Giarratano v. Midas Muffler

• Decision Date: 28 June 1995
• Citation: 630 N.Y.S.2d 656,166 Misc.2d 390
• Parties: , 27 UCC Rep.Serv.2d 87 Elena C. GIARRATANO, Plaintiff, v. MIDAS MUFFLER, Defendant.
• Court: New York City Court

Page 656

630 N.Y.S.2d 656

166 Misc.2d 390, 27 UCC Rep.Serv.2d 87

Elena C. GIARRATANO, Plaintiff, v. MIDAS MUFFLER, Defendant.

City Court of Yonkers, Westchester County.

June 28, 1995.

[166 Misc.2d 392] Frank J. Cattarrasa, Yonkers, for plaintiff.

Midas Muffler, defendant pro se.

THOMAS A. DICKERSON, Judge.

On May 5, 1993 the plaintiff drove her vehicle, a 1990 Honda Civic, to the defendant, a Midas Muffler shop located at 400 South Broadway, Tarrytown, New York ["Midas"] to have her brakes serviced. A Midas mechanic inspected the Honda and replaced the front brake pads, resurfaced the right and left front rotors, replaced the shims and relined the rear brakes.

Seeking to avoid the high cost of a future "brake job" the plaintiff decided to buy a Midas Warranty Certificate sold by defendant which provided:

"WARRANTY PERIOD

"Your Midas brake shoes or disc brake pads are warranted by Midas to you, the original purchaser, for as long as you own the vehicle on which the brake shoes and/or disc brake pads were originally installed.

"WHAT IS COVERED

"If your Midas brake shoes and/or disc brake pads become damaged, defective or worn out ... Midas will install replacement warranted brake shoes or disc brake pads. You will not be charged for the brake shoes or disc brake pads or the labor required to install them. The brake shoes and/or disc brake pads will be considered worn out when the lining's minimum wearable thickness is less than manufacture's specifications....

"WHAT IS NOT COVERED

"This warranty does not cover the cost of additional components and labor required to restore the brake system to its proper operation. The Midas shop must restore the entire brake system to its proper operation. If you do not authorize this service, you will receive non-installed, non-warranted brake shoes and/or disc brake pads...."

On December 15, 1994 the plaintiff's brakes were screeching once again. The plaintiff returned her vehicle to Midas for servicing. Plaintiff presented her Warranty Certificate and requested that defendant inspect the front wheels and replace worn brake pads, free of charge.

Midas's mechanic removed the Honda's front wheels, found that the right front inner brake pads were worn and invited plaintiff to inspect. Plaintiff observed the worn pads and requested that defendant replace them. Midas's mechanic, however, refused to replace the worn brake pads unless plaintiff allowed him to (1) inspect the entire brake system, front and rear, and (2) replace any and all parts which Midas determined to be needed to restore the entire brake system to its proper operation. Plaintiff would, of course, be required to pay all of the costs [labor and parts] generated during this restoration process.

The plaintiff refused to permit Midas to inspect the entire brake system and make repairs as it deemed necessary. Midas's manager not only failed to replace plaintiff's worn brake pads but also failed to give her "non-installed, non-warranted brake shoes and/or disc brake pads". The plaintiff took possession of her vehicle and drove to a service station located in Irvington, New York, where she purchased new brake pads and had them installed for $128.10.

At trial Midas's manager's only explanation for why it was necessary to inspect the entire brake system and make repairs deemed necessary and proper by Midas was to protect Midas from exposure to consumer lawsuits arising from accidents traceable to that part of the brake system that had not been inspected.

DISCUSSION

The plaintiff seeks damages of $128.10, the amount she paid to another repair shop to remove and replace her worn right front brake pads. Plaintiff reasonably expected Midas to honor its Warranty Certificate and provide the new brake pads which she had already paid for but was forced to purchase a second time elsewhere.

Based upon a review of the facts the Court finds that plaintiff has asserted the following cognizable causes of action against the defendant: (1) violation of U.C.C. § 2-316(1) (exclusion or modification of warranties), (2) violation of U.C.C. § 2-719(2) (contractual modification or limitation of remedy), (3) violation of General Business Law

                §   617(2)(a) (motor vehicle parts warranty), (4) breach of warranty and (5) violation of General Business Law § 349 (unfair, deceptive and misleading business practices)
                

