Title: Jessica Mayberry v. Volkswagen of America, Inc.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2005 WI 13 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
03-1621 
COMPLETE TITLE: 
 
 
Jessica Mayberry,  
          Plaintiff-Appellant, 
 
     v. 
 
Volkswagen of America, Inc.,  
          Defendant-Respondent-Petitioner. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2004 WI App 64 
Reported at:  271 Wis. 2d 258, 678 N.W.2d 357 
(Ct. App. 2004-Published) 
 
 
OPINION FILED: 
February 16, 2005 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
November 4, 2004   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Outagamie   
 
JUDGE: 
Harold V. Froehlich   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
WILCOX, J., concurs (opinion filed). 
PROSSER and ROGGENSACK, J.J., join the 
concurrence.   
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the defendant-respondent-petitioner there were briefs 
by Bruce D. Huibregtse, Drew J. Cochrane, and Stafford Rosenbaum 
LLP, Madison, and oral argument by Drew J. Cochrane. 
 
For the plaintiff-appellant there was a brief by Matthew J. 
McClenahan and Krohn & Moss, Ltd., Chicago, IL, and oral 
argument by Scott Cohen. 
 
 
2005 WI 13 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  03-1621  
(L.C. No. 
02 CV 636) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Jessica Mayberry,  
 
          Plaintiff-Appellant, 
 
     v. 
 
Volkswagen of America, Inc.,  
 
          Defendant-Respondent-Petitioner. 
 
FILED 
 
FEB 16, 2005 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
JON P. WILCOX, J.   This is an appeal from a published 
court of appeals decision, Mayberry v. Volkswagen of America 
Inc., 2004 WI App 64, 271 Wis. 2d 258, 678 N.W.2d 357, that 
reversed an order of the Outagamie County Circuit Court, Harold 
V. 
Froehlich, 
Judge, 
which 
granted 
summary 
judgment 
to 
Volkswagen and dismissed the plaintiff's claims for breach of 
warranty. 
I. 
ISSUE 
¶2 
The issue on appeal concerns the proper measure of 
damages under Wisconsin's Uniform Commercial Code in a breach of 
warranty action.  We must determine what constitutes the 
No. 
03-1621   
 
2 
 
appropriate measure of damages where the buyer alleges that the 
product was defective and not worth what she paid for it at the 
time of acceptance but nonetheless used the product for a 
significant period of time and later resold the product for more 
than its fair market value after the manufacturer made several 
attempts at repairing the product.  Specifically, the issue 
before us is whether the "special circumstances" clause in 
Wis. Stat. § 402.714(2)(2001-02)1 requires damages in a breach of 
warranty action to be calculated based on the difference between 
the fair market value of the defective product at resale and the 
price the consumer actually obtained, such that a consumer's 
claim may be barred if she receives more than the fair market 
value for the defective product upon resale.  This is an issue 
of first impression in Wisconsin.   
¶3 
We 
reject 
Volkswagen's 
claim 
that 
the 
"special 
circumstances" language in § 402.714(2) prevents the plaintiff 
from maintaining her action by calculating damages based on the 
difference in market value and actual price at the time of 
resale.  We hold that pursuant to § 402.714(2), the appropriate 
method for measuring damages in this case is the difference 
between the warranted value of the vehicle in question and its 
actual value at the time and place of acceptance.  When the 
plaintiff has established a prima facie case of damages under 
this 
standard, 
the 
"special 
circumstances" 
clause 
of 
                                                 
1 Unless otherwise indicated, all subsequent references to 
the Wisconsin Statutes are to the 2001-02 version.   
No. 
03-1621   
 
3 
 
§ 402.714(2) should not be construed so as to completely bar her 
breach of warranty claim simply because she used the defective 
product for a period of time and later resold it for more than 
its fair market value.  We have found no authority that stands 
for the proposition that the proper measure of damages under the 
Uniform Commercial Code in such circumstances is the difference 
between the market value and actual price obtained for the 
defective product at the time and place of resale.  However, the 
price of the defective product upon resale may be relevant 
insomuch as it constitutes circumstantial evidence of the actual 
value of the product in its defective condition at the time and 
place of acceptance.   
¶4 
Because 
the 
circuit 
court 
applied 
an 
incorrect 
standard for measuring damages, we affirm the decision of the 
court of appeals reversing the circuit court's order of summary 
judgment.   
II. FACTUAL BACKGROUND 
¶5 
On October 14, 2000, the plaintiff, Jessica Mayberry, 
purchased a new 2001 galactic blue Volkswagen Jetta GLS from Van 
Dyn Hoven Imports in Appleton, Wisconsin.  The cash price of the 
vehicle was $17,800.  After sales tax, registration, title, and 
other fees, the price of the vehicle came to $18,526.  However, 
according to Mayberry, the total purchase price of the vehicle 
came to $22,548 after adding finance charges.  As part of the 
vehicle purchase, the manufacturer, Volkswagen, issued a two-
year or 24,000 mile limited warranty for the Jetta.  Under the 
terms of the written warranty, Volkswagen agreed to repair any 
No. 
03-1621   
 
4 
 
manufacturer's defect in material or workmanship and replace 
defective parts free of charge for the warranty period.2  
However, the warranty did not give Mayberry the right to a 
refund or replacement of the vehicle if it was defective. 
¶6 
Shortly after taking possession of the Jetta, Mayberry 
began experiencing problems with the vehicle.  Service records 
from Van Dyn Hoven indicate that Mayberry brought the vehicle in 
for service on a number of occasions for various problems.  The 
problems 
consisted 
of 
a 
broken 
armrest, 
intermittent 
illumination of the "check engine" light, and burning and 
leaking oil.  The engine problems culminated in the replacement 
of a piston ring in the engine on November 29, 2001.  On all 
occasions, the vehicle was inspected or repaired free of charge 
under the warranty.3  Thereafter, Mayberry attempted to revoke 
acceptance of the vehicle in writing.  Volkswagen refused the 
revocation. 
¶7 
On 
June 
3, 
2002, 
Mayberry 
filed 
suit 
against 
Volkswagen under the federal Magnuson-Moss Warranty Act, 15 
                                                 
2 The warranty specifically excluded "any incidental or 
consequential damages, including loss of value of the vehicle, 
lost 
profits 
or 
earnings, 
or 
out-of-pocket 
expenses 
for 
substitute transportation or lodging."  The parties dispute the 
validity of this clause.  However, as this issue is not properly 
before us, we do not address whether Mayberry may recover 
incidental and consequential damages. 
3 The service records indicate that Mayberry was charged for 
routine maintenance, such as oil and filter changes, which were 
not covered under the warranty. 
No. 
03-1621   
 
