Facts
- Everette and Patsy Carrigg bought a used 2013 Thor Challenger R.V. from General R.V. Center, Inc. (General RV) in an “as is” sale and paid for a three-year service contract administered by Cornerstone United, Inc. (Cornerstone).
- The written purchase agreement contained multiple warranty-disclaimer provisions, including prominent language disclaiming all express and implied warranties and an “AS IS” statement presented in capitalized and bolded text.
- The agreement also included an integration clause stating the written contract was the parties’ complete and final agreement and that no outside statements or promises were part of the deal.
- During the sales process, General RV employees allegedly told the Carriggs the R.V. was in excellent condition and that a manufacturer warranty existed.
- After the purchase, the Carriggs discovered structural and mechanical problems and learned the manufacturer warranty had expired roughly two years before the sale.
- The Carriggs submitted repair claims under the Cornerstone service contract, and Cornerstone paid the claims it received.
- The Carriggs sued in the United States District Court for the Eastern District of Michigan asserting claims against General RV and Cornerstone for, among other things, breach of express and implied warranties and breach of the service contract; they also pursued related theories under the Magnuson–Moss Warranty Act (MMWA) and fraud based on alleged pre-contract statements.
- General RV and Cornerstone moved for summary judgment. (A lender/assignee, The Huntington National Bank, was also named as a defendant, but the court’s ruling turned on whether plaintiffs could establish any underlying breach or statutory violation tied to the sale and service contract.)
Issues
- Whether the purchase agreement’s “as is” provision and conspicuous disclaimers barred the Carriggs’ Michigan-law express and implied warranty claims against General RV.
- Whether the MMWA applied to General RV when the R.V. was sold “as is” and General RV did not provide a written warranty or become the obligor under the Cornerstone service contract.
- Whether the integration clause made reliance on alleged oral statements about quality and warranty coverage unreasonable for purposes of warranty and fraud-based claims.
- Whether Cornerstone breached the service contract when the record showed it paid the repair claims submitted by the Carriggs.
Decision
- The court granted summary judgment to General RV and Cornerstone.
- The court held the contract’s “as is” language and warranty disclaimers were effective under Michigan law and defeated the Carriggs’ express and implied warranty claims against General RV.
- The court rejected the Carriggs’ MMWA theory against General RV because the dealer did not issue a qualifying written warranty and was not the party that undertook obligations under the Cornerstone service contract.
- The court concluded that, given the agreement’s clear disclaimers and integration clause, the Carriggs could not show reasonable reliance on alleged pre-contract oral statements to support fraud or warranty theories premised on those statements.
- The court granted summary judgment to Cornerstone on the service-contract claim because Cornerstone paid the claims it received in accordance with the service contract, and plaintiffs did not identify unpaid covered claims creating a triable breach issue.
Legal Principles
- Under Michigan’s UCC, implied warranties may be excluded by an “as is” sale and by conspicuous disclaimer language that satisfies UCC § 2-316 requirements.
- When a written contract contains a clear integration clause and express warranty disclaimers, a party generally cannot base warranty or fraud claims on prior oral statements that conflict with the written terms; reliance may be unreasonable as a matter of law absent a showing of fraud directed at the integration clause itself.
- The MMWA requires a qualifying written warranty or a service-contract obligation by a statutory “warrantor”; a dealer that sells a used product “as is,” without issuing a written warranty or undertaking the service-contract duties, is not liable under the Act on that basis.
- A service-contract administrator does not breach the contract where the undisputed record shows it paid the covered claims submitted and the plaintiff cannot point to unpaid covered obligations.
Conclusion
Carrigg held that an “as is” used-R.V. sale with conspicuous warranty disclaimers and an integration clause defeated the buyers’ state-law warranty, MMWA, and fraud-based claims against the dealer, and that the service-contract administrator was entitled to summary judgment where it paid the repair claims presented under the service contract.