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Clemons v. Nissan North America, Inc.

Court of Appeal of Illinois, Fourth District

October 11, 2013

Latesha CLEMONS, Plaintiff-Appellant,
v.
NISSAN NORTH AMERICA, INC., Defendant-Appellee.

Page 308

[Copyrighted Material Omitted]

Page 309

Larry P. Smith (argued) and David Marco, both of Smith Marco, P.C., of Chicago, for appellant.

Bruce S. Terlep (argued) and Amy R. Miller, both of Swanson, Martin & Bell, LLP, of Lisle, for appellee.

OPINION

KNECHT Justice.

[375 Ill.Dec. 306] ¶ 1 In June 2009, plaintiff, Latesha Clemons, filed a complaint against defendant, Nissan North America, Inc. (Nissan), alleging breach of written warranty pursuant to the Magnuson-Moss Warranty— Federal Trade Commission Improvement Act (Act) (15 U.S.C. §§ 2301 to 2312 (2006)) (count I) and breach of implied warranty (count II). Nissan is an automobile manufacturer. In June 2012, Nissan filed a motion to dismiss pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/ 2-619 (West 2010)), alleging the dealer which sold the vehicle [375 Ill.Dec. 307]

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disclaimed the warranties through an " as is" clause. In July 2012, the trial court granted Nissan's motion to dismiss.

¶ 2 Plaintiff appeals, arguing the trial court erred in granting Nissan's motion to dismiss because the manufacturer's warranty had not been disclaimed. We reverse and remand.

¶ 3 I. BACKGROUND

¶ 4 On July 24, 2008, plaintiff purchased a used 2007 Nissan Pathfinder with 12,800 miles for $27,690 from New York Auto Sales, Inc. (New York Auto), an automobile dealership in Aurora, Illinois. Plaintiff began experiencing mechanical problems with the Pathfinder's fuel and exhaust systems and she took it to two Nissan dealerships in the St. Louis, Missouri, metropolitan area for repairs.

¶ 5 In June 2009, plaintiff filed a complaint pursuant to the Act (see 15 U.S.C. § 2310 (2006)) alleging breach of written warranty and breach of implied warranty, seeking damages for the diminution of the Pathfinder's value and attorney fees. Plaintiff filed her complaint in the Cook County circuit court. According to plaintiff, at the time of purchase defendant " issued and supplied to [plaintiff] its written warranty, which included three (3) year or thirty-six thousand (36,000) mile bumper to bumper coverage, as well as other warranties fully outlined in the Warrantor's New Vehicle Warranty booklet." Plaintiff did not attach a copy of the warranty booklet to her complaint.

¶ 6 In August 2009, Nissan filed a motion to transfer venue arguing it maintained an office in Springfield, Illinois, and venue was proper in Sangamon County. In December 2009, the Cook County circuit court transferred the case to the Sangamon County circuit court.

¶ 7 A. Discovery

¶ 8 In March 2010, the parties exchanged various discovery responses. Nissan admitted it issued a " limited written warranty" for the Pathfinder. Plaintiff submitted several sales documents in response to defendant's request to produce. She submitted two " Buyers Guide" window forms from New York Auto. The first guide (see Appendix A) is the required window form (see 16 C.F.R. § 455.2 (2012)) and contains two large headings reading " AS IS-No Warranty" and " Warranty." The box next to " Warranty" is checked. Below the " Warranty" heading, the document is marked " Limited Warranty." It states the warranty covers 50% of the costs to repair the vehicle's transmission and engine and is for one month or 1,000 miles from the date of purchase, whichever comes first. The second attached " Buyers Guide" is in a different format with New York Auto's name at the top and restates the vehicle is covered by a limited warranty as described in the first guide. This guide is signed and dated. Plaintiff attached a document appearing to be the sales contract. It is signed in plaintiff's name and contains information about her trade-in vehicle, the Pathfinder, financing, and the unpaid balance. The document contains six dark, boxed areas where we cannot read the text.

¶ 9 Plaintiff attached seven invoices for repairs: (1) The invoice dated August 12, 2008, shows the Pathfinder had 14,389 miles and a defective exhaust shield clamp was replaced. (2) The invoice dated October 30, 2008, shows the Pathfinder had 18,117 miles and a fuel pump was replaced. (3) The invoice dated December 16, 2008, shows the Pathfinder had 21,280 miles. It stated the mechanic took the vehicle for a test drive and it died and the fuel pressure dropped to zero. The fuel pump was replaced. (4) The invoice dated December [375 Ill.Dec. 308]

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29, 2008, shows the Pathfinder had 21,780 miles and the voltage at the fuel pump was 9.45 volts rather than 12 volts. The battery was charged. (5) The invoice dated February 4, 2009, shows the Pathfinder had 23,289 miles and the crash zone sensor was replaced. (6) The invoice dated February 12, 2009, shows the Pathfinder had 23,761 miles and a failed air fuel sensor was replaced. (7) The invoice dated July 17, 2009, shows the Pathfinder had 30,284 miles and a defective secondary timing chain and tensioner was replaced. The February 2009 invoices were from Suntrup Automotive Group in St. Louis, Missouri, and the other five invoices were from Auffenberg Nissan in O'Fallon, Illinois.

