On January 6 a Federal Judge in California issued a stinging rebuke to Thor Motor Coach while denying Thor‘s motion to have a RV breach of warranty lawsuit transferred to Indiana.
The Judge noted that Thor had for years been using warranty terms that were unenforceable in California, saying “that scheme is contrary to California public policy and the court should not condone or encourage it.” The Federal Court pointed out how Thor was using a warranty that said people would not have a right to a jury trial, which Thor had known for years was contrary to California law. In California a jury trial is guaranteed for RV warranty cases.
The Court went on to point out Thor’s warranty also said warranty claim lawsuits had to be filed in Indiana, when doing that would actually take away rights guaranteed to California RV buyers by California law. "Yet TMC continued to include those provisions in its warranty agreements” the Federal Judge said in condemning the practice and refused to transfer the case out of the California court.
As an enticement to get the California Federal Judge to transfer the case to Indiana Thor had said it was willing to not enforce those provisions in the Indiana court, but the Judge didn’t fall for it. That clever ploy has worked before in some California courts, but not in the courtroom of Federal Judge Rita Linn in the California Northern District federal courtroom in the case of Julio Gorga versus Thor Motor Coach, Case No. 23-cf-03603-RFL, N.D. Calif.
Judge Linn noted that Thor had lost that battle the year before in a different California Federal Court where Federal Court Judge James Lorenz denied the same motion by Thor.
In January 2023, a Federal Judge noted that “Thor Motor states that it knowingly presents agreements to California consumers containing clauses that are prohibited under California law.” Judge Lorenz went on to say that Thor’s use of the prohibited terms could cause some California consumers to follow Thor’s instructions and file their case in Indiana and later find out that by doing so they lost the rights that California law guaranteed them when they bought their new Thor RV.
The Judge called Thor’s practice a “scheme” that was contrary to California public policy as he refused to allow Thor to have the case transferred out of his court, noting that the enforcement of a clause “drafted in bad faith would be condoning, or at least not discouraging, an illegal scheme.....” That January 13, 2023 case was Waryck versus Thor Motor Coach, 2023 WL 3794002, S.D. Calif.
Lawyers call these kind of clauses “in terrorem” clauses. It’s when a company puts in a term that they know is not enforceable just so people will see it and think it is enforceable, and then not even fight it. It’s a way of scaring people into doing something they don’t really have to do. Moral of the story? Just because it’s in writing does not mean you are always stuck with it.
So, is Thor trying to deprive California RV buyers of their legal rights by tricking them into thinking something is enforceable when it is not? You betcha!
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