Alvine v. Mercedes-Benz of North America

• Decision Date: 03 January 2001
• Docket Number: No. 21187, No. 21193.
• Citation: 2001 SD 3,620 N.W.2d 608
• Parties: Frank ALVINE, Plaintiff and Appellee, v. MERCEDES-BENZ OF NORTH AMERICA, Defendant and Appellant.
• Court: South Dakota Supreme Court

620 N.W.2d 608

2001 SD 3

Frank ALVINE, Plaintiff and Appellee, v. MERCEDES-BENZ OF NORTH AMERICA, Defendant and Appellant.

Nos. 21187, 21193.

Supreme Court of South Dakota.

Considered on Briefs April 26, 2000.

Decided January 3, 2001.

Steven W. Sanford and Karen A. Hilmoe of Cadwell, Sanford, Deibert & Garry, Sioux Falls, SD, Attorneys for plaintiff and appellee.

Lon J. Kouri and Deborah A. Birgen of May, Johnson, Doyle & Becker, Sioux Falls, SD, Attorneys for defendant and appellant.

MARTIN, Circuit Judge

[¶ 1.] Mercedes-Benz of North America, Inc. (Mercedes-Benz) appeals from a judgment determining that it breached an express warranty for a used Mercedes automobile purchased by Frank Alvine. We affirm all issues but remand issue 4 in part.

FACTS

[¶ 2.] In 1992, Mercedes-Benz introduced a new model automobile, the 500 SEL. Everything on this model was new except the engine. Mercedes-Benz offered a limited written warranty with this vehicle, which provided in part:

Mercedes-Benz of North America, Inc. (MBNA) warrants to the original and each subsequent owner of a new Mercedes-Benz passenger car that any authorized Mercedes-Benz Dealer will make any repairs or replacements necessary, to correct defects in material or workmanship.

* * *

Our intention is to repair under the warranty, without charge to you, anything that goes wrong with your car during the warranty period which is our fault. All we ask that you properly maintain and care for the car and that you have warranty repairs or adjustments performed by an authorized Mercedes-Benz dealer.

(emphasis added).

[¶ 3.] The warranty period was forty-eight months or 50,000 miles, whichever came first. The limited warranty provided in part, "[t]he warranty period starts on the date the car is delivered to the first retail purchaser or put in service as a dealer demonstrator or MBNA Company Car." The first purchaser, Jerry Berger, purchased the vehicle on February 18, 1992 and kept it until October 27, 1993. Vaughn Woodward and his wife were the second purchasers, owning the car from February 2, 1994 until the summer of 1995. Alvine was the third owner, acquiring the vehicle on September 23, 1995 for $57,000. At that time, the vehicle had just under 44,661 miles and there were approximately five months left on the warranty. He purchased the vehicle from Superior Lexus Motor Company in Kansas City, Missouri and the dealership had it driven to Sioux Falls. Alvine was unaware of any problems with the vehicle.

[¶ 4.] On January 15, 1996, while the warranty was still in effect, the vehicle simply stopped running and would not restart. It had to be pushed off the street and towed to the local Mercedes dealer, Vern Eide Motorcars, Inc. (Vern Eide). Alvine had similar experiences eight more times in less than 3,000 miles. These incidents occurred after the term of the express warranty expired in February 1996. The vehicle was towed to Vern Eide each time and repair attempts were made, but were unsuccessful. Alvine registered complaints to Mercedes Benz, but its involvement did not cure the problem. Finally, in the summer of 1997, Alvine had enough and tried to return the car by leaving it at Vern Eide, but it refused the vehicle and delivered it back to Alvine. Mercedes-Benz believed its obligation under its warranty expired when the warranty term expired.

[¶ 5.] Alvine commenced a lawsuit against Mercedes-Benz for breach of express warranty. At trial, the jury awarded Alvine damages in the amount of $70,440. This figure represented the $57,000 purchase price of the vehicle, plus $1,440 for storage and $12,000 for the lease of a replacement vehicle. In addition, the trial court awarded attorney fees in the amount of $47,328.50. Mercedes-Benz appealed, raising five issues. By notice of review, Alvine appealed the denial of his motion for new trial based on the failure to award prejudgment interest.

[¶ 6.] 1. Whether the trial court erred in denying Mercedes-Benz' motion for directed verdict and in allowing the jury to decide if the vehicle had been repaired per the express warranty.

