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Houston v. Country Coach

July 17, 2008


The opinion of the court was delivered by: Howard R. Lloyd United States Magistrate Judge


On account of his unhappy experiences as the owner of one of defendant's motor homes, Mark Houston sues for breach of warranty under California's Song-Beverly Consumer Warranty Act (CAL. CIV. CODE §1790.1 et seq.) and the federal Magnuson-Moss Warranty Act (15 U.S.C. § 2301 et seq.). His case was tried to the Court on April 21-22, 2008. The Court heard the testimony of six live witnesses, received documentary evidence, and inspected the motor home in question. Having considered all of the evidence, the arguments of counsel, and the parties' proposed findings of fact and conclusions of law, the Court now makes its findings and conclusions.*fn1 conclusion includes any matter of fact, it shall be deemed both a finding of fact and a conclusion of law.

Findings of Fact

1. Plaintiff Purchases the Motor Home

Mark Houston and his wife, Barbara, live in Penn Valley, California, about an hour drive northeast from Sacramento. In late 2004 they were in the market for something bigger and more comfortable than their 36 foot Allegro Bay motor home. After shopping around, they found a dealer they liked, Guaranty RV ("Guaranty"), in Gilroy. The salesman there steered them to a Country Coach "Inspire," a luxurious 40 foot coach, with slideouts, powered by a diesel engine. The price was $239,000. Houston traded in the Allegro Bay, obtained financing through Guaranty, and signed the papers for a new Inspire on January 31, 2005. His new coach was not in Guaranty's inventory at that time; it was driven to Guaranty from Country Coach's Oregon plant a few days later. When it did arrive, Guaranty, following Houston's instructions, removed his satellite dish from the Allegro Bay and installed it on the new Inspire. Installation involved attaching the dish on the roof near the front of the coach and drilling a hole through the roof to run the cable to connect to the "entertainment center" inside. Guaranty also installed aftermarket solar panels that Houston wanted. Houston and his wife picked up the motor home on February 12 and immediately drove south to visit friends in Ventura.

2. The Express Warranty

The Country Coach House/Coach Limited Warranty ("express warranty") provided one year "Basic" coverage and five year "Structural" coverage. The "Basic" coverage applies to all portions of the motorhome manufactured by Country Coach. It also applies to Country Coach's installation of separately warranted component parts; however, it does not cover any problems with the separately warranted components themselves.

The "Structural" coverage applies to "the welds on the roof and sidewall steel structure on the coach." Pursuant to the express warranty, the owner was to take the motor home "to an authorized Country Coach dealer or service facility within the warranty period and request the needed repairs." It is undisputed that Guaranty was one such authorized facility.

3. The Roof Leak

A day or so after the Houstons arrived in Ventura, it began to rain heavily. At some point Barbara Houston noticed water leaking into the coach. The two ceiling-mounted light fixtures behind the driver and passenger seats were "filled" with water. Water puddled on top of the overhead cabinet behind the driver's seat and ran down the wall. More rainwater flowed from a vent in the ceiling above the seats and some dripped onto the dashboard. Houston called Guaranty and they told him to bring the coach back. It continued to rain that day and the next. On February 21, on their way back from Venture, the Houstons delivered the coach to Guaranty. Houston and his wife used a bucket to catch dripping water and towels to wipe up what they could. Houston acknowledged he did nothing to try to stem further intrusion of water into the coach once the leak was discovered. For example, he did not cover the roof with a tarp, try to find covered parking, or seek a repair facility in the Ventura area. (The Country Coach express warranty says, "Warranty coverage does not apply to collateral damage caused by delays in reporting a warranty defect. For this reason, warranty defects should be reported and tendered for repair promptly.") Houston said he did, as instructed, promptly call Guaranty, but that all he was told to do was to bring the coach in. Nothing was said about how quickly he should return the coach or about any preventative measures he should take. No one from Guaranty testified about this telephone call.*fn2 Country Coach argued that Houston's failure to promptly try to stop the leaking was evidence of his failure to mitigate. Yet, it offered no evidence suggesting that the additional rainwater, if any, that intruded (either because of the delay in obtaining repair, or because Houston did not take any precautionary action once the leak was discovered) affected the severity or extent of damage. It also offered no measure or means that the court might use to calculate an offset.

4. Roof Leak Repair

The work order for the Houston coach's February 21 visit to the Guaranty shop listed five "jobs:" the roof leak, and four other warranty items that are not the subject of dispute in this case. With respect to the roof leak the work order read: C/S [Customer states] water is leaking into coach at front over drivers area. Both ceiling lights behind driver/passenger seat filled up with water. Cabinet over left of driver's seat filled with water and damaged cabinet. Water drips on dash.

Cause: Bad Seal Correction: After inspecting roof & light, found a pinch at roof AC [air conditioner] seal. Removed old seals, cleaned surface, and replaced with new. Remove lights to drain water, replaced gasket. reinstalled all, tested for leaks, none found. Remove and replace wood panel underneath entertainment center. Scraped away old wood and pulled staple. Tested, works fine.

