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CONTACT: Warranty claims dismissed under Satute of Limitations

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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
HIGHWAY SALES, INC., and DONALD
OREN,
Plaintiffs,
v.
BLUE BIRD CORPORATION and
THERMO LEASING CORPORATION,
doing business as Shorewood RV Center,
Defendants.
Case No. 05-CV-1652 (PJS/JJG)
ORDER GRANTING DEFENDANTS
MOTION FOR SUMMARY JUDGMENT
Brian A. Wood and Kevin J. Rodlund, LIND, JENSEN, SULLIVAN & PETERSON, PA,
for plaintiffs.
Edward H. Wasmuth, Jr., SMITH, GAMBRELL & RUSSELL, LLP; Mark S. Enslin and
Randall J. Pattee, LINDQUIST & VENNUM, PLLP, for defendants.
This matter is before the Court on the parties objections to Magistrate Judge Jeanne J.
Grahams April 2, 2007 Report and Recommendation (R&R) [Docket No. 105]. In her R&R,
Judge Graham recommends that defendants motion for summary judgment [Docket No. 65] be
granted in part and denied in part. As to most of plaintiffs claims, the Court agrees with Judge
Grahams recommended disposition. The Court finds, however, that defendants are entitled to
summary judgment on all of plaintiffs claims, not just on those claims as to which Judge
Graham recommends summary judgment. Accordingly, the Court overrules plaintiffs partial
objection [Docket No. 107], sustains defendants objection [Docket No. 108], and adopts Judge
Grahams R&R to the extent that it is consistent with this opinion.
1Following the parties lead, the Court will refer to defendant Thermo Leasing as
Shorewood RV. Because plaintiff Highway Sales, not Oren, purchased the RV from
Shorewood RV, the Court will generally refer to plaintiffs collectively as Highway Sales.
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I. BACKGROUND
The key facts are thoroughly described in Judge Grahams R&R. R&R at 1-4. The
Court will summarize them only briefly here. As did Judge Graham, the Court will resolve any
disputes and make all reasonable inferences in plaintiffs favor.
Plaintiff Donald Oren runs plaintiff Highway Sales, Inc., a company that sells and leases
highway tractors (i.e., the front portion of a tractor-trailer). Rodlund Aff. Ex. I (Oren Dep.) at
7-8 [Docket No. 84]. In early 2003, Oren decided to replace his 1977 General Motors
recreational vehicle (RV) with a new luxury RV manufactured by defendant Blue Bird
Corporation. Id. at 17-19. In late July or early August 2003, Highway Sales purchased, for
Orens use, a Blue Bird Wanderlodge M380 from defendant Thermo Leasing Corporation, a
Blue Bird dealer that does business under the name Shorewood RV.1 Oren Dep. Exs. 1 & 5.
Highway Sales paid almost 0,000 for the RV, a 38-foot vehicle built on a bus chassis. Oren
Dep. at 21-22; id. Ex. 5.
As Judge Graham explains, numerous defects in the RV surfaced in the months following
the sale. See R&R at 1-2 (citing record). Oren returned the RV to Shorewood RV for repairs on
several occasions. Id; Oren Dep. at 24-32, 54-60; id. Exs. 1 & 10. By early July 2004, however,
Oren had given up hope that the RV could ever be put in satisfactory working condition. Oren
Dep. at 62-64. He cleaned out his personal belongings and, on July 2, 2004, dropped off the RV
at Shorewood RVs sales lot. Oren Dep. at 62; Purvis Aff. Ex. B at 1 [Docket No. 12]. As Oren
said at his deposition, at that point, I was just done with it. Oren Dep. at 63. About a week
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later, on July 8, Oren wrote to Blue Bird requesting a refund of the RVs purchase price and
stating:
After almost a year of continued problems with this motor home
[i.e., the Wanderlodge M380 at issue in this suit], I have come to
three conclusions. First, the Model M380 was released before it
had been properly designed, tested, and debugged. Second,
Shorewood RV is a terrific dealer for you, but even they could not
overcome the inherent problems in the Model M380. Third, I have
run out of patience, confidence, and trust that the problems can be
fixed in a reasonable time, and I request that you return my
purchase price. . . .
On July 2, 2004, after the engine batteries once again died, I
removed all of my personal belongings and returned the coach to
the dealer. This was the final event the last straw. . . .
Suffice it to say that I am out of patience, and that both of our lives
will be made easier if you will simply authorize a repurchase of the
coach at its original cost. This coach simply needs to be
permanently recalled until major corrections are made. . . .
Im not interested in further retrofits, patches, or excuses. I will
never take this coach back.
Purvis Aff. Ex. B at 1-2.
Blue Bird refused to give Highway Sales a refund. Oren Dep. at 84; id. Ex. 16. In mid-
September 2004, Oren and Shorewood RV partially executed a consignment agreement under
which Shorewood RV agreed to sell the Wanderlodge M380 on Highway Saless behalf. Oren
Dep. at 64-68; id. Ex. 12. Throughout the remainder of 2004, Oren corresponded with Blue
Bird, raising the specter of legal action and continuing to seek a refund. Id. Exs. 3, 22-23. Blue
Bird disputed Orens claims about the condition of the RV and continued to refuse to issue a
refund. Id. Ex. 24.
In February 2005, Oren agreed to sell the RV to a Florida-based dealer, Parliament
Coach. Oren Dep. at 69-71; id. Exs. 30-31. The sale took place some time between then and
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April 2005. Oren Dep. at 114-16; Rodlund Aff. Ex. E at 2, Ex. F at 5. Oren admits that he did
not give Blue Bird notice before selling the RV to Parliament Coach. Oren Dep. at 71-72, 116.
On July 15, 2005, Highway Sales sued defendants in state court. Defendants removed
the case to this Court under 28 U.S.C. 1441(a).
II. DISCUSSION
A. Standard of Review
Summary judgment is appropriate if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law. Fed. R. Civ. P. 56(c). A dispute over a fact is material only if its resolution
might affect the outcome of the suit under the governing substantive law. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute over a fact is genuine only if the evidence is
such that a reasonable jury could return a verdict for either party. Ohio Cas. Ins. Co. v. Union
Pac. R.R., 469 F.3d 1158, 1162 (8th Cir. 2006). In considering a motion for summary judgment,
a court must assume that the nonmoving partys evidence is true. Taylor v. White, 321 F.3d 710,
715 (8th Cir. 2003).
