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[W] Tammi v. Porsche Cars North America

July 14, 2008; withdrawn July 16, 2008

BRUCE A. TAMMI, PLAINTIFF-APPELLEE,
v.
PORSCHE CARS NORTH AMERICA, INC., DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Eastern District of Wisconsin. No. 04 C 1059-Charles N. Clevert, Jr., Judge.

The opinion of the court was delivered by: Manion, Circuit Judge.

ARGUED JANUARY 8, 2008

Before FLAUM, RIPPLE, and MANION, Circuit Judges.

Bruce Tammi filed suit against Porsche Cars North America, Inc. ("Porsche") in Wisconsin state court seeking damages for violations of the Wisconsin Lemon Law ("Lemon Law"), Wisconsin Statute Section 218.0171, involving the 2003 Porsche 911 Turbo he leased from US Bank. Porsche removed the case to federal court on the basis of diversity jurisdiction where the case proceeded to a jury trial. The jury entered a verdict in favor of Tammi and awarded him $26,600.00 in damages. The parties filed post-trial motions. The district court denied Porsche's motion for judgment notwithstanding the verdict and granted Tammi's motion to alter the verdict on damages awarding Tammi $266,159.76. Porsche appeals. We affirm the jury's verdict on the sufficiency of the evidence. However, because Wisconsin law does not provide sufficient guidance on the important issue of pecuniary loss under its Lemon Law, we stay the remand of this appeal and certify four questions to the Wisconsin Supreme Court, pursuant to Circuit Rule 52 and Wisconsin Statute § 821.01.

I.

On May 30, 2003, Bruce Tammi, a member of the Porsche Club of America, leased a 2003 Porsche 911 Turbo. Tammi's lease through US Bank was for a 36-month term and required an initial payment of $1,999.85 and 35 monthly payments of $1,912.35 (for a total amount of lease payments of $68,844.50). The lease provided a purchase option at the end of the lease for $64,344.10 plus taxes, and it imposed a $395.00 termination fee if the lessee elected not to purchase the vehicle.

Tammi testified at trial that he leased the vehicle for use in competitive car club events as well as for his work commute, which consisted primarily of highway driving. The car Tammi leased was equipped with a rear spoiler that was designed to deploy automatically when the vehicle exceeded 75 m.p.h. in order to provide aerodynamic stability to the car. The spoiler was designed to retract automatically at 40 m.p.h. While he did not experience any problems with the spoiler when participating in auto-cross competitions, Tammi testified that on occasion when he drove the car on the highway between 55 m.p.h. and 70 m.p.h., the spoiler failed. Specifically, the spoiler would deploy, but would not retract. In addition, Tammi explained that when the spoiler failed, it prompted an audible chime to ring intermittently, a red warning light to illuminate, and a red warning message image to display in the center instrument cluster. Tammi stated that while he was able to temporarily stop the warning lights and sounds by stopping the vehicle, upon restarting the vehicle and returning to the highway, the warning would reappear and sound approximately every five minutes. Tammi found the warning light and the chimes startling and distracting. Tammi also complained that the car radio volume would blast upon start-up and then resume a normal volume after a few minutes. Tammi's wife also testified at trial that when she was driving the car no more than 65 m.p.h., the rear spoiler system failed causing her to pull off the highway, turn off the car, and call for assistance because she was unsure whether the car was safe to drive. Moreover, Tammi's wife stated that the warning lights and sounds continued after she restarted the car.

Tammi first took the car to Concours Service Inc. ("Concours"), a certified Porsche service provider, on March 2, 2004, noting that the rear spoiler failed to automatically retract and the radio volume was very loud when the car was first started. Between March 2004 and August 13, 2004, Tammi took the car to Concours, Zimbrick European of Madison, and International Autos at least eight times for service on the spoiler because of recurring failures without receiving a successful repair. Evidence of these service visits was presented at trial. At oral argument before this court, Porsche's attorney conceded that Tammi had taken his car in for repairs at least four times. Tammi again experienced another spoiler failure after the August 13, 2004, service visit at Zimbrick.

On September 7, 2004, Tammi submitted to Porsche the required notice under the Wisconsin Lemon Law, Wisconsin Statute Section 218.0171. In that notice, Tammi indicated that his vehicle had been "made available for repair at least 4 times for the same defect during its first year of warranty," and demanded "[a] refund calculated in accordance with the Lemon Law, plus collateral costs." Tammi also listed the date, dealership, and problems reported for each service visit and indicated that the vehicle was leased from US Bank. Porsche responded with a letter dated October 6, 2004, rejecting Tammi's Lemon Law notice stating that it was its understanding that Tammi's vehicle had been repaired.

