Buying an RV in a business’s name could void warranty

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If you’ve considered buying your dream RV in your business’s name or plan to use it for business you might want to give it a second thought.

Nicholas Knopick bought a $414,583 Jayco RV at a dealership in Iowa in July 2012, but he signed the purchase documents and took title on behalf of Montana Freedom Rider LLC, a company he controlled, reports TheIndianaLawyer.com. Almost immediately after the sale was complete, Knopick began having trouble with the unit. He said it leaked, smelled of sewage and the features were poorly installed.

Although Jayco repaired the RV twice at its manufacturing facility in Indiana, Knopick was not satisfied and sued the company. The U.S. District Court for the Northern District of Indiana granted summary judgment to Jayco, and Knopick appealed to the 7th Circuit.

District Court Judge Jon DeGuilio ruled Knopick had no rights under the warranty because the RV was actually purchased by a business. The language in the two-year limited manufacturer’s warranty specifically states it does not cover any RV used for commercial purposes or purchased in a business’s name.

The 7th Circuit pointed out the warranty also included a provision that stated any fixes done on an RV bought by a business would be considered “good will” repairs and would not alter the terms of the warranty.

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Tom
2 years ago

An LLC is a business, so most likely.

Ron
2 years ago

I wonder if this also pertains to individuals who get a Montana LLC specifically for this purchase (no business) to be able to escape from having to pay sales taxes from their home state?

ron
3 months ago
Reply to  Ron

I sure hope so

BobB
3 months ago
Reply to  Ron

This is apparently the exact situation that occurred here. As shown on casemine.com, the judgement issued by the Circuit Court includes the following statement:

“The obvious question arises: why would a consumer structure such a large purchase in a way that strips him of the protection of the manufacturer’s standard warranty? And what to make of Knopick using a Montana LLC despite his having no ties to the state discernible in the record? The unsurprising answer is taxes. At oral argument, Knopick’s lawyer asserted: ‘Knopick purchased the recreational vehicle through the LLC solely for the purpose of sales tax advantage,” and the business entity serves “no other purpose whatsoever.'”