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Carey v. Chaparral Boats, Inc: US District Court: UCC - no evidence to raise any fact issue regarding alleged warranty breaches

1 On a motion for summary judgment, the Court views the evidence in the light most
favorable to the nonmoving party. Ludwig v. Anderson, 54 F.3d 465, 470 (8th Cir. 1995).
Paul Carey,
Civil No. 06-3974 ADM/AJB
Chaparral Boats, Inc.,
Todd E. Gadtke, Esq., Hauer Fargione Love Landy & McEllistrem, Minneapolis, MN, on behalf
of Plaintiff.
Nathan J. Marcusen, Esq., and Ryan L. Nilsen, Esq., Bowman & Brooke LLP, Minneapolis, MN,
on behalf of Defendant.
On September 14, 2007, the undersigned United States District Judge heard oral
argument on Defendant Chaparral Boats, Inc.s (?Chaparral) Motion for Summary Judgment
[Docket No. 11]. Plaintiff Paul Carey (Carey) asserts in his Complaint [Docket No. 1] claims
for breach of Chaparrals express and implied warranties under the Magnuson-Moss Warranty
Act, 15 U.S.C. 2301-2312. For the reasons set forth herein, Chaparrals Motion is granted.
On June 16, 2005, Carey purchased a Chaparral boat from a Chaparral authorized dealer.
Compl. 3. Chaparral provided Carey with an express limited warranty. Marcusen Aff. [Docket
No. 14] Ex. 3. Under the terms of the warranty, Chaparral warranted Careys boat against
defects for one year subject to several limitations. Id. Chaparrals express warranty excluded
from coverage Defects in paint or gelcoat finishes including blisters below the waterline,
cracking, crazing, or minor discoloration. Id. Further, Chaparrals express warranty limited the
duration of any implied warranty of merchantability to one year. Id.
Carey asserts that his boat has several defects including a loose windshield, electrical
problems, and interior cracking. Compl. 7. Wayzata Marine, the Chaparral authorized dealer
and service provider, performed windshield repairs on Careys boat under the warranty on July
6, 2005, and again on October 27, 2005. Gadtke Aff. [Docket No. 18] Ex. 3. There is no
complaint that the windshield was not successfully repaired. Pl.s Mem. in Opp. to Def.s Mot.
for Summ. J. (hereinafter Pl.s Mem.) at 20.
On four separate occasions Wayzata Marine performed repairs to the boats electrical
system. On August 31, 2005, Wayzata serviced Careys boat to repair the bow navigation light,
Gadtke Aff. Ex. 5; on September 7, 2005, they serviced Careys boat to repair the boats radio,
Id. Ex. 6; on October 27, 2005, they serviced Careys boat to repair a problem with an interior
light, Id. Ex. 7; and finally, on May 3, 2006, they serviced Careys boat to repair a problem with
the boats engine that had prevented it from starting, Id. Ex. 9. Again, Carey does not contend
that any of the problems with the boats electrical system have not been corrected. Pl.s Mem. at
The majority of Careys current complaints about his boat relate to cracking in the boats
finish. Id. at 6-13, 21-24. On July 6, 2005, Chaparral contracted Steve Torberg, a gelcoat and
fiberglass specialist, to repair cracks in the cockpit and bow of the boat for a total cost of ,610.
Gadke Aff. Ex. 4. Torberg serviced Careys boat to repair cracks in the boats finish again on
September 7, 2005, Id. Ex. 6; December 15, 2005, Id. Ex. 8; and on June 15, 2006, Id. Ex. 10.
As of May 2007 there are 20 additional cracks in Careys boat amounting to a total repair cost of
,327.50these repairs have not been made. Id. Ex. 11.
A. Standard of Review
Federal Rule of Civil Procedure 56(c) provides that summary judgment shall issue 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); see Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 252 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On a motion for
summary judgment, the Court views the evidence in the light most favorable to the nonmoving
party. Ludwig, 54 F.3d at 470. The nonmoving party may not rest on mere allegations or
denials, but must demonstrate on the record the existence of specific facts which create a genuine
issue for trial. Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).
B. Magnuson-Moss Warranty Act
The Magnuson Moss Warranty Act provides for civil actions in federal court subject to
specific jurisdictional requirements not at issue in this case. 15 U.S.C. 2310(d). In such
actions, a consumer may bring suit to recover from a supplier, warrantor, or service contractor
for breach of a written warranty, implied warranty, or service contract. Id. In determining
whether the warrantor has breached a written or implied warranty, this Court must look to state
law. See Walsh v. Ford Motor Co., 807 F.2d 1000, 1013 (D.C. Cir. 1986), cert. denied, 482 U.S.
915 (1987).
C. Express Warranty Claims
Chaparral asserts that there is no genuine issue concerning breach of its express warranty
because the windshield and electrical system were repaired within the warranty period and
because the undisputed facts demonstrate that the cracks in the boats finish are cracks in the
gelcoat, which is expressly excluded from warranty. Def.s Mem. in Supp. of Mot. for Summ. J.
(hereinafter Def.s Mem.) at 19-21, 24.
