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Tac Med Holdings, Inc v. Rev Recreation Group, Inc.

Court of Appeals of Texas, Fifth District, Dallas

August 20, 2019

TAC MED HOLDINGS, INC. AND LORETTA YOUNG, Appellants
v.
REV RECREATION GROUP, INC. F/K/A ALLIED RECREATION GROUP, INC., Appellee

          On Appeal from the 296th Judicial District Court Collin County, Texas Trial Court Cause No. 296-02909-2017

          Before Justices Schenck, Osborne, and Reichek

          MEMORANDUM OPINION

          AMANDA L. REICHEK, JUSTICE

         Appellants Tac Med Holdings, Inc. and Loretta Young purchased a motor home from a dealer in Arizona and picked it up from the manufacturer, REV Recreation Group, Inc. f/k/a Allied Recreation Group, Inc., in Indiana. When problems arose with the motor home, appellants sued in Collin County, Texas. REV moved to dismiss based on a forum selection clause contained in appellants' sales contract with the dealer. The trial court granted the motion and dismissed the lawsuit. Appellants challenge that ruling on appeal. For reasons set out below, we reverse the order dismissing appellants' claims against REV and remand the cause to the trial court with instructions to reinstate the case.

         Factual Background

         Young is a resident of Hidalgo County, Texas, and owns Tac Med, a Texas corporation. REV is a motor home manufacturer located in Indiana. In May 2015, appellants purchased a 2015 Holiday Rambler from the Lazydays RV dealership in Tucson, Arizona. According to the petition, appellants had problems with the motor home almost immediately. Young notified REV, who instructed her to take it to the factory in Oregon for repairs. When Young reached Oregon, the motor home caught fire. Young notified Lazydays and REV that she was afraid to drive the Rambler after the fire incident.

         According to the petition, Lazydays and REV advised appellants that their "only remedy" was to purchase a more expensive diesel motor coach, which they did. Appellants paid $309, 000 for the 2016 Monaco Diplomat and went to REV's manufacturing facility in Indiana to pick it up. Once there, appellants allege, REV and/or Lazy Days "admonished" her that the "only way" she could take delivery would be to sign the sales contract. The contract identified Tac Med as buyer and Lazydays as seller and contained the forum selection clause at issue here. The clause, in all caps, provided as follows:

15. APPLICABLE LAW, MANDATORY MEDIATION, VENUE AND FEES: THIS CONTRACT AND DISPUTE BETWEEN SELLER AND PURCHASER ARE GOVERNED BY ARIZONA LAW WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS. PURCHASER WILL PARTICIPATE IN PRE-SUIT MEDIATION BEFORE FILING ANY LEGAL ACTION AGAINST SELLER. ALL LEGAL ACTIONS BROUGHT BY PURCHASER OR SELLER RELATING TO THE VEHICLE PURCHASED OR ITS SALE, SERVICE OR USE MUST BE FILED EXCLUSIVELY IN PIMA COUNTY, ARIZONA. PURCHASER UNCONDITIONALLY WAIVES ANY RIGHT TO INITIATE OR PARTICIPATE IN ANY CLASS ACTION OR CLASS ARBITRATION.

         (Emphasis added.)

         In the contract, the seller disavowed any implied warranty of merchantability or of fitness for a particular purpose on new vehicles unless the seller gave the purchaser a written warranty, "on Seller's behalf," or, at the time of sale or within ninety days, the seller entered into a service contract with the buyer. The seller provided a limited implied warranty of merchantability for used cars. Finally, the seller included the following provision in boldface type:

13. FURTHER EXCLUSION OF WARRANTIES: ALL WARRANTIES OR SERVICE CONTRACTS, IF ANY, BY A MANUFACTURER, SUPPLIER OR SERVICE CONTRACT PROVIDER, OTHER THAN SELLER, ARE THEIRS, NOT SELLER'S, AND ONLY SUCH MANUFACTURER, SUPPLIER OR PROVIDER SHALL BE LIABLE FOR PERFORMANCE UNDER SUCH WARRANTIES. PURCHASER UNDERSTANDS THAT SELLER IS NOT AN AGENT OF ANY MANUFACTURER, WARRANTOR OR SERVICE CONTRACT PROVIDER. . . .

         Young signed the contract and left. As with the Holiday Rambler, appellants had problems with the new motor home almost immediately. Those problems continued over the next year. In June 2017, appellants filed this lawsuit against Lazy Days and REV.

         In their lawsuit, appellants alleged "never-ending" problems with the motor home that substantially impair its use, safety, and value, appellants' attempts to have the motor home repaired, and misrepresentations made by both REV and Lazydays. They sued both defendants for DTPA violations, unconscionable acts, breach of warranty, fraud, and breach of contract.

         In response to the lawsuit, the defendants filed a joint motion to dismiss based on the forum selection clause in the sales contract. In their response, appellants noted that REV was not a signatory to the sales contract and raised unconscionability and absence of contractual privity. REV then filed a brief arguing it was entitled to enforce the clause in the retail sales contract because (1) under the express language of the provision, all parties intended "all legal actions" related to the Monaco to be brought in Arizona, including appellants' claims against REV, and (2) as a nonsignatory, REV could enforce the provision under a theory of direct benefits estoppel because appellants seek to enforce direct benefits ...


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