Costa v. Volkswagen of America

• Decision Date: 15 July 1988
• Docket Number: No. 85-306,85-306
• Citation: 551 A.2d 1196,150 Vt. 213
• Parties: , 8 UCC Rep.Serv.2d 389 George COSTA v. VOLKSWAGEN OF AMERICA.
• Court: Vermont Supreme Court

Page 1196

551 A.2d 1196

150 Vt. 213, 8 UCC Rep.Serv.2d 389

George COSTA v. VOLKSWAGEN OF AMERICA.

No. 85-306.

Supreme Court of Vermont.

July 15, 1988.

Paterson, Walke & Pratt, P.C., Montpelier, for plaintiff-appellant.

Plante, Richards, Hanley & Gerety, P.C., White River Junction, for defendant-appellee.

Before ALLEN, C.J., PECK, DOOLEY and MAHADY, JJ., and BARNEY, C.J. (Ret.), Specially Assigned.

DOOLEY, Justice.

This is a breach of warranty case that has eluded resolution for eight years. During this time it has been tried twice--once to a jury and once to court--with different results, and has been the subject of numerous motions. Plaintiff-appellant--who prevailed at the first trial but lost at the second--challenges the order of the Lamoille Superior Court entering judgment for defendant, and also appeals the court's earlier order granting defendant's motion for a new trial. We reverse, in part, the new trial order and remand the cause, vacating the subsequent orders of the trial court.

In October of 1979, plaintiff, George Costa, purchased a new 1979 Audi 5000 from Hyannis Porsche-Audi, Inc., a Hyannis, Massachusetts automobile dealership franchised by defendant, Volkswagen of America (VWoA). The purchase price of the vehicle was $11,530. In connection with the purchase, VWoA expressly warranted the vehicle to be free of defects in material and workmanship for twelve months, regardless of mileage. From the time of purchase until July 24, 1980, plaintiff experienced numerous and chronic mechanical and cosmetic problems with the automobile. During this period, the vehicle was serviced extensively by Hyannis Porsche-Audi, Inc. and by Crossway Motors, an authorized Audi dealership located in Barre, Vermont.

On July 12, 1980--after having had possession of the vehicle since May 12, 1980 for the purpose of repair--a representative of Crossway Motors returned the automobile to plaintiff in Mashpee, Massachusetts, where he was staying at the time. On driving the vehicle, plaintiff noticed that a number of defects--of which he had complained--persisted, including problems with the brakes, steering, transmission, and air conditioning. On July 24, 1980 plaintiff delivered the vehicle, and a letter evincing his intent to revoke acceptance, to the Massachusetts dealership. A copy of the letter revoking acceptance was also forwarded to defendant, and the instant action--for breach of warranty--followed. In his complaint, plaintiff relied on the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-2312, as well as the provisions of Article 2 of the Uniform Commercial Code as adopted in Vermont and Massachusetts. ¹

The matter was tried to a jury, which--after a four-day trial--returned a verdict for plaintiff. The jury's verdict found defendant liable for breach of warranty and assessed damages in the amount of $13,000. A handwritten note on the face of the verdict form stated that: "The Jury's verdict for the Plaintiff is with the stipulation that the title to the 1979 Audi 5000 be awarded to Volkswagon of America, Inc."

After the jury was discharged, plaintiff--who had forcefully objected to the court's instructions on damages--filed a motion for corrected verdict seeking to have the damages award increased from $13,000 to $15,586.03. ² Plaintiff also filed a motion for attorney's fees. Defendant, on the other hand, filed a motion for judgment notwithstanding the verdict (judgment n.o.v.) and, in the alternative, a motion for a new trial. In the new trial motion, defendant argued that the jury had gone beyond the charge in requiring the return of the vehicle and had disregarded the instruction on measure of damages. On November 22, 1983, the court denied plaintiff's motion for modification of the verdict and attorney's fees. The court also denied defendant's motion for judgment n.o.v. However, defendant's motion for a new trial was granted "on the ground that the verdict rendered by the jury is based upon a theory of rescission which is contrary to the instructions of the court on the issue of damages, as shown by the evidence." Plaintiff sought permission in both the trial court and this Court to take an interlocutory appeal from the November 22 order, see V.R.A.P. 5(b), which requests were denied.

The case again came to trial on December 18, 1984. The parties waived trial by jury and submitted the case to the court. After a four-day trial, the court issued findings and conclusions, and awarded judgment to the defendant. The court found that the vehicle was not defective when the plaintiff attempted to revoke acceptance, that the plaintiff could not pursue an implied warranty claim against defendant because of the absence of privity between plaintiff and defendant, and that revocation of acceptance was not available as against defendant VWoA.

