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Castagna v. Newmar Corp.

United States District Court, N.D. Indiana, South Bend Division

September 11, 2018

DANIEL CASTAGNA, Plaintiff,
v.
NEWMAR CORPORATION, et al, Defendants.

          OPINION AND ORDER

          JON E. DEGUILIO UNITED STATES DISTRICT JUDGE.

         Daniel Castagna bought a recreational vehicle manufactured by Newmar Corporation. Though the vehicle came with a written warranty, Mr. Castagna had a hard time finding appointments to repair the many problems he encountered, and the vehicle spent multiple months out of service for repairs in just the first year. Finally, just over a year after he purchased the vehicle, it experienced a fire involving the power inverter, causing smoke and fire damage. Mr. Castagna alleges that the vehicle is now unusable. He thus sued Newmar, alleging breaches of express and implied warranties and a claim under Indiana's Deceptive Consumer Sales Act. In turn, Newmar asserted a claim against Magnum Energy, Inc., which manufactured the inverter, seeking indemnification for any damages it may owe to Mr. Castagna if the inverter is found to have caused the fire.

         Newmar has now filed a partial motion for summary judgment, and Magnum moved for summary judgment on the indemnification claim. They each seek judgment as to any claim arising out of the fire, arguing that there is no evidence that the inverter caused the fire and that the fire occurred after the implied warranty expired. Newmar also seeks summary judgment on Mr. Castagna's claim under the Deceptive Consumer Sales Act, and on some of remedies he seeks. For the following reasons, the Court denies the motions as to the implied warranty. However, the Court grants Newmar's motion as to the Deceptive Consumer Sales Act claim. The Court also grants Newmar's motion as to Mr. Castagna's request for rescission, but denies it as to his request for consequential damages.

         I. FACTUAL BACKGROUND

         Daniel Castagna grew up working in his father's RV dealership, and now owns an online marketing company. In 2013, he and his wife decided that they wanted to buy an RV, so Mr. Castagna began exploring the options available from different manufacturers. He called Newmar's national sales manager, whom he spoke to on six or seven occasions. According to Mr. Castagna, that individual told him that Newmar “had an extremely high quality product, ” that “they stood behind the product, ” and that their service was “a step above.” Mr. Castagna ultimately decided to purchase a 2014 Mountain Aire model manufactured by Newmar. He purchased the vehicle on July 3, 2013, from North Trail RV, for a total price of $393, 255.37.

         The vehicle came with a twelve-month limited warranty from Newmar. Under the warranty, Newmar agreed to repair any manufacturing defects that arose within twelve months of the date of purchase. To obtain service, the warranty required a buyer to contact the original dealer or Newmar's customer service department in order to schedule an appointment at a service center. However, the warranty stated that Newmar will not be responsible for any incidental or consequential damages, such as for loss of use of the vehicle, loss of time, or travel expenses. The warranty also stated that the implied warranty of merchantability was limited to a period of twelve months from the date of purchase. Mr. Castagna was aware when he purchased the vehicle that it came with a warranty, and he signed a warranty registration form at the time of the purchase. However, he denies having received the warranty itself or being aware of the limitations at the time of his purchase.

         Mr. Castagna alleges that he began experiencing problems with the vehicle immediately after the purchase. In fact, it was in the shop for the first time the very next day. Mr. Castagna states that the vehicle was in the shop for a laundry list of repairs at least thirteen times over the first year, spanning 145 days (though a portion of that time appears to have been due to a collision in which the vehicle was involved). Over that time, Mr. Castagna drove the vehicle from Florida, then up to Indiana, then to southern California and the southeast, and then to northern California. There, the vehicle was parked for some time at a home at which Mr. Castagna's son was staying in Covelo, California.

         On August 5, 2014, as Mr. Castagna's son was returning home from dinner, he saw smoke coming out of the vehicle. He and his friend disconnected the vehicle from shore power and looked inside the vehicle and in its basement compartments to see if they could find a fire, but did not find one. However, the basement compartments had suffered smoke and fire damage. Sometime later, the vehicle was towed away from the site. In order to tow the vehicle, the tow truck driver had to repair the vehicle's air lines in order to release its brakes. To do so, he had to clear out debris from inside the basement compartments, but those contents were not preserved.

         Over the ensuing months, the vehicle was inspected on a number of occasions by representatives of Mr. Castagna, Newmar, and an insurance company. In the course of those inspections, they determined that the fire involved the vehicle's power inverter, which was manufactured by Magnum Energy. An inverter is a device that converts direct current from batteries into alternating current for use in appliances in the vehicle like microwaves. If the vehicle is plugged into external power, the inverter can also convert alternating current to direct current to charge the vehicle's batteries.

