Edwards v. Hyundai Motor America, ED 84940.

• Decision Date: 03 May 2005
• Docket Number: No. ED 84940.,ED 84940.
• Citation: 163 S.W.3d 494
• Parties: Jammy and Julie EDWARDS, Plaintiffs/Appellants, v. HYUNDAI MOTOR AMERICA, Defendants/Respondents.
• Court: Missouri Supreme Court

163 S.W.3d 494

Jammy and Julie EDWARDS, Plaintiffs/Appellants, v. HYUNDAI MOTOR AMERICA, Defendants/Respondents.

No. ED 84940.

Missouri Court of Appeals, Eastern District, Division Four.

May 3, 2005.

COPYRIGHT MATERIAL OMITTED

Adam J. Krohn, Kristin M. Liddle, Krohn & Moss, Ltd., Chicago, IL, for appellant.

Jeremiah W. (Jay) Nixon, Atty. Gen., Lisa M. Kennedy, Jefferson City, MO, for respondent.

LAWRENCE G. CRAHAN, Judge.

Jammy and Julie Edwards ("Buyers") appeal the judgment dismissing their claims pursuant to the Magnuson-Moss Warranty Act, 15 U.S.C. sec. 2301 et seq. ("Warranty Act"), against Hyundai Motor America ("Seller") as untimely. We reverse and remand.

In September 2001, Buyers purchased a new 2001 model Elantra from Seller. Buyers received a six-year or 72,000 mile bumper-to-bumper warranty on the vehicle. Soon after Buyers took possession, the vehicle began to exhibit various defects, including a malfunctioning transmission, substandard trim, defective brakes and a leaking engine. Despite numerous attempts to repair the vehicle, Seller was unable to cure the defects or repair them as required by the terms of the warranty.

In January 2004, Buyers filed suit alleging three counts pursuant to the Warranty Act, including breach of written warranty, breach of implied warranty of merchantability and revocation of acceptance.

The Warranty Act does not contain its own statute of limitations. When a federal statute creates a cause of action enforceable in state court, state courts are to apply the state statute of limitations governing the state law cause of action most closely analogous to the federal action at hand. DelCostello v. Int'l Bhd. Of Teamsters, 462 U.S. 151, 159, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). In addition, courts will apply the state time limitation to a cause of action under the federal statute only if it is not inconsistent with federal policy to do so. Nitcher v. Newton County Jail, 751 S.W.2d 800, 803 (Mo.App.1988).

Seller moved to dismiss Buyers' claims as untimely based on the statute of limitations found in Missouri's Lemon Law, sections 407.560 to 407.579 RSMo 2000.¹ The statute of limitations governing claims under the Lemon Law requires a plaintiff to file claims within six months following the expiration of the terms, conditions or limitations of the express warranty or within eighteen months of delivery of the new motor vehicle to the consumer, whichever is earlier, or within ninety days of final action on any informal dispute settlement procedure, if utilized. Section 407.573.3. Buyers urged that the state law cause of action most analogous to the Warranty Act is Missouri's version of the Uniform Commercial Code ("UCC"), which requires a plaintiff to file claims within four years after the cause of action accrued. Section 400.2-725. The trial court agreed with Seller and dismissed Buyers' claims. Buyers appealed.²

The issue presented to this court on appeal is an issue of first impression. No Missouri appellate court has previously decided whether the statute of limitations codified in the Lemon Law or Missouri's UCC provisions applies to breach of warranty claims regarding new motor vehicles made pursuant to the Magnuson-Moss Warranty Act. As such, Buyers are asking this court to interpret the Lemon Law.

Construction of a statute is a question of law and does not involve judicial discretion. Delta Air Lines, Inc. v. Director of Revenue, 908 S.W.2d 353, 355 (Mo. banc 1995). As such, it falls within this court's province of independent review, and consequently, no deference is given the trial court's determination of the law. St. Louis County v. B.A.P., Inc., 25 S.W.3d 629, 631 (Mo.App.2000). In construing statutes, courts determine legislative intent from the language used and consider words in their plain and ordinary meaning, recognizing that the law favors a statutory construction that tends to avert an unreasonable result. Allen v. Public Water Supply Dist. No. 5 of Jefferson County, 7 S.W.3d 537, 540 (Mo.App.1999). When interpreting a statute, our primary role is to ascertain the intent of the General Assembly from the language used in the statute and, whenever possible, to give effect to that intent. Sullivan v. Carlisle, 851 S.W.2d 510, 512 (Mo. banc 1993). Provisions of an entire legislative act must be construed together and, if reasonably possible, all provisions must be harmonized. B.A.P., 25 S.W.3d at 631. A statute must not be interpreted narrowly if such an interpretation would defeat the purpose of the statute. Id. Moreover, it is presumed every word, clause, sentence and provision of a statute have effect; conversely, it will be presumed that idle verbiage or superfluous language was not inserted into a statute. Id.

