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Newmar Corp. v. McCrary

Supreme Court of Nevada

October 3, 2013

NEWMAR CORPORATION, A DELAWARE CORPORATION, Appellant,
v.
ALLISON MCCRARY, AN INDIVIDUAL, Respondent. NEWMAR CORPORATION, A DELAWARE CORPORATION, Appellant,
v.
ALLISON MCCRARY, AN INDIVIDUAL, Respondent.

Consolidated appeals from a district court judgment in a revocation of acceptance and breach of warranty action and from a post-judgment order awarding attorney fees. Eighth Judicial District Court, Clark County; Valorie J. Vega, Judge.

Morris Law Group and Robert McCoy, Rex D. Garner, and Raleigh C. Thompson, Las Vegas, for Appellant.

Alverson, Taylor, Mortensen & Sanders and Kurt R. Bonds, Alan V. Mulliner, and Eric W. Hinckley, Las Vegas, for Respondent.

BEFORE THE COURT EN BANC.[1]

OPINION

CHERRY, J.

In this opinion, we consider whether a purchaser of a motor home may revoke acceptance and recover the purchase price from the motor home's manufacturer under the Uniform Commercial Code (UCC). We hold that a purchaser is entitled to revoke acceptance of the motor home against its manufacturer where, as here, privity exists between the manufacturer and the buyer because the manufacturer interjected itself into the sales process and had direct dealings with the buyer to ensure the completion of the transaction. We also conclude that the district court properly awarded incidental and consequential damages but that it abused its discretion in awarding attorney fees. Thus, we affirm the judgment but reverse the award of attorney fees.

FACTS AND PROCEDURAL HISTORY

Respondent Allison McCrary purchased a luxury motor home manufactured by appellant Newmar Corporation from Wheeler's Las Vegas RV. The purchase included Newmar's two-year express warranty for repair and service. After purchasing the motor home, McCrary let it remain in Wheeler's possession for repairs, due to some issues noticed during the test drives. A week later, McCrary returned to inspect and pick up the motor home. Noticing continued problems with the motor home during the inspection, McCrary met with a Newmar factory representative. She stated that she would not take possession of the motor home until the representative assured her that Newmar would take care of any problems and that there was a full, bumper-to-bumper warranty. After receiving the sought-after reassurances from Newmar, McCrary took possession of the motor home.

Shortly thereafter, the motor home experienced significant electrical problems, making it unsafe to drive and resulting in repeated delays and canceled vacation plans for McCrary. After numerous repairs at the Newmar factory and other repair shops, McCrary attempted to revoke her acceptance of the motor home from Newmar, but Newmar rejected the revocation. McCrary then filed the underlying action asserting, inter alia, causes of action for revocation of acceptance, breach of contract, and breach of warranty against Newmar.[2]

Prior to trial, both parties made offers of judgment. Neither offer was accepted. Following a bench trial, based on the particular facts of this case, the district court concluded that McCrary did not take possession of the motor home when she signed the contract and would not have completed the purchase and eventually taken possession except for the interactions with and assurances made by Newmar's representative to McCrary. Ultimately, the district court found in favor of McCrary and awarded her $406, 500 in damages—the $385, 000 purchase price for the motor home based on the revocation of acceptance, but required McCrary to return the motor home as part of the revocation, $12, 500 for the cost of insuring the motor home, and $9, 000 for storage fees—plus $44, 251.40 in prejudgment interest and $107, 581.50 in attorney fees. The court entered judgment accordingly, and these appeals followed.

DISCUSSION

We must first determine whether revocation of acceptance is an available cause of action against a manufacturer before we can reach the issues of damages and attorney fees.

Revoking acceptance from Newmar

Newmar argues that, under Nevada's applicable UCC provision, NRS 104.2608, a buyer can only revoke acceptance from a seller, and while it manufactured the motor home, it was not a seller of the motor home. Thus, Newmar contends that Wheeler's is the only entity from whom McCrary can revoke acceptance and that, because McCrary revoked ...


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