5 
 
U.S.C. § 2301 et seq. (2000),4 asserting three causes of action.  
First, Mayberry alleged that Volkswagen breached its written 
warranty for the vehicle.  Second, Mayberry contended that 
Volkswagen breached its implied warranty of merchantability 
under 15 U.S.C. §§ 2301(7) & 2308.  Finally, Mayberry claimed 
that she revoked her acceptance under 15 U.S.C. § 2310.   
¶8 
Subsequently, Mayberry traded in her Volkswagen for a 
2003 Mazda Tribute at Mazda Knoxville.  Mayberry received 
$15,100 as a trade-in allowance for the Jetta.  The total 
purchase price of the Mazda Tribute was $24,149.32.  At the time 
of the trade-in, the mileage on the Jetta was 32,737.  On 
November 8, 2002, Mayberry amended her complaint to reflect the 
trade-in of the Jetta.  As an affirmative defense to the amended 
complaint, Volkswagen alleged that Mayberry "suffered no damages 
as she received more than the full fair market value for the 
vehicle which is the subject of the action at the time of the 
trade in."  
III. PROCEDURAL POSTURE 
¶9 
On February 18, 2003, Volkswagen moved for summary 
judgment on the ground that Mayberry did not suffer any damages 
as a result of the allegations set forth in her complaint.  
Specifically, Volkswagen argued that Mayberry was "unable to 
prove that she suffered any compensable damages" because 
"Mayberry traded in the vehicle for more than fair market 
                                                 
4 Unless otherwise indicated, all subsequent references to 
the United States Code are to the 2000 version.   
No. 
03-1621   
 
6 
 
value."  In addition, Volkswagen argued that Mayberry's extended 
use of the vehicle and subsequent trade-in for more than fair 
market value invalidated her revocation of acceptance claim 
because she could not demonstrate that the value of the Jetta 
was substantially impaired.    
¶10 In response to the summary judgment motion, Mayberry 
submitted the affidavit of Joseph Pennachio, her named expert 
and "retail vehicle finance specialist."5  Mr. Pennachio opined 
that Mayberry did not receive fair market value for her Jetta.  
He stated, based on the N.A.D.A. Official Used Car Guide, that 
the fair market value of the vehicle at the time of the trade-in 
was $15,900 and that "[t]he Fair Market Value indicated given 
the presumption of a private party transaction would be 
$17,900."  However, in a letter filed with the court on April 
21, 2003, Mayberry conceded:  "Mr. Joe Pennachio's report 
appears flawed.  While Mr. Pennachio asserts the FMV of the 
vehicle at the time of sale was $15,900.00 it is true that the 
N.A.D.A. Official Used Car Guide states that the applicable FMV 
of this vehicle for trade in is $14,200.00."   
¶11 In addition, Mayberry herself filed an affidavit, 
stating:   
Based 
on 
the 
problems 
with 
the 
Jetta 
that 
I 
experienced, it is my opinion that I paid too much 
                                                 
5 Mr. 
Pennachio's 
curriculum 
vitae 
indicates 
that 
he 
previously held the position of a salesman at The Oak Agency and 
that of finance manager at Carr's Honda.  Mr. Pennachio is 
currently the owner of Prime Lending, a vehicle loan brokerage 
business.   
No. 
03-1621   
 
7 
 
money for the vehicle.  I believe that the Jetta was 
not worth $18,526.00 I paid at the time I purchased it 
and at most was worth only $12,526.00 based on the 
problems I experienced. 
¶12 The circuit court rendered its decision on May 7, 
2003.  First, the circuit court dismissed Mayberry's revocation 
of acceptance claim, reasoning:  
Plaintiff used the car for almost two years, put 
32,737 miles on it, and expired the warranty.  The car 
was never out of service for a prolonged period of 
time.  Plaintiff received more than FMV on a trade-in.  
Therefore, there was no substantial impairment of the 
value of the goods and no effective revocation.6   
¶13 Furthermore, the circuit court ruled, based on Valenti 
v. Mitsubishi Motor Sales of America, Inc., 773 N.E.2d 1199 
(Ill. App. Ct. 2002), that Mayberry failed to establish she 
suffered any damages for any breach of warranty.7  The court 
reasoned: 
Plaintiff argues that the Jetta was defective when she 
bought it and she suffered damages in having it 
repaired.  However, she is not specific about her 
damages and she does not offer any evidence to dispute 
the FMV of the car.  In fact, her expert's assessment 
has the FMV below what she received on trade-in.  
Furthermore, she was not charged for any repairs 
covered under the warranty. 
                                                 
6 The parties have not appealed from this portion of the 
circuit court's summary judgment decision. 
7 While the circuit court stated that "[t]he affidavits and 
other proof submitted by defendant establish a prima facie case 
for summary judgment because plaintiff suffered no damages and 
defendant did not breach it [sic] warranties[,]" the circuit 
court never actually analyzed whether Volkswagen breached either 
its written warranty or its implied warranty of merchantability.   
No. 
03-1621   
 
8 
 
 . . . . Plaintiff actually received more than FMV for 
the Jetta.  She put 32,737 miles on the car in less 
than two years.  She has no damages.  
Thus, on May 28, 2003, the circuit court entered judgment in 
favor of Volkswagen, dismissing Mayberry's complaint in its 
entirety.   
¶14 The court of appeals reversed, concluding that the 
circuit court utilized an incorrect standard for measuring 
damages and that genuine issues of material fact concerning 
damages existed.  Mayberry, 271 Wis. 2d 258, ¶1.  The court of 
appeals concluded that under § 402.714(2), the proper measure of 
damages for breach of warranty is the difference between the 
value of goods as accepted and the value as warranted at the 
time and place of acceptance.  Id., ¶10.  The court stated that 
the evidence demonstrated that the warranted value of the 
vehicle was $18,000 and that Mayberry's own testimony as to the 
actual value of the car was sufficient to survive summary 
judgment.  Id., ¶¶11-12.  The court of appeals also noted that 
Volkswagen might be entitled to an offset for the mileage 
Mayberry put on the vehicle under the "special circumstances" 
clause of Wis. Stat. § 402.714(2).  Id., ¶13 n.3.  Therefore, 
the court of appeals reversed the circuit court order for 
summary judgment because the circuit court failed to apply the 
correct measure of damages in Wis. Stat. § 402.714(2) and a 
genuine issue of material fact existed regarding damages 
insomuch as Mayberry had provided testimony as to the actual 
value of the vehicle and Volkswagen had "offered evidence 
No. 
03-1621   
 
