Chaurasia v. General Motors Corp.

• Decision Date: 03 January 2006
• Docket Number: No. 1 CA-CV 04-0264.,1 CA-CV 04-0264.
• Parties: Vishal CHAURASIA, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee.
• Court: Arizona Supreme Court

126 P.3d 165

212 Ariz. 18

Vishal CHAURASIA, Plaintiff-Appellant, v. GENERAL MOTORS CORPORATION, Defendant-Appellee.

No. 1 CA-CV 04-0264.

Court of Appeals of Arizona, Division 1, Department E.

January 3, 2006.

COPYRIGHT MATERIAL OMITTED

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Krohn & Moss, Ltd. By Marshall Meyers, Phoenix, Attorneys for Plaintiff-Appellant.

Bowman and Brooke LLP By Negatu Molla and Sonia I. Krainz, David Williams, Phoenix, Attorneys for Defendant-Appellee.

OPINION

THOMPSON, Judge.

¶ 1 Vishal Chaurasia challenges the trial court's grant of summary judgment and attorneys' fees to General Motors Corporation (GM) under Arizona Revised Statutes (A.R.S.) § 12-341.01 (2004). For the following reasons, we affirm.

FACTUAL AND PROCEDURAL HISTORY

¶ 2 Chaurasia purchased a 2001 Chevrolet Corvette on October 17, 2000 from NuCar Connection. The Corvette came with a New Vehicle Limited Warranty from GM, the manufacturer. Subject to certain exclusions, the warranty covered the vehicle for three years or 36,000 miles, whichever came first. It entitled Chaurasia to repairs and part replacements to correct defects in materials or workmanship at no cost whenever he brought the vehicle to an authorized repair facility during the warranty period.

¶ 3 Chaurasia discovered numerous defects. He took the Corvette to authorized dealers for repairs but remained unsatisfied. Accordingly, he sued GM, asserting that it had violated the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. §§ 2301-2312 (1998), by breaching the express warranty and the implied warranty of merchantability, thereby entitling him to revocation of acceptance.

¶ 4 GM moved for summary judgment. The trial court granted judgment as matter of law in favor of GM and awarded $5107 in attorneys' fees to GM. Chaurasia timely appealed.

DISCUSSION

A. As a matter of law, Chaurasia demonstrated no breach of the limited express warranty

¶ 5 On appeal from a grant of summary judgment, we determine de novo whether there is a genuine issue of disputed material fact and, if not, whether the trial court correctly applied the substantive law. In re Estate of Johnson, 168 Ariz. 108, 109, 811 P.2d 360, 361 (App.1991) (citations omitted). To demonstrate a triable issue of fact, the party opposing summary judgment must set forth specific facts demonstrating a genuine issue for trial. Ariz. R. Civ. P. 56(e). We view the facts in the light most favorable to the party against whom summary judgment was granted. Estate of Hernandez v. Flavio, 187 Ariz. 506, 509, 930 P.2d 1309 1312 (1997) (citing Orme School v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990)). The interpretation of a statute is a question of law that we review de novo. Walls v. Ariz. Dep't of Pub. Safety, 170 Ariz. 591, 594, 826 P.2d 1217, 1220 (App.1991) (citing U.S. Parking Sys. v. City of Phoenix, 160 Ariz. 210, 211, 772 P.2d 33, 34 (App.1989)).

¶ 6 Chaurasia claims that GM breached an express warranty by failing to make the promised repairs and replacements of defective components. According to Chaurasia, a breach occurs when a defect is discovered in a vehicle or when the manufacturer is unable to make the vehicle defect free after at least two repair attempts.

¶ 7 The MMWA contemplates that warranties may be full or limited:

(a) Full (statement of duration) or limited warranty

Any warrantor warranting a consumer product by means of a written warranty shall clearly and conspicuously designate such warranty in the following manner, unless exempted from doing so by the Commission pursuant to subsection (c) of this section:

(1) If the written warranty meets the Federal minimum standards for warranty set forth in section 2304 of this title, then it shall be conspicuously designated a "full (statement of duration) warranty" [sic].

(2) If the written warranty does not meet the Federal minimum standards for warranty set forth in section 2304 of this title, then it shall be conspicuously designated a "limited warranty" [sic].

15 U.S.C. § 2303.

¶ 8 GM's warranty did not meet the federal minimum standards of 15 U.S.C. § 2304,¹ and the MMWA consequently allowed GM to conspicuously label the warranty as a "limited" warranty. The MMWA is virtually silent with respect to requirements for manufacturers issuing a limited written warranty. See Ventura v. Ford Motor Corp., 180 N.J.Super. 45, 433 A.2d 801, 809 (Ct.App.Div.1981) ("`Limited' warranties protect consumers by prohibiting disclaimers of implied warranties... but are otherwise not described in the act."), disapproved on other grounds, Ramirez v. Autosport, 88 N.J. 277, 440 A.2d 1345, 1351 (1982). The MMWA requires only that the limited warranty not disclaim or limit the duration of any implied warranties to a period shorter than the duration of an express warranty. Id. at 809 (quoting 15 U.S.C. § 2308). Express warranties are treated like any other contract and interpreted according to general contract principles. Ex parte Miller, 693 So.2d 1372, 1376 (Ala.1997).