B. Breach of Warranty
In Count 1 of its second amended complaint, Highway Sales alleges that Blue Bird
breached the implied warranties of merchantability and of fitness for a particular purpose, as
well as applicable express warranties. Blue Bird argues that all of Highway Saless breach-ofwarranty
claims are untimely. Def. Mem. Supp. Mot. S.J. at 4-10 (Def. S.J. Mem.) [Docket
No. 72].
2The Limited Warranty provides that [a]ll rights under this limited warranty shall be
governed by the law of Georgia, U.S.A. Purvis Aff. Ex. A. Defendants assert, however, that
Minnesota law and Georgia law are identical with respect to limitations periods for breach-ofwarranty
claims. Def. S.J. Mem. at 5 n.3. Plaintiffs do not dispute this assertion, and both
parties have briefed the contract and warranty issues in this case with reference to Minnesota
law. Therefore, with the parties acquiescence, the Court will apply Minnesota law to plaintiffs
claims for breach of warranty and breach of contract.
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The parties agree that the governing sales contract in this case incorporates a Limited
Warranty that sets forth Blue Birds warranty responsibilities.2 Def. S.J. Mem. at 4-6; Pl. Resp.
Def. Mot. S.J. at 13 (Pl. S.J. Resp.) [Docket No. 85]. That Limited Warranty includes a
contractual limitations period that provides: Any suit alleging a breach of this limited warranty
of or any other alleged warranty must be filed within one year of breach. Purvis Aff. Ex. A.
The parties do not dispute that the one-year limitations period in the Limited Warranty
applies to all of Highway Saless breach-of-warranty claims. They do, however, dispute whether
the period had run by July 15, 2005, the date this suit was filed in state court. The parties
disagree about when Highway Saless breach-of-warranty claims accrued, and they disagree
about whether the limitations period was tolled by Blue Birds actions. Because the law
governing accrual dates differs for implied-warranty claims and express-warranty claims, the
Court considers each type of claim separately.
1. Implied-Warranty Claims
Section 2-725(2) of the Uniform Commercial Code (UCC) establishes when a claim for
breach of warranty accrues:
A cause of action accrues when the breach occurs, regardless of
the aggrieved partys lack of knowledge of the breach. A breach
of warranty occurs when tender of delivery is made, except that
where a warranty explicitly extends to future performance of the
goods and discovery of the breach must await the time of such
3Following a practice sometimes used by the Minnesota Supreme Court, this Court will
generally refer to provisions of Minnesotas UCC by their UCC section number. See Chemlease
Worldwide, Inc. v. Brace, Inc., 338 N.W.2d 428, 432 n.1 (Minn. 1983). Minnesota has codified
the UCC in Chapter 336 of the Minnesota Statutes. The Court follows Minnesota case law in
interpreting the Minnesota UCC.
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performance the cause of action accrues when the breach is or
should have been discovered.
Minn. Stat. 336.2-725(2).3 Because Minnesota courts have held that implied warranties cannot
explicitly extend[] to future performance, a claim for breach of implied warranty accrues under
2-725(2) when tender of delivery is made. See Nelson v. Intl Harvester Co., 394 N.W.2d
578, 582 (Minn. Ct. App. 1986) (an implied warranty by its very nature cannot contain such an
explicit extension [to future performance]), overruled on other grounds, Lloyd F. Smith Co. v.
Den-Tal-Ez, Inc., 491 N.W.2d 11, 17 (Minn. 1992); see also Marvin Lumber & Cedar Co. v.
PPG Indus., Inc., 223 F.3d 873, 879 (8th Cir. 2000) (Implied warranties cannot, by their very
nature, explicitly extend to future performance.).
In this case, the parties do not dispute that tender of delivery was made some time
close to July 31, 2003. Def. S.J. Mem. at 7; Second Am. Compl. IV. This suit was not brought
until almost two years later. Blue Bird therefore argues that Highway Saless implied-warranty
claims are untimely.
Highway Sales responds with two arguments. First, Highway Sales asserts that the
parties contracted around the limitations period of 2-725(2) by providing that the statute of
limitations on all warranties would run from the date of discovery of breach. Pl. S.J. Resp. at 20
(emphasis added); see also Pl. Partial Obj. to R&R at 2 [Docket No. 107]. Yet the contractual
language on which Highway Sales relies which Highway Sales quotes accurately in its brief,
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see Pl. S.J. Resp. at 20 provides simply that a suit alleging a breach [of warranty] must be
filed within one year of breach. (Emphasis added.) The word discovery is conspicuously
absent from the contract. Highway Sales may wish that the contract provided that all breach-ofwarranty
claims accrue on discovery of breach but wishing does not make it so. Highway
Saless claim for breach of implied warranties thus accrued on about July 31, 2003.
Second, Highway Sales asserts that the limitations period was tolled because Blue Bird
repeatedly attempted and promised to repair the RV. The Court agrees with Judge Graham that
even if Blue Birds repair attempts and promises tolled the running of the limitations period for
some period of time which the Court assumes but does not decide Blue Birds actions did
not toll the running of the limitations period sufficiently to save Highway Saless claims. R&R
at 10.
Under Minnesota law, the doctrine of equitable estoppel provides that if a seller promises
to repair defective goods and the buyer delays suit as a result of reasonably and detrimentally
relying on the sellers promises, the limitations period is tolled during that period of delay. See,
e.g., Lake Superior Ctr. Auth. v. Hammel, Green & Abrahamson, Inc., 715 N.W.2d 458, 473
(Minn. Ct. App. 2006) (discussing equitable tolling with respect to claims for defects in real
property); U.S. Leasing Corp. v. Biba Info. Processing Servs., Inc., 436 N.W.2d 823, 826 (Minn.
Ct. App. 1989) (discussing equitable tolling with respect to a claim for breach of warranty under
the UCC). Without detrimental reliance by the buyer, however, equitable estoppel cannot toll
the limitations period. Any detrimental reliance by Oren and Highway Sales ended no later than
July 8, 2004, when Oren wrote to Blue Bird, told Blue Bird that he was not interested in further
retrofits, patches, or excuses, and insisted that he would never take this coach back. Clearly,
4The warranty provides five-year/50,000 mile coverage for the chassis, body, and paint;
three-year/36,000 mile coverage for most other components; and one-year coverage for
preinstalled plasma TVs. Purvis Aff. Ex. 1.
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from that point forward, Oren and Highway Sales were not delaying any action in reliance on
any promise by Blue Bird to repair the RV, and no reasonable jury could find otherwise. Thus,
plaintiffs claims for breach of implied warranty accrued on roughly July 31, 2003, and the
limitations period, if it was tolled at all, began to run again no later than July 8, 2004. Because
this suit was brought over one year later, plaintiffs implied-warranty claims are time-barred.
