Chicago Business Litigation Lawyer Blog

A federal breach of warranty case of ours IWOI v. Monaco Couch recently survived a motion to dismiss in U.S. District Court for the Northern District of Illinois. Our client, a limited liability company formed in Montana, bought a motor home in Illinois and allegedly discovered that it had a twisted frame causing it to list to one side, requiring constant steering corrections. On discovering this alleged defect, the individual owning the LLC brought it back to the dealership the very next day for the first of three unsuccessful repair attempts. Per the manufacturer's warranty, he submitted his complaints in writing to the manufacturer, Monaco Coach after these three repair attempts. The alleged defects remain, and we alleged in our filings that neither the manufacturer nor the dealer has agreed to accept the motor home for return or fixed the problems.

Our client sued both the manufacturer and the dealer under the federal Magnuson-Moss Warranty Act, the Illinois Consumer Fraud Act and other state claims. In defense, the defendants argued that our client was not a "consumer" within the meaning of federal law; this claim was flatly denied by the Court, which found no allegations in the Complaint to support it. On the Illinois Consumer Fraud Act issues, the Court also identified several alleged facts suggesting that Monaco Coach may well have known of the problems before the RV was sold, as we alleged. Thus, those claims also survived.

Furthermore, the trial court decided that our client could revoke its acceptance of the dealer's "AS IS" condition and the dealer's disclaimer of all implied warranties, a claim under the Illinois Commercial Code. The Seventh Circuit has addressed this issue in Priebe v. Autobarn, Ltd., 240 F.3d 584, 588 (7th Cir. 2001), in which it adopted an earlier ruling stating that consumers may revoke their acceptance even when the dealer has properly disclaimed implied warranties, if the evidence is clear that the vehicle's substantial defects clearly impair its value to the plaintiff. This allowed our client's Magnuson-Moss Act and state conversion claims to survive as well.

Although this case is at the trial court level, we believe the judge's interpretation of Seventh Circuit and Illinois precedent on Magnuson-Moss and the Illinois Consumer Fraud Act is good news for consumers. As auto and RV dealer fraud lawyers in Chicago, Naperville and Oak Brook, Ill., we believe automotive dealers take advantage of consumers' lack of education about their rights far more often than they are caught. When they are caught, they should not be allowed to wiggle out of liability for their actions with an unfair, high-pressure contract that the consumer has little room to renegotiate. Both the Magnuson-Moss Act (which governs how warranties may be offered) and the Illinois Consumer Fraud Act were specifically intended to help consumers fight this behavior.

If you believe you may be a victim of automotive dealer fraud or another type of consumer fraud and you're ready to fight back, please contact DiTommaso-Lubin online, via telephone or at our offices near or in Naperville, Wheaton, Oak Brook or Chicago.

To see more about our firm and the consumer rights, consumer fraud, lemon law and class action cases we have handled click here.