Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—6th Cir.: Mobile home not a consumer product; Magnuson-Moss claim for improper installation dismissed, (Oct 30, 2014)

By Linda O’Brien, J.D., LL.M.

The Magnuson-Moss Warranty Act (MMWA) did not extend to warranties guaranteeing the proper installation of homeowners’ manufactured home, the U.S. Court of Appeals in Cincinnati has ruled. Thus, a district court ruling that the mobile home manufacturer violated the MMWA was reversed and the homeowners’ claim was dismissed (Bennett v. CMH Homes, Inc., October 30, 2014, Merritt, G.).

In 2004, Dan and Karen Bennett purchased a manufactured home from CMH Homes to be installed on their property. The sales agreement for the purchase stated that CMH would be responsible for “normal delivery and installation” and warranted that the installation would be completed in accordance with applicable government requirements. After installation, the Bennetts noticed defects that suggested the home was not level when installed. After CMH failed to satisfactorily level or repair the home, the Bennetts filed suit, alleging breach of warranty in violation of the MMWA. A district court ruled that CMH had violated the Act and CMH appealed.

Warranty claims. The homeowners’ manufactured home was not a consumer product for purposes of the MMWA, according to the court. The MMWA provides a federal cause of action for a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under a written warranty or implied warranty. The Act limits its protections to consumer products and defines a “consumer product” as any tangible personal property that is normally used for personal, family, or household purposes.

In this case, the purchased house was not designed to be moved; it was permanent once it was constructed on the site. The home, at 2180 square feet, had the size and appearance of a regular home and was taxed as real property. The size, construction, and permanence of the home illustrated that it was not tangible personal property and therefore not a consumer product. Accordingly, the plaintiffs’ MMWA claim failed on the merits, the court concluded.

Dissent. In a dissenting opinion, Judge Stranch maintained that the Bennetts’ home fell within the category of consumer products. Manufactured homes were federally regulated and the U.S. Department of Housing and Urban Development (HUD) developed standards and inspection mechanisms for such homes. Both HUD and the FTC have concluded that manufactured homes were consumer products for purposes of the MMWA. Although HUD’s and the FTC’s administrative pronouncements were not promulgated to make them carry the force of law, such interpretations were persuasive.

The case is No. 13-5423.

Attorneys: Kirk L. Clements (Haynes, Freeman & Bracey, PLC) for Dan Bennett and Karen Bennett. William S. Rutchow (Ogletree, Deakings, Nash, Smoak & Stewart, P.C.) for CMH Homes, Inc.

Companies: CMH Homes, Inc.

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