         The parties have each retained experts to determine the fire's cause. The experts appear to agree that the inverter suffered a failure, but disagree as to the cause. Magnum's expert opined that a fire of unknown origin began in the vehicle's basement. He believes that the fire then caused a fault in electrical lines outside of the inverter, sending 120-volt alternating current into the 12-volt direct current lines, which then traveled to the inverter and caused it to fail. He concluded that the inverter performed as intended, and was a victim of the fire, not its cause. Newmar's expert reached a similar conclusion.

         Mr. Castagna retained three experts who each disagree with those conclusions.[1] They did not locate any source of electrical activity outside of the inverter that could have caused the fault in the inverter. They also opined that the damage in the basement compartments indicated that the fire began at the inverter and then spread outward. Due to the fire damage to the inverter and the unexplained loss of certain components after the fire, they could not identify what caused the fault within the inverter. However, they opined that the failure was consistent with an electrical discharge within one of the inverter's components. The failure within the inverter would have been forceful enough to expel heated gases and flames into the vehicle. They believe that this caused other materials in the vehicle's basement compartments to catch fire, before the fire self-extinguished due to a lack of fuel and oxygen.

         Mr. Castagna alleges that the fire and the vehicle's other defects have rendered it unusable. He thus filed this action against Newmar asserting claims for breach of express and implied warranties. He raises each of those theories under state law and the federal Magnuson- Moss Warranty Act. He also asserts a claim under Indiana's Deceptive Consumer Sales Act. Newmar then asserted a claim for indemnification against Magnum, to the extent it may be held liable to Mr. Castagna due to a fault with the inverter.[2] Discovery has now closed, and both defendants have filed motions for summary judgment.

         II. PRELIMINARY MOTIONS

         Before addressing the substance of the motions for summary judgment, there are a number of preliminary matters to discuss. First, Newmar filed a motion to strike various materials Mr. Castagna submitted in response to summary judgment. The argument portion of Newmar's motion is so conclusory that it often forgoes even using grammar. [E.g., DE 117 p. 4 (“¶ 6, violates FRE 801-802, statement ‘fixed as promises [sic] indicates hearsay”); (“¶'s 14, 15 & 16 violates [sic] FRE 701, not helpful. Plaintiff just choosing sides.”)]. Newmar seeks to strike a total ten expert reports and affidavits with the following argument: “(a) Violates FRE 403 and 801-802. (2) Expert reports under FRCP26 [sic] are not independently admissible. (c) Reports prepared with an eye toward litigation are not admissible. (d) Reports rely on hearsay and allowance would be creating a hearsay conduit.” [DE 117 p. 3 (case citations omitted)]. Those might be appropriate as subheadings to introduce developed arguments, but here they constitute the entirety of Newmar's argument as to these extensive materials. The Court thus finds that Newmar's objections are waived as undeveloped.

         In addition, to the extent the Court can discern Newmar's arguments from its terse discussion, those arguments are meritless. For example, while expert reports generally cannot be admitted into evidence at trial, that does not mean they cannot be used at summary judgment, which is by definition resolved on a paper record instead of through live testimony. Though the reports themselves were not authenticated with sworn declarations, there is no reason to believe the experts here will not testify consistent with their written reports at trial. Rule 56(c)(2) allows a party to object that the material cited “cannot be presented in a form that would be admissible in evidence, ” Fed.R.Civ.P. 56(c)(2) (emphasis added), but the content of the reports can be presented in admissible form at trial-through the experts' testimony-so the reports need not be stricken on that basis. Newmar also objects that the reports were prepared with an eye toward litigation, but that is inherently the case for retained experts; that does not make their opinions inadmissible. Newmar also raises Rule 403, which is a puzzling objection at summary judgment. If a fact is necessary to the outcome of the motion, then its probative value could not be substantially exceeded by any danger of prejudice, so the evidence could not be stricken on that basis. And if the fact is not necessary to the outcome of the motion, then it need not be stricken anyway. In addition, concerns about unfairly prejudicing a party in the eyes of the jury or presenting cumulative evidence are not applicable at summary judgment, which tests the sufficiency of the evidence. Newmar has thus not adequately presented any argument that warrants striking these materials.

