Title: DaimlerChrysler Services North America, LLC v. Ouimette

State: vermont

Issuer: Vermont Supreme Court

Document:

DaimlerChrysler Services N. A., LLC v. Ouimette (2002-423); 175 Vt. 316;
830 A.2d 38

2003 VT 47

[Filed 16-May-2003]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 2003 VT 47

                                No. 2002-423

  DaimlerChrysler Services North 	         Supreme Court
  America, LLC

                                                 On Appeal from
       v.	                                 Franklin Superior Court

  Duane Ouimette and Stephanie Faulkner	         April Term, 2003
  a/k/a Ouimette

  David A. Jenkins, J.

  Alan A. Bjerke of Bauer, Anderson & Gravel, Burlington, for
  Plaintiff-Appellant.

  PRESENT:  Amestoy, C.J., Dooley, Johnson and Skoglund, JJ., and Allen, C.J.
            (Ret.), Specially Assigned

       ¶  1.  DOOLEY, J.   Plaintiff DaimlerChrysler Services North
  America, LLC (DaimlerChrysler) appeals a superior court decision denying
  its request for a default judgment in an action to collect a deficiency
  remaining on a motor vehicle retail installment sales contract. 
  DaimlerChrysler argues that the superior court erred by (1) applying the
  statute of limitations sua sponte, and (2) using the four-year statute of
  limitations for sales contracts in 9A V.S.A. § 2-725 instead of the general
  six-year statute of limitations for civil actions in 12 V.S.A. § 511.  We
  affirm.
   
       ¶  2.  In 1992, defendants Duane Ouimette and Stephanie Faulkner
  purchased a Pontiac Grand Prix from Burt Paquin Ford, Inc., along with an
  extended warranty service contract, credit life insurance policy, and
  credit accident and health policy.  Defendants and the car dealership
  entered into a Vermont simple interest retail installment sales contract
  (the contract) pursuant to the Motor Vehicle Retail Installment Sales
  Finance Act, 9 V.S.A. §§ 2351-2362.  The contract provided for deferred
  payments on the balance remaining after defendants' down payment and
  trade-in, and granted a security interest in the car to the dealership in
  order to ensure full payment of the purchase price.  Under the terms of the
  contract, the dealership simultaneously sold and assigned the rights under
  the contract to Chrysler Credit Corporation, which later became
  DaimlerChrysler.

       ¶  3.  When defendants failed to make all payments, DaimlerChrysler
  repossessed the car and sold it at auction as provided under the terms of
  the contract.  In addition, DaimlerChrysler terminated the extended
  warranty and insurance agreements and obtained a refund of the unearned
  premiums.  All funds collected by DaimlerChrysler were credited to
  defendants' account, leaving a balance due of $10,044.76.  In May 2002,
  approximately five and one-half years after default and repossession,
  DaimlerChrysler sued to collect the deficiency, plus costs of service,
  interest, and attorney's fees, for a total of $17,551.06.  After defendants
  failed to appear, DaimlerChrysler moved for a default judgment.  The
  superior court denied the claim as barred by the four-year statute of
  limitations for sales contracts under Article 2 of the Uniform Commercial
  Code (UCC).  See 9A V.S.A. § 2-725(1) ("An action for breach of any
  contract for sale must be commenced within four years after the cause of
  action has accrued.").  The court later denied DaimlerChrysler's motion for
  reconsideration.  This appeal followed.
   
       ¶  4.  DaimlerChrysler first challenges the court's authority to
  apply the statute of limitations sua sponte on behalf of a party in
  default.  DaimlerChrysler contends that because V.R.C.P. 8(c) requires the
  statute of limitations defense to be affirmatively pled in the defendant's
  answer or the defense is waived, Lillicrap v. Martin, 156 Vt. 165, 170, 591 A.2d 41, 43 (1991), and because the defendant bears the burden to establish
  the defense, Monti v. Granite Sav. Bank & Trust Co., 133 Vt. 204, 209,