112 N.E.3d 1106
Ind. Ct. App.2018Background
- Paccar/Kenworth (Defendants) sold 49 dump trucks to several trucking companies (Plaintiffs) in Nov 2005–Jan 2006; each sale included a manufacturer’s warranty promising vehicles be "free from defects in materials and workmanship" and promising repair or replacement remedies.
- Warranty schedule provided a basic vehicle warranty of 12 months/100,000 miles; in March 2008 Paccar extended the basic vehicle warranty to 4 years/250,000 miles (retroactive to original in-service dates).
- Trucks exhibited excessive vibration immediately after delivery; repeated repair attempts (engine‑mount replacements) produced only temporary relief; by 2008 Paccar agreed to provide free engine‑mount replacements as long as Plaintiffs owned the trucks.
- Plaintiffs sued in October 2010 (claims for breach of express and implied warranty, breach of contract, constructive fraud, rescission, estoppel, and UCC nonconforming goods).
- Defendants moved for summary judgment arguing Plaintiffs’ claims accrued at tender of delivery and were time‑barred under UCC § 2‑725 (one‑year shortening under the parties’ warranty), or alternatively four‑year UCC limitations; trial court denied summary judgment and on interlocutory appeal the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did breach‑of‑warranty causes of action accrue? | Accrual occurred when repair promise failed/refused (not at delivery); accrual during the extended 4‑year warranty. | Accrual occurred at tender of delivery under UCC § 2‑725, so suits filed years later are untimely under the one‑year contractual shortening. | Accrual date is a factual question here because repair promises and an express warranty both exist; genuine factual disputes preclude summary judgment for Defendants. |
| Is a manufacturer’s promise to repair/replace an "express warranty" under UCC § 2‑313 (triggering tender‑of‑delivery accrual)? | Repair promise is a separate remedial promise (not an express UCC warranty), so accrual occurs when repair obligation is breached. | Repair/replace promise qualifies as an express warranty tied to goods and thus accrues at delivery. | Court follows Mydlach: repair/replacement promises are remedial (not UCC express warranties); but because the contract here also contains an express warranty that vehicles be free from defects, that express‑warranty question creates factual issues. |
| Effect of Paccar’s retroactive extension of warranty to 4 years/250,000 miles | The 4‑year extension removed the one‑year filing bar and preserved claims within that extended period. | The extension was a mere goodwill gesture and should not alter accrual/limitations analysis. | Court held the extension was a binding modification making the warranty period four years/250,000 miles as a matter of law; factual accrual timing still disputed. |
| Did Plaintiffs’ knowledge, repair attempts, or Defendants’ conduct toll or estop limitations? | Plaintiffs contend tolling/estoppel or "failure of essential purpose" of the repair remedy may apply; factual disputes exist. | Defendants argue Plaintiffs knew of defects and repair efforts and cannot claim tolling; Ludwig and similar cases support accrual at delivery. | Court found genuine factual issues about whether the exclusive remedy failed of its essential purpose and whether tolling/estoppel apply, so summary judgment was improper. |
Key Cases Cited
- Mydlach v. DaimlerChrysler Corp., 875 N.E.2d 1047 (Ill. 2007) (repair/replace promises are remedial commitments, not UCC express warranties; breach accrues when remedial promise is refused or fails).
- Ludwig v. Ford Motor Co., 510 N.E.2d 691 (Ind. Ct. App. 1987) (court previously held breach‑of‑warranty claims accrue at tender of delivery under § 2‑725).
- Perry v. Gulf Stream Coach, Inc., 814 N.E.2d 634 (Ind. Ct. App. 2004) (issue of whether exclusive repair remedy failed of its essential purpose creates fact question avoiding summary judgment).
- Mississippi Chem. Corp. v. Dresser‑Rand Co., 287 F.3d 359 (5th Cir. 2002) (distinguishing an express warranty that goods be defect‑free from a promise to repair; accrual may await failure of remedial promise).
- Monticello v. Winnebago Indus., Inc., 369 F. Supp. 2d 1350 (N.D. Ga. 2005) (under Georgia law, repair warranty is breached when purchaser returns product and repair is refused or unsuccessful).