Even though the buyer of the recreational vehicle described it as a “jalopy,” the 7th Circuit of Appeals found the warranty was built solidly enough to prevent the manufacturer from having to cover the repairs.
Nicholas Knopick bought a $414,583 Jayco RV at a dealership in Iowa in July 2012, but he signed the purchase documents and took title on behalf of Montana Freedom Rider LLC, a company he controlled. Almost immediately after the sale was complete, Knopick began having trouble with the unit. He said it leaked, smelled of sewage and the features were poorly installed.
Although Jayco repaired the RV twice at its manufacturing facility in Indiana, Knopick was not satisfied and sued the company. The U.S. District Court in for the Northern District of Indiana granted summary judgment to Jayco, and Knopick appealed to the 7th Circuit.
District Court Judge Jon DeGuilio ruled Knopick had no rights under the warranty because the RV was actually purchased by a business. The language in the two-year limited manufacturer’s warranty specifically states it does not cover any RV used for commercial purposes or purchased in a business’s name.
Before the appellate panel, Knopick argued Jayco waived the “business-purpose RV” exclusion by performing some repairs at no charge. The company was treating the vehicle as if it were covered by the warranty.
The 7th Circuit disagreed in Nicholas Knopick v. Jayco, Inc., 17-2285. The panel pointed out the warranty also included a provision that stated any fixes done on an RV bought by a business would be considered “good will” repairs and would not alter the terms of the warranty.
Under Knopick’s waiver argument, the appellate court said, merchants who go beyond their contractual duties would risk obliging themselves to perform new and broader duties. This could discourage amicable resolutions to minor commercial disputes.
“In business generally and in consumer markets, a contracting party’s willingness to go beyond her strictly enforceable legal obligations is a key commercial lubricant,” Judge David Hamilton wrote. “It facilitates trust, long-term relationships, repeat customers, and referrals.”