Justices steer defective dump-truck suit back to trial court

A lawsuit alleging an Indianapolis manufacturer delivered dozens of defective dump trucks in 2005 has taken a U-turn back to the trial court after the Indiana Supreme Court found it could not grant summary judgment sought by the truck builder in litigation brought against it by the truck buyers.

Justices on Tuesday remanded Kenworth of Indianapolis, Inc., et al. v. Seventy-Seven Limited, et al., 19S-PL-37, to the Marion Superior Court for further proceedings. The suit initially filed by the truck buyers more than nine years ago alleges breach of contract, constructive fraud and other causes over the sale of 40 dump trucks that, according to the record, almost immediately vibrated excessively while idling and at certain RPMs.

While Kenworth undertook fixes within the warranty period, the company also debated whether to recall the vehicles or “to simply maintain the status quo” of regularly changing engine mounts to try to address the problems, Justice Christopher Goff wrote. “The latter option, according to one Kenworth employee, would ‘likely lead to litigation’ because continually changing engine mounts would ‘probably not be acceptable to the customer.’ … He was right.”

After the Marion Superior Court denied Kenworth’s motion for summary judgment, the company lost its challenge before a divided Court of Appeals, resulting in this appeal to the Indiana Supreme Court.

“We hold that, under the express terms of their agreement, the parties here contracted for a future-performance warranty and any breach-of-warranty claims did not accrue until the buyers knew (or should have known) of the breach,” Goff wrote for the majority. “We also hold that, under the equitable estoppel doctrine, a party’s conduct — even relating to the repair of goods — may toll a contractually agreed-upon limitations period when that conduct is of a sufficient affirmative character to prevent inquiry, elude investigation, or mislead the other party into inaction.

“However, because there remain genuine issues of material fact relating to both issues, we hold that summary judgment is not appropriate now. We, therefore, affirm the trial court order denying summary judgment and remand for proceedings consistent with this opinion.”

The court found that the parties contracted for a one-year limitation period that started when a cause of action accrued; that buyers’ breach-of-warranty cause of action accrued when they discovered the breach; that when buyers discovered a breach or should have remains a genuine issue of material fact, and; that Indiana law allows tolling a limitation period once it begins.

The court was unanimous except for Justice Geoffrey Slaughter, who concurred without opinion in the court’s judgment that the parties contracted for a one-year limitation period that started when a cause of action accrued and that buyers’ breach-of-warranty cause of action accrued when they discovered the breach.