Terri Broome v. General Motors, LLC

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2013-CA-01580-SCT
TERRI BROOME AND PAUL BROOME
v.
GENERAL MOTORS, LLC
DATE OF JUDGMENT: 08/16/2013
TRIAL JUDGE: HON. ROBERT P. KREBS
COURT FROM WHICH APPEALED: JACKSON COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: SHIREEN HORMOZDI
ERIC KACZANDER
ATTORNEY FOR APPELLEE: PAUL V. CASSISA, JR.
NATURE OF THE CASE: CIVIL - CONTRACT
DISPOSITION: REVERSED AND REMANDED - 08/14/2014
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE WALLER, C.J., CHANDLER AND KING, JJ.
KING, JUSTICE, FOR THE COURT:
¶1. In today’s case, this Court is presented with an issue of first impression: whether
Mississippi Code Section 63-17-159(6) (Rev. 2013), the Motor Vehicle Warranty
Enforcement Act, or Mississippi Code Section 75-2-101 (Rev. 2012), et seq. (the Uniform
Commercial Code, the “UCC”) is the most analogous state statute to the federal Magnuson-
Moss Warranty Act for the purposes of determining the statute of limitations for Magnuson-
Moss Act claims filed in Mississippi.
¶2. The trial court found that the Motor Vehicle Warranty Enforcement Act was the most
analogous state law to the Magnuson-Moss Act and dismissed the plaintiffs’ claim as barred
by the statute of limitations. As discussed below, Mississippi’s UCC is the most analogous
state statute to the Magnuson-Moss Act. Therefore, the trial court erred in dismissing the
plaintiffs’ claim.
FACTS AND PROCEDURAL HISTORY
¶3. Paul and Terri Broome (“the Broomes”) purchased a 2010 Chevrolet Equinox from
a Chevrolet dealership in April 2010. The vehicle came with a three-year or 36,000 mile
warranty. According to the Broomes, the vehicle had various defects which they attempted
to have repaired through the dealership. When the dealership was unable to fix the defects,
in December 2011, the Broomes filed suit against the manufacturer of the vehicle, General
Motors, for breach of written and implied warranty under the Magnuson-Moss Act.
¶4. General Motors then filed a motion to dismiss the Broomes’ complaint, alleging that
their claims were barred by the statute of limitations. Because the Magnuson-Moss Act does
not have a statute of limitations, the statute of limitations of the most analogous state law
applies. The County Court of the First Judicial District of Jackson County found that the
most analogous state statue is the Motor Vehicle Warranty Enforcement Act; which requires
an action to be brought either one year after the expiration of the express warranty, or
eighteen months after the delivery of the vehicle to the consumer, whichever is earlier. See
Miss. Code Ann. § 63-17-159 (Rev. 2013). Because the Broomes filed suit more than
eighteen months after delivery of the vehicle, the trial court granted General Motors’ motion
to dismiss. The Broomes appealed to the Circuit Court of Jackson County, and the circuit
court affirmed the judgment of the county court. The Broomes now appeal to this Court.
2
ANALYSIS
1. Introduction
¶5. The Broomes present one issue on appeal: whether Section 63-17-159(6) or Section
75-2-101, et seq. is the most analogous state statute to the federal Magnuson-Moss Warranty
Act for the purposes of determining the statute of limitations for Magnuson-Moss Act claims
in Mississippi.
¶6. The Magnuson-Moss Act is a federal private cause of action for breach of warranty
and service contract obligations. 15 U.S.C. § 2301, et seq. The Magnuson-Moss Act does
not contain a specific statute of limitations. When a federal law creates a cause of action but
does not include a statute of limitations, the statute of limitations contained in the most
analogous state law applies. See Del Costello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 103
S. Ct. 2281 (1983). If Mississippi Code Section 63-17-159 – the Motor Vehicle Warranty
Enforcement Act – is the most analogous state statute to the Magnuson-Moss Act, the claims
presented in the Broomes’ complaint are barred. If Mississippi Code Section 75-2-101, et
seq. – the UCC – is the most analogous state statute, the claims are not barred because the
UCC’s six-year statute of limitations applies.
