IL Supreme Court: Buyers of defective RV not required to allow dealer to fix it before

[Mythplaced]

RV Initial build quality must improve if a manufacturer is to stay in business.


Recent court cases have fallen on the side of the consumer.

IL Supreme Court: Buyers of defective RV not required to allow dealer to fix it before demanding refund

https://cookcountyrecord.com/stories...manding-refund

Defendant Vacationland Inc. argued that plaintiffs Kimberly Accettura and Adam Wozniak had not allowed it adequate time to fix the recreational vehicle’s defects before revoking their acceptance of the trailer. After succeeding at the circuit and appellate levels, Vacationland lost its argument before the Supreme Court on Sept. 19.

Accettura and Wozniak purchased the RV new from Vacationland in April 2014. That June, they noticed a window leaked, and Vacationland offered to repair the issue at no charge. A month later, leaking windows during a rainstorm caused extensive damage inside the RV, including electrical failure. Vacationland told the couple it could not repair the defect itself and would have to send the RV back to the manufacturer.

Neither Vacationland nor the manufacturer would give the couple an estimate of how long the repairs would take, and the RV sat at the dealership for more than two weeks without being picked up by the manufacturer. Nearly three weeks after returning the vehicle for repairs, Accettura and Wozniak called Vacationland and “verbally revoked acceptance of the RV.”

About six weeks later, Vacationland called the couple and told them the repairs were complete and they could pick up the vehicle. The pair responded with a letter from their attorney confirming they had revoked their acceptance of the RV.

At issue before the court was whether the revocation was allowed under the Uniform Commercial Code. The code states that a buyer may “revoke his acceptance of a lot or commercial unit whose non-conformity substantially impairs its value” under two conditions – one, if the buyer knew the item was defective but expected it to be repaired, and it was not repaired in a reasonable amount of time; or two, if the buyer did not know of the defect at the time of purchase.

While Vacationland conceded that the buyers did not know the RV was defective when they purchased it, it claimed the statute allows that the dealership should have time to address the defect. The buyers, meanwhile, argued that the ability to repair a defect applies only to the first condition of the statute and not the second.

“We agree with [the plaintiffs’] interpretation,” Justice Rita B. Garman wrote in the court’s unanimous opinion. “We find this language plain and … subsection (1)(b) [of the UCC} does not require that a buyer give the seller an opportunity to cure.”

[dward51]

Considering the UCC has been adopted by all 50 states and the District of Columbia, this may get interesting. Hopefully the build quality of units will increase or PDI by the maker will become more important as the dealers start to push back on the makers to protect themselves from similar situations. The flip side is will prices increase to offset the additional quality control?

Of course this is just one State, but since the code is "uniform" nationwide, and it was the Supreme Court of that state, this does carry significant weight pending contrasting rulings. The IL court also spells out specific reasons where similar cases in other states did not apply as the issue raised by these owners/plaintiffs were different and not exactly on point with prior contrasting rulings. So this may have legs so to speak....

I attached the PDF of the full court ruling if you are interested in reading the details beyond the initial story.

[Oaklevel]

My question is ok but at what cost. How much $ did the couple payout to get the case to the IL Supreme Court

[dward51]

Don't know the specifics for IL, but most states have "looser pays" laws so the dealer would have to pay not only the price of the trailer which was sought a the original remedy, but the legal expenses billed by the owners/plaintiff's lawyers for the entire legal process including appeals. Those laws are to discourage frivolous lawsuits. The feds and my state both have that.

However if their attorney took the case on for a percentage, he would also recover a portion of the trailer cost to his expenses (in addition to what the actual expenses paid by the RV dealer were - the dealer pays both their own and the winning parties legal fees).

Basically if the above is true for IL, the RV dealer will have to shell out hundreds of thousands if not millions in legal expenses to cover the cost of a defective $26,000 trailer (at 2014 value). Much cheaper to make a better product and to actually fix issues pre-delivery (better PDI).

[D W]

I see no Judgment in this decision. I do see where Paragraph 27 has been Reversed and Remanded.

I did notice throughout the decision that the Court examined related Case Law from various States, but arrived at different conclusions.

Most likely this case will be returned to the lower court for further proceedings.

[aircommuter]

I don’t know about that state, but where I live the plaintiff can collect the fees only if it is in the contract. If the suit is for collection of funds owed then interest is also collectable. But if one gets a judge who likes to share then the interest could be lost.

[Adrian Gordon]

Originally Posted by dward51

Don't know the specifics for IL, but most states have "looser pays" laws so the dealer would have to pay not only the price of the trailer which was sought a the original remedy, but the legal expenses billed by the owners/plaintiff's lawyers for the entire legal process including appeals. Those laws are to discourage frivolous lawsuits. The feds and my state both have that.

