Murphy v. 24th St. Cadillac

• Decision Date: 15 April 1999
• Docket Number: No. 95,95
• Citation: 353 Md. 480,727 A.2d 915
• Parties: Thomas J. MURPHY, III v. 24TH STREET CADILLAC CORPORATION t/a Chesapeake Cadillac Jaguar et al.
• Court: Maryland Court of Appeals

727 A.2d 915

353 Md. 480

Thomas J. MURPHY, III v. 24TH STREET CADILLAC CORPORATION t/a Chesapeake Cadillac Jaguar et al.

No. 95, Sept. Term, 1998.

Court of Appeals of Maryland.

April 15, 1999.

Kelly A. Koermer; Thomas G. Bodie (Bodie, Nagle, Dolina, Smith & Hobbs, P.A., on brief), Towson, for Petitioner.

Samuel Y. Botts (Veronica R. Hill, Jordan Keys Jessamy & Botts, LLP, on brief), Greenbelt, for Respondents.

Argued before BELL, C.J., and ELDRIDGE, RODOWSKY, CHASANOW, RAKER, WILNER and CATHELL, JJ.

CHASANOW, Judge.

This case requires that we address the construction of the remedial provisions of Maryland's Consumer Motor Vehicle Leasing Contracts Act (the Act) for the first time since it was enacted in 1987. Maryland Code (1990 Repl.Vol., 1998 Supp.), Commercial Law Article, § 14-2001 et seq.¹ The Act extends the warranty provisions of Maryland's Automotive Warranty Enforcement Act, § 14-501 et seq., better known as the "lemon law," to automobile leasing arrangements. The petition arises out of an action filed under the Act by Mr. Thomas J. Murphy, III (Mr. Murphy) against 24th Street Cadillac Corporation, t/a Chesapeake Cadillac Jaguar (Chesapeake) and General Motors (GM). Mr. Murphy seeks to invoke the Act's remedial provision requiring a manufacturer to accept return of a leased vehicle and refund monies related to the lease agreement. The primary issue concerns whether Mr. Murphy permitted the defendants the statutorily required "reasonable number of attempts" at repairing the alleged defect. § 14-2004(d)(1)(i). After a bench trial, the trial judge ruled that Mr. Murphy acted unreasonably in not permitting an additional repair attempt. The Court of Special Appeals affirmed. Murphy v. 24th St. Cadillac, 121 Md.App. 454, 710 A.2d 332 (1998). For the reasons that follow, we shall affirm the judgment of the trial court, albeit on grounds slightly different than the Court of Special Appeals.

I.

A.

Mr. Murphy entered into a lease with Chesapeake on February 26, 1996, for use of a brand new Cadillac STS automobile, covered by a standard warranty, for 24 months. The lease required Mr. Murphy to pay a monthly rate of $930.74. A little over a month into the lease agreement, Mr. Murphy noticed that the vehicle occasionally hesitated during acceleration. In describing the hesitation problem, Mr. Murphy testified that:

"The best example I can think of is the fact that backing out of my garage, you come up the driveway and it's a little bit of an angle that spans coming up, the car would hesitate. * * * Hesitate to me would be when you put your foot on the gas, it's not smooth going off, it jumped or whatever you want to call it. But you can tell the engine is not performing the way it should."

On April 16, 1996, he returned the car to Chesapeake to have their mechanics check into the hesitation problem. Chesapeake kept the car overnight, but its mechanics were unable to duplicate the hesitation problem after visual inspection and road and computer tests. Chesapeake contacted GM about the condition through a satellite transmission and through its Technical Assistance Center. GM informed Chesapeake that it was coming out with a new computer recalibration chip that might address the hesitation problem that Mr. Murphy said he was experiencing. An invoice introduced into evidence stated: "Unable to duplicate at this time. Cadillac is coming out with a recalibration for this condition." Chesapeake advised Mr. Murphy of its efforts and returned the car.

According to Mr. Murphy's trial testimony, after the initial visit the hesitation problem continued, and he began to encounter a new problem—the car stalled on several occasions when he was stopped or nearly stopped. On three occasions the car stalled at a traffic light, requiring that he put the car's transmission back into the "park" position to restart the engine. On April 24, 1996, per the instructions in the warranty book, Mr. Murphy called GM to report these incidents because, he testified, "with the car simply stopping in the middle of traffic at a light, it became a lot more serious than the simple hesitation problem." GM took note of Mr. Murphy's complaint, but took no immediate action on the problem. Mr. Murphy continued to drive the automobile. On April 28, 1996, while driving Mr. Murphy attempted to turn onto a highway and the car again hesitated. Mr. Murphy testified that, as a result of the hesitation, his car was nearly struck by another. The following day Mr. Murphy took the automobile back to Chesapeake for repair. Chesapeake kept the car for a few days but again was unable to duplicate the problems complained of by Mr. Murphy. A Chesapeake mechanic testified that he did some rewiring of the ignition "in order to satisfy [the customer]," but not because he found anything wrong with the vehicle. After Chesapeake returned the car, Mr. Murphy noticed an improvement for about a ten-day period. In early and mid-May, however, the car stalled again; once while stopped at a light and another time while the car was moving very slowly over a speed bump in a parking lot.

