Marquez v. Mercedes–Benz USA, LLC

Decision Date24 May 2012
Docket NumberNo. 2010AP826.,2010AP826.
PartiesMarco A. MARQUEZ, Plaintiff–Respondent–Cross–Appellant, v. MERCEDES–BENZ USA, LLC, Defendant–Appellant–Cross–Respondent.
CourtWisconsin Supreme Court

OPINION TEXT STARTS HERE

For the defendant-appellant-cross respondent briefs by Patrick L. Wells, Thomas Armstrong and von Briesen & Roper, S.C., Milwaukee and oral argument by Patrick L. Wells and Owen Thomas Armstrong, Jr.

For the plaintiff-respondent-cross appellant there were briefs by Timothy J. Aiken, Vincent P. Megna, Susan M. Grzeskowiak and Aiken & Scopture, S.C., Milwaukee and oral argument by Vincent P. Megna and Timothy J. Aiken.

SHIRLEY S. ABRAHAMSON, C.J.

[341 Wis.2d 124]¶ 1 Marco A. Marquez, the consumer, brought this action against Mercedes–Benz USA, LLC, alleging that his new car was a “lemon,” as defined in Wis. Stat. § 218.0171(2) (2005–06); 1 that he requested a refund and provided Mercedes–Benz with the required notice and information; and that Mercedes–Benz failed to provide a refund within the 30–day statutory period as required by Wis. Stat. § 218.0171(2)(c).

¶ 2 The Lemon Law provides that [i]f a new motor vehicle does not conform to an applicable express warranty” 2 and the nonconformity is not cured after a “reasonable attempt to repair,” then the consumer may return the vehicle to the manufacturer and elect to receive either a comparable replacement vehicle or a refund.3

¶ 3 A manufacturer violates the Lemon Law if it fails to voluntarily provide a refund or replacement vehicle within 30 days after receipt of the consumer's demand.4 The penalties a manufacturer incurs for failure to provide a refund to the consumer within the 30–day statutory period are costly. They include “twice the amount of any pecuniary loss, together with costs, disbursements and reasonable attorney fees, and any equitable relief the court determines appropriate.” 5 The order for judgment in the present case awarded the consumer $117,285.06, (twice his pecuniary loss), $5,833.41 (prejudgment interest), $45,423.68 (statutory interest), $10,216.72 (statutory costs), $2,105.79 (litigation costs), and $301,707.00 (attorney fees).

¶ 4 In the present case, no one disputes that the vehicle at issue is a lemon under the Lemon Law. No one disputes that the consumer gave Mercedes–Benz proper notice and information to start the 30–day statutory period during which Mercedes–Benz was required to provide a refund.6 No one disputes that Mercedes–Benz did not provide the required refund within the 30–day statutory period. The basic issue presented is whether Mercedes–Benz has a valid defense to its failure to issue a refund within the 30–day statutory period.

¶ 5 The specific issues presented are as follows:

¶ 6 I. To avoid paying the remedies provided by Wis. Stat. § 218.0171(7) for not issuing a refund within the 30–day statutory period, must a manufacturer prove that the consumer intentionally prevented it from providing a refund within the 30–day statutory period,7 or may the manufacturer prove that the consumer's conduct was merely unreasonable?

¶ 7 II. Does the ordinary burden of proof or the middle burden of proof apply to a manufacturer's affirmative defense that the consumer intentionally prevented the manufacturer from providing a refund within the 30–day statutory period in a Lemon Law action? 8

¶ 8 III. Did the circuit court err in directing a verdict in the consumer's favor?

[341 Wis.2d 127]¶ 9 IV. Is Mercedes–Benz entitled to a new trial because the circuit court did not grant it an adjournment on the morning of trial to conduct additional discovery relating to the paralegal's testimony or because it was not allowed to call the consumer's counsel as a witness at trial?

¶ 10 For the reasons set forth, we decide the issues as follows:

I. If a manufacturer raises the affirmative defense that the consumer prevented it from providing a refund within the 30–day statutory period under the Lemon Law, it must prove that the consumer did so intentionally.

II. The manufacturer must meet the middle burden of proof in its affirmative defense that a consumer intentionally prevented it from providing a refund within the 30–day statutory period under the Lemon Law.

III. No credible evidence supports the jury's verdict. The circuit court was not clearly wrong in directing the verdict in favor of the consumer.

IV. The circuit court did not erroneously exercise its discretion in denying Mercedes–Benz's request for an adjournment on the morning of trial to conduct additional discovery relating to the paralegal's testimony or in denying Mercedes–Benz's request to call the consumer's attorney as a witness at trial.

¶ 11 Thus, we affirm the judgment and order of the circuit court.