[¶ 7.] The jury heard testimony from Alvine regarding the problems with the vehicle stalling and also heard extensive testimony from Mercedes-Benz about this model, including the reasons for the stalling problem, the problems of this particular vehicle, and the repair attempts made thereto. The jury had the opportunity to consider all this testimony and observe the witnesses. [¶ 8.] Reasonable minds could differ whether the problems experienced by Alvine after the warranty expired were the same as the problems experienced within the warranty period. This issue was properly presented to the jury. McDonough v. Kahle, 1999 SD 14, ¶ 8, 588 N.W.2d 600, 602. Put another way, whether the problems incurred by Alvine after the warranty term expired were latent in nature or caused by a failure of the dealer to appropriately fix the problems that occurred during the warranty period was a jury question. Defects occurring before the expiration of the warranty period should be repaired in accordance with the warranty, and, if not, then a warrantor's liability for breach of warranty continues even after the expiration of the term of express warranty. Johnson v. John Deere Co., 306 N.W.2d 231, 235 (S.D.1981); Durant v. Palmetto Chevrolet Co., 241 S.C. 508, 129 S.E.2d 323, 326 (S.C.1963); Nearhouse v. Volkswagen of America, Inc., 42 Ohio App.3d 42, 536 N.E.2d 46, 48 (1987). The trial court did not err in denying the motion for directed verdict.

[¶ 9.] 2. Whether the trial court abused its discretion in allowing testimony of a prior lawsuit and complaints from previous lawsuit and complaints from previous owners regarding the vehicle in determining damages.

[¶ 10.] The trial court allowed the jury to hear testimony from the two previous owners regarding their problems with this vehicle, as well as evidence from Mercedes-Benz about the problems with this car. This vehicle had 73 warranty claims between February 18, 1992 and July 6, 1995 and went to the repair shop 35 times before Alvine purchased it. A problem experienced by all of the owners was that the vehicle would, without warning, simply quit and not restart. The first two owners also experienced problems with this vehicle involving windows not working, computer replacement, replacement of contact rings and brush set in motor, seals on windows leaking, vehicle hesitating on acceleration, replacement of mirror motors, transmission shifting jerkily, doors out of alignment, and the trunk, air conditioner, and phone not working. Both owners were allowed to testify that a national class action lawsuit had been brought involving this make and model for tire and vibration problems.

[¶ 11.] Admissibility of evidence is within the sound discretion of the trial court. The trial court has broad discretion in balancing the probative value of evidence against its prejudicial effect and its ruling will not be disturbed on appeal absent abuse of discretion. Schaffer v. Edward D. Jones & Co., 521 N.W.2d 921, 925 (S.D.1994); Time Out, Inc., v. Karras, 469 N.W.2d 380, 384 (S.D.1991). An abuse of discretion refers to a discretion exercised to an end or purpose not justified by, and clearly against reason and evidence. Harter v. Plains Ins. Co., Inc., 1998 SD 59, ¶ 13, 579 N.W.2d 625, 629.

[¶ 12.] The decision by the trial court to allow such testimony has not been shown to be an abuse of discretion. This evidence may have been probative to the jury in determining the amount of damages for breach of warranty. In addition, Mercedes Benz cannot be heard to complain since it made no timely objection nor motion to strike this evidence. SDCL 19-9-3(1); Andreson v. Black Hills Power & Light, 1997 SD 12, ¶ 19, 559 N.W.2d 886, 890; Bakker v. Irvine, 519 N.W.2d 41, 47 (S.D.1994). Mercedes-Benz made a motion in limine regarding this testimony but failed to specifically object during the trial, and is foreclosed from raising this issue on appeal. State v. Gallipo, 460 N.W.2d 739, 743 (S.D.1990).

[¶ 13.] 3. Whether the trial court erred in denying Mercedes-Benz' motion for directed verdict regarding consequential damages.

[¶ 14.] At the conclusion of Alvine's evidence, Mercedes Benz made a motion for a directed verdict on the issue of consequential damages. However, Mercedes-Benz failed to renew its motion at the close of all the evidence. Thus, it is not reviewable on appeal. Pearson v. Adams, 279 N.W.2d 674, 677 (S.D.1979). In addition, Mercedes-Benz made no objection to this evidence nor to the jury instruction on the measure of damages. This instruction provided in part,

In this case, 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.

This instruction permitted the jury to determine if special circumstances were present making the usual measure of damages inadequate in this case. Mercedes-Benz cannot now be heard to complain. No error has been shown, on this record, in the trial court's ruling denying the motion for directed verdict on consequential damages.

[¶ 15.] 4. Whether the trial court erred in denying Mercedes-Benz' motions for remittitur and judgment notwithstanding the verdict.

[¶ 16.] Mercedes-Benz claims that the damages for the vehicle of $57,000, storage costs of $1,440, and replacement rental loss of $12,000 should be remitted. The jury was instructed, with the concurrence of Mercedes-Benz, that "the measure of damages 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."

[¶ 17.] The standard regarding a motion for remittitur is that:

The

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