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Mydlach v. DaimlerChrysler Corporation

September 30, 2005

LUCY MYDLACH, PLAINTIFF-APPELLANT,
v.
DAIMLERCHRYSLER CORPORATION, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County Honorable P. Scott Neville, Judge Presiding.

The opinion of the court was delivered by: Justice O'mara Frossard

MODIFIED UPON DENIAL OF PETITION FOR REHEARING March 31, 2006

Plaintiff Lucy Mydlach brought this action against defendant DaimlerChrysler Corporation under the Magnuson-Moss Warranty--Federal Trade Commission Improvement Act (Act or Magnuson-Moss Act) (15 U.S.C. * 2301 et seq. (2000)) after she purchased a used car manufactured by defendant which was allegedly defective. Plaintiff=s three-count complaint alleged breach of written warranty (count I), breach of implied warranty of merchantability (count II), and revocation of acceptance (count III). Defendant filed a motion for summary judgment, contending that plaintiff=s claims were barred by the four-year statute of limitations included in section 2-725 of the Uniform Commercial Code--Sales (Code or UCC) (810 ILCS 5/2-725 (West 2000)). The trial court granted defendant=s motion, and plaintiff now appeals, contending the trial court erred in finding that her claims were time barred. She further contends that the trial court should have recognized her claim for revocation of acceptance because the Act permits consumers to recover equitable relief.

In a previously filed opinion, we affirmed the trial court's entry of summary judgment on count II and reversed its entry of summary judgment on counts I and III. Mydlach v. DaimlerChrysler Corp., No. 1-03-1402 (September 30, 2005). In a petition for rehearing, defendant contends that the trial court properly entered summary judgment on counts I and III and argues that the Magnuson-Moss Act does not apply to the limited warranty at issue in the instant case. Upon consideration of defendant's petition for rehearing, we conclude that our previous decision reversing the trial court's entry of summary judgment on counts I and III was proper.

BACKGROUND

On June 20, 1998, plaintiff bought a used 1996 Dodge Neon, manufactured by defendant, from McGrath Buick Nissan (McGrath) in Elgin, Illinois. The car was put in service to its original buyer on June 24, 1996. At that time, the car carried a 3-year/36,000-mile warranty. When plaintiff bought the car on June 20, 1998, about one year or 10,000 miles remained on the warranty.

Within approximately 17 days of buying the car, plaintiff tendered it to an authorized dealer of defendant for repairs. On July 7, 1998, she brought in the car complaining of a squealing noise in the brakes. On July 15, 1998, she brought in the car for a fluid leak. On July 24, 1998, repairs were performed for a transmission leak, a creaking noise while shifting, failure of the transaxle, and failure of the engine mounts. On July 31, 1998, the car was repaired for a leak and the failure of the drive shaft. On August 6, 1998, repairs were performed for the same problems. Finally, on August 21, 1998, the car was repaired for a rattle in the front end due to a defective tire. At the time of this repair, the car=s mileage was 31,103 miles.

On May 16, 2001, plaintiff filed her three-count complaint against defendant. In count I plaintiff alleged breach of written warranty based upon the limited written warranty provided by defendant. The warranty states in relevant part:

AWHAT=S COVERED

*** The >Basic Warranty= covers the cost of all parts and labor needed to repair any item on your vehicle (except as noted below) that=s defective in material, workmanship or factory preparation. You pay nothing for these repairs. The >Basic Warranty= covers every Chrysler supplied part of your vehicle, EXCEPT its tires and cellular telephone. *** These warranty repairs or adjustments (parts and labor) will be made by your dealer at no charge using new or remanufactured parts.*

Plaintiff alleged that as a result of ineffective repair attempts by defendant, she could not use the car as she had intended. Specifically, plaintiff alleged that defendant failed to properly diagnose a fluid leak despite seven repair attempts and alleged she was entitled to seek relief under section 2310(d)(1) of the Magnuson-Moss Act (15 U.S.C. * 2310(d)(1) (2000)).

In count II, plaintiff alleged that her car Awas subject to an implied warranty of merchantability as defined in [section 2301(7) of the Act (15 U.S.C. * 2301(7) (2000))] running from [defendant] to the intended consumer, plaintiff.* Plaintiff alleged that defendant breached this warranty as the defect in her car rendered it Aunmerchantable and thereby not fit for the ordinary and essential purpose for which [it] was intended and as represented by [defendant].*

In count III, which is styled ARevocation of Acceptance Pursuant to Section 2310(d) of the [Act] Manufacturer,* plaintiff alleged that defendant=s tender of her car Aconstitutes a violation of 15 U.S.C. * 2310(d).*

Defendant filed a motion for summary judgment, seeking dismissal of all three counts. In the motion, defendant contended that the express and implied warranty claims were subject to the four-year statute of limitations included in section 2-725 of the UCC (810 ILCS 5/2-725 (West 2000)), that the statute had begun running upon purchase by the original buyer on June 24, 1996, and that counts I and II of plaintiff=s May 2001 complaint were thus time barred. Defendant further contended the claim for revocation in count III should be dismissed because no privity existed between defendant and plaintiff and because plaintiff could not prove a breach of implied warranty of merchantability.

The trial court granted defendant=s motion for summary judgment, finding that plaintiff=s complaint was untimely, and denied plaintiff=s motion for reconsideration.