         Newmar also moves to strike various paragraphs of Mr. Castagna's affidavit with similarly succinct objections. It repeatedly objects on hearsay grounds to Mr. Castagna explaining what Newmar's employees told him, but statements by a party-opponent are not hearsay. Newmar's other objections are either undeveloped or inapplicable, or address matters that are not material to the resolution of the motion. Therefore, Newmar's motion to strike is denied.

         Next, Magnum filed two motions to strike testimony by Mr. Layson, one of Mr. Castagna's retained experts, on the basis that the opinions were not timely disclosed under Rule 26. Mr. Layson issued a written report as required, but Magnum argues that, during his deposition, Mr. Layson offered opinions beyond the scope of his report. Magnum thus moves to strike those opinions. It also argues that Mr. Layson offered another new opinion in response to its motion to strike, so it filed a separate motion to strike that opinion.

         The Court denies these motions to strike. First, none of the opinions in question are necessary to the outcome of the motion for summary judgment. Second, even assuming these are new opinions that were not timely disclosed, Magnum has not shown that they should be stricken. Under Rule 37(c)(1), a party cannot use evidence that was not timely disclosed as required under Rule 26, “unless the failure was substantially justified or harmless.” Fed.R.Civ.P. 37(c)(1); David v. Caterpillar, Inc., 324 F.3d 851, 857 (7th Cir. 2003). Here, Magnum has not identified any cognizable harm. In its opening brief, Magnum argues that the testimony is confusing, misleading, and vague, but that is an attack on its substance, not its timeliness; the testimony would be no more or less confusing, misleading, or vague had it been disclosed earlier. In its reply brief, Magnum argues that it was prejudiced because, without a proper disclosure, it would not have learned about these opinions until trial if it hadn't deposed Mr. Layson. Magnum did depose Mr. Layson, though, and it has not shown how it is any worse off for having learned of these opinions during Mr. Layson's deposition instead of in his report.

         A party might argue that a late disclosure of expert opinions prevented the party from conducting follow-up discovery into those opinions or having their own expert respond to those opinions, but Magnum does not do so. In fact, its own expert did not address or respond to any of the opinions in Mr. Layson's written report, so there is no reason to believe he would have addressed or responded to any of these “new” opinions if given the chance. In addition, even if the opinions at issue are new, they each relate to and arise out of matters that Mr. Layson did discuss and opine on in his initial report.[3] Thus, in the absence of any plausible argument to the contrary, Mr. Castagna has shown that the disclosure, even if untimely, was harmless. Magnum also seeks to strike a paragraph of an affidavit submitted by plaintiff's counsel in response to the first motion to strike, but that is immaterial and does not warrant discussion. Thus, Magnum's motions to strike are denied.

         Finally, the Court notes that Mr. Castagna filed his entire response brief and supporting materials [DE 104] under seal, without ever filing a motion for leave to file the documents under seal. That is unacceptable. If information in a filing meets the high standard for keeping an item in the public record under seal, see Baxter Int'l, Inc. v. Abbott Labs., 297 F.3d 544, 546 (7th Cir. 2002) (stating that only trade secrets, information covered by a recognized privilege, and information required by statute to be maintained in confidence may be filed under seal), the filing party must move to maintain the filing under seal, and must publicly file any remaining materials. Mr. Castagna never publicly filed any of these materials-the vast majority of which have no conceivable justification for sealing-and has not moved to maintain them under seal. Accordingly, unless any party files a motion to seal within fourteen days, the Court will direct the Clerk to unseal this filing.

         III. STANDARD OF REVIEW

         Summary judgment is proper when the movant shows that there “is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A “material” fact is one identified by the substantive law as affecting the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A “genuine issue” exists with respect to any material fact when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. Where a factual record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial, and summary judgment should be granted. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing Bank of Ariz. v. Cities Servs. Co., 391 U.S. 253, 289 (1968)). In determining whether a genuine issue of material fact exists, this Court must construe all facts in the light most favorable to the non-moving party and draw all reasonable and justifiable inferences in that party's favor. Jackson v. Kotter, 541 F.3d 688, 697 (7th Cir. 2008); King v. Preferred Tech. Grp., 166 F.3d 887, 890 (7th Cir. 1999).

         IV. DISCUSSION

         Mr. Castagna asserts claims for beaches of express and implied warranties, raising each of those theories under Indiana law (Count 1) and the Magnuson-Moss Act (Count 2). He also asserts a claim under Indiana's Deceptive Consumer Sales Act (Count 3). Newmar and Magnum have each moved for summary judgment that Mr. Castagna is not entitled to recover for the fire damage, which underlies his implied warranty claims. Newmar has also moved for summary judgment on Mr. Castagna's claim ...


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