Hyundai Motor America, Inc. v. Goodin

Summary

The Indiana Supreme Court held that a consumer may sue a vehicle manufacturer for economic loss based on breach of the implied warranty of merchantability without establishing vertical privity. The court concluded that Indiana's prior privity requirement was not controlling and affirmed the availability of the claim under the Magnuson-Moss Warranty Act, which relies on state law for the contours of implied warranties. The case arose from alleged recurring brake defects in a Hyundai Sonata purchased from a dealer.

Holdings

1. Indiana law does not require vertical privity between a consumer and a manufacturer as a condition of maintaining a claim for direct economic loss based on breach of the manufacturer's implied warranty of merchantability.
2. The Magnuson-Moss Warranty Act does not independently eliminate or impose a vertical-privity requirement; the issue is determined by applicable Indiana law.
3. The statement in a footnote in Martin Rispens that Indiana requires privity for an implied-warranty claim was dicta because privity was not necessary to that decision and was not presented or briefed as an issue on transfer.

Questions Presented

1. Whether Indiana requires vertical contractual privity between a consumer and an automobile manufacturer for a claim seeking direct economic loss based on breach of the implied warranty of merchantability.
2. Whether the Magnuson-Moss Warranty Act independently supplies the governing rule on privity for Goodin's implied-warranty claim.
3. Whether the privity language in Martin Rispens & Son v. Hall Farms, Inc. controlled the issue.

Disposition

affirmed