Hughes v. Chrysler Motors Corp.

• Decision Date: 17 January 1996
• Docket Number: No. 93-0208,93-0208
• Citation: 197 Wis.2d 973,542 N.W.2d 148
• Parties: , 64 USLW 2472 John L. HUGHES, Plaintiff-Respondent, v. CHRYSLER MOTORS CORPORATION, Defendant-Appellant-Petitioner.
• Court: Wisconsin Supreme Court

Page 148

542 N.W.2d 148

197 Wis.2d 973, 64 USLW 2472

John L. HUGHES, Plaintiff-Respondent, v. CHRYSLER MOTORS CORPORATION, Defendant-Appellant-Petitioner.

No. 93-0208.

Supreme Court of Wisconsin.

Argued Sept. 5, 1995.

Decided Jan. 17, 1996.

For the defendant-appellant-petitioner there were briefs by Jeffrey S. Fertl, Susan R. Tyndall and Hinshaw & Culbertson Milwaukee and oral argument by Jeffrey S. Fertl.

For the plaintiff-respondent there was a brief by Edward Grutzner, Christofer C. Helwig and Grutzner, Holland & Vollmer, S.C., Beloit and oral argument by Edward Grutzner.

REVIEW of a decision of the Court of Appeals affirming a circuit court judgment. Affirmed.

BABLITCH, Justice.

Mr. Hughes bought a new car in 1990. It was, unfortunately, a lemon, a fact admitted by all parties. After the manufacturer failed to respond within the time limits set by law, Mr. Hughes sued the manufacturer, Chrysler, seeking among other things the amount of money he paid for the van as pecuniary damages. Under Wisconsin's "lemon law," any pecuniary damages awarded to a successful plaintiff are doubled. Chrysler argues that the purchase price of the car to the consumer is not a pecuniary damage within the meaning of the lemon law. We disagree. One purpose of the law, among others, is to provide an incentive for a manufacturer to put the purchaser of a new car back to the position the purchaser thought he or she was in at the time they bought the car. We conclude that the legislature intended to include the purchase price of the car to the consumer as pecuniary damages. Accordingly, we affirm.

The facts are not in dispute. Hughes purchased a new Dodge Caravan on January 11, 1990. During his first year of ownership, Hughes took the vehicle to a dealer to repair transmission defects on seven separate occasions. Hughes retained counsel after the repair efforts proved to be unsuccessful. On June 19, 1991, Hughes' counsel wrote to CT Corporation Systems, Chrysler's registered agent in Wisconsin, and demanded that Chrysler replace Hughes' car within 30 days with a "comparable new motor vehicle" without any further charge to him. Wisconsin Stat. § 218.015(2)(b)2.a and (c).

Having received no response within the 30 days provided by the statute, Hughes' counsel contacted Chrysler on July 29, 1991, and at Chrysler's request, mailed a copy of the June 19 demand letter. After Chrysler received a copy of the letter, Chrysler attempted to reach Hughes' counsel by telephone before discovering that Hughes had filed suit on August 22, 1991. On August 23, 1991, Chrysler sent Hughes a letter offering to replace his vehicle without any charge for a model year upgrade or the mileage on his vehicle.

The circuit court granted Hughes' motion for summary judgment. The court then entered judgment for Hughes in the amount of $74,371, which included double the amount he paid for the vehicle, attorney fees, and prejudgment interest. The court of appeals affirmed the circuit court. We granted Chrysler's petition for review.

The first issue is whether the purchase price of the car to the consumer is pecuniary damages within the meaning of Wisconsin's so-called lemon law, Wis.Stat. § 218.015(7) (1993-94), the relevant part of which is cited below. ¹ Statutory construction is a question of law which this court decides de novo without deference to the decisions of the lower courts. Eby v. Kozarek, 153 Wis.2d 75, 79, 450 N.W.2d 249 (1990). "The cardinal rule in all statutory interpretation, as this court has often said, is to discern the intent of the legislature." Scott v. First State Ins. Co., 155 Wis.2d 608, 612, 456 N.W.2d 152 (1990). This court ascertains that intent by examining the language of the statute and the scope, history, context, subject matter and purpose of the statute. Id; see also Voss v. City of Middleton, 162 Wis.2d 737, 749, 470 N.W.2d 625 (1991). We are also aware that remedial statutes should be liberally construed to suppress the mischief and advance the remedy that the statute intended to afford. Madison v. Hyland, Hall & Co., 73 Wis.2d 364, 373, 243 N.W.2d 422 (1976).

Chrysler argues that a buyer's pecuniary loss is limited to the buyer's out-of-pocket expenses that were caused by the manufacturer's violation of the statute. Hughes disagrees. He argues that pecuniary loss within the meaning of the lemon law includes the purchase price of the car. Hughes contends that allowing the consumer to recover double the purchase price of the automobile effectuates the purposes of the lemon law and strengthens the rights of consumers in dealing with vehicle defects. We agree.