9 
 
suggesting 'proximate damages of a different amount.'"  Id., 
¶15.   
IV. STANDARD OF REVIEW 
¶15 This court reviews a circuit court's decision granting 
summary 
judgment 
independently, 
but 
we 
apply 
the 
same 
methodology as the circuit court.  Smaxwell v. Bayard, 2004 WI 
101, ¶12, 274 Wis. 2d 278, 682 N.W.2d 923.  Pursuant to 
Wis. Stat. § 802.08(2), summary judgment "shall be rendered if 
the pleadings, depositions, answers to interrogatories, 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."  
Therefore, "[s]ummary judgment should not be granted, 'unless 
the facts presented conclusively show that the plaintiff's 
action has no merit and cannot be maintained.'"  Smaxwell, 274 
Wis. 2d 278, ¶12 (quoting Goelz v. City of Milwaukee, 10 
Wis. 2d 491, 495, 103 N.W.2d 551 (1960)).  In determining 
whether summary judgment was appropriately granted, "[w]e view 
the summary judgment materials in the light most favorable to 
the nonmoving party."  Id.   
V. 
ANALYSIS 
¶16 This is a breach of warranty action under the federal 
Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq.  Mayberry 
filed suit under 15 U.S.C. § 2310(d)(1), which allows a consumer 
to bring suit against a warrantor in any state for failure to 
comply with its obligations under a written warranty or implied 
warranty.  Mayberry alleged that Volkswagen failed to comply 
No. 
03-1621   
 
10 
 
with its written warranty.8  In addition, Mayberry claimed that 
Volkswagen 
breached 
its 
implied 
warranty 
under 
15 
U.S.C. §§ 2301(7) & 2308.9  Pursuant to 15 U.S.C. § 2310(d)(1)(A) 
and 15 U.S.C. § 2311(b)(1), state law governs the appropriate 
measure of damages for breach of warranty under the Magnuson-
Moss Act.  MacKenzie v. Chrysler Corp., 607 F.2d 1162, 1166 (5th 
Cir. 1979).10   
¶17 We begin by noting that we are not presented with any 
issue concerning whether Volkswagen actually breached any of its 
warranties in this case.  Rather, the appeal concerns only the 
issue of what measure of damages is appropriate in this case.  
Thus, for purposes of this appeal, we will assume that 
                                                 
8 The parties agree that the court of appeals incorrectly 
stated that 15 U.S.C. § 2304(a) applies to this case.  Mayberry 
v. Volkswagen of America, Inc., 2004 WI App 64, ¶8, 271 
Wis. 2d 258, 678 N.W.2d 357.  The federal minimum standards for 
warranties provided in § 2304(a) apply only to full warranties.  
See 15 U.S.C. §§ 2303(a) & 2304(a).  The parties agree that the 
written warranty at issue in this case is a limited warranty, 
and is therefore not subject to the federal minimum standards 
provided in § 2304(a).   
9 Except 
where 
otherwise 
provided, 
the 
Magnuson-Moss 
Warranty Act requires application of state law governing written 
and implied warranties.  Walsh v. Ford Motor Co., 807 F.2d 1000, 
1012 (D.C. Cir. 1986).  From the consumer's perspective, the 
chief advantage of proceeding under the Magnuson-Moss Act for 
breach of limited warranty or breach of implied warranty is the 
availability of attorney fees to a prevailing consumer under 15 
U.S.C. § 2310(d)(2). 
10 See also Saval v. BL Ltd., 710 F.2d 1027, 1033 (4th Cir. 
1983); Novosel v. Northway Motor Car Corp., 460 F.Supp. 541, 545 
(N.D.N.Y. 1978); Murphy v. Mallard Coach Co., 582 N.Y.S.2d 528, 
532 (N.Y. App. Div. 1992).   
No. 
03-1621   
 
11 
 
Mayberry's 
allegations 
regarding 
Volkswagen's 
breach 
of 
warranties are true.   
¶18 Wisconsin's 
Uniform 
Commercial 
Code 
governs 
the 
remedies available for transactions involving the sale of goods.  
Wisconsin  Stat. § 402.714(2),11 governing a buyer's damages for 
breach of warranty, provides: 
The measure of damages for breach of warranty is 
the difference at the time and place of acceptance 
between the value of the goods accepted and the value 
they would have had if they had been as warranted, 
unless special circumstances show proximate damages of 
a different amount. 
Wis. Stat. § 402.714(2). 
¶19 Volkswagen argues that while § 402.714(2) provides 
that the usual means for calculating damages for breach of 
warranty is the difference in value at the time and place of 
acceptance between the product as warranted and the product as 
received, the statute specifically allows for an alternate 
damage calculation when special circumstances show proximate 
damages in a different amount.  Volkswagen contends that special 
circumstances are present here because under the standard 
calculation, Mayberry would reap a windfall, as Volkswagen 
repaired the vehicle free of charge under the warranty, Mayberry 
was able to use the vehicle for a substantial period of time, 
and Mayberry later resold the vehicle for more than its fair 
                                                 
11  Wisconsin Stat. § 402.714 is identical to § 2-714 of the 
Uniform 
Commercial 
Code. 
Uniform 
Law 
Note, 
Wis. Stat. Ann. § 402.714 
(West 
2003). 
 
See 
U.C.C. § 2-
714(2)(1962). 
No. 
03-1621   
 
12 
 
market value.  Volkswagen points to a series of cases that allow 
damages to be calculated at the time and place of replacement 
and asserts that we should follow the Illinois Court of Appeals' 
decision in Valenti, which held that a consumer cannot prove 
damages when she resells the vehicle for more than its fair 
market value.  Volkswagen contends that because Mayberry 
received more than fair market value for the Jetta on resale, 
she has no damages and thus has no case.  
¶20 In contrast, Mayberry argues that we should follow the 
default 
rule 
for 
calculating 
damages 
as 
contained 
in 
§ 402.714(2).  Mayberry states that Valenti has been overruled 
by Bartow v. Ford Motor Co., 794 N.E.2d 1027 (Ill. App. Ct. 
2003), 
and 
conflicts 
with 
the 
language 
of 
§ 402.714(2).  
Further, Mayberry asserts that the special circumstances clause 
is applicable only where the standard method for calculating 
damages is insufficient to compensate the plaintiff for her loss 
or the goods in question are unique with no ready market.  
Mayberry states that Volkswagen is attempting to turn the 
special circumstances clause on its head and use it to preclude 
her from any recovery.  Mayberry notes that she presented a 
prima facie case of damages by presenting evidence of the value 
of the vehicle as warranted (its purchase price) and testified 
as to the actual value of the vehicle at the time and place of 
acceptance.  Thus, the crux of the dispute before us is the 
interpretation of the "special circumstances" language contained 
in § 402.714(2) and what effect, if any, a purchaser's use and 
No. 
03-1621   
 
13 
 
subsequent resale of an allegedly defective vehicle has on the 
her ability to recover damages.   
¶21 For purposes of construction, Wis. Stat. § 401.102(1) 
directs that "[c]hapters 401 to 411 shall be liberally construed 
and applied to promote its underlying purposes and policies."  
One of the driving underlying policies of the Uniform Commercial 
Code 
is 
"[t]o 
make 
uniform 
the 
law 
among 
the 
various 
jurisdictions." 
 
