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Mangold v. Nissan North America

April 30, 2004

CHRISTOPHER MANGOLD AND ERYNN MANGOLD, PLAINTIFFS-APPELLEES,
v.
NISSAN NORTH AMERICA, INC., DEFENDANT-APPELLANT.



Appeal from the Circuit Court of the 12th Judicial Circuit, Will County, Illinois No. 01-LM-2572. Honorable Paula Gomora, Judge Presiding.

The opinion of the court was delivered by: Justice Lytton

Plaintiffs, Christopher and Erynn Mangold, brought suit against Nissan North America (Nissan) pursuant to the Magnuson-Moss Warranty Act (15 U.S.C. section 2301 et seq.) (Act). The complaint alleged that Nissan failed to uphold provisions of its warranties on a vehicle purchased by a financial services company and leased to plaintiffs. Nissan filed a motion to dismiss, contending that leases do not fall under the protection of the Magnuson-Moss Warranty Act.

The circuit court of Will County denied Nissan's motion. The court then granted Nissan's petition for interlocutory appeal under Supreme Court Rule 308. We are asked to determine whether automobile lessees may enforce warranties under the Magnuson-Moss Warranty Act. We answer the certified question in the affirmative and remand. Plaintiffs leased a new 2001 Infiniti I30 at Infiniti of Orland Park.

The dealer sold the vehicle to Debis Financial Services, Inc., which leased it to plaintiffs. Nissan supplied a written warranty that covered the vehicle against factory defects for four years or 60,000 miles. The warranty was issued to Debis; as part of the lease transaction, Debis assigned its rights under the written warranty to plaintiffs. Plaintiffs assert that without the rights under the written warranty, they would not have entered into the lease.

Almost immediately after plaintiffs leased the car, they began to notice excessive wind noise and brought the vehicle back to the dealership. As a result, repairs were performed; the repair work was covered by the manufacturer's written warranty. After several unsuccessful attempts to repair the wind noise, plaintiffs filed a complaint against Nissan in Cook County. They alleged that Nissan breached its written warranty and an implied warranty of merchantability, and thus they were entitled to revoke their acceptance of the car. All counts were pled under the Magnuson-Moss Warranty Act. The matter was transferred to Will County on forum non-conveniens grounds. Nissan filed a motion to dismiss, claiming that the Act provides protection only when an alleged breach of warranty occurs in connection with the sale of a consumer product and does not apply to leases. The trial court denied the motion and Nissan appealed pursuant to Supreme Court Rule 308. The court certified the following question to us: "whether a lessee of an automobile may maintain a cause of action for breach of warranty under the Magnuson-Moss Warranty Act."

I.

Defendants argue that the Act requires that a "sale" be made to a "consumer," and as lessees, plaintiffs are neither purchasers nor consumers.

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 Act defines "consumer" as:

[1] a buyer (other than for purposes of resale) of any consumer product,

[2] any person to whom such product is transferred during the duration of an implied or written warranty (or service contract) applicable to the product, and

[3] any other person who is entitled by the terms of such warranty (or service contract) or under applicable State law to enforce against the warrantor (or service contractor) the obligations of the warranty (or service contract). 15 U.S.C. § 2301(3) (2000).

a.

A person need only meet one of the three criteria to qualify as a consumer. Dekelaita v. Nissan Motor Corporation in USA, 343 Ill. App. 3d 801, 807 (2003). Plaintiffs claim that they are consumers under both the second and third prongs of the Act. The second prong defines a consumer as any person to whom a product is transferred during a warranty's duration. The majority of courts have held that the lessees do not qualify as transferees, citing the Uniform Commercial Code's definition of transfer, which includes the "passing of title." See, for example, DiCintio v. ...


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