2. Express-Warranty Claim
The express Limited Warranty in this case explicitly extends to future performance by
guaranteeing that components of the Wanderlodge M380 will be free from defects in material
and workmanship for specific periods. Purvis Aff. Ex. 1.4 Thus under UCC 2-725, Highway
Saless claim for breach of express warranties accrued when the breach [was] or should have
been discovered. Minn. Stat. 336.2-725(2).
Under Minnesota law, a sellers express future-performance warranty is not breached
when the buyer discovers that the goods he purchased are defective. Rather, breach of the
warranty occurs when the seller is unable or unwilling to maintain the goods as warranted. See
Church of Nativity of Our Lord v. WatPro, Inc., 491 N.W.2d 1, 6 (Minn. 1992), overruled on
other grounds, Ly v. Nystrom, 615 N.W.2d 302, 314 n.25 (Minn. 2000); Anderson v. Crestliner,
Inc., 564 N.W.2d 218, 223 (citing Church of Nativity). Under the discovery rule embodied in
UCC 2-725(2), the buyers cause of action for breach of express warranty accrues i.e., the
limitations period begins to run when the sellers inability or unwillingness to repair the
goods was discovered or should have been discovered by the buyer.
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Blue Bird contends that it has never been unable or unwilling to repair the Wanderlodge
M380 that it sold to Highway Sales. Def. S.J. Mem. at 8; Def. Obj. to R&R at 2 [Docket No.
108]. This, however, is just another way of saying that Blue Bird denies liability, and a
defendants mere denial of liability does not prevent a plaintiffs cause of action from accruing.
See Grand Island Express Corp. v. Timpte Indus., Inc., 28 F.3d 73, 75 (8th Cir. 1994) (under
Nebraska UCC, finding as a matter of law that breach-of-warranty claim accrued when buyer
had to extensively repair purchased goods even though seller refused to concede the validity of
[buyers] warranty claim). Indeed, while denying liability, Blue Bird also argues that, because
Oren concluded no later than July 8, 2004 that the RV was beyond repair, Highway Saless
claim accrued then and is therefore time-barred. Def. S.J. Mem. at 8-10; Def. Obj. to R&R at 3-
5. The Court agrees, and holds that no reasonable jury could find otherwise. Moreover, as the
Court explains below, if Highway Saless claim is not time-barred, then it necessarily fails on the
merits. Either way, defendants are entitled to summary judgment on Highway Saless expresswarranty
claim.
As noted above, the limitations period for the express-warranty claim began to run when
Highway Sales knew or reasonably should have known that one of two things had happened:
either (1) Blue Bird was unwilling to maintain the RV as warranted; or (2) Blue Bird was unable
to maintain the RV as warranted. The Court agrees with Judge Graham that a reasonable juror
could conclude that Blue Bird did not express its unwillingness to repair Highway Saless
Wanderlodge M380 until some time in November 2004. See R&R at 8. Thus, if a sellers
unwillingness to repair were the only thing that set the limitations period ticking on an expresswarranty
claim, Highway Saless claim (filed on July 15, 2005) would be timely.
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But a sellers inability to repair warranted goods can also start the running of a
limitations period. And there is no doubt that as of July 8, 2004, Oren firmly and reasonably
believed, based on the facts available to him at the time, that Blue Bird would never be able to
repair the Wanderlodge M380 so that it would comply with Blue Birds future-performance
warranty. This belief which is at the heart of Highway Saless case was sufficient to start
the limitations period running no later than July 8, 2004.
As a general rule, under Minnesota law, [a] cause of action accrues and the statute of
limitations begins to run when the cause of action will survive a motion to dismiss for failure to
state a claim upon which relief can be granted. Herrmann v. McMenomy & Severson, 590
N.W.2d 641, 643 (Minn. 1999). When the discovery rule applies as it does to some, but not
all, causes of action this general rule is modified slightly. Under the discovery rule, a claim
accrues when a plaintiff knows or reasonably should know that he has a claim. Thus, a claim
might accrue some time after the events giving rise to the claim (if those events are concealed or
unknowable). And a claim might accrue some time before the plaintiff actually realizes that he
has a claim (if the plaintiff is slow on the uptake). See, e.g., Minn. Stat. 541.05 subd. 1(6)
(providing that cause of action for fraud does not accrue until the discovery by the aggrieved
party of the facts constituting the fraud); Rose Revocable Trust v. Eppich, 640 N.W.2d 601,
607-08 (Minn. 2002) (discussing Minnesotas discovery rule as it applies to the statute of
limitations for fraud claims).
Section 2-725(2) of the UCC embodies the discovery rule with respect to futureperformance
warranties. Under 2-725(2), a claim for breach of a future-performance warranty
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accrues when the plaintiff discovers or should have discovered the breach. See Minn. Stat.
336.2-725(2).
It is not necessary that a plaintiff know with certainty that he will prevail on a claim for
that plaintiff to be held to know of that claim for limitations-period purposes. Plaintiffs rarely
know with certainty that they will prevail at trial. For example, a buyer who learns that a seller
breached a warranty and who files suit based on that knowledge might discover at the end of
trial, to his disappointment, that the seller did not breach the warranty at all. But the jurys
verdict does not mean that the limitations period on the claim never began to run.
Rather, for limitations-period purposes, a plaintiff knows of i.e., discovers a cause
of action when the plaintiff subjectively believes that he should prevail and can allege sufficient
facts in support of that belief to state a cause of action. It follows that a plaintiff discovers or
knows of a breach-of-warranty claim when the plaintiff believes that he has a breach-ofwarranty
claim, provided that there is a reasonable basis for that belief. Cf. Harrison v. United
States, 708 F.2d 1023, 1027 (In assessing the awareness required to trigger the statute of
limitations, it is essential to distinguish between knowledge and belief. . . . [C]onclusions
based on dreams, intuitions, suspicion, conjecture, ESP, speculation, or faulty reasoning, even if
true, are merely belief. Absent a reasonable basis, these conclusions do not rise to the level of
knowledge.). In other words, if a party (1) subjectively believes that he has a breach-ofwarranty
claim and (2) can allege facts sufficient to state such a claim, then the applicable
limitations period is running on that claim. See Herrmann, 590 N.W.2d at 643; see also Noske v.
Friedberg, 670 N.W.2d 740, 742-43 (Minn. 2003) (citing Herrmann).