Wis. Stat. § 401.102(2)(c). 
 
Regarding 
remedies, 
Wis. Stat. § 401.106(1) 
provides: 
 
"The 
remedies 
provided by chs. 401 to 411 shall be liberally administered to 
the end that the aggrieved party may be put in as good a 
position as if the other party had fully performed . . . ."   
¶22 In addition, the Official Comments to the Uniform 
Commercial Code § 2-714 explain that "[i]n general this section 
adopts the rule of the prior uniform statutory provision for 
measuring damages where there has been a breach of warranty as 
to goods accepted, but goes further to lay down an explicit 
provision as to the time and place for determining the loss."  
Official 
Comment 
1 
U.C.C. 
§ 2-714 
(1962).12 
 
Moreover, 
"[s]ubsection (2) describes the usual, standard and reasonable 
method of ascertaining damages in the case of breach of warranty 
                                                 
12 The official comments to the Uniform Commercial Code are 
reproduced in the Wisconsin Statutes Annotated.  Uniform 
Commercial Code Comments, Wis. Stat. Ann. § 402.714 (West 2003).  
The "official comments are indispensable to an understanding of 
the objectives and purposes of the Uniform Commercial Code and 
the substantive changes effected in the law."  Acknowledgment: 
Uniform 
Commercial 
Code 
Comments, 
Wis. Stat. Ann. xi 
(West 
2003).    
No. 
03-1621   
 
14 
 
but it is not intended as an exclusive measure."  Official 
Comment 3, U.C.C. § 2-714 (1962).  
¶23 Further, as one court has explained:  
The measure of damages in section [2-714(2)] has been 
referred to as "direct economic loss."  Such losses 
are "damage flowing directly from insufficient product 
quality."  So they include "ordinary loss of bargain 
damages:  the difference between the actual value of 
the goods accepted and the value they would have had 
if they had been as warranted."   
Beyond the Garden Gate, Inc. v. Northstar Freeze-Dry Mfg., Inc., 
526 N.W.2d 305, 309 (Iowa 1995)(quoting James J. White & Robert 
S. Summers, Uniform Commercial Code § 11-5, at 536 (3d ed. 
1988)). 
¶24 It 
is 
with 
this 
understanding 
of 
the 
Uniform 
Commercial Code that we address the parties' arguments.  The 
core of Volkswagen's argument is that special circumstances are 
present when an automobile purchaser uses the vehicle for an 
extended period of time, the manufacturer makes numerous repairs 
free of charge under its warranty, and the consumer later 
resells it for more than its fair market value.  According to 
Volkswagen, 
under 
these 
circumstances, 
damages 
should 
be 
calculated based on the actual value and fair market value of 
the vehicle at the time 
of resale. 
 Volkswagen 
relies 
principally on the Valenti decision for this proposition.13   
                                                 
13 Because the question presented is an issue of first 
impression in Wisconsin and the Uniform Commercial Code seeks 
uniformity 
in 
the 
application 
of 
its 
provisions, 
it 
is 
appropriate to turn to case law from other jurisdictions 
addressing the issue. 
No. 
03-1621   
 
15 
 
¶25 Valenti involved a fact scenario very similar to the 
case at bar.  There, the plaintiff purchased a new vehicle with 
a limited warranty and began experiencing problems with it 
shortly after she took possession.  Valenti, 773 N.E.2d at 1200-
01.  She later brought suit under the Magnuson-Moss Warranty Act 
for breach of express and implied warranties after the vehicle 
was taken in for service on several occasions.  Id.14  The 
plaintiff subsequently sold the vehicle and the circuit court 
granted summary judgment on this basis.  Id. at 1201-02.   
¶26 On appeal, the Illinois Court of Appeals noted that 
the uncontested evidence indicated that the plaintiff had 
received more than fair market value for the vehicle.  Id. at 
1202.  The court of appeals, in upholding the grant of summary 
judgment, stated that the plaintiff was required to prove 
damages with reasonable certainty and ruled:  "Plaintiff here 
cannot meet this burden where the undisputed facts show that 
plaintiff sold the car at its fair market value, despite the 
alleged defect of which she now complains."  Id. at 1203. 
¶27 Mayberry asserts that Valenti was overruled by the 
Illinois Court of Appeals in Bartow.  In Bartow, another 
Magnuson-Moss Warranty Act case, the defendant contended that 
the plaintiff lacked standing to maintain a claim under the 
Magnuson-Moss Warranty Act because she resold the vehicle and 
its warranty prior to filing suit.  Bartow, 794 N.E.2d at 1028-
                                                 
14 At oral argument, plaintiff's counsel indicated that he 
handled the appeal in Valenti v. Mitsubishi Motor Sales of 
America, Inc., 773 N.E.2d 1199 (Ill. App. Ct. 2002).   
No. 
03-1621   
 
16 
 
29.  The Illinois Court of Appeals ultimately rejected "the 
defendant's assertion that resale of the object at issue 
precludes a buyer from suing for breach of warranty . . . ."  
Id. at 1037. 
¶28 We are not persuaded that the Bartow decision is 
controlling in this case.  The only issue in Bartow was "whether 
the plaintiff had standing to bring her cause of action . . . ."  
Id. at 1029.  The court never mentioned the Valenti decision and 
did not address whether resale of a vehicle qualifies as a 
special circumstance under U.C.C. § 2-714(2) sufficient to 
deviate from the standard calculation of damages. 
¶29 However, ultimately, we are not persuaded by the 
rationale of Valenti either.  First, in Valenti, the court of 
appeals never discussed the "special circumstances" language 
contained in U.C.C. § 2-714(2).  In addition, the court stated 
that damages for a breach of warranty claim are calculated "on 
the date of the breach."  Valenti, 773 N.E.2d at 1203.  This 
statement is contrary to U.C.C. § 2-714(2), which provides that 
damages are calculated at the time and place of acceptance.  
Thus, the Valenti decision was not applying the pertinent 
language of the Uniform Commercial Code at issue in this case.  
More importantly, unlike the plaintiff in the present case, the 
plaintiff in Valenti maintained that she did not have to show 
damages at the summary judgment stage and provided no evidence 
No. 
03-1621   
 
