Nicholas Knopick v. Jayco, Inc.
895 F.3d 525
7th Cir.2018Background
- In July 2012 Nicholas Knopick (through his wholly controlled Montana Freedom Rider, LLC) purchased a $414,583 RV manufactured by Jayco, Inc.; title and warranty registration were completed in the LLC’s name.
- Jayco’s two-year limited warranty disclaimed implied warranties and expressly excluded coverage for RVs purchased, registered, or titled in a business name or used for commercial purposes; it also stated that any repairs for excluded items would be "good will" and would not alter the warranty.
- The RV exhibited multiple defects soon after purchase; Jayco performed some repairs (at no charge), but Knopick remained dissatisfied and sought a refund, then sued for breach of warranty and under the Magnuson–Moss Warranty Act.
- Jayco removed to federal court; the district court (Northern District of Indiana) granted summary judgment for Jayco, concluding the LLC purchase excluded the RV from the express warranty.
- On appeal, the Seventh Circuit reviewed jurisdictional issues (amount in controversy and real-party-in-interest/standing) and then affirmed on the merits, holding the warranty exclusion applied and that good-faith/paid repairs did not waive the exclusion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Amount in controversy for Magnuson–Moss jurisdiction | Damages sought (diminution in value/special damages) exceed $50,000 | Purchase price or refund demand supports >$50,000 | Court: Amount in controversy requirement met (not legally impossible) |
| Standing / real party in interest | Knopick (individual) can press claims despite LLC purchase; later assignment to Knopick | Rights belonged to LLC; real-party-in-interest issue | Court: Jayco conceded and LLC assigned claims; court exercised jurisdiction (not dismissed) |
| Whether RV is covered under express warranty | Warranty should apply; repairs suggest coverage or waiver | Warranty expressly excludes vehicles purchased/titled to business entities; RV was titled to LLC | Court: Exclusion unambiguous; RV not covered |
| Whether Jayco waived exclusion by performing free repairs | Good-will repairs functionally treated RV as covered; waiver of exclusion | Warranty’s non-waiver clause and waiver doctrine do not create new affirmative duty; repairs were "good will" and do not alter exclusion | Court: No waiver; repairs are "good will" and do not alter express terms; exclusion stands |
Key Cases Cited
- Greengrass v. Int’l Monetary Sys., Ltd., 776 F.3d 481 (7th Cir. 2015) (summary-judgment standard and view for nonmovant)
- KDC Foods, Inc. v. Gray, Plant, Mooty, Mooty & Bennett, P.A., 763 F.3d 743 (7th Cir. 2014) (courts do not vouch for truth of facts at summary judgment)
- Montgomery v. Am. Airlines, Inc., 626 F.3d 382 (7th Cir. 2010) (de novo review of summary judgment)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (U.S. 1938) (court’s independent obligation to ensure jurisdictional requirements)
- Grinnell Mut. Reins. Co. v. Haight, 697 F.3d 582 (7th Cir. 2012) (amount-in-controversy standard: not legally impossible to recover alleged sum)
- Rawoof v. Texor Petroleum Co., Inc., 521 F.3d 750 (7th Cir. 2008) (real party in interest and standing issues)
- Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470 (U.S. 2006) (natural person generally not real party in interest for corporate claims)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (U.S. 2014) (statutory cause-of-action inquiry vs. prudential standing)
- Cole Taylor Bank v. Truck Ins. Exchange, 51 F.3d 736 (7th Cir. 1995) (definition of waiver as intentional relinquishment of a right)
- Licciardi v. Kropp Forge Div. Emp. Ret. Plan, 990 F.2d 979 (7th Cir. 1993) (tax-avoidance considerations should not decide private contract disputes)