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In this case, there is no doubt that, by July 8, 2004, Highway Sales both believed that it
had a breach-of-warranty claim and could have alleged facts sufficient to state a cause of action
for breach of warranty. Highway Sales knew that the Wanderlodge M380 was covered by an
express warranty; it knew that despite numerous repairs, the RV suffered from related, serious
defects over the course of almost a year; and it believed that Blue Bird was unable to repair the
RV adequately. Accordingly, Highway Saless express-warranty claim accrued no later than
July 8, 2004.
Highway Sales attempts to save its express-warranty claim from untimeliness by arguing
that even if the claim accrued on July 8, 2004 as the Court has found the limitations period
was tolled by Blue Birds promises of repair. But as noted above in connection with Highway
Saless implied-warranty claim, Highway Sales did not delay any action in reliance on Blue
Birds promises after July 8. Without such reliance, equitable estoppel cannot save Highway
Saless express-warranty claim.
Significantly, Highway Saless entire case is premised on the notion that as of July 8,
2004, Blue Bird had breached its express warranty i.e., had proven itself unwilling or unable
to repair the RV. Highway Sales asserts not only that it was entitled to a refund for breach of
warranty as of July 8, but also that it was entitled to revoke its acceptance of the RV because it
was so defective that it did not conform to the sales contract. Second Am. Compl. XXXIIXXXVII.
Put another way, to prevail on its claims, Highway Sales must establish that the RV
was so defective on July 8 that Blue Bird could not have adequately repaired it. But by
establishing this fact, Highway Sales necessarily establishes that its express-warranty claim
accrued on July 8.
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In sum, if the RV was defective on July 8, 2004 (as Highway Sales alleges), Highway
Saless express-warranty claim is time-barred. If the RV was not defective on July 8, 2004,
Highway Saless express-warranty claim is meritless. Either way, Highway Saless expresswarranty
claim must be dismissed.
C. Breach of Warranty Magnuson-Moss Act
In Count 3 of its second amended complaint, Highway Sales raises federal claims under
the Magnuson-Moss Warranty Act, 15 U.S.C. 2301-12. The parties agree that Highway
Saless Magnuson-Moss Act claims are subject to the same limitations period as Highway
Saless breach-of-warranty claims under the Minnesota UCC. Def. S.J. Mem. at 10-11; Pl. S.J.
Resp. at 21. Because Highway Saless Minnesota breach-of-warranty claims are time-barred (as
explained above), Highway Saless Magnuson-Moss Act claims are also time-barred.
D. Minnesota Lemon Law
Highway Sales raises a claim under Minnesotas Lemon Law, Minn. Stat. 325F.665,
in Count 2 of its second amended complaint. As relevant to this case, the Lemon Law provides
that when a dealer or manufacturer cannot repair a substantially defective new motor vehicle to
make the vehicle comply with applicable express warranties, the manufacturer shall either
replace the new motor vehicle with a comparable motor vehicle or accept return of the vehicle
from the consumer and refund to the consumer the full purchase price . . . . Minn. Stat.
325F.665 subd. 3(a). The manufacturers option to replace the defective vehicle, rather than
refund the purchase price, is illusory, as the statute permits the buyer to reject a manufacturers
offer of replacement and to insist on a refund. Id. (If the manufacturer offers a replacement
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vehicle under this section, the consumer has the option of rejecting the replacement vehicle and
requiring the manufacturer to provide a refund.).
For purposes of its summary-judgment motion, Blue Bird does not dispute that a material
issue of fact exists as to whether the Wanderlodge M380 purchased by Highway Sales was a
lemon under subdivision 3(a) of 325F.665 i.e., whether (1) the RV suffered a defect or
condition which substantially impair[ed] the use or market value of the RV, and (2) Blue Bird
was unable to conform the [RV] to any applicable express warranty . . . after a reasonable
number of [repair] attempts. See Def. S.J. Mem. at 11-13. Instead, Blue Bird argues that
regardless of the quality of the Wanderlodge M380, Highway Saless Lemon Law claim fails as
a matter of law because Highway Sales sold the RV rather than returning it to Blue Bird. Id. As
did Judge Graham, R&R at 19, the Court agrees with Blue Bird.
The viability of Highway Saless Lemon Law claim turns largely on the proper
interpretation of a single word tender as used in one case Pfeiffer v. Ford Motor Co.,
517 N.W.2d 76 (Minn. Ct. App. 1994). The plaintiffs in Pfeiffer, after losing on their Lemon
Law claim in arbitration proceedings, sold their purported lemon of a car to a third party and
brought a state-court Lemon Law action. Id. at 78. Pfeiffer held that the Lemon Law claim was
properly dismissed because [the car buyers] failed to tender the vehicle as required by [the
Minnesota Lemon Law]. Id. at 79. Although the Lemon Law does not actually use the word
tender, Pfeiffer observed that [a] plain, common sense reading of [subdivision 3(a) of
325F.665] evidences a requirement of tender of the allegedly defective vehicle in order to
recover under the Lemon Law. Id. at 80.
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According to Highway Sales, it did tender i.e., offer the Wanderlodge M380 to
Blue Bird, but Blue Bird refused to take it back, and that refusal justified Highway Sales in
selling the RV to a third party. Blue Bird protests that Highway Saless interpretation of the
word tender is strained, Def. Reply Mem. at 8 [Docket No. 93], but the Court disagrees.
According to the American Heritage Dictionary, the verb tender means to offer formally, as
in tender a letter of resignation. American Heritage Dictionary of the English Language (4th
ed. 2000), entry 2 for tender, available at http://www.bartleby.com/61/30/T0103000.html.
Letters of resignation that are tendered are not necessarily accepted. And Blacks Law
Dictionary defines the phrase tender of performance to mean [a]n obligors demonstration of
readiness, willingness, and ability to perform the obligation . . . . Blacks Law Dictionary 1507
(8th ed. 2004) (emphasis added). In the abstract, then, it would seem reasonable to read Pfeiffer
to mean that a plaintiff seeking to bring a Lemon Law claim must simply offer, i.e., tender, a
defective vehicle to the manufacturer some time before bringing suit, regardless of whether the
manufacturer takes the vehicle back, and regardless of whether the vehicle is still available at the
time of suit.
The Court must, however, reject this reading of Pfeiffer in light of the language of
Minnesotas Lemon Law, other language in Pfeiffer, and the policy underlying the Lemon Law.