2. Trial Court’s Findings
¶7. The trial court in today’s case found that the most analogous state statute to the
Magnuson-Moss Act is Mississippi’s Motor Vehicle Warranty Enforcement Act.1 In support
1
It should be noted that cases from other jurisdictions discussing similar state statutes
refer to such statutes as “Lemon Laws.” For purposes of clarity and continuity with the
statute’s title, Sections 63-17-155 to -165 are referred to by their title – the Motor Vehicle
Warranty Enforcement Act.
3
of its motion to dismiss, General Motors cited Wheeler v. Chrysler Motors Corporation,
1996 WL 408059 (N.D. Miss. 1996). In Wheeler, the Northern District of Mississippi was
presented with the same issue which is on appeal today, and the district court found that the
statute of limitations in the Motor Vehicle Warranty Enforcement Act applied. Id. at *1.
Wheeler is the only Mississippi case – state or federal – that addresses the present issue.
Wheeler, however, cites Lowe v. Volkswagen of America, Inc., 879 F. Supp. 28 (E.D. Penn.
1995); and Lowe held that the UCC – not Pennsylvania’s Lemon Law – was most analogous
to the Magnuson-Moss Act. Further, Wheeler does not contain analysis comparing the
Motor Vehicle Warranty Enforcement Act and Mississippi’s UCC to the Magnuson-Moss
Act. Wheeler, 1996 WL 408059, at *1. The Magnuson-Moss analysis in Wheeler reads, in
full:
Magnuson-Moss Act claim. The Magnuson-Moss Act does not contain an
express limitations period; therefore, federal courts must apply the time limit
of the most analogous state statute, here, the Motor Vehicle Warranty
Enforcement Act. Lowe v. Volkswagen of America, Inc., 879 F. Supp. 28(E.D. Pa. 1995). As set out above, that statute of limitations runs eighteen
months after date of delivery of the vehicle. This claim, likewise, is time-
barred, and summary judgment will be granted as to any claim under the
Magnuson-Moss Act.
Id. Because Wheeler is conclusory and appears to incorrectly cite Lowe, it is not instructive
for the issue presented to this Court today. As such, a complete analysis of the Motor
Vehicle Warranty Enforcement Act and UCC is necessary.
3. Standard of Review
¶8. The issue presented in today’s case requires this Court to interpret the UCC and the
Motor Vehicle Warranty Enforcement Act. The interpretation of statutes is a question of
4
law; thus, a de novo standard of review is applied to today’s case. Miss. State Univ. v.
People for the Ethical Treatment of Animals, Inc., 992 So. 2d 595, 606 (Miss. 2008).
4. Motor Vehicle Warranty Act, UCC, and Magnuson-Moss Act
¶9. The Motor Vehicle Warranty Enforcement Act applies to motor vehicle purchases and
provides consumers with remedies when “the manufacturer or its agent cannot conform the
motor vehicle to any applicable express warranty by repairing or correcting any default or
condition which impairs the use, market value, or safety of the motor vehicle to the consumer
after a reasonable number of attempts . . . .” Miss. Code Ann. § 63-17-159(1) (Rev. 2013).
The remedies provided are either replacement of the motor vehicle or a refund. Miss. Code
Ann. § 63-17-153 (Rev. 2013); see also Miss. Code Ann. § 63-17-159(1). The Motor
Vehicle Warranty Enforcement Act, however, is not intended to preclude other remedies:
“nothing in Sections 63-17-151 et seq. shall in any way limit the rights or remedies which
are otherwise available to a consumer under any other law.” Miss. Code Ann. § 63-17-153.
The Motor Vehicle Warranty Enforcement Act includes the following statute of limitations:
Any action brought under Sections 63-17-151 et seq. shall be commenced
within one (1) year following expiration of the terms, conditions or limitations
of the express warranty, or within eighteen (18) months following the date of
original delivery of the motor vehicle to a consumer, whichever is earlier . . .
.