17 
 
of the actual value of the vehicle at the time and place of 
acceptance.  Id. at 1202-03.15   
¶30 These unique facts of Valenti were recognized in Cohen 
v. AM General Corp., 264 F.Supp.2d 616 (N.D. Ill. 2003).  In 
Cohen, the plaintiffs leased a new Hummer for $84,000 and 
brought suit under the Magnuson-Moss Warranty Act for breach of 
warranty after experiencing problems with the vehicle.  Id. at 
618.  After filing suit, and three years after signing the 
lease, the plaintiffs traded in the vehicle and received 
$49,000.  Id.  The defendant, relying on Valenti, argued that 
the plaintiffs could not prove damages because they sold the 
vehicle for fair market value.  Id. at 621.  The court disagreed 
and distinguished Valenti on the basis that the plaintiff in 
Valenti never alleged that the vehicle was defective from the 
moment she took possession.  Id. at 621-22.  The court held that 
the proper measure of damages was the difference in value at the 
time plaintiffs accepted the vehicle.  Id. at 622.  The court 
stated that the fact the plaintiffs were able to trade in the 
vehicle for its fair market value merely created an issue of 
material fact as to the quality of the vehicle at the time of 
acceptance.  Id.  However, despite the similarities with the 
                                                 
15 For the same reason, we do not find Price v. Chevrolet 
Motor Division of General Motors Corp., 765 A.2d 800 (Pa. Super. 
Ct. 2000), to be persuasive.  In Price, the plaintiff "provided 
absolutely no evidence as to the vehicle's present value, or to 
its actual value when it was delivered to her in the alleged 
defective 
condition . . . Rather, 
the 
sole 
evidence 
[the 
plaintiff] introduced as to damages was [the plaintiff's] sales 
agreement."  Id. at 811. 
No. 
03-1621   
 
18 
 
present case, the Cohen court, as in Valenti and Bartow, did not 
address the applicable Uniform Commercial Code language and did 
not consider whether the plaintiffs' use of the vehicle and 
subsequent resale constituted a "special circumstance."   
¶31 Volkswagen also relies on Harlan v. Smith, 507 So.2d 
943 (Ala. Civ. App. 1986).  In Harlan, the plaintiff purchased a 
used mobile home and filed suit against the seller after 
discovering numerous defects over the course of several weeks.  
Id. at 944.  The defendant moved for summary judgment on the 
ground that the plaintiff submitted insufficient evidence of 
damages to support his breach of warranty claim because he 
failed to introduce evidence of the difference in value of the 
mobile home at the time and place of acceptance.  Id. at 944-45.  
The court noted that under Alabama's Uniform Commercial Code, 
the measure of damages in a breach of warranty action is the 
difference in value between the goods as warranted and the 
actual value at the time and place of acceptance and that 
failure to introduce evidence regarding the difference in value 
bars the claim.  Id. at 945.  The court stated that while the 
plaintiff did not present evidence as to the actual value of the 
mobile home the day it was accepted, he presented his opinion as 
to what the mobile home was worth after he discovered all of the 
defects six weeks later.  Id.  The court held that the 
plaintiff's use of the mobile home without notice of the defects 
constituted a special circumstance that took the case outside 
the normal time and place of acceptance measure of damages and 
No. 
03-1621   
 
19 
 
that therefore the plaintiff presented sufficient legal evidence 
as to the amount of damages.  Id.   
¶32 Because the court in Harlan utilized the "special 
circumstances" exception to allow the plaintiff to recover, this 
decision is not helpful to Volkswagen's position.  Harlan did 
not construe the "special circumstances" exception in a manner 
that would bar the plaintiff from maintaining a claim.  Harlan 
does not stand for the proposition that damages may be 
calculated based on the difference in market value of the 
product and its actual price at the time and place of resale.   
¶33 Volkswagen also cites to a number of cases involving 
breach of warranty of title for the proposition that when a 
purchaser uses an automobile for a significant period of time, 
special circumstances are present and damages may be calculated 
based on the difference in value at the time the plaintiff is 
dispossessed of the vehicle.  Petr's Br. at 25.  However, breach 
of warranty of title cases present unique concerns not present 
in most breach of warranty cases.  Therefore, we believe the 
rule 
utilized 
in 
breach 
of 
warranty 
of 
title 
cases is 
inapplicable here.   
¶34 Under the standard damage calculation in a breach of 
warranty of title case, the value of the vehicle as warranted is 
generally the purchase price, and the actual value of the 
vehicle as accepted is zero because of the defective title.  
Courts hold that special circumstances exist in these cases and 
it is appropriate to calculate damages based on the value of the 
goods at the time of dispossession "because it would be unjust 
No. 
03-1621   
 
20 
 
to allow the purchaser unfettered use and possession of the 
goods for a substantial period of time and then allow recovery 
of the full purchase price paid for the goods."  Canterra 
Petroleum, Inc. v. Western Drilling and Mining Supply, 418 
N.W.2d 267, 275 (N.D. 1987)(emphasis added).  Thus, the rule in 
breach of warranty of title cases is premised on a concern over 
allowing the plaintiff to completely undo the transaction, 
recover the full purchase price, and receive the additional 
benefit of substantial use of the vehicle.  See Roy Anderson, 1 
Damages Under UCC § 10:12, at 10-57 to 10-58 (2003).  In 
essence, courts conclude that plaintiffs would receive a 
windfall if they were able to use the vehicle for a substantial 
period of time and yet obtain a full refund of the purchase 
price of the vehicle.   
¶35 This concern is not present in the current case.  
Utilizing the standard measure for calculating damages in the 
present case would not result in Mayberry recovering the full 
purchase price of the vehicle.  In breach of warranty of title 
cases, the product has no actual value to the consumer because 
the consumer does not legally own the vehicle.  Here, Mayberry 
is merely seeking to recover the diminished value of the vehicle 
due to its defective condition.  Mayberry does not allege that 
the Jetta was valueless to her at the time of acceptance; 
rather, she alleges she paid too much for the vehicle given its 
defective condition.  Taking the consumer's use of the vehicle 
into account when calculating damages makes sense when there is 
a defective title and the consumer is essentially seeking to 
No. 
03-1621   
 
21 
 
undo the transaction; however, when a consumer is merely seeking 
benefit of the bargain damages, her use of the vehicle has no 
bearing on the question.   
¶36 As such, we have found no authority that stands for 
the proposition that the proper measure of damages under the 
Uniform Commercial Code is the difference between the market 
value and actual price of the defective product at the time and 
place of resale when the plaintiff alleges a breach of the 
manufacturer's 
written 
warranty 
and 
implied 
warranty 
of 
merchantability.  Breach of contract remedies under the Uniform 
Commercial Code are designed to put the aggrieved party "in as 
good a position as if the other party had fully performed." 
Wis. Stat. § 401.106(1). 
 
