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Mydlach v. DaimlerChrysler Corp.

September 20, 2007

LUCY MYDLACH, APPELLEE,
v.
DAIMLERCHRYSLER CORPORATION, APPELLANT.



JUSTICE FITZGERALD delivered the judgment of the court, with opinion.

Chief Justice Thomas and Justices Freeman, Kilbride, Garman, Karmeier, and Burke concurred in the judgment and opinion.

OPINION

Plaintiff, Lucy Mydlach, filed a three-count complaint in the circuit court of Cook County against defendant, DaimlerChrysler Corporation, alleging claims under the Magnuson-Moss Warranty--Federal Trade Commission Improvement Act (Magnuson-Moss Act or Act) (15 U.S.C. §2301 et seq. (1994)). The circuit court granted defendant's motion for summary judgment, holding that the claims were time-barred under the four-year statute of limitations contained in section 2--725 of the Uniform Commercial Code--Sales (UCC) (810 ILCS 5/2--725 (West 2006)). The appellate court affirmed in part and reversed in part. 364 Ill. App. 3d 135. For the reasons discussed below, we affirm in part and reverse in part the judgment of the appellate court and remand the matter to the circuit court for further proceedings.

BACKGROUND

On June 20, 1998, plaintiff purchased a used 1996 Dodge Neon, manufactured by defendant, from McGrath Buick-Nissan (McGrath) in Elgin, Illinois. The vehicle was originally put into service on June 24, 1996, with a three-year/36,000-mile limited warranty. The warranty provided, in relevant part, as follows:

"The 'Basic Warranty' begins on your vehicle's Warranty Start Date which is the earlier of (1) the date you take delivery of your new vehicle, OR (2) the date the vehicle was first put into service ***.

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.

The 'Basic Warranty' lasts for 36 months from the vehicle's Warranty Start Date OR for 36,000 miles on the odometer, whichever occurs first." (Emphasis in original.) At the time of plaintiff's purchase in 1998, the car's mileage was 26,296. Thus, the warranty had approximately one year or 10,000 miles remaining.

Beginning July 7, 1998, plaintiff brought the car to McGrath and another authorized dealership several times for a variety of problems, including a recurring fluid leak. Plaintiff claimed that the dealerships' repair attempts were unsuccessful and, as a result, she could not use the vehicle as intended. Plaintiff ultimately filed suit against defendant on May 16, 2001, seeking legal and equitable relief, as well as attorney fees and costs, under the Magnuson-Moss Act. Plaintiff alleged breach of written warranty (count I), breach of the implied warranty of merchantability (count II), and revocation of acceptance (count III).

The case initially proceeded to arbitration, where a decision was entered in favor of defendant. Plaintiff rejected the arbitrators' decision and the case was returned to the trial court. After further discovery, defendant filed a motion for summary judgment. Defendant argued that counts I and II of plaintiff's complaint were subject to the four-year statute of limitations found in section 2--725 of the UCC (810 ILCS 5/2--725 (West 2006)) and that, as provided by section 2--725(2), the statute of limitations commenced upon "tender of delivery" of the vehicle to its original purchaser in June 1996. Thus, according to defendant, plaintiff's suit, filed in May 2001, was outside the four-year limitations period. With respect to count III, defendant argued that plaintiff was not entitled to seek revocation of acceptance because no privity existed between plaintiff and defendant, and because plaintiff could not prove the underlying breach of implied warranty claim.

Plaintiff responded that her claims were not time-barred because the "tender of delivery" referenced in the UCC was the tender of delivery to her, and not to the original purchaser. Plaintiff also argued that a lack of privity is not a bar to a claim for revocation of acceptance against a manufacturer who is also a warrantor.

Relying on Nowalski v. Ford Motor Co., 335 Ill. App. 3d 625 (2002), the trial court agreed with defendant that plaintiff's claims were time-barred and granted defendant's motion for summary judgment on all three counts. The trial court denied plaintiff's motion for reconsideration, and plaintiff appealed.

The appellate court reversed the trial court's grant of summary judgment on counts I and III, and affirmed the grant of summary judgment on count II. As to the limitations issue, the appellate court followed Cosman v. Ford Motor Co., 285 Ill. App. 3d 250 (1996), rather than Nowalski, and held that:

"plaintiff's right to bring a breach of written warranty action based on the promise to repair accrued when defendant allegedly failed to successfully repair her car after a reasonable number of attempts and that the four-year statute of limitations did not begin to run until that time." 364 Ill. App. 3d at 146.