First, the statute itself contemplates that the buyer will in fact return a lemon to the manufacturer,
and not just offer it back to the manufacturer. Under subdivision 3(a) of 325F.665, a
manufacturer must either replace the [lemon] with a comparable motor vehicle or accept return
of [the lemon] from the consumer and refund to the consumer the full purchase price. The
remedy of a refund is expressly conditioned on the manufacturers accept[ing] return of the
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lemon from the car buyer, not just on the buyers offering or tendering the lemon back to the
manufacturer.
Moreover, the Lemon Law is designed to protect not just the initial purchaser of a vehicle
that turns out to be a lemon, but any subsequent purchasers of that vehicle. Subdivision 5 of
325F.665 governs the resale of a vehicle that has been returned to the manufacturer under
Minnesotas (or any other states) Lemon Law. Minn. Stat. 325F.665 subd. 5(a) (emphasis
added). The Lemon Law altogether forbids the resale of certain lemons (those that had
dangerously defective braking or steering systems). Id. subd. 5(b). As to less-dangerous
lemons, the statute imposes on the manufacturer two obligations with respect to the resale of
such lemons. First, the manufacturer must provide, for at least 12 months or 12,000 miles, the
same express warranty it provided to the original purchaser . . . . Id. subd. 5(a)(1). Second, the
manufacturer must provide the consumer with a conspicuous notice, on a separate piece of paper,
stating that the lemon being resold was returned to the manufacturer because it did not conform
to the manufacturers express warranty and the nonconformity was not cured within a reasonable
time as provided by Minnesota law. Id. subd. 5(a)(2). The Lemon Laws provisions governing
the resale of lemons protect subsequent purchasers by imposing obligations on manufacturers
obligations that could not be imposed if a lemon were resold privately by the first purchaser,
rather than returned to the manufacturer. Recognizing the importance of the Lemon Laws
resale-related provisions, Pfeiffer observed: We believe it is inconsistent to allow a Lemon
Law recovery, while allowing the same injured party to pass the defective auto on to another
consumer without notice or the warranty protections provided to the first owner. 517 N.W.2d at
80.
- 17 -
This Court therefore reads Pfeiffer as holding that a buyer who has sold his vehicle
before trial that is, passed on his lemon to another rather than returning his lemon to the
manufacturer cannot recover under Minnesotas Lemon Law. See Hull v. DaimlerChrysler
Corp., 99 P.3d 1026, 1028 (Ariz. 2004) (relying on Pfeiffer to hold that a consumer is not
entitled to relief under Arizonas Lemon Law if the consumer no longer possesses the vehicle).
While the Court is not bound by Pfeiffer because it is not a decision of the Minnesota Supreme
Court, the Court nonetheless chooses to follow Pfeiffer both because it is persuasive evidence of
how the Minnesota Supreme Court would interpret the states Lemon Law, and because it is
consistent with the language and policy of the Lemon Law itself. See generally B.B. v.
Continental Ins. Co., 8 F.3d 1288, 1291 (8th Cir. 1993) (discussing the application of state law in
diversity cases). Accordingly, Highway Saless Lemon Law claim fails as a matter of law.
E. Revocation of Acceptance
Highway Sales alleges, in count 4 of its second amended complaint, that it revoked its
acceptance of the Wanderlodge M380 against both the seller, Shorewood RV, and the
manufacturer, Blue Bird. Under 6-608 of the UCC, a buyer can, under some circumstances,
revoke its acceptance of nonconforming goods that a seller has tendered and that the buyer has
already accepted. Minn. Stat. 336.2-608. As Judge Graham observed, a revocation-ofacceptance
claim is a type of breach-of-contract claim; it is essentially a delayed rejection of
nonconforming goods by the buyer. R&R at 13.
A buyer can prevail on a revocation-of-acceptance claim only if several conditions are
met. The conditions relevant to this case are the following: First, the goods must be
substantially nonconforming. Minn. Stat. 336.2-608(1). Second, the buyer must have been
- 18 -
unable to discover the nonconformity at delivery (otherwise the buyer should have rejected them,
or retained them and sued under 2-713 for breach of warranty). Id. 336.2-608(1)(b). Finally,
the buyer must revoke within a reasonable time of discovering the nonconformity and must
notif[y] the seller of the revocation. Id. 336.2-608(2). The notice of revocation must be
unequivocal. See 1 James J. White & Robert S. Summers, Uniform Commercial Code 8-4, at
572 (5th ed. 2006). Although the notice need not follow any particular format, it must fairly
apprise the seller that the buyer wants to give back the goods and receive a substitute or money
in return. Cissell Mfg. Co. v. Park, 36 P.3d 85, 89 (Colo. Ct. App. 2001).
Blue Bird and Shorewood RV challenge Highway Saless revocation-of-acceptance claim
on a number of grounds. The Court addresses them in turn.
First, both defendants argue that because this claim rests on the same facts as Highway
Saless breach-of-warranty claim, it is subject to the same contractual limitations period and is
therefore time-barred. Def. S.J. Mem. at 13-15. Judge Graham rejected this argument, R&R at
12-14, and the Court agrees with her analysis. As Judge Graham explains, a revocation claim
under UCC 2-608 is a type of breach-of-contract claim and differs from a breach-of-warranty
claim. Although revocation and breach-of-warranty claims may arise from the same facts as
they do in this case the UCC provides different remedies for, and imposes different
requirements on, the two types of claims. See Jaramillo v. Gonzales, 50 P.3d 554, 559 (N.M. Ct.
App. 2002) ([B]reach of warranty and revocation are separate and distinct claims. They are
unconnected, and one may be found without the other.). Accordingly, Highway Saless
revocation-of-acceptance claim is subject to the four-year statute of limitations found in UCC
- 19 -
2-725(1), rather than the one-year contractual limitations period applicable in this case to
breach-of-warranty claims. See Minn. Stat. 336.2-725(1).
Second, Blue Bird contends that under Minnesota law, a revocation-of-acceptance claim
cannot be brought against a nonselling manufacturer unless the selling dealer is insolvent or
otherwise not amenable to suit. Def. S.J. Mem. at 20-23. Because Shorewood RV is both
solvent and amenable to suit, argues Blue Bird, Highway Sales cannot revoke acceptance against
Blue Bird as a matter of law. Id. Again, Judge Graham rejected this argument, R&R at 14-17,
and again, the Court agrees with Judge Grahams analysis.
The Court sympathizes with Blue Birds argument that allowing a buyer to revoke
acceptance against a nonselling manufacturer is inconsistent with the language of UCC 2-608.