Unfortunately, since Guaranty reportedly "lost" its shop records, the court did not have the benefit of the technician's notes which may have explained in detail exactly how he traced the cause of the leak to what he called a "pinch" in the seal on the front air conditioning unit. The Customer Work Order does show that a new gasket for a Dometic air conditioner (A/C) was ordered and subsequently installed. This Work Order was sent by Guaranty to Country Coach. A Country Coach record (Ex. 15) reports a telephone conversation that occurred on or about March 1 with "Rachel" of Guaranty about obtaining authorization for warranty repairs to the Houston coach. It says: Attached are pictures of this coach. There was a huge leak in the coach- We believe it came from the AC- the seal around the entire AC was completely gone, so our tech resealed the whole thing. The coach was flooding inside because of the leak- and it dmaged [sic] the wood piece where the audio/visual over the p/s is. There is warping on the cabinet (we have pictures). [. . . ]

3/1/05 We need to remove & replace the entire damaged wood piece of the audio/visual over passenger side. We are requesting 3 hours to do this. As for the seal with the AC, I need to get back to you with the time.*fn3

Intriguingly, Country Coach records (Ex. 111) also document a telephone call from Mark Houston on March 1. Houston complained about the severity of the water leak on the roof (water "pouring in") and wondered if it had been caused by Guaranty when it installed the satellite dish and solar panels on the roof. "Mark is afraid of water damage in the roof that may not show up now but may show up in the future. (Guaranty issue)?" After the coach left the shop on April 14 (the repairs were delayed while waiting for parts), Guaranty sent a Warranty Claim to Country Coach, seeking payment for the five jobs on the February 21 Work Order. With respect to the roof leak job, the Claim notes the Country Coach repair authorization number (I050748) and summarizes the Work Order as follows:

Customer states water is leaking into coach at front over drivers area. Both ceiling lights behind D/S & P/S seat filled up with water. Cabinet over left of drivers seat filled with water & damaged cabinet. Water drips on dash. Bad seal. Inspected roof and light.

Although Country Coach was on notice that Houston wondered whether Guaranty's aftermarket installation of the satellite dish and solar panels caused the leak, and despite Guaranty's two seemingly conflicting explanations about why the air conditioner gasket was the cause ("pinch[ed]" verses "gone"), Country Coach paid for the repair under warranty without question. Country Coach now contends that the roof leak was caused by Guaranty's faulty installation of the satellite dish, an installation for which Country Coach bears no responsibility and which concededly would not be covered by the Country Coach warranty. In support, Country Coach relies on the fact that each if its products undergo a water leak test before leaving the plant. If a leak is detected, it is immediately fixed. (However, no testimony was offered as to the details of this inspection.) Furthermore, both the Country Coach sales department and Guaranty performed pre-delivery visual inspections which likewise did not detect any leaks. Country Coach also relies on the testimony of its expert witness, Kevin Kiscoan (a customer service employee of Country Coach with many years of experience in the RV business). Kiscoan testified that he never heard of such a thing as a "pinched" A/C gasket and that these particular gaskets were too thick to pinch. He also said that they came from the manufacturer of the A/C unit already stuck to the underside.

Furthermore, Kiscoan could not think of any explanation for the Guaranty remark that the gasket was "gone." He acknowledged he had never actually looked at the Houston coach, but believed that was not necessary. The roof leak, he said, must have been the result of Guaranty's faulty installation of the satellite dish because, to his mind, there was no other logical explanation. This court rejects Kiscoan's opinion and finds that the roof leak at issue occurred because of a deficiency in the installation by Country Coach of the front rooftop- mounted Dometic air conditioner. There is no evidence of a leak at the place where the roof was penetrated to run the wire for the satellite dish.*fn4

There was no evidence that any repair was ever done at that location, and no evidence that anyone connected with Guaranty or Country Coach at the time in question ever considered that the satellite dish installation could possibly be the cause of the leak (even though Houston had speculated to Country Coach that it might be). The employees of Guaranty (the defendant's authorized agent) are the only ones who examined the coach to determine the cause, and they concluded it was the A/C gasket. They replaced the A/C gasket, and the roof never leaked again. Country Coach accepted Guaranty's explanation for the leak and paid the repair bill without question or investigation. Country Coach admitted that, if the leak had been caused by the A/C seal, it would be covered under the one year "Basic" warranty. Defendant's attempt to finger the satellite dish installation relies on speculation. The actual evidence points to the A/C gasket.*fn5

5. Aftermath of the Roof Leak

After the A/C gasket was replaced, no further roof leak was observed. However, much later, in June 2006, Houston brought in the coach for additional work to another of defendant's authorized dealers, Country Coach Showcase (CCS), in Sacramento. One of the items Houston was concerned about was the way the vinyl interior wall covering behind the driver's seat was peeling away. (Ex 12). The CCS technician did not get to that task until August 21. His notes indicate that the wall on the driver's side below the window was warped. Warping suggests water intrusion, so he "pulled the window frame off" (after getting authorization from Country Coach's Kevin Kiscoan) and observed "a little mold on the wood trim." He thought that fixing this "will be too ...

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