In their first point, Buyers argue that the trial court erred in applying the statute of limitations found in Missouri's Lemon Law because the language of the Lemon Law itself makes it clear that claims for diminished value due to breach of warranty are not governed by the Lemon Law. Buyers contend that since the Lemon Law does not include the breach of warranty statutes within its provisions, the four-year statute of limitations for breach of warranty claims provided under the Missouri UCC should apply to their claim for diminished value due to breach of warranty under the Warranty Act. We agree.

Section 407.563 of the Lemon Law, which is titled "Law applicable to breach of new motor vehicle warranties," states that "[t]he provisions of sections 400.2-602 to 400.2-609, RSMo., shall not apply to sales of new motor vehicles and such sales shall be governed by the provisions of sections 407.560 to 407.579." The sections of the Missouri UCC that the Lemon Law refers to only address claims for the rejection and acceptance of goods, the revocation of acceptance, and the assurance of performance. Accordingly, Buyers concede that the Lemon Law, and specifically section 407.573.3, supersedes the UCC with respect to their claim for the revocation of acceptance, and they do not challenge the trial court's dismissal of the third count of their petition.

Buyers argue, however, that the Lemon Law was not intended by the legislature to extend to diminished value damages pursuant to breach of warranty claims. In support of their argument, Buyers point out that sections 400.2-602 to 400.2-609, which are included in section 407.563, do not include the claims for breach of warranty, which are addressed in UCC sections 400.2-313, -314, and 400.2-725. Seller counters by claiming that sections 400.2-313 and -314 set forth only how express warranties and implied warranties of merchantability are created without addressing any remedy for a breach of such warranty. Seller also concedes that section 400.2-725, concerning the statute of limitations in contracts for sale, does address breach of warranty. But it argues that this section was not included in section 407.563 because it is "clear from the plain and ordinary meaning of section 407.563" that the Lemon Law shall apply to all sales of new motor vehicles and that it is presumed that the legislature was aware of the UCC statute of limitation for breach of warranty when it enacted the Lemon Law.

While section 400.2-313 certainly deals with the creation of express warranties by promise, description or sample, section 400.2-314 states that "a warranty that the goods shall be merchantable is implied in a contract for their sale" and deals with what it means for goods to actually be merchantable. Section 407.563 does not supercede the UCC; rather, it merely modifies the notice requirement for establishing breach stated in section 400.2-607 for actions where a new motor vehicle is involved.

The Lemon Law states only that the provisions of sections 400.2-602 to 400.2-609 shall not apply to sales of new motor vehicles, and it does not include, for example, any of the remedies provisions available under the UCC in sections 400.2-711 to 400.2-717. In addition, the Lemon Law provides remedies available to a buyer of a nonconforming motor vehicle only in the form of repair procedures and ultimately the refund of the purchase price or replacement of the vehicle, at the manufacturer's option, but it does not state that it precludes other remedies. The UCC, on the other hand, provides other remedies for breach of warranty on nonconforming goods such as cover damages, incidental and consequential damages, and a measure of damages allowing for the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had they been as warranted. The Lemon Law, by its own terms, only changes the terms and procedures for the remedy of revocation of acceptance. Additionally, section 407.569 states: "Except as provided in subsection (1) of section 407.560, nothing in sections 407.560 to 407.579 shall in any way limit the rights or remedies which are otherwise available to a consumer at law or in equity." Thus, the Lemon Law also specifically states that other remedies are still available and that it does not preclude all other remedies at law. It is presumed the legislature was aware of all other remedies, and it chose not to limit their application in breach of warranty actions concerning new motor vehicles. It appears the legislature was simply altering the structure of remedies for revocation of acceptance and refund or replacement of the vehicle by limiting the availability of these remedies to only a short period after the vehicle is purchased.

These differences suggest that it was not the intent of the legislature to supercede the UCC in all respects with regard to nonconforming new motor vehicles. Also, nowhere does the Lemon Law reveal that there was an intent to preclude any remedy for breach of the implied...