After all, the statute provides that a buyers revocation is not effective until the buyer notifies
the seller of it. Minn. Stat. 336.2-608(2) (emphasis added). Further, in the typical case where a
seller delivers nonconforming goods where, for instance, the seller delivers red widgets when
the buyer ordered blue ones the manufacturer will have had no responsibility for or even
knowledge of the sellers error. If the Court were writing on a clean slate, the Court would agree
that UCC 2-608 does not permit a buyer to revoke acceptance against a nonselling
manufacturer.
But the Court is not writing on a clean slate. The Court is bound to follow Minnesota
law and, under Durfee v. Rod Baxter Imports, Inc., 262 N.W.2d 349 (Minn. 1977), a motorvehicle
buyer may bring a revocation-of-acceptance claim under UCC 2-608 against a
nonselling vehicle manufacturer who has provided an express warranty. In Durfee, the
Minnesota Supreme Court held that a car buyer could maintain a revocation claim against Saab-
20 -
Scania, the nonselling manufacturer, based on the buyers purchase of a defective Saab coupe.
The court noted:
The existence and comprehensiveness of a warranty undoubtedly
are significant factors in a consumers decision to purchase a
particular automobile. . . . When the exclusive remedy found in
the warranty fails of its essential purpose and when the remaining
defects are substantial enough to justify revocation of acceptance,
we think the buyer is entitled to look to the warrantor for relief. If
plaintiff had sued Saab-Scania for breach of either express
warranty or implied warranty, the absence of privity [between the
buyer and Saab-Scania] would not bar the suit despite the language
of the pertinent [UCC] sections. We see no reason why the result
should differ merely because plaintiff has chosen to revoke his
acceptance instead of suing for breach of warranty.
Id. at 357 (citations omitted).
It is true, as Blue Bird points out, Def. S.J. Mem. at 22, that the seller of the defective
Saab at issue in Durfee was insolvent, and that this seemed to matter to the court. After
observing that if Saab-Scania were not liable to the buyer, he may well be left without relief,
Durfee held that [a]lthough the relevant sections of Article 2 of the Uniform Commercial Code
seem to require a buyer-seller relationship, Saab-Scania does not escape liability on this ground
[i.e., because it was a nonselling manufacturer] in these circumstances. Id. Despite this
language, however, the Court does not believe that Durfee can be read as narrowly as Blue Bird
advocates. See Christian v. Sony Corp., 152 F. Supp. 2d 1184, 1188-89 (D. Minn. 2001)
(rejecting, based on Durfee, manufacturers argument that a claim for revocation of acceptance
may only be asserted against a seller in privity with the buyer not against a remote
manufacturer). Durfees reasoning rested largely on the nature of automobile warranties, as the
lengthy passage quoted above illustrates, and that reasoning is independent of the immediate
- 21 -
sellers solvency. The Court therefore rejects Blue Birds argument that, as a nonselling
manufacturer, it cannot be liable to Highway Sales under 2-608.
Third, Shorewood RV and Blue Bird make related arguments about why Highway
Saless revocation-of-acceptance claim fails as a matter of law in light of Highway Saless
actions after Oren wrote to Blue Bird on July 8, 2004 demanding a refund. For its part,
Shorewood RV argues that Highway Sales effort to sell the Wanderlodge M380 through
Shorewood RV on consignment, and Highway Saless ultimately successful sale of the RV to
Parliament Coach, foreclose Highway Saless revocation-of-acceptance claim because these
actions are inconsistent with a revocation claim against Shorewood RV. Def. S.J. Mem. at 18-
19. Blue Bird makes a slightly different argument, contending that because Highway Sales sold
the RV to Parliament Coach without complying with the UCC provisions that govern the postrevocation
sale of goods by a revoking buyer, Highway Sales cannot, as a matter of law, bring a
revocation-of-acceptance claim. Id. at 23-25.
Judge Graham found that because Highway Sales ultimately sold the RV to Parliament
Coach without complying with the UCC, Highway Sales reaccepted the RV. R&R at 18.
Accordingly, Judge Graham concluded that Highway Saless revocation claim failed as a matter
of law. The Court agrees with Judge Grahams conclusion, but arrives at it differently.
Under 2-608(3), a buyer who has revoked his acceptance of goods but nonetheless
maintains control of those goods is subject to the requirement found in 2-602(2)(b), and
incorporated in 2-608(3) by reference that the buyer hold them with reasonable care at the
sellers disposition for a time sufficient to permit the seller to remove them[.] See Minn. Stat.
336.2-608(3) (imposing on revoking buyer the same rights and duties with regard to the
- 22 -
goods involved as if the buyer had rejected them), 336.2-602(2)(b) (setting out duties of
rejecting buyers). The theory underlying this requirement is that, after revocation, the goods
belong not to the buyer, but to the seller as they did before acceptance.
Relying on the law governing a buyers preacceptance rejection of goods, at least one
court has held that a buyers revocation-of-acceptance claim failed as a matter of law where the
buyer resold the goods after purportedly revoking acceptance. In Chancellor Development Co.
v. Brand, the Missouri Court of Appeals observed that UCC 2-606(1)(c) provides that any act
by a buyer inconsistent with sellers ownership will constitute acceptance of goods. 896
S.W.2d 672, 675 (Mo. Ct. App. 1995); see also Minn. Stat. 336.2-606(1)(c) (Acceptance of
goods occurs when the buyer . . . does any act inconsistent with the sellers ownership[.]).
Chancellor Development concluded that because revocation of acceptance is a type of delayed
rejection, [a] buyers act of dominion over goods, including sale of the goods, is inconsistent
with a buyers claim of revocation of acceptance. 896 S.W.2d at 676.
This Court respectfully disagrees that any sale of goods by a buyer vitiates the buyers
revocation-of-acceptance claim. Chancellor Development reached this conclusion only by
emphasizing UCC 2-606 (governing rejection) at the expense of other relevant provisions of
the UCC. Under 2-711(3), a buyer who justifiably revokes acceptance of goods has a security
interest in goods in the buyers possession or control . . . and may hold such goods and resell
them in like manner as an aggrieved seller [i.e., in accordance with 2-706]. Minn. Stat.
336.2-711(3) (emphasis added). In other words, 2-711(3) explicitly authorizes a buyer who
has revoked acceptance of goods to resell them under certain circumstances. It cannot be the
case, then, that the mere fact that a revoking buyer resells goods in his possession defeats the
- 23 -
buyers claim under 2-608 for revocation of acceptance. Chancellor Developments broad
language to the contrary cannot be reconciled with 2-711(3).