Miss. Code Ann. § 63-17-159(6) (Rev. 2013). The Act also allows a prevailing consumer
to collect attorneys’ fees. Miss. Code Ann. § 63-17-159(7) (Rev. 2013). There is little
caselaw interpreting the Motor Vehicle Warranty Enforcement Act.
¶10. Mississippi’s UCC is broader in scope than the Motor Vehicle Warranty Enforcement
Act and applies to “transactions in goods.” Miss. Code Ann. § 75-2-102 (Rev. 2012). While
5
the Motor Vehicle Warranty Enforcement Act applies only to express warranties, the UCC
applies to both written and implied warranties. See Miss. Code Ann. § 75-2-314 (Rev. 2012).
Further, unlike the Motor Vehicle Warranty Enforcement Act, the UCC permits buyers to
collect damages for the difference between the contract price and the value of the non-
conforming goods:
The measure of damages for breach of warranty is the difference at the time
and place of acceptance between the value of the goods accepted and the value
they would have had if they had been as warranted, unless special
circumstances show proximate damages of a different amount.
Miss. Code Ann. § 75-2-714(2) (Rev. 2012). Buyers also may collect incidental damages
under the UCC. Miss. Code Ann. § 75-2-715(1) (Rev. 2012). The UCC contains a six-year
statute of limitations. Miss. Code Ann. § 75-2-725 (Rev. 2012). The UCC does not include
a provision for the award of attorneys’ fees. Mississippi courts have applied provisions of
the UCC to breach-of-warranty claims involving the purchase of new motor vehicles. See
Royal Lincoln-Mercury Sales, Inc. v. Wallace, 415 So. 2d 1024 (Miss. 1982).
¶11. The Magnuson-Moss Warranty Act governs written warranties on consumer products.
“The purpose of the [Magnuson-Moss] Warranty Act is to regulate written warranties on
consumer goods and to provide injured consumers with a cause of action against
manufacturers who fail to comply with its requirements.” Edwards v. Hyundai Motor Am.,
163 S.W. 3d 494, 499 (Mo. App. 2005) (citing Price v. Freedom Ford, Inc., 46 Va. Cir. 129,
131 (1998)). Like the UCC, the Magnuson-Moss Warranty Act is broad in its application
and applies to any consumer product, including motor vehicles. See id.
¶12. In today’s case, to support its contention that the Motor Vehicle Warranty
6
Enforcement Act is the most analogous Mississippi statute to the Magnuson-Moss Act,
General Motors highlights several similarities between the Motor Vehicle Warranty
Enforcement Act and the Magnuson-Moss Act. Specifically, General Motors draws attention
to the following:
• The Magnuson-Moss Act and the Motor Vehicle Warranty
Enforcement Act both permit the award of attorneys’ fees, while the
UCC does not. Miss. Code Ann. § 63-17-159(7); 15 U.S.C. §
2310(d)(2).
• The Magnuson-Moss Act and the Motor Vehicle Warranty
Enforcement Act both create a cause of action for breach of warranty
when a manufacturer cannot comply with an express or written
warranty obligation. Miss. Code Ann. § 63-17-157 (express warranty);
15 U.S.C. § 2310(d)(1) (written warranty).
• Both statutes encourage the use of alternate dispute resolution. Miss.
Code Ann. § 63-17-163; 15 U.S.C. § 2310(a).
¶13. The Broomes respond to General Motors’ comparison by noting similarities between
the Magnuson-Moss Act and the UCC and distinguishing the Motor Vehicle Warranty
Enforcement Act; specifically:
• The Motor Vehicle Warranty Enforcement Act requires consumers to
prove that the vehicle’s defect “impairs the use, market value, or safety
of the motor vehicle.” Miss. Code Ann. § 63-17-159(1). The UCC and
Magnuson-Moss Act do not contain such a requirement.
• The Motor Vehicle Warranty Enforcement Act requires that a
“reasonable number of attempts” be made to conform the vehicle to the
express warranty prior to bringing suit under the statute. Miss. Code §
Ann. 63-17-159(3). The UCC and Magnuson-Moss Act do not contain
this requirement.