¶ 12 We begin with a brief procedural history of the case. We shall then discuss each issue in turn, setting forth the standard of review and the applicable facts relating to that issue. Because the facts and evidence relate predominantly to the last two issues, most of the facts are set forth in our discussion of these latter two issues.

[341 Wis.2d 128]¶ 13 This case originated in the Circuit Court for Waukesha County, Paul F. Reilly, Judge. The circuit court granted summary judgment in favor of the consumer. Mercedes–Benz appealed, alleging that the consumer intentionally thwarted its attempt to provide a refund within the 30–day statutory period by failing to provide necessary information. The court of appeals reversed the summary judgment in favor of the consumer and remanded the matter to the circuit court. It held that a consumer who intentionally thwarts a manufacturer's efforts to provide a refund within the 30–day statutory period cannot recover the Lemon Law's statutory remedies provided in Wis. Stat. § 218.0171(7). The court of appeals further concluded that genuine issues of material fact existed regarding whether the consumer intentionally thwarted Mercedes–Benz's attempt to provide a refund within the 30–day statutory period by failing to provide necessary information. Marquez v. Mercedes–Benz USA, LLC (Marquez I ), 2008 WI App 70, ¶ 3, 312 Wis.2d 210, 751 N.W.2d 859.

¶ 14 On remand in the Circuit Court for Waukesha County, Michael A. Bohren, Judge, the jury found in favor of Mercedes–Benz after a three-day trial. The circuit court entered a directed verdict in favor of the consumer, finding no credible evidence that the consumer intentionally thwarted Mercedes–Benz's efforts to provide a refund. Mercedes–Benz appealed, and the court of appeals certified the appeal to this court.

I

¶ 15 The first issue is whether a manufacturer who raises the affirmative defense that the consumer prevented it from providing a refund within the 30–day statutory period must prove that the consumer did so intentionally. Determining the elements of a defense, here the mens rea, is a question of law that this court decides independently of the court of appeals and circuit court but benefiting from their analyses.9

¶ 16 The text of the Wisconsin Lemon Law does not refer to either party's obligation to act in good faith or to refrain from acting in bad faith, and does not refer to the consumer's preventing the manufacturer from providing a refund within the 30–day statutory period.

¶ 17 The court of appeals, however, has introduced the concept of good faith into the Lemon Law, noting that “good faith is implicit in the Lemon Law” and [i]t should go without saying that the legislature contemplated that all the parties covered by the Lemon Law should act in good faith.” Herzberg v. Ford Motor Co., 2001 WI App 65, ¶ 18, 242 Wis.2d 316, 626 N.W.2d 67.10

¶ 18 In Herzberg, the manufacturer attempted to require the consumer to sign forms relating to the condition of the vehicle that was being returned. These forms are not required by the Lemon Law. The consumer refused to sign the forms, thereby rejecting the manufacturer's conditional refund offer. The court of appeals held that “the obligations of the consumer who has purchased a ‘lemon’ are limited to those set out in the Lemon Law,” 11 and that the court “cannot logically rule that the [consumer] engaged in bad faith by rejecting the offer” that asked more of the consumer than the Lemon Law requires.12

¶ 19 In Marquez I, the court of appeals discussed “good faith,” “bad faith,” and a consumer “intentionally thwarting” a manufacturer'sattempt to make a refund. The court of appeals stressed that it was not invoking the “amorphous and far-reaching” contractual doctrine of good faith and fair dealing. “Good faith” under the Lemon Law is not grounded in common-law contract doctrines; “good faith” is inherent in the statute.13 The court of appeals held “that a consumer fails to act in good faith when he or she intentionally prevents the manufacturer from complying with the statute.” 14 Compliance with the statute requires the manufacturer to make the refund within the 30–day statutory period. The court of appeals declared that if the consumer “intentionally thwarted [the manufacturer's] attempt to make a refund by failing to provide necessary information ... [T]he consumer is not entitled to the Lemon Law's statutory remedies.” 15

¶ 20 In addition, the court of appeals used the following language, all of which establishes that it was not creating a negligence-based defense for manufacturers: the consumer “intentionally prevented,” the consumer “intentionally thwarted,” the consumer “intentionally withheld,” the consumer's “deliberate obstruction,”and the consumer's “deliberate refusal.” 16 Under Marquez I, it is not sufficient for a manufacturer to prove that a consumer's careless, unreasonable, or unjustifiable conduct caused the manufacturer to violate the Lemon Law. Rather, the manufacturer must prove that the consumer intentionally prevented it from making a refund within the 30–day statutory period.

¶ 21 Mercedes–Benz asks this court to reexamine the holding of Marquez I.17 Merced...

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