ANALYSIS

Summary judgment is appropriate where the pleadings, depositions, affidavits, and admissions on file, when viewed in the light most favorable to the nonmoving party, show that no genuine issue of material fact exists and that 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 (1999). Our review of a grant of summary judgment is de novo. Morris v. Margulis, 197 Ill. 2d 28, 35 (2001). We may affirm on any ground supported by the record, even if that ground was not relied on by the trial court. Valenti v. Mitsubishi Motor Sales of America, Inc., 332 Ill. App. 3d 969, 971 (2002), citing Leonardi v. Loyola University of Chicago, 168 Ill. 2d 83, 97 (1995).

The Magnuson-Moss Act was designed Ato 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). AAlthough the Act does not require any consumer product to be warranted [citation], if a manufacturer or supplier chooses to warrant a product, the Act imposes specific minimum federal standards for warranties [citation].* Nowalski v. Ford Motor Co., 335 Ill. App. 3d 625, 628 (2002). The Magnuson-Moss Act Aprovides a statutory private right of action to consumers who are >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.= * Borowiec v. Gateway 2000, Inc., 209 Ill. 2d 376, 386 (2004), quoting 15 U.S.C. * 2310(d)(1) (1994). AA consumer who prevails [under the Act] may elect repair, replacement, or refund of defective parts.* Cosman v. Ford Motor Co., 285 Ill. App. 3d 250, 255 (1996), citing 15 U.S.C. * 2301(10) (1994).

I. Breach of Written Warranty (Count I)

Plaintiff contends that the trial court improperly dismissed her breach of express warranty claim based on its conclusion that it was barred by the statute of limitations. Count I of plaintiff=s complaint seeks relief pursuant to section 2310(d)(1) of the Act (15 U.S.C. * 2310(d)(1) (2000)) and alleges that defendant issued a written warranty promising to repair defects in plaintiff=s car and that it breached that warranty by failing to repair defects in plaintiff=s car despite various attempts to do so.

We note as a preliminary matter that plaintiff filed all three of the counts in her complaint under the Act, a federal statute which does not provide a statute of limitations. See Nowalski, 335 Ill. App. 3d at 626, 628. AWhere 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.* Nowalski, 335 Ill. App. 3d at 628, citing DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 158-60, 76 L. Ed. 2d 476, 485-87, 103 S. Ct. 2281, 2287-89 (1983). The Illinois action most analogous to plaintiff=s warranty claims is an action for breach of warranty in a contract for sale. Cosman, 285 Ill. App. 3d at 255. This state law action is subject to the four-year statute of limitations included in section 2-725 of the UCC (810 ILCS 5/2-725 (West 2000)), and accordingly we conclude, and the parties agree, that this statute of limitations is applicable in the instant case. Cosman, 285 Ill. App. 3d at 255; Nowalski, 335 Ill. App. 3d at 626, 628.

Section 2-725 of the UCC states in relevant part:

AStatute 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.* (Emphasis added.) 810 ILCS 5/2-725 (West 2000).

While the parties agree that plaintiff was required under section 2-725 of the UCC to file her claim for breach of express warranty within four years after her cause of action accrued, they disagree about when that cause of action accrued. Plaintiff contends the four-year statute of limitations in section 2-725(1) of the UCC began running on June 20, 1998, when the used 1996 Dodge Neon was delivered to her, and that the trial court thus erred in finding that her complaint, filed in 2001, was untimely. Defendant responds that the statute of limitations began running on June 24, 1996, when the car was delivered to its first buyer, and that plaintiff=s complaint was thus time barred.

We note that the written warranty at issue in the instant case is essentially a promise to repair defects in plaintiff=s car. The question in the instant case is when did plaintiff=s cause of action for breach of express warranty to repair accrue (i.e., when did breach of that warranty allegedly occur) and in turn trigger the running of the statute of limitations. This court has previously addressed this question and arrived at two distinct conclusions. See Cosman, 285 Ill. App. 3d 250; Nowalski, 335 Ill. App. 3d 625.

In Cosman, the plaintiffs purchased a motor home in 1989 and in 1994 filed a complaint under the Act for breach of express and implied warranties against the manufactures of that vehicle. Cosman, 285 Ill. App. 3d at 253. The vehicle came with a limited express warranty provided by manufacturer Ford which covered defects in its powertrain for six years or 60,000 miles after the delivery date. Cosman, 285 Ill. App. 3d at 257. The warranty stated as follows:

A >Under the Limited Warranty *** Ford warrants that your selling dealer will repair, replace, or adjust all parts (expect [sic] 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.

The trial court dismissed the counts for breach of express and implied warranties, ruling that they were barred by the four-year statute of limitations included in section 2-725 of the UCC (810 ILCS 5/2-725 (West 1994)). Cosman, 285 Ill. App. 3d at 254. The trial court found that the statute of limitations began to run on September 12, 1989, when the plaintiffs took delivery of the vehicle, and that plaintiffs= 1994 complaint was thus not timely filed. Cosman, 285 Ill. App. 3d at 254.

On appeal, this court reversed the trial court=s dismissal of the plaintiffs= express warranty claim against manufacturer Ford. Cosman, 285 Ill. App. 3d at 261. The court found that the four-year statute of limitations included in subsection (1) of section 2-725 of the UCC began to run on the express warranty claim not on the date the plaintiffs took delivery of the vehicle, but when ...


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