¶14. General Motors contends that the remedies available under the Magnuson-Moss Act
are similar to those available under the Motor Vehicle Warranty Enforcement Act
7
(replacement or refund). See 15 U.S.C. § 2304(a)(4); Edwards, 163 S.W.3d at 500 (The
Magnuson-Moss Act provides for the remedies “of repair, replacement, or refund.”). The
Broomes, however, contend that the remedies available to a consumer under the Magnuson-
Moss Act are similar to those in the UCC when the claim is for breach of express limited
warranty, which is the Broomes’ claim. See MacKenzie v. Chrysler Corp., 607 F. 2d 1162,
1166 (5th Cir. 1979) (quoting Miss. Code Ann. § 75-2-714(2) (Rev. 2012)) (finding that
UCC remedy of “the difference at the time and place of acceptance between the value of the
goods accepted and the value they would have had if they had been as warranted” is available
remedy for Magnuson-Moss claim).
¶15. Clearly, both the Motor Vehicle Warranty Enforcement Act and the UCC have
elements in common with the Magnuson-Moss Act. When other courts have considered the
question presented in today’s case, they have found consistently that their states’ UCC is the
most analogous state statute to the Magnuson-Moss Act. In Edwards, 163 S.W. 3d at 500,
the Missouri Court of Appeals compared Missouri’s UCC and Missouri’s Lemon Law and
found that the UCC was most analogous to the Magnuson-Moss Act because the UCC and
the Magnuson-Moss Act both apply to a broad category of any consumer product, rather than
only motor vehicles. The court further considered that the Missouri Lemon Law expressly
states that it is not intended to “limit the rights or remedies which are otherwise available to
a consumer at law or in equity.” Id. at 498 (quoting Mo. Rev. Stat. § 407.569). Notably,
Mississippi’s Motor Vehicle Warranty Enforcement Act includes a similar provision. Miss.
Code Ann. § 63-17-153. In addition, the court found the Magnuson-Moss Act and UCC
were similar because they both provided remedies for implied warranties, while Missouri’s
8
Lemon Law does not. Edwards, 163 S.W.3d at 500. For comparison, Mississippi’s Motor
Vehicle Warranty Enforcement Act applies only to express warranties. Miss. Code Ann. §§
63-17-157 to -159. Finally, the court found that application of Missouri’s eighteen-month,
Lemon-Law statute of limitations was incompatible with the issuing of new-car warranties:
Seller’s argument fails because applying the statute of limitations found in the
Lemon Law to all breach of warranty claims would essentially render virtually
all new car warranties fraudulent. Although a dealer may entice purchasers
with a promise of a six-year or 72,000 mile bumper to bumper warranty, such
a warranty would be a fraud because it would be unenforceable unless suit is
filed within eighteen months from delivery of the vehicle. This effect simply
could not have been what the legislature intended when it enacted the Lemon
Law.
Id.
¶16. Like Edwards, in Hillery v. Georgie Boy Manufacturing, Inc., 341 F. Supp. 2d 1112,
1114-15 (D. Ariz. 2004), the district court found that Arizona’s UCC – not Arizona’s Motor
Vehicle Warranty Act – was the most analogous state statute to the Magnuson-Moss Act
because the UCC and the Magnuson-Moss Act both apply to all consumer goods, while the
Motor Vehicle Warranty Act applies only to motor vehicles. Further, in Murungi v.
Mercedes Benz Credit Corp., 192 F. Supp. 2d 71, 78-79 (W.D. N.Y. 2001), the district court
found that the New York UCC was the most analogous state statute to the Magnuson-Moss
Act because the scope of consumer protection under the Magnuson-Moss Act is similar to
that of the UCC. The Eastern District of Pennsylvania in Lowe, 879 F. Supp. at 30, held that
Pennsylvania’s UCC was the most analogous state statute to the Magnuson-Moss Act
because both laws concern “rules for warranties of consumer products.” See also Brown v.