However if their attorney took the case on for a percentage, he would also recover a portion of the trailer cost to his expenses (in addition to what the actual expenses paid by the RV dealer were - the dealer pays both their own and the winning parties legal fees).

Basically if the above is true for IL, the RV dealer will have to shell out hundreds of thousands if not millions in legal expenses to cover the cost of a defective $26,000 trailer (at 2014 value). Much cheaper to make a better product and to actually fix issues pre-delivery (better PDI).

Can you give us a citation to one of those "looser pays" laws?

[D W]

Originally Posted by Adrian Gordon

Can you give us a citation to one of those "looser pays" laws?

I'd like to see that citation as well. A "frivolous" suit would be one that the first judge to hear the arguments determines "frivolous", and then only after a motion to dismiss.

This case went through the Appellate Court, and then on to the IL Supreme Court, so it can hardly be deemed "frivolous".

[Larry-NC]

Originally Posted by D W

I see no Judgment in this decision. I do see where Paragraph 27 has been Reversed and Remanded.

I did notice throughout the decision that the Court examined related Case Law from various States, but arrived at different conclusions.

Most likely this case will be returned to the lower court for further proceedings.

DW (my wife, not you), is an attorney. I asked about this. She explained that the appeals and supreme courts are Courts of Law. They interpret the law, not facts. Once they have decided how the law applies, they "remand" the case back to the original court which is a Court of Facts. That court will look at the facts and decide the size of the award, extenuating circumstances, etc. and make the ruling, using the interpretation of the law that was handed them.

[TitanMike]

Originally Posted by dward51

Considering the UCC has been adopted by all 50 states and the District of Columbia, this may get interesting. Hopefully the build quality of units will increase or PDI by the maker will become more important as the dealers start to push back on the makers to protect themselves from similar situations. The flip side is will prices increase to offset the additional quality control?

Of course this is just one State, but since the code is "uniform" nationwide, and it was the Supreme Court of that state, this does carry significant weight pending contrasting rulings. The IL court also spells out specific reasons where similar cases in other states did not apply as the issue raised by these owners/plaintiffs were different and not exactly on point with prior contrasting rulings. So this may have legs so to speak....

I attached the PDF of the full court ruling if you are interested in reading the details beyond the initial story.

Prices are more contolled by market forces than manufacturer's costs. If a manfacturer merely raises his prices because he wants to cover more overhead, customers often push back by just not buying.

In many cases the extra costs are often offset by reduced warranty expense when better quality controls are implemented.

Sales often increase when one manufacturer demonstrates they can produce a more "defect free" product. In essence, the word gets around.

Also, when looking at the extra cost of a QC assurance "inspector" is a small expense when comparing total revenues of a Manufacturer. A few hundred thousand in extra payroll (depending on how many inspectors are added) versus Forest River's $5 Billion in revenue.


FWIW, Customers need to be more involved in the delivery process and be less anxious to "take their new baby home". When one buys a house it's customary to hire a professional home inspector. Perhaps it's time for people to do likewise when purchasing their "home away from home".

Here's one example a quick Google Search revealed. I'm sure there are other services out there too:

https://nrvia.org/locate/


Regardless if it's a small towable you pay cash for or a Coach costing as much as a small mansion you're going to be on the hook to pay off a purchase contract, if you are new to RV's the cost of a professional inspector might be worth it's weight in gold.

[D W]

Originally Posted by Larry-NC

DW (my wife, not you), is an attorney. I asked about this. She explained that the appeals and supreme courts are Courts of Law. They interpret the law, not facts. Once they have decided how the law applies, they "remand" the case back to the original court which is a Court of Facts. That court will look at the facts and decide the size of the award, extenuating circumstances, etc. and make the ruling, using the interpretation of the law that was handed them.

Never ONCE claimed to be an attorney. Just merely read the decision, as any layman would do. Just reading the decision an idiot could tell that this is going back to a lower court for further consideration.

[Larry-NC]

Originally Posted by D W

Never ONCE claimed to be an attorney. Just merely read the decision, as any layman would do. Just reading the decision an idiot could tell that this is going back to a lower court for further consideration.

Not criticizing you. Just shedding some more light on the subject.

[FlaNative]

Cases like this would be very rare if the manufacturers would do a better job of quality control. I agree that prices would rise, but the rise in price would not be that significant when defects/defective workmanship were discovered during the manufacturing process where these things could be handled immediately, rather than becoming a pain to both the consumer and the dealer at the time of sale (and afterwards). The price a consumer pays isn't limited to just the monetary side. When trips are cancelled due to multiple failures or sloppy workmanship or bad engineering, it takes the joy out of owning an rv. It's a shame that this couple went through all this to get some sort of relief from their dilema, but I'm happy to see that the court sided with them.

