Nowalski v. Ford Motor Co.

• Decision Date: 27 November 2002
• Docket Number: No. 1-02-0947.,1-02-0947.
• Citation: 269 Ill.Dec. 781,335 Ill. App.3d 625,781 N.E.2d 578
• Parties: Mark and Alice NOWALSKI, Plaintiffs-Appellants, v. FORD MOTOR COMPANY, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

781 N.E.2d 578

335 Ill. App.3d 625

269 Ill.Dec. 781

Mark and Alice NOWALSKI, Plaintiffs-Appellants, v. FORD MOTOR COMPANY, Defendant-Appellee.

No. 1-02-0947.

Appellate Court of Illinois, First District, Third Division.

November 27, 2002.

Adam J. Krohn, Krohn & Moss, Ltd., Chicago, for Appellants.

Timothy Ray and Emily L. Mulder, Neal, Gerber & Eisenberg, Chicago, for Appellee.

Justice WOLFSON delivered the opinion of the court:

Mark and Alice Nowalski purchased a new automobile from Ford Motor Company in October 1995. The vehicle came with a limited 3-year/36,000 mile warranty. They discovered problems with the car's rear axle and brought the car to the dealer for repairs on at least five occasions. Finally, they filed a complaint against Ford in January 2001. Ford contended their action was filed too late, and the trial court entered summary judgment for Ford.

The Nowalskis chose to file their cause of action for breach of warranty under the federal Magnuson-Moss Act (the Act) (15 U.S.C. § 2301 et seq. (1994)). The issue in this case is created by the failure of the Act to provide a statute of limitations. As directed, we look to the most analogous state statute of limitations. The parties and the Illinois courts seem to agree that the four-year statute in UCC section 2-725 controls. 810 ILCS 5/2-725 (West 2000).

The question is, when did the plaintiffs' cause of action accrue—when Ford failed to successfully repair the vehicle, or when the vehicle was delivered? If the latter, then the Nowalskis filed too late. Our decision rests on our analysis of this court's decision in Cosman v. Ford Motor Co., 285 Ill.App.3d 250, 220 Ill.Dec. 790, 674 N.E.2d 61 (1996). We decline to apply Cosman to the facts of this case and affirm the trial court.

FACTS

The UCC statute of limitations section at issue states:

"Sec. 2-725. Statute of Limitations in Contracts for Sale.

(1) An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.

(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered." 810 ILCS 5/2-725 (West 2000).

On October 7, 1995, plaintiffs purchased and took possession of a new 1995 Ford Mustang manufactured by defendant. The car was sold with a "New Vehicle Limited Warranty" that provided:

"Authorized Ford Motor Company dealers will repair, replace or adjust all parts on your vehicle (except tires) that are defective in factory-supplied materials or workmanship for 3 years or 36,000 miles (whichever occurs first)."

Plaintiffs' complaint alleged the rear axle assembly of the vehicle was defective. They took the car to various Ford service dealers to have repairs performed on the rear axle. On appeal, plaintiffs contend there were five unsuccessful repair attempts—on August 30, 1996; October 5, 1998; October 14, 1998; December 15, 1998; and February 23, 1999.¹ The car was delivered on October 7, 1995. The final three repair attempts took place after the expiration of the warranty period. Plaintiffs filed their complaint on January 29, 2001.

The complaint alleged causes of action under the Magnuson-Moss Act for breach of implied warranty, breach of the express "repair or replace" warranty, and revocation of acceptance. Defendant moved to dismiss on grounds other than the statute of limitations. That motion was denied. Discovery was conducted and completed. At the mandatory arbitration that followed an award was entered for plaintiffs in the amount of $5,000, plus attorney fees and costs of $4,309.65. Plaintiffs rejected the arbitrators' award, and the case was assigned to the circuit court's trial calendar.

Ford then moved for summary judgment, arguing plaintiffs' claims for breach of implied warranty and breach of written warranty were barred by the statute of limitations, which began to run on October 7, 1995, the date of delivery of the vehicle. Plaintiffs voluntarily dismissed their claim for breach of implied warranty, under the decision in Cosman, 285 Ill.App.3d at 257, 220 Ill.Dec. 790, 674 N.E.2d 61.² However, plaintiffs contended their claim for express warranty was filed within the appropriate time period because the cause of action accrued October 5, 1998, at the latest. The trial court granted Ford's motion. This appeal followed.