General Motors Corp., 14 So. 3d 104 (Ala. 2009) (recognizing that limitations period in
9
Alabama’s UCC applied to car buyer’s Magnuson-Moss Act claim against car manufacturer);
Mydlach v. DaimlerChrysler Corp., 875 N.E.2d 1047, 1055 (Ill. 2007) (“In suits brought
under the Magnuson-Moss Act, our appellate court, as well as courts in other jurisdictions,
generally consider the UCC to be the most closely analogous statute and have borrowed the
limitations provisions contained therein.”); Pender v. DaimlerChrysler Corp., 2004 WL
2191030, at *4 (Del. July 30, 2004) (finding that the statute of limitations in Delaware’s
UCC applies to Magnuson-Moss claims); Poli v. DaimlerChrysler Corp., 793 A.2d 104, 181
(N.J. Super. Ct. App. Div. 2002) (“[T]he statutory cause of action that is most analogous to
a claim under the [Magnuson-Moss] Act is a breach of warranty claim under the UCC . . .
.”); Keller v. Volkswagen of America, Inc., 733 A.2d 642, 644 (Pa. 1999) (finding that UCC
statute of limitations applied to Magnuson-Moss claim); Snyder v. Boston Whaler, Inc., 892
F. Supp. 955, 960 (W.D. Mich. 1994) (“[B]orrowing the state Uniform Commercial Code
statute of limitations would not frustrate the remedial policies of Magnuson-Moss.”).
¶17. Although this Court has not addressed the specific issue presented in today’s case, we
have discussed the relationship of the Magnuson-Moss Act and the UCC. In Guerdon
Industries, Inc. v. Gentry, 531 So. 2d 1202, 1205 (Miss. 1988), this Court, when discussing
an express warranty issued during the sale of a mobile home, stated: “The area of express
warranty law is governed by the Magnuson-Moss Warranty-Federal Trade Commission
Improvement Act, 15 U.S.C.A. §§ 2301-2312 (1982) . . . and various provisions of the
Uniform Commercial Code, as codified under Mississippi Law.” In Royal Lincoln-Mercury
Sales, Inc. v. Wallace, 415 So. 2d 1024, 1027 (Miss. 1982), this Court recognized that the
elements of proof for a breach-of-warranty claim under the Magnuson-Moss Act are the same
10
as the elements of proof required for a UCC breach-of-warranty claim. The Fifth Circuit has
held that, because the Magnuson-Moss Act “is virtually silent as to the amount and type of
damages which may be awarded for breach of an express limited warranty,” the measure of
damages provided by the UCC is applied to these claims under the Magnuson-Moss Act.
MacKenzie, 607 F. 2d at 1166 (applying Mississippi law).
¶18. Although the Motor Vehicle Warranty Enforcement Act does share some
characteristics with the Magnuson-Moss Act, when the statutes as a whole are compared to
the Magnuson-Moss Act, the UCC is most analogous. The UCC and Magnuson-Moss Act
are similar in scope, including claims for any consumer product, rather than the Motor
Vehicle Warranty Enforcement Act’s limited application to motor vehicles. Further, the
UCC and Magnuson-Moss Act apply to implied and express warranties; again, the Motor
Vehicle Warranty Enforcement Act is limited in its application to only express warranties.
Finally, the Motor Vehicle Warranty Enforcement Act expressly states that it does not “in
any way limit the rights or remedies which are otherwise available to a consumer under any
other law.” Miss. Code Ann. § 63-17-153. Thus, the Legislature likely intended for
consumers to be able to bring claims similar to the Broomes’ for breach of warranty under
statutes other than the Motor Vehicle Warranty Enforcement Act.
CONCLUSION
¶19. For the reasons discussed above, Mississippi’s UCC is the most analogous state statute
to the Magnuson-Moss Act. As such, the UCC’s six-year statute of limitations applies to the
Broomes’ Magnuson-Moss Act claim. Because the six-year statute of limitations applies,
the trial court erred in dismissing the Broomes’ claim. Accordingly, we reverse the trial
11
court’s judgment and remand the case to the County Court of the First Judicial District of
Jackson County for further proceedings.
¶20. REVERSED AND REMANDED.
WALLER, C.J., DICKINSON AND RANDOLPH, P.JJ., LAMAR, KITCHENS,
CHANDLER, PIERCE AND COLEMAN, JJ., CONCUR.
12