Section 
2-714 
of 
the 
Uniform 
Commercial Code is designed to compensate "'damage flowing 
directly from insufficient product quality.'"  Beyond the Garden 
Gate, 526 N.W.2d at 309 (quoting James J. White & Robert S. 
Summers, Uniform Commercial Code § 11-5, at 536 (3d ed. 1988)).   
¶37 Mayberry has alleged that she suffered damages because 
her vehicle was defective when she accepted it and she did not 
receive a vehicle of the quality for which she paid.  The fact 
that Mayberry later resold the vehicle for more than its fair 
market value does not totally negate the fact that she did not 
receive the benefit of her bargain.  While the amount of profit 
realized on the resale may be relevant to the issue of 
mitigation, construing the "special circumstances" clause of 
§ 402.714(2) to completely bar the plaintiff from maintaining a 
claim would defeat the manifest purpose of the remedies under 
No. 
03-1621   
 
22 
 
the Uniform Commercial Code, which are to compensate the 
plaintiff for her direct economic loss and place her in as good 
a position as if the seller had fully performed.   
¶38 Therefore, 
we 
hold 
that 
pursuant 
to 
Wis. Stat. § 402.714(2), the appropriate method for measuring 
damages in this case is the difference between the warranted 
value of the vehicle in question and its actual value at the 
time and place of acceptance.  Further, we conclude that 
Mayberry 
has 
established 
a 
prima 
facie 
case 
of 
damages 
sufficient to survive summary judgment under this standard.   
¶39 The standard measure of damages under § 402.714(2) 
requires evidence of two values:  (1) the value of the product 
as warranted at the time and place of acceptance and (2) the 
actual value of the vehicle with defects at the time and place 
of acceptance.  As to the first value, courts generally hold 
that the contract price is relevant but not conclusive evidence 
of the value of the goods as warranted at the time and place of 
acceptance.  Mulvaney v. Tri State Truck & Auto Body Inc., 70 
Wis. 2d 760, 769, 235 N.W.2d 460 (1975).  See also K & C, Inc. 
v. Westinghouse Elec. Corp., 263 A.2d 390, 394 (Pa. 1970)(ruling 
that purchase price of goods is "prima facie evidence" of the 
value of the goods as warranted but not conclusive because 
purchaser may have struck a good or bad bargain); Carlson v. 
Rysavy, 262 N.W.2d 27, 31 (S.D. 1978)(contract price is "strong 
evidence" 
of 
the 
value 
of 
goods 
as 
warranted 
but 
not 
conclusive); Lone Star Ford, Inc. v. McGlashan, 681 S.W.2d 720, 
725 (Tex. Ct. App. 1984)(sales price is sufficient evidence as 
No. 
03-1621   
 
23 
 
to the market value of goods as warranted in absence of other 
evidence); James J. White & Robert S. Summers, 1 Uniform 
Commercial Code § 10-2, at 557 (4th ed. 1995)("[T]he purchase 
price of the damaged goods may be the best evidence of the value 
of the goods as warranted.").16   
¶40 The record in the present case contains a copy of the 
sales contract for the Jetta that indicates the cash price of 
the vehicle was $17,800 and that after taxes and fees the price 
came to $18,526.  In addition, Mayberry alleged in her complaint 
that after finance charges, the total cost of the Jetta was 
$22,548.  The parties dispute which figure——$17,800, $18,526, or 
$22,548——correctly 
represents 
the 
value 
of 
the 
Jetta 
as 
warranted.  This issue is not directly before us and therefore 
                                                 
16 However,  
Since the contract price is often negotiated long 
before the time of acceptance, fair market value at 
the time of acceptance provides the more accurate 
measure of value as warranted under 2-714(2).  Use of 
fair market value at the time of acceptance gives a 
buyer the benefit of a good bargain (when the market 
price has risen above the contract price), but 
prevents the buyer from recovering the cost of a bad 
bargain (when the market price has fallen below the 
contract price).  
James J. White & Robert S. Summers, 1 Uniform Commercial Code 
§ 10-2, at 557 n.13 (4th ed. 1995).   
No. 
03-1621   
 
24 
 
we do not directly address it.17  Because the record contains 
evidence of the purchase price of the vehicle, Mayberry has 
presented sufficient evidence of the value of the vehicle as 
warranted at the time and place of acceptance.   
¶41 As to the second value——the actual value of the 
vehicle with defects at the time and place of acceptance——
Mayberry submitted an affidavit stating that she believed the 
value of the Jetta with all of its defects was only $12,526.  
Volkswagen 
challenges 
whether 
this 
constitutes 
sufficient 
evidence of the actual value of the vehicle to survive summary 
judgment. 
¶42 Wisconsin case law is clear that an owner of property 
may testify as to its value and that such testimony may properly 
support a jury verdict for damages, even though the opinion is 
not 
corroborated 
or 
based 
on 
independent 
factual 
data.  
D'Huyvetter v. A.O. Smith Harvestore Prods., 164 Wis. 2d 306, 
323-24, 475 N.W.2d 587 (Ct. App. 1991).  In D'Huyvetter, the 
court stated: 
                                                 
17 But see James J. White & Robert S. Summers, 1 Uniform 
Commercial Code § 10-2, at 557 n.15 (4th ed. 1995)("The contract 
price used as evidence of value as warranted should be the cash 
price of the goods, not a "credit price" that includes finance 
charges.  Finance charges merely represent the cost of money and 
do not increase the value of the goods.")(citing Long v. Quality 
Mobile Home Brokers, Inc., 248 S.E.2d 311, 312-13 (S.C. 1978)).  
"[M]ost courts have restricted the evidence to the cash price of 
goods.  
Whenever 
finance 
charges 
are 
to 
be 
allowed as 
compensable damages, they should be considered consequential 
damages subject to the specific requirements in Section 2-715(2) 
for the recovery of such damages."  Roy Anderson, 1 Damages 
Under UCC § 10:7, at 10-35 (2003).    
No. 
03-1621   
 
25 
 
The only evidence plaintiffs produced regarding the 
actual value of the Harvestore at the time of purchase 
was . . . [the plaintiff's] testimony that, in her 
opinion, the Harvestore was worth "nothing."  In 
Wisconsin, the general rule is that a non-expert owner 
may testify concerning the value of their property, 
regardless 
of 
whether 
it 
is 
realty 
or 
personalty. . . . The weight to be attached to a non-
expert 
owner's 
testimony 
is 
for 
the 
trier 
of 
fact. . . . We 
conclude 
that 
plaintiffs 
produced 
credible evidence at trial to establish that the 
 . . . value of the Harvestore system at the time of 
purchase was $0. 
Id. (emphasis in original).18  Thus, under Wisconsin law, 
Mayberry's opinion as to the actual value of her car on the date 
of acceptance is sufficient to survive summary judgment.19  
Volkswagen's complaints bear upon the weight and credibility of 
Mayberry's opinion, not its legal sufficiency. 
¶43 While Mayberry's opinion as to the value of her 
vehicle may be sufficient for her to survive summary judgment, 
it does not necessarily follow that it will be persuasive to a 
jury.  Although we have held that the fact that Mayberry traded 
                                                 
