Katims v. Daimlerchrysler Corp.

• Decision Date: 18 July 2005
• Docket Number: HUSC 819-04
• Citation: 802 N.Y.S.2d 312,9 Misc.3d 503,2005 NY Slip Op 25312
• Parties: SANFORD KATIMS, Plaintiff, v. DAIMLERCHRYSLER CORP. et al., Defendants.
• Court: New York District Court

9 Misc.3d 503

802 N.Y.S.2d 312

2005 NY Slip Op 25312

SANFORD KATIMS, Plaintiff, v. DAIMLERCHRYSLER CORP. et al., Defendants.

HUSC 819-04

District Court of Suffolk County, Third District.

July 18, 2005.

Sanford Katims, plaintiff pro se.

Stephen Kunken, Commack, for Huntington Jeep Chrysler, Inc., defendant.

OPINION OF THE COURT

C. STEPHEN HACKELING, J.

Sanford Katims, the above-captioned plaintiff, filed a complaint dated November 11, 2004 against DaimlerChrysler Motors Company, and its dealer/franchise/agent, codefendant Huntington Jeep Chrysler, Inc. The plaintiff is seeking to recover $4,264.53 for an alleged breach of a written warranty as well as alleging a violation of 15 USC § 2303. Huntington Jeep has appeared and was defended by counsel and a corporate officer and has advised the court that Chrysler is aware of the action but will not appear as it contends that this court lacks jurisdiction to enter a judgment in the matter against it.

The Undisputed Relevant Facts

The plaintiff purchased a 2002 Chrysler Jeep Cherokee on April 29, 2002 from the Huntington Jeep Chrysler dealership. At that time the dealership was advertising a Chrysler promotion to increase its normal three-year/36,000-mile warranty to seven years/100,000 miles. In its capacity as a Chrysler dealer, Huntington Jeep transferred title from Chrysler to the plaintiff and tendered the new car kit inclusive of the standard three-year/36,000-mile warranty documents. (Exhibit 6.)

The subject Jeep's transmission failed on October 26, 2004 at 55,000 miles and the plaintiff inquired from the Chrysler Roadside Assistance Unit and Huntington Jeep's service department about whether his vehicle was covered under this warranty.

Disputed Issues of Fact

The factual dispute in this matter arises out of the plaintiff's assertion that he was advised telephonically on at least four occasions over two days by both Chrysler and Huntington Jeep that his warranty was limited to 36,000 miles and that plaintiff would be responsible to pay for any transmission repair. Premised upon this determination, the plaintiff chose to have the repair done at Amoco at a $2,375 expense. (Exhibits 1, 2.) Halfway through the Amoco repair on October 26, 2004, Huntington Jeep advised plaintiff of the 100,000-mile coverage, but refused to undertake repairs unless the vehicle was delivered fully assembled. Rather than reassemble a broken transmission at a $2,000 expense, the plaintiff chose to complete the repair and seek "emergency repair reimbursement" for the Amoco repair cost. (Exhibit 3.) Chrysler denied the request.

It is Huntington Jeep's contention that all the Chrysler computers evidence the 100,000-mile warranty status. (Exhibits B, C.) Although Huntington Jeep's witness had no personal knowledge, it was his contention that this fact would have been communicated to plaintiff during his initial October 24 and 25 telephone calls and that plaintiff knowingly chose to void his warranty by having an out-of-service repair. This assertion that Chrysler's business practice to always advise customers of the extended warranty is not corroborated by the recording of the roadside service call made several weeks after the fact wherein the Chrysler employee advised the plaintiff that he had only 36,000-mile coverage. (Exhibit 7.)

Legal Issues Presented

(1) Is Huntington Jeep liable for a breach of the Chrysler warranty?

(2) Did Huntington Jeep violate the "deceptive warranty" provisions of 15 USC § 2310?

(3) Does this court have jurisdiction to enter a default judgment against Chrysler?

Discussion

Agency Defense

Though not expressly conceded by the appearing defendant, the interdependent and continuing relationship between Chrysler and Huntington Jeep is obvious. Huntington Jeep describes itself as a Chrysler "dealer" or "franchisor" and "independent contractor." While these are accurate descriptions, the facts and the law of New York recognize it as a "disclosed agent" of the international foreign corporation known as DaimlerChrysler Corp. All the sale documents including the title and warranty disclose Chrysler and the plaintiff as the contracting parties. The record is devoid of a scintilla of evidence which would indicate that Huntington Jeep contracted in any capacity for itself or that this was anything other than the usual new car sales transaction. New York law codifies the common law which maintains that disclosed agents are not liable for the contractual representations of their principals. (See Keskal v Modrakowski, 249 NY 406 [1928]; Slota v Lynnsu Enters., Inc., NYLJ, Dec. 18, 1998, at 35, col 5 [App Term, 2d Dept]; New York Times Co. v Glynn-Palmer Assoc., 138 Misc 2d 862 [Civ Ct, NY County 1988]; see also Voss v John Lowry, Inc., 252 NY 587 [1929]; Mencher v Weiss, 306 NY 1 [1953].)

15 USC § 2310

The plaintiff has also raised the consumer protections afforded him under the federal Magnuson-Moss Warranty Act. Section 2310 of USC title 15 prohibits deceptive warranties which would mislead a reasonable person. As Huntington Jeep is only the disclosed agent and not the actual "warrantor," it likewise falls outside the liability imposed by 15 USC § 2310 which is limited to "written warranty" deceptive representations. As the written warranty was solely Chrysler's, Huntington Jeep's alleged culpability in not forwarding the new paperwork and not acknowledging the 100,000-mile warranty status need not be addressed. Only the actual written warrantor is covered by this statute. (See Annotation, Construction and Effect of Standard New Motor Vehicle Warranty, 99 ALR2d 1419, citing Hall v Everett Motors, Inc., 340 Mass 430, 165 NE2d 107 [1960]; Runco v Brockway Motor Co., 164 Pa Super 240, 63 A2d 397 [1949]; Simmons v Ruggles, 176 SW 152 [Tex Civ App 1915]; Ford v Willys-Overland, Inc., 197 NC 147, 147 SE 822 [1929].) The court is also not convinced that the plaintiff has fully born its burden of establishing the jurisdictional preconditions of 15 USC § 2310, which require exhaustion of arbitration remedies in state court and a minimum of $50,000 collective damages to invoke federal jurisdiction.

Jurisdictional Defense

The issue of agency is also determinative of Chrysler's alleged jurisdictional defense. Huntington Jeep's counsel has acknowledged Chrysler's knowledge of the subject complaint and this trial and its deliberate election not to participate, even to the limited extent of obtaining a ruling upon a jurisdictional challenge. Such a tactical posture appears risky, but is possibly explainable by the fact that this is a small claims proceeding.^*

Obtaining personal jurisdiction in a small claims case is governed by UDCA 1803, which provides:

"§ 1803. Commencement of action upon small claim "(a) Small claims shall be commenced upon the payment by the claimant of a filing fee ... without the service of a summons and ... without the service of any pleading other than a statement of his cause of action by the claimant or someone in his behalf to the clerk, who shall reduce the same to a concise, written form and record it in a docket kept especially for such purpose. Such procedure shall provide for the sending of notice of such claim by ordinary first class mail and certified mail with return receipt requested to the party complained against at his residence, if he resides within a district of the court in the county, and his residence is known to the claimant, or at his office or place of regular employment...."

Under UDCA 1803, it is the Clerk of the Court who makes service upon the defendants. Alternative plaintiff-effected manners of service upon corporations pursuant to CPLR 311, such as...