DECISION

Summary judgment is appropriate where, when viewed in the light most favorable to the non-moving party, the pleadings, depositions, affidavits, and admissions on file show there is no genuine issue of material fact, and the moving party is entitled to a judgment as a matter of law. 735 ILCS 5/2-1005(c)(West 2000); Petrovich v. Share Health Plan of Illinois, Inc., 188 Ill.2d 17, 30-31, 241 Ill.Dec. 627, 719 N.E.2d 756 (1999). We conduct a de novo review of a grant of summary judgment. Morris v. Margulis, 197 Ill.2d 28, 35, 257 Ill.Dec. 656, 754 N.E.2d 314 (2001).

The Magnuson-Moss Act creates civil actions for consumers in state or federal court when suppliers, warrantors, or service contractors violate the provisions of the Act. 15 U.S.C. § 2310(d)(1) (1994). Although the Act does not require any consumer product to be warranted (15 U.S.C. § 2302(b)(2) (1994)), if a manufacturer or supplier chooses to warrant a product, the Act imposes specific minimum federal standards for warranties (15 U.S.C. § 2304 at (1994)). A consumer who prevails against the warrantor may elect repair, replacement, or refund of defective parts. 15 U.S.C. § 2301(10) (1994). If the product cannot be repaired after a reasonable number of attempts, the consumer may elect either a replacement or a refund. 15 U.S.C. § 2304(a)(4) (1994).³

The Act does not contain a statute of limitations. Where a federal statute creates a cause of action, but does not establish a limitations period for that action, state courts will apply the statute of limitations governing the state cause of action most closely analogous to the federal action. DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 158-60, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). Illinois courts are in agreement that the four-year statute in UCC section 2-725 applies to Magnuson-Moss claims. 810 ILCS 5/2-725 (West 2000); Lipinski v. Martin J. Kelly Oldsmobile, Inc., 325 Ill.App.3d 1139, 1149, 259 Ill.Dec. 586, 759 N.E.2d 66 (2001); Evans v. General Motors Corp., 314 Ill.App.3d 609, 614, 247 Ill.Dec. 363, 732 N.E.2d 79 (2000); Portwood v. Ford Motor Co., 292 Ill.App.3d 478, 481, 226 Ill.Dec. 486, 685 N.E.2d 941 (1997); Cosman, 285 Ill.App.3d at 255, 220 Ill.Dec. 790, 674 N.E.2d 61.

This case turns on whether and how we should apply the holding in Cosman. The Nowalskis say we are obligated by the principle of stare decisis to adhere to the holding in Cosman, the only Illinois case to consider the precise issue before us. Should we agree, we would decide their cause of action accrued when Ford breached its promise to repair, that is, when Ford failed to successfully repair the defects "after a reasonable number of attempts" or "within a reasonable time." That would be a fact issue for further proceedings. The plaintiffs agree the undertaking of but one repair effort cannot, alone, constitute a breach. Therefore, the time of breach could occur after a second failed effort, on October 5, 1998.

In Cosman, the plaintiffs filed suit under the Act in 1994 against the manufacturers of a motor home purchased in 1989. They alleged the manufacturers failed to repair the motor home after several unsuccessful attempts in 1990 and 1991. The motor home came with a warranty covering defects in the powertrain of the vehicle for six years or 60,000 miles after the delivery date. Other than its duration, the warranty contained nearly identical language to the warranty in this case, stating:

"Under the Limited Warranty * * * Ford warrants that your selling dealer will repair, replace, or adjust all parts (except tires) that are found to be defective in factory-supplied materials or workmanship. The defects must occur under normal use of the vehicle during the warranty coverage period." Cosman, 285 Ill.App.3d at 257, 220 Ill.Dec. 790, 674 N.E.2d 61.

The trial court dismissed the Magnuson-Moss counts with prejudice, finding the four-year statute under section 2-725 began to run on September 12, 1989, when the plaintiffs took delivery, and the action was not filed within that limitations period.

On appeal, this court reversed the trial court, holding the promise to repair was an independent obligation that was not breached until the seller failed to repair. 285 Ill.App.3d at 260-61, 220 Ill.Dec. 790, 674 N.E.2d 61. The plaintiffs argued that applying section 2-725(2) to find the cause of action accrued at the time of delivery of the vehicle would lead to an unfair result. It would render "the remaining years of manufacturer's warranties of more than four years illusory and unenforceable." Cosman, 285 Ill.App.3d at 255, 220 Ill.Dec. 790, 674 N.E.2d 61. Noting that the plaintiffs' warranty expired two years after the statute of limitations had run, the court focused on its problem with the trial court's disposition: "[T]he Cosmans are holding warranties that have not expired, but are unable to legally enforce them. There appears to be no Illinois decision that offers precise guidance." Cosman, 285 Ill.App.3d at 253, 220 Ill.Dec. 790, 674 N.E.2d 61.

Our case differs from Cosman. There, the warranty ran two years beyond the four-year statute of limitations in section 2-725(1). The Cosman court was faced with a...