The key cases on which Chancellor Development relied cases in which other courts
found that a revoking buyers claims failed as a matter of law involved not only the buyers
resale of the goods at issue, but also the buyers failure to comply with the express requirements
of 2-608. In Hays Merchandise, Inc. v. Dewey, for instance (cited by Chancellor Development,
896 S.W.2d at 675-76), the Washington Supreme Court found that a buyers revocation claim
failed as a matter of law because [t]he buyers acts of pricing, displaying advertising and selling
were for his own account and were not in keeping with the duty to use reasonable care in
holding the goods at the sellers disposition for a reasonable time. 474 P.2d 270, 273 (Wash.
1970) (emphasis added). It is apparent from the italicized language in this quotation that Hays
Merchandise turned not on the mere fact of resale by the buyer, but on the nature and timing of
that resale, which the court found inconsistent with the buyers express duty under 2-608(2)
and 2-602(2)(b) to hold the goods on the sellers behalf for a reasonable time.
In Delhomme Industries, Inc. v. Houston Beechcraft, Inc. (another case cited in
Chancellor Development, 896 S.W.2d at 676), the Fifth Circuit upheld a district courts finding
that a buyers revocation claim failed because the buyer did not give proper notice of revocation
under 2-608. 735 F.2d 177, 182-83 (5th Cir. 1984). The buyer argued that by reselling a
defective airplane to the original seller for a portion of the purchase price, the buyer had given
notice of revocation. Id. at 182. It is true that Delhomme observed that a bona fide sale . . . is
inconsistent with intent to revoke acceptance, id. at 182-83, but Delhomme was not a case in
which the buyer gave notice of revocation and then, after a reasonable period of time, resold the
- 24 -
goods at issue. Rather, the buyer in Delhomme argued that the resale itself was an adequate
notice of revocation. The Fifth Circuit quite sensibly held that the district court had not clearly
erred in finding that the buyer had not given adequate notice of revocation under 2-608(2). Id.
at 183.
In this case, there is no dispute that, at least with respect to Blue Bird, Highway Sales
gave effective notice of revocation as of July 8, 2004. There is also no dispute that Highway
Sales returned the Wanderlodge M380 to Shorewood RV around that time, did not attempt to sell
it on consignment until September 2004, and did not succeed in selling it until February 2005 or
some time afterwards. The Court finds, as a matter of law, that Highway Saless resale-related
actions were consistent with its duty to hold [the RV] with reasonable care at the sellers
disposition for a time sufficient to permit the seller to remove them[.] See Minn. Stat. 336.2-
602(2)(b), 336.2-608(3). The Wanderlodge M380 was in the possession of Shorewood RV, Blue
Birds authorized dealer, for several months after Highway Sales notified Blue Bird that it was
revoking its acceptance of the RV. Blue Bird could have taken possession of the RV at any time
during that period.
It is also true, however, that when Highway Sales resold the RV to Parliament Coach,
Highway Sales did not comply with the UCCs provisions governing a revoking buyers resale
of goods as to which the buyer has revoked acceptance. Under 2-711(3), a buyer who
justifiably revokes acceptance of goods has a security interest in the goods for the amount of the
purchase price (plus certain expenses related to transporting and holding the goods). Minn. Stat.
336.2-711(3). Provided that the buyer has held the goods for a time sufficient to permit the
seller to remove them as required by 2-608(3) and 2-602(2)(b), the UCC permits the buyer to
- 25 -
redeem his security interest by reselling the goods in like manner as an aggrieved seller.
Minn. Stat. 336.2-711(3).
Section 2-706 of the UCC governs resale by an aggrieved seller. Minn. Stat. 336.2-
706. Under 2-706(2), every aspect of the sale including the method, manner, time, place and
terms must be commercially reasonable. Minn. Stat. 336.2-706(2). And under 2-706(3),
where the resale occurs not at a public sale (such as an auction), but rather at a private sale as
it did in this case when Highway Sales sold the RV to Parliament Coach the aggrieved seller
(or the revoking buyer) must give . . . reasonable notification of an intention to resell. Minn.
Stat. 336.2-706(3).
It is undisputed that Highway Sales did not give any notice to Blue Bird of its intention to
resell the Wanderlodge M380 to Parliament Coach. Oren Dep. at 71-72, 116. Highway Sales
argues that such notice was unnecessary for two reasons: First, Shorewood RV, as Blue Birds
agent, was aware of Highway Saless general intent to sell the RV; and second, 2-706(3), as
applied to revoking buyers, requires only that notice be given to the seller, not to a nonselling
manufacturer. Pl. Partial Obj. R&R at 5. Given Highway Saless insistence that it is entitled to
bring a revocation-of-acceptance claim against Blue Bird despite the fact that 2-608 refers only
to sellers (and not to nonselling manufacturers), this second argument borders on the frivolous.
As to the first argument which appears only in a footnote, unencumbered by citation to
authority, Pl. S.J. Resp. at 34 n.6 the Court agrees with Judge Graham that no reasonable
juror could find that Shorewood RV is Blue Birds agent. R&R at 16-17. Accordingly, the
Court finds that because Highway Sales did not give reasonable notification to Blue Bird
5Because the analogy between revoking buyers and aggrieved sellers is not complete, the
measure of damages for a revoking buyer who fails to comply with 2-706 is not provided by
2-708, which applies only to actual aggrieved sellers. As a general rule, the measure of a
revoking buyers damages is provided by 2-711(1) (which allows the revoking buyer to
recover whatever it has paid toward the price of the goods as to which the buyer revokes his
acceptance) and either 2-712 (if the buyer covers by buying elsewhere) or 2-713 (if the
buyer does not cover). See Minn. Stat. 336.2-711(1)(a)-(b), 336.2-712 to .2-713. By contrast,
an aggrieved seller generally recovers damages under 2-708. The Court therefore analyzes
independently the effect on a revoking buyers damages of his failure to comply with 2-706
when reselling the goods as to which he has revoked acceptance.
- 26 -
before selling the RV to Parliament Coach, Highway Sales did not comply with 2-711(3) and
2-706.
Does Highway Saless resale to Parliament Coach in violation of 2-706 defeat Highway
Saless revocation-of-acceptance claim as a matter of law? The Court thinks not. The official
comments to 2-706 indicate that an aggrieved sellers failure to comply with that section limits,
but does not defeat, the sellers right to recover damages. An aggrieved seller who complies
with 2-706 can recover from a breaching buyer the difference between the resale price and the
contract price plus incidental damages (and less any savings resulting from the buyers breach).