Carey asserts that the warranty fails of its essential purpose because Chaparrel failed to
repair his boat within a reasonable time. Pl.s Mem. at 19. Carey asserts there is a genuine issue
of fact as to whether the number of, and/or time for, the repair attempts to the windshield and
electrical system were reasonable. Id. Carey also asserts that there is a genuine issue as to
whether the cracks in his boat are excluded from the express warranty. Id. at 23. Carey argues
the deposition testimony demonstrates a genuine issue about whether the cracks are in the
fiberglass of the boat, the gelcoat finish, or something else. Id.
A repair-and-replace clause will fail of its essential purpose where circumstances arise to
deprive either party of the substantial value of the bargain. Minn. Stat. 336.2-719, U.C.C.
Comment 1. Under Minnesota law, [s]o long as the seller repairs the goods each time a defect
arises, a repair-and-replacement clause does not fail of its essential purpose. Durfee v. Rod
Baxter Imports, Inc., 262 N.W.2d 349, 356 (Minn. 1977). However, if repairs are not
successfully undertaken within a reasonable time, the buyer may be deprived of the benefits of
the exclusive remedy. Id.
The record demonstrates that the problems relating to the windshield and electrical
system were successfully repaired each time a defect arose. Accordingly, the question then
becomes whether Carey has come forward with any specific facts to create a genuine issue as to
whether the boat was repaired by Chaparral within a reasonable time. Carey has not. There are
no facts in the record demonstrating the amount of time it took to repair the defects relating to
the windshield or electrical problems and thus no way to determine whether Chaparral conducted
those repairs in an unreasonable manner that deprived Carey the benefit of his bargain. The
undisputed record is that the repairs were successful, and there are no facts of record to create a
genuine issue that it took Chaparral an unreasonably long time to perform the repairs to the
windshield and electrical system.
The record also does not demonstrate a genuine issue of fact to whether the cracks are
covered under warranty. The uncontradicted testimony is that the defects in the boats
appearance are cracks in the boats gelcoat finish. Daniel Gau, an employee of Wayzata Marine,
testified that he is familiar with Careys boat from having seen it numerous times and from
discussing it with Carey. Gau Dep. (Marcusen Aff. Ex. 6; Gadtke Aff. Ex. 16) at 15-16. Gau
testified that he had no knowledge of cracks in the fiberglass of Careys boat. Id. at 36. Rather,
Gau testified that the cracks in Careys boat are gelcoat cracks. Id. at 38. Scott Lyber, who also
works at Wayzata Marine, directed the repairs on Careys boat. Lyber Dep. (Marcusen Aff. Ex.
7) at 24-25, 33. Lyber testified that all of the cracks in Careys boat appear to be cracks in the
gelcoat and that there are no cracks in the fiberglass of the boat. Id. Carey has not presented any
evidence demonstrating that the cracks are in the fiberglass rather than the gelcoat finish.
For the foregoing reasons, Carey failed his burden to demonstrate a genuine issue of
material fact as to the express warranty and thus his claim that the warranty fails of its purpose
must fail.
D. Implied Warranty Claims
In Careys Memorandum in Opposition to Chaparrals Motion for Summary Judgment,
Carey argues that the cracking in his boats finish demonstrates a breach of the implied warranty
of merchantability. Pl.s Mem. at 12. Chaparral asserts that this Court should not consider
Careys breach of implied warranty claim because it was not sufficiently pled in the Complaint.
Def.s Mem. at 3. In the alternative, Chaparral asserts that, even if timely pled, Careys implied
warranty claim cannot survive summary judgment. Id.
The sole reference in the Complaint to an implied warranty is in a concluding paragraph
requesting damages. Compl. 13. In specifying the relief sought, Carey claims he is entitled to
recover loss of use damages measured by the cost to rent a like boat for the periods during
which the subject boat has not conformed to the written or implied warranties. Id. (emphasis
added). Although barely mentioned, Chaparral arguably was provided with sufficient notice
since Chaparral did address the implied warranty in its Answer to the Complaint. Answer 19.
In its Answer, Chaparral asserted as part of its affirmative defenses that it completely performed
and fulfilled all of its obligations under and pursuant to the only warranties of any kind, either
express or implied, written or oral, which it or anyone acting on its behalf has made with respect
to the boat or any of its component parts identified in the Complaint. Id. (emphasis added).
However, because the substance of Careys claim cannot survive summary judgment this Court
need not determine whether the claim was sufficiently pled.
Under Minnesota law, an implied warranty of merchantability requires that goods be fit
for the ordinary purposes for which such goods are used. Minn. Stat. 336.2-314(2)(c). This
warranty is breached when the product is defective to a normal buyer making ordinary use of the
product. Peterson v. Bendix Home Sys., Inc., 318 N.W.2d 50, 52-53 (Minn. 1982). In this
case, the overwhelming evidence demonstrates that the cracks in the boats finish are a cosmetic
problem and in no way impact the boats ordinary use. Steve Torberg testified that the cracks
are a cosmetic issue, Torberg Dep. (Marcusen Aff. Ex. 5, Gadtke Aff. Ex. 14) at 20, as did
Scott Lyber who stated that the cracks could be characterized as a cosmetic problem that do not
impact the structural integrity of the boat. Lyber Dep. at 23. Further, there is no evidence in the
record that the cracks have prevented Carey from using his boat. Accordingly, there is no
genuine issue as to whether Chaparral breached its implied warranty of merchantability.
Based upon the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Defendants Motion for Summary Judgment is GRANTED.
s/Ann D. Montgomery
Dated: October 1, 2007.


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