¶ 10 In December 2010, Nissan filed an answer. Nissan admitted it supplies a " written, limited warranty" at the time of distribution of a new Nissan motor vehicle. Nissan denied New York Auto was an authorized Nissan dealer. Nissan asserted three affirmative defenses, namely (1) damages should be reduced by the diminished value of plaintiff's use; (2) the alleged nonconformity, defect, or condition was rectified and repaired; and (3) damages are limited by the written, limited warranty issued by Nissan.

¶ 11 On February 22, 2011, plaintiff disclosed her expert witness's identity and proposed testimony. See Ill. S.Ct. R. 213(f) (eff. Jan. 1, 2007). The expert was expected to testify the Pathfinder had diminished in value by $4,085. The expert's 20-page vehicle diagnostic report was attached. The report stated the Pathfinder was experiencing emissions and fuel delivery issues " directly related" to the oxygen and fuel ratio sensors, and because the sensors are not sending correct data the vehicle's computer system " becomes confused as to how much fuel to deliver to the engine system, thus making the vehicle stall at times."

¶ 12 B. Nissan's Motion To Dismiss

¶ 13 On June 19, 2012, Nissan filed a motion to dismiss pursuant to section 2-619 of the Code. The motion stated " [a]lthough Plaintiff attached only the retail installment contract to the Complaint, and has not produced the sales contract relative to the subject vehicle, [Nissan] has recently obtained a copy of the sales contract, which is attached hereto as Exhibit 2, and learned that the vehicle was actually sold to Plaintiff ‘ as is,’ with no warranty." Nissan argued plaintiff " was informed, in bold language that New York Auto Sales was selling the vehicle with no express warranty and no implied warranty of merchantability. * * * Given that the vehicle was sold ‘ as is,’ with no warranty at all as to mechanical condition, Plaintiff cannot meet her burden to prove the existence of, and her compliance with, the terms and conditions of a warranty given to her by the Defendant at the time of sale."

¶ 14 Nissan did not attach an affidavit in support of its motion. It did attach a document from New York Auto dated July 24, 2008. The document does not contain a title but lists plaintiff's personal information, trade-in vehicle, purchase vehicle, and lists the price and balanced owed. (It appears to be the same sales document plaintiff provided in March 2010 but without the darkened areas.) The document states, in bold print, " [T]his vehicle is SOLD AS IS with no warranty as to mechanical condition." The document is unsigned.

¶ 15 C. The Hearing and the Trial Court's Order

¶ 16 On June 29, 2012, the trial court held a hearing on Nissan's motion to dismiss. Nissan asserted it had been provided the document from New York Auto on June 13, 2012, and accused plaintiff of failing to disclose this document during discovery although dealer documents were [375 Ill.Dec. 309]

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requested. Plaintiff responded she had disclosed the document and presented a signed version of the document to the court. The trial court asked if plaintiff could offer proof she had disclosed the document. She could not. The court asked if plaintiff signed the sales contract, and she admitted she had.

¶ 17 Nissan argued the Pathfinder was sold " as is" by New York Auto, and the manufacturer's warranty could not be part of the basis of the bargain. Nissan contended New York Auto had the right to extinguish any preexisting warranty rights and it did so. By selling the vehicle " as is" New York Auto " effectively eviscerated any subsequent legal obligation or responsibility" Nissan had.

¶ 18 Plaintiff responded Nissan's motion was " dilatory" and tantamount to filing a motion to continue as it had been filed mere days before trial. On the merits, plaintiff distinguished Nissan's provided authority on the basis New York Auto was not affiliated with Nissan, was not its agent, and had no authority to disclaim the warranty. Plaintiff informed the trial court Nissan's expert testified at his deposition repairs were carried out on the Pathfinder under Nissan's warranty.

¶ 19 On July 2, 2012, the trial court issued a written order. The court cited Mitsch v. General Motors Corp., 359 Ill.App.3d 99, 105, 295 Ill.Dec. 730, 833 N.E.2d 936, 940 (2005), for the proposition the Uniform Commercial Code requires a " conspicuous" disclaimer for such to be effective. The order, in relevant part, stated:

" In the instant case, the defendant properly disclaimed both the express and implied warranties. The Plaintiff signed a sales contract disclaiming the vehicle was sold, ‘ as is with no warranty as to mechanical condition.’ [Footnote: There is no dispute Plaintiff signed the sales contract.] The disclaimer language is in a larger type than the previous and subsequent type. The term ‘ sold ...

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