What Diaz v. Thor Motor Coach Means for Your Contracts
Horst Legal Counsel | February 2026
Picture this: you buy a motorhome from a California dealer. A few months in, serious defects start showing up. The manufacturer won’t fix them. So you do what you’re supposed to do — you hire an attorney and file suit in California to enforce your warranty rights. Then you find out the fine print says you have to sue in Indiana, under Indiana law, and without a jury.
That’s not a hypothetical. That’s what happened to Edward and Linda Diaz. And on February 13, 2026, a California Court of Appeal had something to say about it.
The decision in Diaz v. Thor Motor Coach, Inc. is the latest signal from California’s appellate courts that manufacturers can’t use forum selection clauses to quietly strip away the protections that statutes like the Song-Beverly Consumer Warranty Act and the Consumer Legal Remedies Act were built to provide. But the 2–1 split on the panel — and the forceful dissent from Justice Wiley — suggests this area of law is far from settled. If your business buys, sells, or warrants high-value goods in California, this one is worth reading closely.
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What Happened
The Diazes bought their motorhome from a California dealer. The warranties came from Thor Motor Coach, headquartered in Indiana. Buried in the warranty were three provisions that, together, created a significant obstacle for any California consumer trying to enforce their rights: an exclusive Indiana forum clause, an Indiana choice-of-law provision, and a jury trial waiver.
When defects emerged and Thor failed to repair or replace the vehicle, the Diazes sued in Los Angeles Superior Court under Song-Beverly. Thor moved to stay the case and push the dispute to Indiana. The trial court granted the stay — in part because Thor offered to stipulate that it would not contest the application of Song-Beverly or a jury trial in Indiana.
The Court of Appeal was not persuaded — at least, two of the three justices were not.
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What the Majority Decided
The Second Appellate District reversed in a 2–1 decision, with Acting Presiding Justice Viramontes writing for the majority and joined by Judge Uzcategui. The court held that Thor’s warranty provisions violated California public policy. The reasoning is straightforward: Song-Beverly rights are non-waivable by design. You cannot contract them away directly, and you cannot circumvent them through a forum clause that effectively places them out of reach.
Two aspects of the majority opinion are particularly significant.
The stipulation did not cure the defect. Thor’s offer to “give back” California-law protections once litigation began was not enough. Enforceability is evaluated at the time the contract is formed — not after a dispute arises. A warranty that strips statutory rights on its face does not become lawful because the manufacturer later agrees not to enforce those provisions.
The court declined to sever the problematic provisions. Rather than striking the choice-of-law and jury-waiver clauses and leaving the rest of the warranty intact, the majority refused to do that cleanup work. Its reasoning centered on deterrence: routine severance creates the wrong incentives. If manufacturers know courts will simply trim overreaching terms, there is little downside to including them in the first place.
The majority relied on its prior decision in Lathrop v. Thor Motor Coach, Inc. (2024) — a nearly identical case involving the same company — as well as Hardy v. Forest River, Inc. (2025). It expressly declined to follow the approach taken by Division One in Kim v. Airstream, Inc. (2025), which had been more willing to sever the offending provisions while enforcing the forum selection clause.
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The Dissent: Justice Wiley Pushes Back
Justice Wiley dissented, and his opinion is worth careful attention — both for its reasoning and because it previews arguments likely to surface when the California Supreme Court takes up the related Lathrop case.
Wiley’s central objection is that the unconscionability doctrine is being stretched beyond its intended limits. In his view, unconscionability is designed to address genuine coercion or exploitation — not ordinary consumer purchases in a competitive marketplace. He opened with a vivid reference to the 19th-century case Post v. Jones, where whaling ships exploited a stranded vessel’s helplessness to purchase its oil at a fraction of its value. That, Wiley argued, is real unconscionability. A consumer browsing $400,000 luxury motorhomes at a dealership is something else entirely.
On procedural unconscionability, Wiley emphasized that Thor did not wield coercive power over the Diazes. The recreational vehicle market is competitive, buyers can walk away, and no one needs a luxury motorhome. The fact that the warranty was presented as a form contract does not, in his view, transform it into oppression; standardized contracts are a feature of modern commerce.
On severance and the majority’s characterization of the warranty as an “illegal scheme,” Wiley sided with the approach in Kim v. Airstream. He argued that the central purpose of Thor’s warranty — to warrant the vehicle — was legitimate and not inherently unlawful. Centralizing litigation in Indiana, he suggested, can be understood as an efficiency measure rather than a rights-stripping device.
Wiley was also skeptical of the majority’s concern that unsophisticated consumers would be steered into filing in Indiana to their detriment, particularly in a state with active lemon law practitioners. He further questioned the majority’s burden allocation analysis and warned that expanded litigation exposure under Song-Beverly ultimately increases costs that may be passed along to consumers.
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Why the Dissent Matters
Justice Wiley’s dissent is not binding law, but it is more than an academic exercise. The California Supreme Court has already granted review in Lathrop v. Thor Motor Coach, the lead case on this issue, and several related matters are being held pending that decision. Wiley’s arguments about the limits of unconscionability, the appropriateness of severance, and the role of market competition are likely to feature prominently before the high court.
In other words, while the majority’s approach reflects the current direction of several appellate panels, the doctrinal boundaries remain unsettled.
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What It Means in Practice
For buyers of vehicles, equipment, or other high-value goods in California: forum selection and choice-of-law terms are worth reading before you sign, not after a dispute arises. These clauses may ultimately be challengeable, but litigating that issue costs time and fees.
• Review dispute resolution provisions before closing high-value purchases.
• If a warranty points you to another state’s courts and laws, the clause may be vulnerable — but early review is far less costly than post-dispute motion practice.
• When in doubt, have counsel review the warranty terms before signing.
For manufacturers and businesses issuing warranties in California: your warranty language must function under California law from the outset. Appellate courts are sending a consistent message — even if not a unanimous one — that litigation-time stipulations will not rescue provisions that were problematic when drafted.
Companies relying on national warranty templates should consider reviewing their dispute resolution language now, rather than waiting for further appellate clarification.
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The Bottom Line
Diaz v. Thor Motor Coach reinforces something California courts have been emphasizing for years: the state’s consumer protection statutes carry real force, and courts are prepared to enforce them.
At the same time, the 2–1 split and Justice Wiley’s pointed dissent are reminders that the legal landscape is still evolving. Forum selection provisions, arbitration agreements, and choice-of-law clauses do not operate in a vacuum. They must be drafted with California’s non-waivable statutory framework firmly in mind.
The time to get that right is at the drafting table, not in the courtroom — and for businesses operating in California, that review should begin sooner rather than later.