18 See also Wilberscheid v. Wilberscheid, 77 Wis. 2d 40, 48, 
252 N.W.2d 76 (1977); Park Falls Lumber Co. v. Stauber, 190 Wis. 
310, 315, 207 N.W. 409 (1926); Arneson v. Arneson, 120 
Wis. 2d 236, 252, 355 N.W.2d 16 (Ct. App. 1984).   
19 See also Razor v. Hyundai Motor Am., 813 N.E.2d 247, 256-
57 (Ill. App. Ct. 2004)(where plaintiff testified as to purchase 
price of car and chronic problems, jury could award damages 
based on its own experience and her testimony that the value of 
the car she received was less than the value of the vehicle she 
thought she was buying).  Don Meadow Motors, Inc. v. Grauman, 
446 N.E.2d 651, 654 (Ind. App. Ct. 1983)(evidence was sufficient 
to support jury's award where plaintiff testified that he 
purchased vehicle for $8214 but, due to defects, he believed it 
was worth only $4000 at the time of purchase under state rule 
allowing owner of property to testify as to its value). 
No. 
03-1621   
 
26 
 
in her vehicle for more than fair market value does not bar her 
claim, the price she obtained for the Jetta at resale may be 
probative as to the value of the vehicle with defects at the 
time and place of acceptance.  A reasonable jury could conclude 
that her testimony that the vehicle was worth only $12,526 at 
the time of acceptance is inherently incredible, given that the 
vehicle was sold two years and 30,000 miles later for $15,100.   
¶44 Numerous courts and commentators have recognized that 
the price obtained for defective goods on resale is probative as 
to the value of the goods actually received.  See, e.g., HCI 
Chems. (USA), Inc. v. Henkel KGaA, 966 F.2d 1018, 1024 (5th Cir. 
1992); Cohen, 264 F.Supp.2d at 622; Bergenstock v. Lemay's 
G.M.C., Inc., 372 A.2d 69, 75 (R.I. 1977); ITT-Indus. Credit Co. 
v. Milo Concrete Co., 229 S.E.2d 814, 822 (N.C. Ct. App. 1976); 
James J. White & Robert S. Summers, 1 Uniform Commercial Code 
§ 10-2, at 558 (4th ed. 1995).  Thus:   
Where the buyer sells a defective article, using 
reasonable care in doing so to secure the best price, 
the price so received may be used in determining the 
value of the article in its defective condition for 
the purpose of determining the amount of the buyer's 
damages.  Evidence of such resale price is admissible 
to prove the value of the defective article, and such 
evidence could be sufficient proof of such value in 
ascertaining the buyer's damages as measured by the 
difference between such value and the value the 
article would have had if it had been as warranted.  
67A Am. Jur. 2d. Sales § 1145, at 555 (2003).   
VI. CONCLUSION 
¶45 We hold that pursuant to Wis. Stat. § 402.714(2), the 
appropriate method for measuring damages in this case is the 
No. 
03-1621   
 
27 
 
difference between the warranted value of the vehicle in 
question and its actual value at the time and place of 
acceptance.  When the plaintiff has established a prima facie 
case of damages under this standard, the "special circumstances" 
clause of § 402.714(2) should not be construed so as to 
completely bar her breach of warranty claim simply because she 
used the defective product for a period of time and later resold 
it for more than its fair market value.  We have found no 
authority that stands for the proposition that the proper 
measure of damages under the Uniform Commercial Code in such 
circumstances is the difference between the market value and 
actual price obtained for the defective product at the time and 
place of resale.  However, the price of the defective product 
upon 
resale 
may 
be 
relevant 
insomuch 
as 
it 
constitutes 
circumstantial evidence of the actual value of the product in 
its defective condition at the time and place of acceptance.   
¶46 Because 
the 
circuit 
court 
applied 
an 
incorrect 
standard for measuring damages, we affirm the decision of the 
court of appeals reversing the circuit court's order of summary 
judgment.   
By the Court.—The decision of the court of appeals is 
affirmed. 
  
 
 
No.  03-1621.jpw 
 
1 
 
 
¶47 JON P. WILCOX, J.   (concurring).  I write separately 
because while I agree that the "special circumstances" clause of 
Wis. Stat. § 402.714(2)20 may not be used to bar Mayberry's claim 
by calculating damages based on the difference between the 
market value and actual price of her vehicle at resale, the 
"special circumstances" clause of § 402.714(2) is still relevant 
to this case.   
¶48 Despite Volkswagen's attempt to sustain the circuit 
court's order for summary judgment, what the parties are really 
arguing over is the amount of Mayberry's damages.  Volkswagen is 
concerned that the standard method for calculating damages under 
§ 402.714(2) will allow Mayberry to reap a windfall because her 
actual damages are less than the difference between the 
warranted value of the Jetta and actual value of the Jetta at 
the time and place of acceptance.  Volkswagen argues that the 
standard measure for calculating damages cannot be an inflexible 
rule because Mayberry has mitigated her damages and thus has 
actual damages of a different amount.  Volkswagen's concerns do 
not fall on deaf ears.   
¶49 While I wholeheartedly agree with the majority that 
the "special circumstances" clause of § 402.714(2) should not be 
construed to completely bar a plaintiff from maintaining a 
claim, I would further hold, in accordance with the numerous 
authorities that have addressed the issue, that the "special 
                                                 
20 All references to the Wisconsin Statutes are to the 2001-
02 version unless otherwise indicated.   
No.  03-1621.jpw 
 
2 
 
circumstances" clause of § 402.714(2) may be utilized to adjust 
a plaintiff's damages——as calculated under the difference in 
value at acceptance standard——to reflect any damages mitigated 
by the plaintiff.  In other words, I would hold that while the 
difference between the warranted value and actual value at the 
time and place of acceptance is the "starting point" for 
calculating damages, this figure may be adjusted upwards or 
downwards in appropriate circumstances to reflect the actual 
amount of plaintiff's damages under the "special circumstances" 
clause of § 402.714(2).   
¶50 Wisconsin Stat. § 402.714(2) provides that a court may 
deviate from the standard method of calculating damages for 
breach of warranty if "special circumstances show proximate 
damages of a different amount."  Both courts and commentators 
have recognized that this clause of the Uniform Commercial Code 
allows damages calculated under the standard time and place of 
acceptance measure to be adjusted upward or downward if the 
plaintiff's actual damages are different than the default 
difference in value calculation.  See, e.g., Neilson Bus. Equip. 
Center, Inc. v. Monteleone, 524 A.2d 1172, 1176 (Del. 1987); 
Vorthman v. Myers Enters., 296 N.W.2d 772, 777 (Iowa 1980); 
Ronald A. Anderson, 4A Anderson on the Uniform Commercial Code 
§ 2-714:199 to § 2-714:224 (3d. ed. rev. vol. 4A 1997).   
¶51 As the court in Vorthman explained, "the present 
standard [under the U.C.C.] is to allow either more or less than 
the difference between the value of the property as it should 
have been and as it actually was.  This conforms to the basic 
No.  03-1621.jpw 
 