¶ 9 There is no cause of action under the MMWA for a limited warranty unless the consumer can prove that the manufacturer did not comply with the limited express warranty's terms. See, e.g., Lara v. Hyundai Motor Am., 331 Ill.App.3d 53, 264 Ill.Dec. 416, 770 N.E.2d 721, 728 (2002) (claim for breach of limited warranty is governed by the state version of the Uniform Commercial Code); Razor v. Hyundai Motor Am., 349 Ill.App.3d 651, 286 Ill.Dec. 190, 813 N.E.2d 247, 258 (2004) (same). GM's limited express warranty provides that it will pay for repairs needed to correct defects in materials or workmanship: "Warranty repairs, including towing, parts and labor, will be made at No Charge." To prove a breach of this warranty, Chaurasia must demonstrate that GM refused or otherwise failed to pay for the repair to a covered item. Here, GM paid for all claimed warranty repairs made by its authorized facilities. Chaurasia submitted no controverting evidence to the trial court. Accordingly, GM was entitled to judgment as a matter of law.

¶ 10 Nevertheless, Chaurasia attempts to claim the benefits of a full warranty. When a warranty is full, "then the warranty on such product shall, for purposes of any action under section 2310(d) of this title or under any State law, be deemed to incorporate at least the minimum requirements of this section and rules prescribed under this section." 15 U.S.C. § 2304(e). One of the requirements is that the manufacturer is obligated to refund or replace a product if it contains a defect after a reasonable number of attempts by the warrantor to remedy the defect. 15 U.S.C. § 2304(a)(4).

¶ 11 Other courts have refused to apply the reasonable number of attempts requirement when the plaintiff holds a limited express warranty. In Lankford v. Rogers Ford Sales, 478 S.W.2d 248, 249 (Tex.Civ.App.1972), the plaintiff argued that the limited warranty "failed in its essential purpose" when the vehicle had been in the repair facility for forty-five days during the first eighteen months of ownership. The trial court granted summary judgment to the manufacturer because it had made repairs to the vehicle under the limited warranty's terms. Id. at 249, 251. The Texas Court of Appeals affirmed, explaining:

there is no allegation of any repudiation of the limited warranty, nor any allegation of any wilful failure or refusal to make the repairs needed nor any allegation of dilatory, careless or negligent compliance with the terms of the limited warranty. In the absence of such circumstances, we must conclude, as a matter of law, that the limited warranty has not failed in its essential purpose. The Defendants having complied with the provisions of the warranty as admitted by the Plaintiff himself, are thus entitled to assert its provisions in limitation of the remedies and liabilities expressed therein.

We therefore affirm the judgment of the trial Court.

Id. at 251 (citations omitted); accord Ford Motor Co. v. Olive, 234 So.2d 910 (Miss.1970) (finding in favor of the manufacturer because the dealer repaired the vehicle and the manufacturer furnished the parts and paid for the labor every time it was brought in for repair); Mattson v. General Motors Corp., 9 Mich.App. 473, 157 N.W.2d 486 (1968) (upholding a directed verdict in favor of the manufacturer on the breach of express warranty claim because the evidence showed that the manufacturer made repairs as promised under the warranty).

¶ 12 The cases on which Chaurasia relies for the flawed proposition that repairs must be made in a reasonable number of attempts deal with Uniform Commercial Code (UCC) provisions adopted into state law and Arizona's Lemon Law, not limited warranties under the MMWA.² Congress has exempted limited warranties from the reasonable number of attempts requirement of full warranties. See generally 2 Barkley Clark & Christopher Smith, The Law of Product Warranties § 16.10. Absent contrary language, Chaurasia cannot engraft the UCC or Arizona Lemon Law reasonableness cases onto his MMWA claim and cannot derive the benefit of the cited authorities.

¶ 13 Chaurasia also claims that the breach of warranty occurs when the consumer first detects a defect. Car manufacturers, however, are "not under a duty to make or design a fool-proof product." Adroit Supply Co. v. Electric Mut. Liab. Ins. Co., 112 Ariz. 385, 390, 542 P.2d 810, 815 (1975). Chaurasia's only authority, Kalil Bottling Co. v. Burroughs Corp., 127 Ariz. 278, 619 P.2d 1055 (App.1980), involves a dispute under the UCC concerning a contract that the warrantor was held to have breached by not repairing the problem within a reasonable time. Kalil Bottling has no application to Chaurasia's MMWA claims.

B. As a matter of law, the implied warranty claim fails due to lack of privity

¶ 14 Chaurasia also contends that the MMWA creates a new claim for breach of implied warranties and revocation of acceptance. He claims that his purchase was subject to the implied...