The appellate court also held that plaintiff could properly pursue revocation of acceptance as an equitable remedy under the Magnuson-Moss Act if her breach of warranty claim was successful. 364 Ill. App. 3d at 158.

We allowed defendant's petition for leave to appeal. See 210 Ill. 2d R. 315. Because plaintiff does not seek cross-relief as to count II of her complaint, the only counts before this court are counts I and

III. ANALYSIS

I.

The purpose of a summary judgment proceeding is not to try an issue of fact, but rather to determine whether one exists. Ferguson v. McKenzie, 202 Ill. 2d 304, 307-08 (2001). Summary judgment is thus appropriate "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2--1005(c) (West 2006). Because summary judgment is a drastic measure, it should only be allowed "when the right of the moving party is clear and free from doubt." Purtill v. Hess, 111 Ill. 2d 229, 240 (1986). In an appeal from the grant of summary judgment our review proceeds de novo. Morris v. Margulis, 197 Ill. 2d 28, 35 (2001). In assessing whether summary judgment was appropriate here, we must determine when the limitations period, applicable to a breach of warranty claim under the Magnuson-Moss Act, commences. On this legal issue our review also proceeds de novo. See Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325, 350 (2002).

II.

As an initial matter we address defendant's argument that the Magnuson-Moss Act does not apply to limited warranties like the one at issue here.

The Magnuson-Moss Act, adopted by Congress in 1975, is a "remedial statute designed to protect consumers from deceptive warranty practices." Skelton v. General Motors Corp., 660 F.2d 311, 313 (7th Cir. 1981). The Act does not require a consumer product to be warranted. See 15 U.S.C. §2302(b)(2) (1994) (prohibiting the Federal Trade Commission (FTC) from requiring "that a consumer product or any of its components be warranted"). Where a warranty is provided, however, the warranty is subject to the Act's regulatory scheme (Skelton, 660 F.2d at 314), including rules promulgated by the FTC (15 U.S.C. §2302(a) (1994); 16 C.F.R. §700.1 et seq. (2006)).

The Act speaks to both implied warranties and written warranties. An "implied warranty" means "an implied warranty arising under State law," as modified by the Act. 15 U.S.C. §2301(7) (1994). As already noted, plaintiff's implied warranty claim is not before this court.

The Act defines a "written warranty" as:

"(A) any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time, or (B) any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking." 15 U.S.C. §2301(6) (1994). The parties are in agreement that the warranty at issue here constitutes a "written warranty" for purposes of the Act. Case law on this subject is in accord. E.g., Cosman, 285 Ill. App. 3d at 253, 259-60 ("A warranty under the Magnuson-Moss Act includes promises to repair products in the future whose inherent reliability is not warranted" and includes six-year/60,000-mile repair or replacement warranty); Pierce v. Catalina Yachts, Inc., 2 P.3d 618, 626-27 (Alaska 2000) (concluding that one-year limited repair warranty "falls within the definition" of a written warranty under section 2301(6)(B) of the Act); Nationwide Insurance Co. v. General Motors Corp., 533 Pa. 423, 433, 625 A.2d 1172, 1177 (1993) (noting that 12-month/12,000-mile repair warranty "fit[s] within the modern concept of warranty," citing section 2301(6)(B) of the Act); see also C. Reitz, Manufacturers' Warranties of Consumer Goods, 75 Wash. U. L.Q. 357, 363 n.21 (1997) ("The Magnuson-Moss Warranty Act's key concept, called a 'written warranty,' is defined primarily as a promise to repair or replace goods," citing section 2301(6)(B) of the Act).

The Magnuson-Moss Act also distinguishes between "full" and "limited" warranties, and sets forth minimum standards for "full" warranties. 15 U.S.C. §2304 (1994). If a written warranty meets the federal minimum standards, "then it shall be conspicuously designated a 'full (statement of duration) warranty.' " 15 U.S.C. §2303(a)(1) (1994). If a warranty does not meet the federal minimum standards, "then it shall be conspicuously designated a 'limited warranty.' " 15 U.S.C. §2303(a)(2) (1994). The parties agree that the warranty at issue here is a "limited" warranty, as opposed to a ...


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