A little over a week later on October 14, 2004, Tammi filed a complaint in Wisconsin state court alleging a violation by Porsche of the Wisconsin Lemon Law, Wisc. Stat. § 218.0171. Porsche removed the case to federal court, with the court having diversity jurisdiction over the case because Tammi was a citizen of Wisconsin, Porsche is a Delaware corporation with its principal place of business in Georgia, and the amount in controversy exceeded $75,000.

During the course of the lease, Tammi paid the $1,999.85 initial payment followed by 29 monthly payments of $1,912.35 (for a total of $55,458.15), some of which were paid after Tammi filed suit. As the litigation continued and before his lease expired, Tammi purchased the car in December 2005 with a final payment of $75,621.88, despite the problems that persisted with the rear spoiler.*fn1 Essentially, Tammi bought a vehicle that he claimed was a lemon.

In August 2006, the case proceeded to a jury trial. Before the case was submitted to the jury, the district court held two hearings with Tammi, an attorney who was proceeding pro se, and Porsche's counsel, Jeffrey Fertl. During the course of these hearings, the parties argued about the proper scope of damages in this case. Tammi stated that he was seeking recovery of his lease payments ($57,458.00), the amount he paid for the purchase of the car under the buy-out option of the lease ($75,621.88), insurance ($2,457.85), winter tires ($2,044.11) and floor mats and an auto manual ($788.71), for a total of $138,370.55. In addition, Tammi sought to retain ownership of the car. Porsche asserted that the lease payments Tammi made were proper subjects of damage, but that the other items were not related to the vehicle repairs. The district court concluded that it was going to allow Tammi "to seek damages for the insurance and the like and reconsider after whatever verdict is returned." The parties stipulated that the mileage of the car as of the first service date was 6,576 miles.

The parties also discussed jury instructions and questions in the presence of the district court judge. The judge handed the parties a set of proposed instructions and interrogatories, which they reviewed at that time. The first proposed jury question read: "During the first year after delivery of his 2003 Porsche, did the plaintiff have a nonconformity covered by the manufacturer's expressed warranty which substantially impaired the use, value or safety of his vehicle?" When the district court inquired of the parties regarding the acceptability of this question, Porsche's counsel responded that his only objection would be to the inclusion of all three terms ("use, value, or safety"), because he did not think the evidence supported the inclusion of all of these. Porsche continued, "[I]f the Court rules that there is sufficient evidence to submit use, value or safety to the jury, then the question is acceptable. I want to make certain for the record that I reserved or haven't waived my right to challenge the insufficiency of the evidence for any three of those." This first question remained unchanged, and the parties approved the remainder of the questions and instructions after additional discussion.

The case was submitted to the jury, which received instructions including instructions on the definition of nonconformity, the necessity for four repair attempts, and a general damages instruction. The jury returned a verdict in favor of Tammi concluding that the vehicle Tammi leased had a "nonconformity covered by the manufacturer's express warranty which substantially impaired the use, value or safety of his vehicle," and that Tammi had provided Porsche with at least four attempts to repair the nonconformity, which continued. The jury also awarded Tammi $26,600.00 for pecuniary loss resulting from the nonconformity.

In his post-trial motion, Tammi argued that rather than the general damages instruction it received, the jury should have received a specific Lemon Law damages instruction. Porsche, in turn, filed a motion for judgment notwithstanding the verdict. The district court denied Porsche's motion, but granted Tammi's motion holding that as a matter of law Tammi was entitled to $266,159.76. Specifically, the district court concluded that Tammi was entitled to the $57,458.00 he paid in lease payments and the $75,621.88 purchase price he paid for the vehicle. The district court then doubled the sum of those two amounts as provided by Wisconsin Statute Section 218.0171(7) which provides for pecuniary loss to be doubled. The district court also concluded that Tammi was not entitled to the cost of the floor mats, winter tires, or insurance. Finally, the district court concluded that subsection 7 of the Lemon Law requires neither a reduction in pecuniary loss for use of the vehicle nor a return of the vehicle. Thus, the district court awarded Tammi $266,159.76 and retention of the car.

Porsche appeals, asserting that there was insufficient evidence for the jury to conclude that the vehicle had a nonconformity and that it violated the Lemon Law. In the alternative, Porsche requests a new trial on the issue of liability because it claims it was prejudiced when the district court submitted to the jury a question regarding substantial impairment of use, value or safety when there was no credible evidence to establish all three items and the verdict was against the ...


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