Powers v. GUARANTY RV, INC.

278 P.3d 333, 229 Ariz. 555, 636 Ariz. Adv. Rep. 10, 2012 WL 2107962, 2012 Ariz. App. LEXIS 97
CourtCourt of Appeals of Arizona
DecidedJune 12, 2012
Docket1 CA-CV 11-0062
StatusPublished
Cited by21 cases

This text of 278 P.3d 333 (Powers v. GUARANTY RV, INC.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Powers v. GUARANTY RV, INC., 278 P.3d 333, 229 Ariz. 555, 636 Ariz. Adv. Rep. 10, 2012 WL 2107962, 2012 Ariz. App. LEXIS 97 (Ark. Ct. App. 2012).

Opinion

OPINION

HALL, Judge.

¶ 1 Guaranty RV, Inc. (Guaranty) appeals from the trial court’s judgment in favor of John Powers, III (Powers) on Powers’ claim of consumer fraud. Powers cross-appeals from the trial court’s judgment in favor of Guaranty on Powers’ claim of fraudulent inducement. For the reasons discussed below, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 2 In early January 2004, Powers attended a motor home show in Tucson where he and Damon Rapozo, a salesman for Guaranty, discussed Powers purchasing a Country Coach, Inc. (Country Coach) motor home from Guaranty. Powers had certain specifications that he wanted in a motor home, including an engine sufficiently powerful to tow a large trailer. On January 21, 2004, Rapozo sent Powers a proposal for a Country Coach Intrigue motor home with a C-13 Caterpillar 525 hp engine. Because Powers had heard of instances in which large engines in motor homes overheated, he specifically asked for an assurance that the C-13 engine would not overheat in the Intrigue. In response, Rapozo emailed Jeff Howe, an employee with Country Coach, the following:

Hi Jeff,

I have a customer ready to fly up and order a new Intrigue Serenade. He wants a letter from CC that states the C-13 will not overheat in the Intrigue, then he said he will fly up. Is that possible?

Damon

¶3 Howe forwarded Rapozo’s email to Bently Buchanan, Country Coach’s chassis engineering manager, who replied via email as follows:

The cooling system for each power train installation is required to be tested by the engine manufacturer. The cooling system consists of a radiator, charge air cooler, transmission cooler, hydraulic oil cooler, air conditioning condenser, hydraulic pump, hydraulic motor and the cooling fan. Recently we successfully completed this testing for our C-13 installation on our Magna and Affinity chassis. This same cooling system will be used on your Intrigue with the C-13. The only difference between our Magna/Affinity installation and the Intrigue is the engine access door. On our Magnas and Affinities the doors have “hidden horizontal louvers” cut into them. On Intrigues we install a door which has a perforated aluminum panel on it. These louvers and perforations aid in engine compartment heat dissipation. Whereas I have faith that our cooling package installation on the C-13 Intrigue will be successful, the effect that the different door has on cooling is unknown at this time. Because our cooling system equip *558 ment is the same on all chassis with the C-13, we are not required to test our Intrigue installation.

¶4 Rapozo then transmitted Buchanan’s response to Powers. On July 19, 2004, Powers and Guaranty executed the purchase documents for the 2004 Intrigue for a sales price of $344,382.00. The Intrigue overheated during its initial drive from the lot in Oregon to Arizona, and repeatedly thereafter. On July 18, 2005, Powers filed a complaint against Country Coach and Guaranty alleging breach of warranty (against Country Coach only), fraudulent inducement, consumer fraud, violation of the Oregon Lemon Law (against Country Coach only), and violation of the Magnuson-Moss Warranty Act (against Country Coach only).

¶ 5 On March 2, 2009, Country Coach filed notice that an involuntary Chapter 11 bankruptcy petition had been filed against it, staying its involvement in this action until further notice by the Bankruptcy Court. At the request of the parties, the matter was then presented to the court for a bench trial as to the claims of fraudulent inducement and consumer fraud against Guaranty.

¶ 6 The three primary issues presented for the trial court’s determination were whether: (1) Guaranty is liable for using the Buchanan e-mail to induce Powers to purchase the motor home; (2) Guaranty is liable for oral assurances Rapozo provided to Powers that the overheating problems with the C-13 were fixed and the manufacturer had parameters in place to ensure that the motor home would not overheat; and (3) Guaranty is liable for Rapozo’s failure to inform Powers that another Guaranty customer, David Hoffman, reported an overheating incident that occurred a few days before Powers finalized his purchase.

¶ 7 After a five-day trial, the court entered a detailed minute entry ruling in favor of Guaranty on all counts. The trial court found, in relevant part:

173. There is clear and convincing evidence that Guaranty provided the statement in writing from Buchanan to induce Powers to purchase the Coach from Guaranty. This writing was false and misleading in that it stated the testing was successfully completed when the testing was not performed pursuant to the manufacturer’s test protocol. There were also test objectives that remained “inconclusive” at the time Buchanan wrote the e-mail. In addition, the e[-]mail was misleading in that it did not inform Powers of the concerns the participants in the test had concerning the manner in which the test was conducted.
174. [WJhen Guaranty passed along the letter and information from Buchanan, it was not intending to separately make a representation.
176. Guaranty, through its salesman, also provided certain oral assurances but they were honest as far as Guaranty knew. Guaranty was also aware, prior to the finalization of the sale of the Coach to Powers, that there was at least one event of the C-13 possibly overheating.
a. July 30, 2004, is the first that Rapo-zo knew of Hoffman’s problem, but he knew of the overheating claims earlier, just as 7/19/04, he just didn’t realize that there was an overheating problem that wasn’t being taken care of.
b. This is because the engine started up again fine and drove well back to Oregon and [Country Coach] couldn’t find a problem.
c. Rapozo thought Hoffman was having an intermittent battery cable problem.
d. Rapozo is sure that no one told him early on that there was a history of high temperatures or Silverleaf history.
177. Given Powers strong concerns he repeatedly expressed to Rapozo about the C-13 overheating, Rapozo on behalf of Guaranty was obligated to disclose the knowledge they had of the subsequent overheating. But by this time, Guaranty knew of Powers’ overheating problems and they were working to try to fix it. Guaranty’s failure to disclose all of the problems that other owners were having is not equivalent to a misrepresentation.
*559 178. The evidence does not show that Powers materially relied upon the statements provided by Guaranty as these statements were a passing along of the information provided by [Country Coach]. If Rapozo had known about and informed Powers of the Hoffman C-13 overheat as opposed to the engine shutdown which Hoffman assumed was an overheat, Powers would not have completed the sale; however, Guaranty didn’t know there was an overheating problem. The factory didn’t conclude that there was an overheat when they cheeked out the Hoffman coach soon thereafter.

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Bluebook (online)
278 P.3d 333, 229 Ariz. 555, 636 Ariz. Adv. Rep. 10, 2012 WL 2107962, 2012 Ariz. App. LEXIS 97, Counsel Stack Legal Research, https://law.counselstack.com/opinion/powers-v-guaranty-rv-inc-arizctapp-2012.