Legal Opinions - Maryland Court of Appeals: April 7, 2008

Daily Record, The (Baltimore), Apr 7, 2008

Commercial Law

Breach of warranty

BOTTOM LINE: In lawsuit alleging breach of warranty under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act and violation of Maryland's Consumer Protection Act, plaintiff failed to prove warranted item did not conform to warranty at time of sale.

CASE: Crickenberger v. Hyundai Motor America, No. 81, Sept. Term 2007 (filed Mar. 21, 2008) (Judges Bell, HARRELL, Battaglia, Greene, Wilner (retired, specially assigned) & Cathell (retired, specially assigned)) (Judge Murphy, concurring).

FACTS: In November 2001, Mary Susan Crickenberger purchased from Antwerpen/Hyundai Kia in Baltimore a 2001 Hyundai XG-300 with 8,911 miles on its odometer. A limited warranty accompanied the sale of the vehicle, stating an agreement to repair or replace any component displaying a defect in materials or workmanship. Prior to Crickenberger's purchase, the vehicle was part of the rental car fleet owned by the Hertz Corporation.

The record did not indicate what, if any, maintenance the Hertz Corporation performed on the vehicle while in its ownership, or its repair record, or whether it was in any accidents. After Crickenberger acquired it, she claimed to have caused the car to be serviced for maintenance purposes on several occasions. Various components of the car were repaired or replaced during Crickenberger's ownership.

In February 2005, the vehicle, with an odometer reading then of 63,700 miles, stopped working altogether. The dealer advised Crickenberger that the engine would have to be replaced. Through its authorized dealer, Antwerpen, Hyundai Motor America (HMA) declined to replace the engine under the limited warranty.

Crickenberger initiated this case in the circuit court, alleging that the vehicle's continued need for repair established defects in the vehicle and that HMA's failure to cure the defects resulted in a breach of the Maryland Consumer Protection Act, CL [section][section]13-101 to 13-501, and the Magnuson-Moss Warranty- Federal Trade Commission Improvement Act (15 U.S.C. [section][section]2301 to 2312).

As the foundation of her Magnuson-Moss Act claims, she alleged breach of express and implied warranties under CL [section][section]2-3131 and 2-314, pursuant to [section]2310(d)(1) 3 of the Magnuson-Moss Act. The Consumer Protection Act count derived from an alleged violation of the Maryland Automotive Warranty Enforcement Act, CL [section]14-1501 to 14-1504, because, as plead, a violation of the latter also was a violation of the former.

In discovery, Crickenberger designated an expert, James E. Lewis, and indicated that he would testify at trial as to the Hyundai's repair history and loss in value as a result of the alleged defects.

HMA filed a motion in limine to exclude Lewis's opinions on the grounds that they lacked an adequate factual basis, were unreliable, and constituted inadmissible speculation in violation of Maryland's requirements for the admissibility of expert witness testimony. Prior to the hearing on HMA's motion in limine, Crickenberger withdrew her designation of Lewis as her expert. No other expert witness was advanced by her on the issues of causation or damages.

HMA filed a motion for summary judgment asserting that Crickenberger could not prevail on her breach of warranty (Magnuson- Moss Act) claims because, without expert testimony, she could not prove the existence of a defect attributable to the manufacturer at the time of sale, HMA's failure to correct alleged defects in violation of warranty, or the amount of damages caused by a defect.

HMA also argued that Crickenberger could not prevail on her Maryland Consumer Protection Act claim as it was derivative of a violation of the Automotive Warranty Enforcement Act, which was inapplicable because the Hyundai was owned previously at the time she purchased it.

The circuit court, after a hearing, granted HMA's motion, finding that expert testimony would be required to prove causation and damages before Crickenberger could recover under the Act.

Because no such expert was identified, the court determined HMA was entitled to judgment as a matter of law. The Court of Special Appeals. The Court of Appeals issued a writ of certiorari, on its own initiative, and affirmed.

LAW: Crickenberger, relying on the full warranty minimum requirement, alleged that a majority of courts have held that a consumer does not bear the burden of proving a specific defect to prevail on a breach of limited or implied warranty action, regardless of whether a specific defect must be proved in order to prevail under state law.

She offered no Maryland case in support of the contention that the Magnuson-Moss Act does not require proof of a specific defect in order to show a breach of an implied or limited warranty.

The out-of-state cases offered by Crickenberger as persuasive, however, are easily distinguishable. Three of those cases, Mason v. Porsche Cars of North America, Inc., 688 So.2d 361 (Fla. 5th Dist. Ct. App. 1997); Universal Motors, Inc. v. Waldock, 719 P.2d 254 (Alaska 1986); and Cline v. DaimlerChrysler Co., 114 P.3d 468 (Okla. Civ. App. 2005), rely on the minimum standard requirements for a full warranty in 15 U.S.C. [section]2304. Inasmuch as these cases apply full warranty requirements to limited warranties, in dissonance with state law, the Court declined to follow them.