The Auto Repair Business

Generally, car and truck owners know precious little about how their vehicles operate. When a problem arises they must rely upon repair shops that on occasion may be operated by unscrupulous people. Common fraudulent and deceptive practices include charging excessive prices, delays in completing repairs [see e.g., Ford Motor Company v. Mayes, 575 S.W.2d 480 (Ky.App.1978) (nine attempts to repair vehicle) ]; failing to honor warranties [see e.g., State of New York v. General Motors Corp., 120 Misc.2d 371, 466 N.Y.S.2d 124 (1983) ($100 deductible on extended warranty held unlawful); Slaney v. Westwood Auto, Inc., 366 Mass. 688, 322 N.E.2d 768 (Sup.1975) (failure to fulfill promises to repair defective engine within 30 days) ] poor workmanship [see e.g., Djordjevic v. King Bear Auto Service Center, N.Y.L.J., Nov. 14, 1994, p. 32, col. 1 (Yonkers Cty Ct) (mechanic's failure to replace drained oil causes engine to burn up) ], bait and switch schemes, "lowballing" [see e.g., State v. Ralph Williams' North West Chrysler, 87 Wash.2d 298, 306, 553 P.2d 423, 430 (1976) ("... the advertisements were not bona fide offers to sell the cars. They were designed to lure consumers into North West.") ] [see also: The End Of Car Wars: A Statutory Compromise For Alleviation Of Consumer Problems In The Automotive Repair Industry, 23 St. Louis U.L.J. 795, 796 [1979] ("It has been estimated that almost a third of all costs for automobile repairs are unnecessary and that these unnecessary repairs constitute a total loss to consumers of well over twelve billion dollars a year") ]; Annotation, Liability Of Repairer For Unauthorized, Unnecessary Or Fraudulent Repairs Of Motor Vehicle, 23 ALR4th 274, 289, fn 5 [ (" 'Lowballing' is the intentional quoting of an appealingly, sometimes ridiculous, low repair price which the automobile mechanic does not intend to honor, but which entices the consumer to authorize the repairs; once the mechanic has the motor vehicle in his possession, other malfunctions are 'discovered' and the price is accordingly 'adjusted' upward by the mechanic." ]; Fixing The Car Brakes, Mufflers, Transmission, Consumer Reports, Sept. 1994, p. 596 [ ("Where can you find an honest mechanic who will do repairs quickly and well--and at a good price") ].

Extended And New Parts Warranties

The extended warranty and new parts warranty business generates extraordinary profits for the retailers of cars, trucks and automotive parts and for repair shops. It has been estimated that no more than 20% of the people who buy warranties ever use them [see e.g., Who Needs An Extended Warranty?, Consumer Reports, Jan. 1991, p. 21 ("Retailers estimate that for every dollar they take in from selling extended warranties, they will have to spend between 4 and 15 cents on service") ]. Of the 20% that actually try to use their warranties, as did the plaintiff, they soon discover that the real costs can easily exceed the initial cost of the Warranty Certificate. Stated, simply, selling Warranty Certificates is a gold mine for Midas.

The Midas Warranty Certificate

Consumers that use the Midas Warranty Certificate believe it to be similar to an insurance policy where in return for the consumer's payment Midas assumes the risk of worn brake pads and undertakes to indemnify the consumer against such loss by replacing them free of charge [See 68 N.Y.Jur.2d, Insurance, §§ 502, 503, 508; Compare: People v. American Motor Club, Inc., 133 A.D.2d 593, 520 N.Y.S.2d 383 (1987) ]. This expectation is reasonable, can be derived from the express language in the Warranty Certificate ["If your Midas ... brake pads become ... worn out ... Midas will install replacement warranted ... brake pads. You will not be charged for the brake ... pads or the labor required to install them ..."] and has been the subject of nationwide advertising for decades [see e.g., Parthenopoulos v. Maddox, 629 S.W.2d 563 (Mo.App.1981) (Midas customer charged $140.00 for guaranteed ¹

brake job); Brooks v. Midas-International Corp., 47 Ill.App.3d 266, 270, 5 Ill.Dec. 492, 494, 361 N.E.2d 815, 817 (1977) ("plaintiff ... alleged ... that (Midas) misrepresented its guarantee ² for the purpose of creating the impression in consumer's minds that no charges would be assessed other than an installation charge ... (Midas's) purpose was to induce (consumers) to purchase from (Midas) instead of its competitors") ] [see also Coryell v. Lombard Lincoln-Mercury Merkur, Inc., 189 Ill.App.3d 163, 136 Ill.Dec. 379, 544 N.E.2d 1154 (1989) (consumer unlawfully charged for guaranteed ³ carburetor repair) ].

The Condition Precedent

From Midas's standpoint the Warranty Certificate is not insurance at all but a clever marketing device used to lure consumers back to Midas repair shops for simple repairs which can be done by others. Once in the shop Midas personnel refuse to honor the Warranty Certificate unless the consumer complies with a condition precedent, i.e., Midas personnel must be given an opportunity to find other "problems" in the brake system and must correct those problems at the consumer's expense. With the exception of selling warranties that are never used, Midas does not make money unless it is selling parts and charging for labor. It is a near certainty that once a consumer's vehicle is up on the Midas garage rack that "problems" will be found and expensive solutions required.

Violation Of U.C.C. § 2-316(1)

U.C.C. § 2-316(1) provides that "Words or conduct ... (creating) ... an express warranty and words or conduct tending to negate or limit warranty shall be construed...