In a ruling covered as featured article in the November issue of MHProNews, Plaintiffs Dan and Karen Bennett purchased a 2180-foot triple-sectional manufactured home after their residence burned down. The seller warranted it would deliver and install the new home and that installation would be in accordance with applicable governmental regulations. The Bennetts alleged the seller never properly leveled their home, and at least one of installers was not licensed to install manufactured homes in the State of Tennessee.
The Bennetts sued, arguing a breach of contract and breach of warranty under the Magnuson-Moss Warranty Act. That act’s protections are limited to “consumer products,” so the issue before the Sixth Circuit, says JDSupra, was narrow: was the Bennetts’ manufactured home a “consumer product?”
The court’s majority held the manufactured home was not a “consumer product,” based upon the legislative history of the Magnuson-Moss Warranty Act as well as the common understanding of the word “consumer goods” at the time the law was enacted.
Industry newcomers should know that the Manufactured Housing Improvement Act of 2000 (MHIA 2000) provides a wide range of consumer protections. Those were not referenced in the reports to date on this case.
Senator Moss stated in 1974, that a house would not be a “consumer product” because it is not “tangible personal property.” The Sixth Circuit, expanding on that understanding, held that the Bennetts’ manufactured home was not a house-trailer or a mobile home designed to be moved; rather, it remained permanently on the land and was taxed as real property.
Further, because the triple sectional was as large and looked like a “regular house,” dictionaries for the words “consumer” or “consumer goods” described products that were expendable or replaced, quite different from a dwelling.
Judge Stranch dissented, taking issue with the majority’s distinction between “manufactured homes” and “mobile homes.” Stranch said so-called “mobile homes” are not built to be actually mobile, opining that the factory built home industry coined the term “manufactured home” to replace “mobile home” in response to negative stigma against “mobile homes.”
Judge Stranch further relied on the Federal Trade Commission’s and the Department of Housing and Urban Development’s (HUD) interpretations of the Magnuson-Moss Warranty Act as well as additional legislative history to concluding that manufactured homes like the Bennetts’ should be considered “consumer products.” Her opinion failed to sway the majority. So it seems that unless one can move his or her home from place to place, the Sixth Circuit ruling wouldn’t consider it a “consumer product” for purposes of federal warranty law. ##
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