Appeal from the Circuit Court of Cook County. No. 02 M1 102302 Honorable John G. Laurie, Judge Presiding.
The opinion of the court was delivered by: Justice Gordon
Martin and Akhshirash Dekelaita (plaintiffs or lessees) appeal from the circuit court of Cook County dismissing their three-count action under the Magnuson-Moss Warranty Federal Trade Improvement Act (the Act) (15 U.S.C. §2301 et seq. (2000)), set forth below, concerning a defective vehicle. Plaintiffs contend that they have successfully stated a claim even though they are lessees, not purchasers, of the defective automobile. For the reasons below, we reverse.
In February 2000, plaintiffs leased a 2000 Nissan Maxima from a local Nissan dealership. The dealership, Fergus Nissan (Fergus), then assigned its interest in the lease and sold the car to Nissan Motor Acceptance Corporation (NMAC). NMAC purchased the car from Fergus in order to lease it to plaintiffs.
In connection with that sale, defendant Nissan Motor Company (defendant or Nissan) issued to NMAC a written warranty that covered the car for 3 years or 36,000 miles. Plaintiffs averred that NMAC would have not purchased the car, nor would plaintiffs have leased it, without this warranty. NMAC assigned its rights in defendant's written warranty to plaintiffs. NMAC thus is not a party to this action.
The lease between NMAC and plaintiffs restricted plaintiffs from a number of activities. Among other things, the lease forbade plaintiffs from using the vehicle to transport goods for hire; it forbade plaintiffs from altering or installing equipment and required plaintiffs to restore the vehicle to its original condition; it forbade plaintiffs from removing the vehicle from the contiguous states without consent. It also noted that plaintiffs had no right to assign, transfer or sublease any of their rights under the lease.
In addition to those restrictions, the lease contained an option to purchase the vehicle from the "originating dealer" or other specified location. That option provided that plaintiffs could purchase the vehicle prior to or at the end of the lease. If plaintiffs chose to exercise that right at the end of the lease, they would have paid $17,168.40 in monthly payments and would pay $17,059.20, the residual value of the vehicle. Plaintiffs also paid an "up-front sales tax" and all title, license, and registration fees. They were responsible for obtaining insurance coverage for comprehensive, collision, property damage, and bodily injury.
Shortly after they took possession, plaintiffs began to experience problems with the engine (failing to start, running rough, and intermittent illumination of the check-engine light) and the brakes. Pursuant to the warranty, on numerous occasions, plaintiffs tendered the car to defendant's authorized dealerships for repair, and the dealerships serviced the car. Despite these efforts, however, defendant ultimately did not repair the car.
Because of defendant's failure to repair the car and because of its subsequent refusal to revoke acceptance of the car, plaintiffs sought redress. Under the Act, plaintiffs alleged breach of written warranty and breach of implied warranty, and they sought revocation of acceptance. The trial court dismissed the action pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 2000)), determining that by its plain language, the Act governs only when a vehicle is sold, not when it is leased. Plaintiffs appeal. Further facts are set forth as necessary.
As noted above, this case is before us on a section 2-619 motion to dismiss. Such a motion presents only a question of law, and an appeal taken from a motion to dismiss is reviewed de novo. Intergovernmental Risk Management v. O'Donnell, Wicklund, Pigozzi & Peterson Architects, Inc., 295 Ill. App. 3d 784, 790, 692 N.E.2d 739, 742 (1998). All well-pleaded facts are accepted as true and viewed in the light most favorable to the plaintiff. Bartow v. Ford Motor Co., __ Ill. App. 3d ___, ___, 794 N.E.2d 1027, 1030 (2003). "[T]he appellate court must consider whether the existence of a material fact should have precluded the dismissal or, absent such an issue of fact, whether dismissal was proper as a matter of law." Intergovernmental, 295 Ill. App. 3d at 790, 692 N.E.2d at 742.
Very generally, the Act was designed to enhance the enforceability of various warranties. In its own words, the statute is designed to "improve the adequacy of information available to consumers, prevent deception, and improve competition in the marketing of consumer products." 15 U.S.C. §2302(a) (2000). It requires that any written warranty be "fully and conspicuously" disclosed in "simple and readily understood language." 15 U.S.C. §2302(a) (2000).
More specifically, the Act permits "a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract" to sue the warrantor for damages; elect repair, replacement, or refund of defective parts; and collect attorney fees. 15 U.S.C. §2310(d)(1)(d)(2) (2000).
The crux of this appeal turns on statutory interpretation of various portions of the Act. Three particular issues arise: (1) whether lessees are "consumers" under either of the three definitions in the Act; (2) given that the definition of "written warranty" states that the warranty must be issued "in connection with the sale" of the consumer product, whether lessees effectively must obtain transfer of title or, alternately, whether that language can apply to the sale between Fergus, the dealership, and the lessor, NMAC; and (3) whether lessees have stated ...