The statute is silent as to whether pecuniary loss includes the purchase price of the vehicle. To determine the legislative intent behind the statute, we first examine the history of lemon laws in general. Lemon laws were enacted to deal with the increasing number of disputes between manufacturers and consumers over automobile warranties. Joan Vogel, Squeezing Consumers: Lemon Laws, Consumer Warranties, and a Proposal for Reform, 1985 Ariz.St.L.J. 589, 589. Warranty disputes were directly responsible for a considerable amount of litigation and have led to numerous legislative proposals. Id. The underlying reason for such legislation was clear. Harold Greenberg, The Indiana Motor Vehicle Protection Act of 1988: The Real Thing For Sweetening the Lemon or Merely a Weak Artificial Sweetener?, 22 Ind.L.Rev. 57, 57 (1989). For the average person, the purchase of an automobile was one of the most important of all consumer purchases in terms of significance and price. Id. However, for thousands of purchasers each year, this highly significant purchase became a virtual nightmare when the automobile refused to function properly, and the seller was unable, or unwilling to take action to remedy the situation. Julian B. Bell III, Ohio's Lemon Law: Ohio Joins the Rest of the Nation in Waging War Against the Automobile Limited Warranty, 57 U.Cin.L.Rev. 1015, 1015 (1989).

Prior to the enactment of lemon laws, the only kinds of remedial relief available to consumers were the statutory remedies of revocation of acceptance and breach of warranty under the Uniform Commercial Code. See Wis.Stat. §§ 402.602; 402.608; 402.313. Federal remedies also existed through the Magnuson-Moss Warranty Act. See 15 U.S.C. §§ 2301-2312 (1982). These state and federal remedies, however, did not adequately protect the interests of the consumer in a typical lemon vehicle claim. Clifford P. Block, Arkansas's New Motor Vehicle Quality Assurance Act--A Branch of Hope for Lemon Owners, 16 U.Ark.Little Rock L.J. 493, 493 (1994). Purchasers of defective cars had no recourse other than to repeatedly bring their cars in for repairs.

The problems faced by the automobile consumer were accurately described in the following comments made at the hearings on a proposed federal Automobile and Warranty Repair Act:

I think there is probably no subject of more ... emotional concern and irritation, frustration, aggravation and outrage than the question of the automobile that does not work. When the consumer buys the car he thinks he is getting a car that will drive and that will service him. He thinks his warranty is going to mean that if anything goes wrong it will be fixed up well and promptly. The fact is that in all too many cases this does not happen....

Automobile Warranty and Repair Act: Hearings on H.R. 1005 before the Subcomm. on Consumer Protection and Finance of the House Comm. on Interstate and Foreign Commerce, 96th Cong., 1st Sess. 1 (1979) (introductory remarks of Rep. James H. Scheuer, Subcommittee Chairman); see also Greenberg at 57. By 1993, 48 states, including Wisconsin, had lemon laws available as remedial assistance to consumers who purchased defective new automobiles. See Block at 493.

Wisconsin's lemon law, Wis.Stat. § 218.015, became effective on November 3, 1983. Prior to its passage, Wisconsin consumers relied on the same inadequate, uncertain and expensive remedies of the Uniform Commercial Code or the Magnuson-Moss Warranty Act. Stephen J. Nicks, Lemon Law II, Wis.Bar Bulletin, Vol. 60, No. 7, July 1987, at 8. Wisconsin's lemon law provides that if a new motor vehicle does not conform to an applicable express warranty, the nonconformity shall be repaired before the expiration of the warranty or one year after delivery of the vehicle, whichever is sooner. Section 218.015(2)(a). If the nonconformity is not repaired after a reasonable attempt to repair, the manufacturer must accept return of the vehicle, and at the direction of the consumer, either replace the vehicle or refund to the consumer the full purchase price plus any sales tax, finance charge, costs, less a reasonable allowance for use. Section 218.015(2)(b) 1 and 2. A reasonable attempt to repair means either that the nonconformity is subject to repair four times and the nonconformity continues or that the vehicle is out of service for an aggregate of at least 30 days because of warranty nonconformities. Section 218.015(1)(h)1 and 2.

The Wisconsin lemon law is violated when the manufacturer fails to voluntarily replace or repurchase the lemon vehicle within 30 days after receipt of the consumer's Wis.Stat. § 218.015(2)(c) demand. This failure to voluntarily comply with the lemon law establishes a violation of the law and triggers the § 218.015(7) remedies of the law. Section 218.015(7) provides that:

The court shall award a consumer who prevails in such an action twice the amount of any pecuniary loss, together with costs, disbursements and reasonable attorney fees, and any equitable relief the court determines appropriate.

Wisconsin's lemon law was created to be a self-enforcing consumer law that provides "important rights to motor vehicle owners." Memorandum from Bronson C. La Follette, Attorney General, to Members of the Legislature, Re: AB 434, Auto "Lemon Law" Changes, Oct. 14, 1985, Wis. Act 205. The intent...