## Facts

- Joseph and Nikki Morrow bought a mobile home in Fairbanks from retailer Golden Heart Mobile Homes, which had been manufactured in Oregon by New Moon Homes, Inc.
- At delivery, some problems were apparent (e.g., unlaid carpeting, broken windows), and the retailer promised repairs and represented the home as suitable and warm.
- After setup, the Morrows experienced continuing defects, including furnace failure and improper installation, doors and windows that would not close properly or cracked, plumbing leaks, roof leaks, and electrical shorting and flickering lights.
- The Morrows repeatedly complained; Golden Heart attempted repairs but did not cure serious defects and later went out of business.
- The Morrows sued both Golden Heart and New Moon for breach of implied warranties of merchantability and fitness for a particular purpose, seeking recovery for economic harm from the defective home.
- Golden Heart suffered a default judgment; the trial court dismissed the claims against New Moon for lack of personal jurisdiction and lack of privity.

## Issues

1. Whether dismissal for lack of personal jurisdiction was improper where the record indicated procedural confusion and the plaintiffs were not clearly afforded an opportunity to establish jurisdictional facts under Alaska’s long-arm statute.
2. Whether a remote consumer purchaser may recover direct economic loss from a manufacturer for breach of implied warranties absent contractual privity.

## Decision

- The Alaska Supreme Court reversed the dismissal and remanded.
- On personal jurisdiction, the court held the dismissal was premature because the plaintiffs should be given a fair opportunity to present evidence establishing jurisdiction over the nonresident manufacturer.
- On privity, the court held that lack of privity does not bar a remote purchaser’s implied-warranty claim against a manufacturer for direct economic loss.

## Legal Principles

- Trial courts should not dismiss for lack of personal jurisdiction without providing plaintiffs a clear, fair opportunity to meet their burden on jurisdictional facts.
- Implied warranties of merchantability and fitness may extend from a manufacturer to remote purchasers, even when the purchaser seeks direct economic loss rather than personal injury or other property damage.
- In distribution chains where goods routinely reach consumers through intermediaries, warranty liability may run to end users because manufacturers are positioned to control product quality and allocate defect-related costs.
- Manufacturers may manage warranty exposure through lawful limitations such as disclaimers, supporting extension of implied-warranty remedies beyond immediate buyers.

## Conclusion

The court allowed the Morrows to pursue implied-warranty claims for direct economic loss against the nonresident manufacturer without privity and required further proceedings after giving the Morrows a proper chance to establish personal jurisdiction.


Morrow v. New Moon Homes, Inc., 548 P.2d 279 (Alaska 1976)