Minn. Stat. 336.2-706(1). An aggrieved sellers failure to comply with 2-706 deprives the
seller of the measure of damages here provided [i.e., under 2-706(1)] and relegates him to that
provided in Section 2-708. UCC 2-706 official cmt. 2. By analogy, when a revoking buyer
fails to comply with 2-706 when selling in like manner as an aggrieved seller under 2-
711(3), the buyer is not barred entirely from recovering damages for revocation of acceptance;
rather, his damages are limited. The Court now turns to the question of how those damages are
limited.5
- 27 -
Recall that, under 2-711(3), a revoking buyer has a security interest in the goods for
the amount of the purchase price plus certain expenses related to transporting and holding the
goods. Secured transactions in general in which the obligations of Party A to Party B are
secured by Party Bs security interest in collateral belonging to Party A are governed in
Minnesota by Revised Article 9 of the UCC. Sections 9-610 and 9-611 of the UCC, which
establish the conditions under which a secured party may sell off collateral to redeem its security
interest, resemble in key respects 2-706, which governs the resale of goods by an aggrieved
seller. See 1 James J. White and Robert S. Summers, Uniform Commercial Code 7-6, at 472
(Section 2-706 . . . lives in the shadow of a large body of case law on resales by secured
creditors under [Article 9].). Section 9-611, like 2-706(3)-(4), requires that a secured party
generally provide notice before selling off collateral. And 9-610 provides, as does 2-706(2),
that every aspect of a disposition of collateral, including the method, manner, time, place, and
other terms, must be commercially reasonable. Minn. Stat. 336.9-610(b).
Where a secured party sells collateral in violation of Article 9s requirements governing
such sales, a rebuttable presumption arises that the proceeds of the sale fully satisfy the
obligation that the collateral secured. See generally 4 James J. White & Robert S. Summers,
Uniform Commercial Code 34-14.a (5th ed. 2002); see also Minn. Stat. 336.9-626(a)(3)-(4).
In other words, a secured party who sells a debtors collateral in a commercially unreasonable
fashion (or without giving notice) will not be entitled to recover a deficiency judgment for the
difference between what the debtor owed and what the sale of the collateral brought, unless the
secured party can establish what the sale of the collateral would have brought had the secured
party complied with 9-610 and 9-611.
- 28 -
It makes sense to take a similar approach when a revoking buyer otherwise complies with
2-608 and justifiably revokes its acceptance of nonconforming goods, but then sells those
goods as an aggrieved seller under 2-711(3) without complying with 2-706. Thus, a
revoking buyers commercially unreasonable sale, or sale without adequate notice, does not
render the buyers revocation ineffective. Instead, such a sale creates a rebuttable presumption
that the buyer took the goods in full satisfaction of the security interest created under 2-711(3).
But such a sale does not diminish the buyers right to seek incidental and consequential damages
under 2-712 (if the buyer covers by buying elsewhere) or 2-713 (if the buyer does not
cover). To hold otherwise would be inconsistent with 2-711 itself, under which the revoking
buyers right to damages is separate from his security interest in, and right to resell, the goods as
to which the buyer has revoked his acceptance. As the UCC official commentary notes, [t]he
buyers right to cover, or to have damages for nondelivery, is not impaired by his exercise of his
right of resale under 2-711(3). UCC 2-711 official cmt. 2 (emphasis added).
It follows that even though Highway Sales did not give Blue Bird adequate notice of
Highway Saless intention to sell the Wanderlodge M380 to Parliament Coach, Highway Saless
revocation-of-acceptance claim does not fail for this reason alone. Instead, the Court finds that
Highway Saless claim fails as a matter of law because Highway Sales revoked acceptance only
against Blue Bird, and not against Shorewood RV.
As noted above, even though UCC 2-608 does not appear to permit a buyer to revoke
acceptance against a nonselling manufacturer, the Minnesota Supreme Court held in Durfee v.
Rod Baxter Imports, Inc., 262 N.W.2d 349 (Minn. 1977), that a motor-vehicle buyer may bring a
claim for revocation of acceptance under 2-608 against a nonselling manufacturer that has
- 29 -
provided an express warranty. But it would stretch this principle too far to allow such a claim to
proceed against the nonselling manufacturer alone when the seller although solvent and
amenable to suit has not received notice of revocation. After all, even under Minnesota law,
it is plain that a buyer may normally only revoke acceptance against a seller. Durfee created a
limited exception to this rule in cases involving express warranties (and perhaps only in cases
involving motor vehicles). The Court is obligated to apply Durfee, but not to extend Durfee to
permit a buyer to revoke only against the nonselling manufacturer when the selling dealer is
solvent and amenable to suit.
In this case, there is no evidence that Highway Sales notified Shorewood RV that
Highway Sales sought to revoke acceptance and receive a refund from Shorewood RV. Instead,
the evidence is clear that Highway Sales gave only Blue Bird the requisite unequivocal notice of
its intent to revoke acceptance, and Highway Sales sought a refund from Blue Bird alone. With
respect to Shorewood RV, Highway Sales attempted to negotiate a consignment agreement that
would have allowed Highway Sales, by reselling the Wanderlodge M380, to recover a portion of
its purchase price (and, presumably, would have allowed some profit to Shorewood RV as the
consignment seller). Highway Sales never intended, or tried, to seek a refund from Shorewood
RV, as evidenced by the undisputed facts that (1) Highway Sales never gave Shorewood RV
notice that it was revoking acceptance against Shorewood RV, and (2) Highway Sales sought to
negotiate a consignment agreement with Shorewood RV to resell the Wanderlodge M380.
Accordingly, no reasonable jury could find that Highway Sales revoked its acceptance against
Shorewood RV.
- 30 -
Where a seller is solvent and amenable to suit, a buyer cannot revoke acceptance against
a nonselling manufacturer alone, for this would be inconsistent with the policy and text of
2-608 and would place responsibility for the delivery of nonconforming goods on the least
responsible party. Because Highway Sales revoked its acceptance only against Blue Bird, and
not against Shorewood RV, both defendants are entitled to summary judgment on Highway
Saless revocation-of-acceptance claim.
ORDER
Based on the foregoing and on all the files, records, and proceedings herein, the Court
ADOPTS IN PART Judge Grahams Report and Recommendation [Docket No. 105] to the
extent that it is consistent with the foregoing, OVERRULES plaintiffs partial objection [Docket
No. 107], and SUSTAINS defendants objection [Docket No. 108].
Defendants motion for summary judgment [Docket No. 65] is GRANTED. This action
is DISMISSED WITH PREJUDICE AND ON THE MERITS.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: August 21 , 2007 s/Patrick J. Schiltz
Patrick J. Schiltz
United States District Judge
 

 
 
 

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