Wisconsin court finds dealer must disclose when mods void warranty

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A Wisconsin appellate court has ruled that a powersports dealer may have violated the state’s Deceptive Trade Practices Act with representations made about a “highly modified” bike.

The plaintiff, Allen Goudy, sued Yamaha after buying two bikes, one a new 2004 Yamaha XVS11S that had a dozen non-stock OEM parts and 42 aftermarket parts. He bought an extended service plan with the bikes from Winnebagoland Kawasaki. He started having problems with the bike shortly after buying it and the problems continued for the next year.

He filed a Lemon Law notice with Yamaha, and the company told him the warranty was invalid because of the modifications. That’s when he sued the dealer and Yamaha.

Both companies sought a dismissal. Yamaha argued that the problems were the result of nonstick parts or normal wear and tear, and the dealer argued that it was not the manufacturer and did not issue warranties.

Goudy’s attorneys countered that both were subject to the Lemon Law -- Winnebagoland because it assembled the bike – and that the dealer failed to disclose that the modifications would void the manufacturer’s warranty.

Although the trial court favored the manufacturer and dealer, the appellate court split the issues.

It ruled that Goudy’s case didn’t meet the Lemon Law standard of requiring four separate repair attempts or issues that keep the vehicle out of service for at least 30 days within the first year after purchase.

But it also found that the dealer was obligated to disclose that the modifications would void the warranty, and sent that part of the case back to a trial court.

Further legal wrangling is pending. The case is Goudy v. Yamaha Motor Corp. and Winnebagoland Kawasaki. An analysis is posted on the Wisconsin State Bar Association Web site.

Posted by Holly Wagner