stuck, and the mechanics were unable to get them back into place." (Dkt. 1 at 6.)

Plaintiffs' complaint identifies several other problems with the motor home. Plaintiffs state: "[d]espite more than ten trips to repair facilities in the first year of ownership, these issues have persisted" and "Defendant has ultimately been unable to adequately repair the motor home in compliance with its written warranty." (Dkt. 75 at 2.) Ms. Miller stated in her deposition that the motor home has "zero" value to her, and that she could not in good faith sell the motor home to someone else due to the extent and history of the vehicle's problems. (Dkt. 67-4 at 4.)

Plaintiffs filed this action against Four Winds on May 18, 2010. Plaintiffs identify two claims for relief. First, Plaintiffs allege breach of express warranty. Second, Plaintiffs assert a claim under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. Plaintiffs seek a full refund of the purchase price, with Four Winds to accept return of the motor home.

DISCUSSION

1. Motion for Spoliation Sanctions

A. Facts

During her deposition on December 16, 2010, Plaintiff Patricia Miller testified that she had recordings of voice mail messages left on her cellular telephone by employees or other representatives of Four Winds. The messages were saved approximately two years prior to the deposition. Ms. Miller testified that she still had access to some of the messages but that: "I haven't gone through my backlog of voicemails[,] I just save them because so many names changed." (Dkt. 57-1, Deposition of P. Miller at 196.) Counsel for Four Winds admonished Ms. Miller not to delete the voice mails and requested that Plaintiffs' counsel make a copy of the voice mails to produce for the Defendant.

When the voicemails were not produced, Four Winds again requested the recordings by email on January 12, 2011, and served a formal request for production on Plaintiffs' counsel on January 26, 2011. Additional requests for production of the voice mails were made on March 31, April 14, and May 5, 2011.

On April 19, 2011, Plaintiffs' counsel sent defense counsel an e-mail stating that he was working on getting the voice mails together and that "[Ms. Miller] told me this morning that she still has access to them." (Dkt. 57-6 at 2.) He also proposed a transcript in lieu of production of the recordings in their original format. (Id.) On May 3, 2011, Plaintiffs' counsel notified Four Winds that he was not sure whether the messages were capable of being recovered, stating: "Ms. Miller is in the process of conferring with her cellular phone provider to determine if the cell phone messages she referenced as still available [and] [a]s of today's date, I do not know if those messages are capable of being recovered." (Dkt. 57-7.) Then, on May 20, 2011, Plaintiffs' counsel informed Four Winds that the messages were not retrievable. (Dkt. 57-9.)

B. Legal Standard for Spoliation Sanctions

Federal trial courts have the inherent discretionary authority to make appropriate evidentiary rulings and to levy sanctions in response to the destruction or spoliation of relevant evidence. Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir. 1993).*fn3 Sanctions for spoliation include dismissal of claims, exclusion of evidence, and adverse jury instructions in which the jury is informed that it may presume that the destroyed evidence, if produced, would have been adverse to the party that destroyed or failed to preserve it. See Unigard Security Ins. Co. v. Lakewood, 982 F.2d 363, 368-70 (9th Cir. 1992). A finding of bad faith is not required ...


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