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How RV Companies in Indiana Try to Take Advantage of RV Buyers in California

Female mechanic fixing the broken down camper van of a couple going on a trip

Did you buy a recreational vehicle (RV) in California? RV sales are at an all-time high, with over 11 million on the road, and at $549.8 million in sales, California far outshines every other state in the country in RV purchases. If you wind up with a lemon, good news; motorized RVs are covered under California’s lemon law. What is not-so-good news is that your purchase contract probably contains a hidden provision that was not disclosed to you and that you were unaware of until now. Many RV companies are located in the state of Indiana, and these RV companies have provisions in their warranty booklet that say if you buy their RV and have problems with it, you must go to Indiana and file a lawsuit there if you want to enforce your lemon law rights.

Read on to learn more about these “forum selection clauses,” how they impact your rights in California, and what Nita Lemon Law is doing to fight this unfair situation on behalf of affected RV customers. If you have a problem with a defective RV or other motor vehicle in California or are being taken advantage of by fraudulent auto dealer actions, contact Nita Lemon Law in Los Angeles to secure and enforce your rights.

What Is a Forum Selection Clause?

A threshold matter in any civil lawsuit is where to file the complaint. Often, more than one state or county might have jurisdiction over the matter, allowing the plaintiff to file the case where it is most convenient. Some contracts, though, might contain “forum selection clauses” that spell out where any litigation related to the contract must be filed. These clauses are not uncommon and are often inserted in “adhesion contracts” that are drawn up by the more powerful party, such as a manufacturer or retailer as compared to the consumer. In an adhesion contract, you don’t really have the opportunity or ability to change the terms of the contract even if they seem unfavorable to you; you either buy the product or you don’t. In the case of a provision like a forum selection clause, you might not even know it’s there when you make your purchase. RV and other motor vehicle sales contracts are lengthy and full of boilerplate, and dealers are likely to only point out salient provisions like price, finance charges, and other provisions they are required to disclose by law.

In our view, these forum selection clauses try to circumvent the lemon law rights of the California consumers who buy their RVs here in California, live here, pay taxes here, and attempt to have the unit repaired here. But when they try to enforce their lemon law rights in the California courts, they are hit by the manufacturer with a Motion to Stay the California proceedings and move the lawsuit to Indiana. If that sounds unfair to you, we agree. Clauses like these are unfair, unreasonable and against California public policy, which favors protecting the rights of its residents.

These forum selection clauses are typically hidden in the warranty booklet, which certainly no one reads at the time of purchase, and some never read it at all. Yet, RV companies use this clause as a strategy to dismiss CA lawsuits. We recently pushed back against a company that used this tactic to try and stay proceedings in California, and we are pleased to report that we received a favorable ruling, keeping the case in California where it belongs.

Nita Lemon Law Wins Pre-Trial Motion to Keep Case in California

We first filed a complaint in September 2023 against Royal Coach Recreational Sales, a California RV dealer; Forest River, Inc., an Indiana motorhome manufacturer; and Mercedes-Benz USA, on behalf of a Bakersfield couple, alleging a number of defects with the RV they purchased. Defendants Royal Coach and Forest River quickly filed a motion to stay (stop) the proceedings and have the case moved to Indiana based on a forum selection clause in the express limited warranty provided by Forest River.

The defendants’ motion relied on section 410.30 of the California Code of Civil Procedure, which allows a California court to stay or dismiss an action if “in the interest of substantial justice” it should be heard in a forum outside the state. The defendants based their motion on a forum selection clause in the dealer’s limited express warranty that accompanied the vehicle purchase. That clause said that Indiana would be the exclusive jurisdiction for deciding legal disputes related to the warranty.

We filed an extensive Opposition to the Motion with the court, to which the defendants responded by filing yet another legal document, this time a ten-page reply to our opposition. As part of their argument, the defendants claimed it was company policy to go over the warranty with the consumer prior to finalizing the sale, allow them to read it and ask any questions, with the consumer signing and dating the warranty registration form as proof of this. The warranty entered as an exhibit is five pages of legalese with a forum selection clause tucked in it somewhere, whereas the warranty registration form is a half-page checklist with a paragraph above the signature box acknowledging that the purchase has “had the opportunity to review the” warranty.

A hearing on the motion was held in the Kern County Superior Court last month, after which the judge denied Forest River’s motion to stay the California proceedings and move the case to Indiana. In the judge’s ruling, he pointed out that state courts have the discretion to stay or dismiss a proceeding on the grounds of an inconvenient forum. In declining to do so in this case, the court was clear. Referring to the papers we filed arguing against the stay, the court wrote succinctly, “Plaintiffs’ opposition was persuasive.”

The judge noted, as we pointed out in our papers, that the RV was purchased in Bakersfield by the plaintiffs, a couple in their 80s who reside in Bakersfield. The judge also explained that the relevant documents and witnesses were also largely located in California, and “the mere fact that the motorhome may have been manufactured in Indiana and the warranty booklet may have contained some language regarding forum selection, that was not specifically pointed out to Plaintiffs, all lead the court to conclude that the State of California has a greater interest in the resolution of this dispute than the State of Indiana.”

The forum selection clause in the warranty booklet may have been mandatory by its terms, but California law creates a strong presumption in favor of the plaintiff’s choice of forum, and where the clause impacts unwaivable statutory rights, the burden is on the defendants to prove that enforcing the clause would not diminish those rights.

In this case, the “unwaivable statutory rights” are those found in the California lemon law. The defendants claimed those rights weren’t diminished because the Indiana court could apply the California law and if not, the plaintiffs could still pursue the case in California since the defendant’s motion was only to stay the proceedings and not dismiss the case outright.

Judge Thomas S. Clark in Kern County found that “solution” to be unfair or unreasonable. It simply makes more sense to keep the case in California rather than send the plaintiffs to Indiana and expect an Indiana judge to learn and apply a California law that is quite different from any law that the Hoosier State has. Indiana doesn’t even have a lemon law covering motorhomes, Judge Clark pointed out.

Get Help With Your Lemon Law Claim From an Experienced California Lemon Law Attorney at Nita Lemon Law Firm

If you are experiencing problems with your RV, motorcycle, car, or truck, I would like the opportunity to evaluate your lemon law claim at no charge to you and discuss your legal options. For a free, no-obligation consultation, please call me in Los Angeles at 213-232-5055 or toll-free throughout California at 877-921-5256. You can also submit a free case evaluation on my website at www.nitalemonlaw.com, or email me directly at nick@nitalemonlaw.com. No matter which way you contact me, I will personally evaluate your case and promptly respond to your inquiries. I look forward to hearing from you.

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