Plaintiff raises numerous issues on appeal, particularly with respect to the second trial and the holding of the trial court after the second trial. Plaintiff also argues that the grant of the new trial motion after the first trial was error. We agree with plaintiff on this point, in part, and accordingly do not reach the claims with respect to the second trial.

The decision of whether or not to grant a motion for new trial pursuant to V.R.C.P. 59(a) is vested in the sound discretion of the trial court, and will only be reversed where there has been an abuse of discretion. See Hoague v. Cota, 140 Vt. 588, 592, 442 A.2d 1282, 1284 (1982). As such, "[i]n reviewing the trial court's disposition of a motion for a new trial, this Court is bound to accord to the ruling all possible presumptive support." Weeks v. Burnor, 132 Vt. 603, 609, 326 A.2d 138, 141 (1974). The deference we afford to the discretion of the trial court, however, is not without limit. In Hardy v. Berisha, 144 Vt. 130, 133-34, 474 A.2d 93, 95 (1984), we stressed that:

Vermont law requires a judge, who is asked to grant a new trial, to weigh the evidence in the light most favorable to the verdict. This is because it is the protected duty of the jury to render a verdict, and a judge may not disturb that verdict unless it is clearly wrong.

(citations omitted).

Thus, while we must give presumptive support to the ruling of the trial judge, the trial judge must likewise afford a similar presumption in favor of the verdict of the jury. See McKenna v. May, 134 Vt. 145, 148, 353 A.2d 359, 361 (1976). Abuse of discretion in deciding a motion for a new trial will be found "when the trial court has entirely withheld its discretion or where the exercise of its discretion was for clearly untenable reasons or to an extent that it is clearly untenable." Lent v. Huntoon, 143 Vt. 539, 552, 470 A.2d 1162, 1171 (1983).

To fully analyze plaintiff's position on the new trial motion, we must start with the jury charge which the trial court found was not followed. In essence, the jury charge relevant to liability and damages instructed that:

[I]f circumstances caused Volkswagen's expressed warranty of repair or replacement of defective parts to fail of its essential purpose, which would be to put the automobile in a defect-free condition, and if the nonconformity of the automobile with the implied warranty of merchantability substantially impaired the value of the automobile to Mr. Costa, and if he accepted it without discovery of its nonconformity as long as its acceptance was reasonably induced either by difficulty of discovery before acceptance or by the seller's assurances, he has certain rights.

....

If you should determine that there has been a breach of warranty, you should find that Mr. Costa had the right within a reasonable time after discovering the nonconformity to revoke his acceptance.... [A] buyer is permitted to revoke his acceptance of a motor vehicle where defects in such vehicle substantially impair its value to him....

....

If, and only if, you find that the Defendant Volkswagen of America is liable to Plaintiff and that the goods were defective; that there was a breach of expressed or implied warranties, then you must turn to the question of damages.

You are instructed that the measure of damages for breach of warranty is the difference at the time and place of acceptance of the goods between the value of the goods accepted and the value they would have had if they had been as warranted ... plus any incidental or consequential damages.

The jury was also instructed that--in order to find VWoA liable for breach of warranty--it had to find that in selling the automobile, and servicing it pursuant to VWoA's express warranty, Hyannis Porsche-Audi was acting for the benefit of and under the consent and general direction of Volkswagen of America (i.e., it was necessary that there was an agency relationship between the two).

It is important to emphasize that the issue before this Court is not whether the charge on revocation of acceptance was erroneous. At the charge conference defendant did not challenge the instructions regarding revocation of acceptance, nor did defendant object to those specific instructions at the time they were given. Moreover, at oral argument before this Court defendant conceded that the trial court's charge on revocation of acceptance was consistent with both the law applied at trial and plaintiff's theory of the appropriate remedy. By failing to make an effective objection to this part of the charge, appellee waived any challenges--of which none are apparent--regarding the appropriateness of the remedy of revocation of acceptance or the instructions thereon. See Poulin v. Ford Motor Co., 147 Vt. 120, 126-27, 513 A.2d 1168, 1173 (1986). This leaves three theories on which the court could have rejected the jury verdict: (1) the return condition imposed by the jury shows they misunderstood the charge on liability; (2) the return condition taints the jury verdict even if it is not inconsistent with the law; and (3) the inconsistency between the charge on damages and the jury's...