But even the strongest, best imaginable case can turn into a sure loser if you have outsmarted yourself by buying or leasing something (car/truck/boat/RV/ATV/motorcycle, vacation rental, phone service, timeshare, computer, etc.) but then getting cute by putting the purchased/leased goods in the name of your business, thinking that this will let you deduct costs of the item from your business taxes or let you avoid insuring the goods yourself, etc.
The first, obvious problem is that this is that you may be doing tax fraud that way.
But there is a less-obvious problem that is potentially far more harmful in most cases:
Consumer protection laws generally only help you if you are a consumer -- meaning that you bought/leased the goods, services, or real estate for "personal, family, or household purposes."
Every now and then I have to tell a prospective client who has clearly been wronged with defective goods that I can't help them. And it's all because of a decision they made when they bought that big-ticket item: they put it in the name of their business.
As this doozy of a decision below from another state shows, this can be a VERY costly mistake.
Don't fool around trying to make things seem different than what they are. The universe has a way of making you pay for that.
1) If it's your personal car/boat/truck/RV/ATV/motorcycle/computer/timeshare/etc., pay for it with your own money and title it in your own name.
2) If it's a business car/boat/truck/RV/ATV/motorcycle/computer/timeshare/etc., put it in the business name and pay for it with the business money, and don't use it for personal use, or you may lose your ability to deduct those payments as business expenses.
(Extra credit if you also conclude that the bottom line should have a third point, "3) Never buy an RV, period" -- but the first two points above apply to more than just RVs.)
Knopick v. Jayco, Inc.
Opinion Date: July 11, 2018
Areas of Law: Business Law, Consumer Law, Contracts
Knopick purchased a Jayco recreational vehicle from an independent Iowa dealer for $414,583, taking title through an LLC he alone controlled. Jayco’s two-year limited manufacturer’s warranty disclaims all implied warranties and “does not cover … any RV used for rental or other commercial purposes,” explains that an RV is “used for commercial and/or business purposes if the RV owner or user files a tax form claiming any business or commercial tax benefit related to the RV, or if the RV is purchased, registered or titled in a business name,” and states that performance of repairs excluded from coverage are "goodwill" repairs and do not alter the warranty. Almost immediately, Knopick claims, the RV leaked, smelled of sewage, had paint issues, and contained poorly installed features, including bedspreads screwed into furniture and staples protruding from the carpet. Knopick drove it to Jayco’s Indiana factory for repairs. He later picked up the RV to drive to his Texas home. Concerned about continuing problems, Knopick left it at a Missouri repair facility, from which a Jayco driver took it to Indiana for further repairs. Jayco later had a driver deliver the coach to Knopick in Arkansas.
Knopick remained unsatisfied and sued for breach of warranty under state law and the Magnuson-Moss Warranty Act, 15 U.S.C. 2301. The Seventh Circuit affirmed summary judgment for Jayco, finding that Knopick had no rights under the warranty because the RV was purchased by a business entity.