KEITH GAYLE DAVIS V FOREST RIVER INCAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
KEITH GAYLE DAVIS,
February 21, 2008
Ingham Circuit Court
LC No. 04-000064-CP
FOREST RIVER, INC,
Advance Sheets Version
KITSMILLER RV, INC,
Before: Owens, P.J., and Bandstra and Davis, JJ.
BANDSTRA, J. (dissenting).
I respectfully but heartily dissent from the majority's conclusion that Michigan law
allows a person to rescind a contract even though that person never contracted with the person
against whom the rescission remedy is imposed. That conclusion is without precedent, contrary
to the only precedent on point, illogical, and apparently limitless in its application.
I agree with the majority that, before Spence v Three Rivers Builders & Masonry Supply,
Inc, 353 Mich 120; 90 NW2d 873 (1958), there was a general rule preventing a person who
purchased a good through a middleman from seeking any recovery whatsoever from the
manufacturer of that good, because of the privity requirement. Spence and its progeny allowed
such purchasers to seek damages from manufacturers even though there was no privity of
contract. However, the majority cites no Michigan case where a rescission remedy was imposed
in this context. Thus, Spence and its progeny did not abrogate the general rule requiring privity
in a rescission case; that general rule still stands.
That conclusion comports with the only Michigan precedent where an out-of-privity
plaintiff sought to return a good to a manufacturer, Henderson v Chrysler Corp, 191 Mich App
337; 477 NW2d 505 (1991). Henderson rejected that attempt under the UCC's revocation of
acceptance provisions, MCL 440.2608. Henderson, supra at 340. Henderson noted that the
"UCC no longer provides for rescission, but rather substitutes revocation of acceptance" instead.
Id. (emphasis added); see also Watts v Mercedes-Benz USA, LLC, 2007 Tenn App LEXIS 580 at
6; 63 UCC Rep Serv 2d 966 at 2 (Tenn App, 2007), quoting Haverlah v Memphis-Aviation, Inc,
674 SW2d 297, 302 (Tenn App, 1984) ("the UCC remedy of revocation of acceptance 'for all
practical effect replaces the old equitable doctrine of rescission'"); Ramirez v Autosport, 88 NJ
277, 288; 440 A2d 1345 (1982) ("[t]he Code eschews the word 'rescission' and substitutes . . .
'revocation of acceptance'"). It would be pointless to allow a plaintiff to avoid the privity
requirement imposed by the UCC as a prerequisite to revocation simply by asking for rescission
instead.1 I agree with Henderson that the enactment of the revocation-of-acceptance provisions
of the UCC here in Michigan constitutes a repudiation of rescission as a remedy for an out-ofprivity plaintiff.
The majority does not explain how a contract can be rescinded when there was no
contract in the first place. The purpose of the rescission remedy is "'to annul the contract and
restore the parties to the relative positions which they would have occupied if no such contract
had ever been made.'" Lash v Allstate Ins Co, 210 Mich App 98, 102; 532 NW2d 869 (1995),
quoting Cunningham v Citizens Ins Co of America, 133 Mich App 471, 479; 350 NW2d 283
(1984). There was no contract involving plaintiff and Forest River, Inc.; Forest River's sale was
to Kitsmiller RV and plaintiff's purchase was from Kitsmiller RV.2 Thus, there is no contract
involving Forest River and plaintiff to "annul" and no precontract "relative positions" to which
these parties can be returned. The majority speaks of "rescission on the theory of breach of
implied warranty," ante at ___, but the contract plaintiff seeks to rescind is not that arising from
Forest River's implied warranty. Instead, plaintiff seeks to rescind a sale and, again, plain and
simply, no sale involving plaintiff and Forest River exists.
Finally, the majority's decision today has no apparent limitation. Had plaintiff resold the
RV to his neighbor, for example, nothing in the majority's opinion suggests that the neighbor
could not seek rescission against Forest River. Durable goods are continually resold in our
society and the ramifications of the majority's decision seem endless. This case involved just
one intermediate purchaser, but the logic of the majority's analysis would apply no matter how
many resales occurred. Nor would there be any limitation with regard to the time that has passed
since goods left the manufacturer's control. Compare MCL 440.2608(2) ("reasonable time"
requirement for revocation of acceptance under the UCC).
And, of course, the other statutory prerequisites to revocation of acceptance—that the goods'
nonconformity substantially impairs their value, that the purchaser did not discover the
nonconformity before acceptance, that notice of revocation occurs within a reasonable time, and
so forth—are avoided as well. See MCL 440.2608.
Accordingly, plaintiff correctly pursued a revocation of acceptance claim against Kitsmiller
RV. Plaintiff chose to forgo any revocation remedy by settling with Kitsmiller RV. That, of
course, does nothing to give rise to a similar claim against Forest River.
The trial court granted alternative remedies of rescission and money damages to plaintiff.
Only money damages are appropriate because there was no contract between plaintiff and Forest
River to rescind. I would reverse the trial court's order to the extent that it ruled otherwise.
/s/ Richard A. Bandstra