[Larry-NC]

Originally Posted by Jimmy James

Cases like this would be very rare if the manufacturers would do a better job of quality control. I agree that prices would rise, but the rise in price would not be that significant when defects/defective workmanship were discovered during the manufacturing process where these things could be handled immediately, rather than becoming a pain to both the consumer and the dealer at the time of sale (and afterwards). The price a consumer pays isn't limited to just the monetary side. When trips are cancelled due to multiple failures or sloppy workmanship or bad engineering, it takes the joy out of owning an rv. It's a shame that this couple went through all this to get some sort of relief from their dilema, but I'm happy to see that the court sided with them.

You are correct. I worked in various aspects of new product development for 27 years. We were aware of the Rule of 10.

• If you find a problem during initial design, it costs X to fix it.
• If you find the problem at the prototype stage, it costs 10X to fix it.
• If you find the problem after the product enters manufacturing, it costs 100X to fix it.
• If you find the problem after the product gets into the customer's hands, it costs 1000X to fix it.

One of the more interesting periods of my career was the time I spent in Component Quality and Reliability, doing Reliability Physics. We leased products in those days, rather than selling them, so the cost of a failure was far higher. We tested every component we purchased from outside vendors: motors, light bulbs, transformers, capacitors and resistors and transistors, and more. We studied the physics of failure of each type of component and developed means to accelerate failure without introducing new failure mechanisms. Depending on the type of component, it might be heat, overvoltage, high-temperature reverse bias, mechanical shake, or more. Motors went on 24-hour locked rotor test, and our tribologist analyzed the bearing lubricant the manufacturer had used.

I had the assignment of testing the photomultiplier tube used in the first supermarket scanner to catch the light from the bar codes. My office mate got the much more glamorous laser to test.

Lots of stories but I am drifting off topic.

[jd4010]

Originally Posted by Larry-NC

One of the more interesting periods of my career was the time I spent in Component Quality and Reliability, doing Reliability Physics. We leased products in those days, rather than selling them, so the cost of a failure was far higher. We tested every component we purchased from outside vendors: motors, light bulbs, transformers, capacitors and resistors and transistors, and more. We studied the physics of failure of each type of component and developed means to accelerate failure without introducing new failure mechanisms. Depending on the type of component, it might be heat, overvoltage, high-temperature reverse bias, mechanical shake, or more. Motors went on 24-hour locked rotor test, and our tribologist analyzed the bearing lubricant the manufacturer had used.

I had the assignment of testing the photomultiplier tube used in the first supermarket scanner to catch the light from the bar codes. My office mate got the much more glamorous laser to test.

After reading this I'm now more convinced than ever that my job sucks and is boring as heck. Thanks Larry!

[Larry-NC]

Originally Posted by jd4010

After reading this I'm now more convinced than ever that my job sucks and is boring as heck. Thanks Larry!

I had the good fortune to have a series of different assignments with the same company and I enjoyed all of them (except nine months as a Project Manager).

https://www.linkedin.com/in/lvmarks/

[Rancher Rob]

We found that Lehto's law video on the RV return under the UCC the day after it posted. The next day we were on the phone with attorneys to see if we could return our XL too. Unfortunately, the attorney we contacted said that our contract had "as is", "arbitration", and other clauses and that we probably wouldn't get anywhere.
The attorney was a guy my wife had worked with in a previous job and he had no dog in the fight. So we figured he was being honest (as far as an attorney can be) and we were SOL.
It'll be interesting to see how this precedent affects things in the industry over the next few years. Hopefully it will be a positive but the big dealership holding companies have lots of money for lots of lawyers to avoid taking a loss on our higher end units.

[Adrian Gordon]

Originally Posted by Adrian Gordon

Can you give us a citation to one of those "looser pays" laws?

I guess not.

[Feel Swift]

Originally Posted by dward51

Considering the UCC has been adopted by all 50 states and the District of Columbia, this may get interesting.

Actually not all states have adopted the UCC, and out of the ones that have they may or may not have adopted all articles of the UCC.

[dward51]

Although the "English Rule" is not in effect where automatically the looser pays the legal fees of both sides, in 99.9% of all civil suits there is a counter-suit filed by the other side which includes a recovery of legal fees incurred in defending the suit. It's virtually the same end result, and can even be negotiated in an out of court settlement. So in effect, looser pays..... I don't know about the rules of all 50 states but in GA and the federal courts in GA it applies. Since it applies to federal courts, I would presume it is pretty well nationwide but state torts might have some obscure exception?

Been there, done that, and they paid my expenses (and their own) to prove it! (along with both my kid's college tuition in damages)