On May 27, 1996, Mr. Murphy called GM again via its "800 number" to report these latest incidents and to ask to be released from the lease. In the first week of June, Mr. Murphy stopped driving the car altogether. At the advice of his counsel, on June 11, 1996, Mr. Murphy called Chesapeake and told them that, although he wanted out of the lease, he would give them one last opportunity to fix the problem with the car. Chesapeake told him that the recalibration chip had arrived and that the repairs could be done if he brought the vehicle in six days later, on June 17, 1996. Mr. Murphy responded that he was not willing to wait six days to have the car repaired and refused Chesapeake's offer. Mr. Murphy then had his attorney inform Chesapeake, via a letter dated June 11, 1996, that he wanted the lease terminated and the car taken back.

Mr. Murphy subsequently maintained his refusal to allow another repair attempt, and he refused GM's offer, on June 27, 1996, to replace the car with another. On July 5, 1996, he filed his lawsuit, asking that GM accept his return of the Cadillac and for a refund of the money paid for the lease. As the lawsuit proceeded, Mr. Murphy continued making his monthly lease payments though he did not drive the car, but he had someone turn the engine over on occasion. A GM consultant test drove the vehicle before trial and testified at trial that he was unable to duplicate any hesitation or stalling problem.

At a bench trial in the Circuit Court for Baltimore County, Judge Robert E. Cadigan ruled in favor of Chesapeake and GM, finding that "it was unreasonable on the part of Mr. Murphy to not wait that six days to see if Chesapeake could repair this vehicle." Judge Cadigan concluded, therefore, "that Chesapeake was not given a reasonable opportunity to perform the repairs which could have cured this particular problem." The Court of Special Appeals affirmed. Murphy, supra.

We shall provide more facts about the case and more detail on the trial court's and intermediate court's decisions as they become relevant in the discussion that follows.

B.

The Consumer Motor Vehicle Leasing Contracts Act comprehensively regulates the leasing of motor vehicles for the protection of lessees. The statute requires lessors of motor vehicles to make certain disclosures at the time leasing arrangements are made and otherwise regulates the contract between the lessee and lessor. § 14-2002. It also protects lessees from unscrupulous marketing practices. § 14-2003. Section 14-2004 is the provision with which the instant case is most concerned. It provides in pertinent part:

"(a) Applicability of Uniform Commercial Code.—To the extent that §§ 2-313 through 2-318, inclusive, of this article apply to the purchase of a motor vehicle, the rights and remedies provided for in those sections shall apply to the lease of a motor vehicle and may be exercised by any lessee.

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(c) Nonconformity, defect or condition— Report.—(1)(i) If a new motor vehicle does not conform to all applicable warranties during the warranty period, the lessee shall, during the warranty period, report the nonconformity, defect, or condition by giving written notice to the manufacturer, factory branch, or lessor by certified mail, return receipt requested.

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(2) The lessee shall provide an opportunity for the manufacturer or factory branch, its agent or authorized dealer, or the lessor or the lessor's agent to cure the nonconformity, defect, or condition.

(3) The manufacturer or factory branch, its agent or its authorized dealer, or the lessor or the lessor's agent shall correct the nonconformity, defect, or condition at no charge to the lessee, even if repairs are made after the expiration of the warranty period.

(d) Same—Rights and remedies where manufacturer, factory branch, etc., unable to repair or correct.—(1)(i) If, during the warranty period, the manufacturer or factory branch, its agent or authorized dealer, or the lessor or the lessor's agent is unable to repair or correct any nonconformity, defect, or condition that substantially impairs the use and market value of the motor vehicle to the lessee after a reasonable number of attempts, the manufacturer or factory branch, at the option of the lessee shall:

1. Replace the motor vehicle with a comparable motor vehicle acceptable to the lessee; or

2. Accept return of the motor vehicle from the lessee and refund to the lessee all moneys paid by the lessee to repair the defect, condition, or nonconformity pursuant to a lease, including all excise tax, license fees, registration fees, and any similar governmental charges, less a reasonable allowance for the lessee's unimpaired use of the vehicle; and

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(2)(i) In the event a manufacturer accepts return of a motor vehicle, under paragraph (1)(i)2 of this subsection, the lessee shall be compensated by the

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