3 
 
principle that damages should compensate for the loss actually 
suffered."  Vorthman, 296 N.W.2d at 777 (second emphasis added).  
See also Roy Anderson, 1 Damages Under UCC § 10:10, at 10-46 
(2003)("The 'special circumstances' exception may justify an 
award of lesser as well as greater damages than would be allowed 
by the difference in value formula.").  In Vorthman, the court 
emphasized that the "special circumstances" clause applies where 
actual damages are of a different——as opposed to a greater——
amount than the standard measure.  Vorthman, 296 N.W.2d at 777.21 
¶52 One 
recognized 
category 
of 
cases 
in 
which 
the 
plaintiff's damages may be adjusted downward from the standard 
difference in value formulation is "where the buyer has 
mitigated damages to less than those provided by the value 
differential formula."  Roy Anderson, 1 Damages Under UCC 
§ 10:10, at 10-47 (2003)(emphasis added).  Thus: 
Circumstances may exist in which the buyer is fully 
indemnified although the buyer does not obtain the 
full recovery authorized by UCC § 2-714.  In such 
case, the buyer will not be allowed to recover the 
damages authorized by the Code but only so much as is 
                                                 
21 Relying on City of New York v. Pullman Inc., 662 F.2d 
910, 912-13 (2d Cir. 1981), Mayberry asserts that the "special 
circumstances" clause of Wis. Stat. § 402.714(2) may be utilized 
only if a plaintiff's damages are greater than the difference 
between the warranted value of the product and actual value of 
the product at the time and place of acceptance or if the goods 
at issue are custom goods with no ready market.  However, in 
Pullman, the court merely concluded that special circumstances 
existed where custom goods were involved and the plaintiff would 
not be fully compensated for its loss under the standard measure 
for calculating damages.  Id. at 916-18.  Pullman did not 
conclude that these are the only two situations in which the 
"special circumstances" clause is applicable. 
No.  03-1621.jpw 
 
4 
 
required to indemnify the buyer for his or her actual 
loss.   
Ronald A. Anderson, 4A Anderson on the Uniform Commercial Code 
§ 2-714:219, at 487 (3d ed. rev. vol. 4A 1997).   
¶53 This 
application 
of 
"special 
circumstances" 
is 
consistent with the purpose underlying the remedies in the 
Uniform Commercial Code, which is to place the aggrieved party 
"in as good a position as if the other party had fully 
performed."  Wis. Stat. § 401.106(1).  As noted by the majority, 
majority op., ¶¶22-24, the remedies under the Uniform Commercial 
Code for breach of warranty are designed to compensate an 
injured party for her "direct economic loss."  Beyond the Garden 
Gate, Inc. v. Northstar Freeze-Dry Mfg., Inc., 526 N.W.2d 305, 
309 (Iowa 1995)(quoting James J. White & Robert S. Summers, 
Uniform Commercial Code § 11-5, at 536 (3d ed. 1988)).  In other 
words, under the Uniform Commercial Code "'an injured party 
should be fully compensated for losses suffered through the 
fault 
of 
another, 
but . . . he 
should 
not 
be 
allowed 
a 
windfall.'"  James J. White & Robert S. Summers, 1 Uniform 
Commercial Code § 10-2, at 555-56 (4th ed. 1995)(quoting Cmty. 
Television Servs., Inc. v. Dresser Indus., Inc., 435 F. Supp. 
214, 217 (D.S.D. 1977))(emphasis added).  The plaintiff is 
entitled to be compensated for her actual damages, no more, no 
less.  As such, § 1-106 of the Uniform Commercial Code "requires 
mitigation of damages."  Cates v. Morgan Portable Bldg. Corp., 
780 F.2d 683, 688 (7th Cir. 1985). 
¶54 Allowing a deduction for damages that have been 
mitigated is also consistent with Wis. Stat. § 402.714(1), which 
No.  03-1621.jpw 
 
5 
 
states that damages may be "determined in any manner which is 
reasonable."  In addition, the Official Comments to the Uniform 
Commercial Code specifically provide:  "Subsection (2) . . . is 
not intended as an exclusive measure" of damages.  Official 
Comment 3, Uniform Commercial Code § 2-714(2) (1962).  As one 
commentator has recognized, "[t]he effect of the [special 
circumstances] 
exception 
is 
to . . . allow 
the 
court 
the 
flexibility to fashion a damages award 'in any manner which is 
reasonable' as provided by subsection (1)."  Roy Anderson, 1 
Damages Under UCC § 10:10, at 10-45 (2003).  It is perfectly 
reasonable and in accordance with prevailing law to adjust a 
plaintiff's damages so that she does not recover damages that 
she avoided pursuant to her duty to mitigate.  Indeed, a 
contrary holding would be patently unreasonable in light of the 
plaintiff's obligation to mitigate damages.   
¶55 As the court of appeals has recently explained: 
The party alleging breach of the contract has a duty 
to mitigate damages, that is, "to use reasonable means 
under the circumstances to avoid or minimize the 
damages."  See Kuhlman, Inc. v. G. Heileman Brew. Co., 
83 Wis. 2d 749, 752, 266 N.W.2d 382 (1978); Wis JI-
Civil 1731.  An injured party cannot recover any item 
of damage that could have been, or was, avoided.  See 
Kuhlman, 83 Wis. 2d at 752 . . . .  
Kramer v. Bd. of Educ. of the Sch. Dist. of the Menomonie Area, 
2001 WI App 244, ¶13, 248 Wis. 2d 333, 635 N.W.2d 857.  This 
court has held that under general principles of contract law, 
"[a]n injured party is entitled to the benefit of his agreement, 
which is the net gain he would have realized from the contract 
but for the failure of the other party to perform."  Thorp Sales 
No.  03-1621.jpw 
 
6 
 
Corp. v. Gyuro Grading Co., 111 Wis. 2d 431, 438-39, 331 
N.W.2d 342 (1983).  However, we have specifically stated:  "A 
party is not entitled to be placed in a better position because 
of a breach than he would have if the contract had been 
performed."  Hanz Trucking, Inc. v. Harris Bros. Co., 29 
Wis. 2d 254, 268, 138 N.W.2d 238 (1965)(emphasis added).  See 
also Kramer, 248 Wis. 2d 333, ¶13.   
¶56 One instance in which courts have recognized that a 
party has mitigated damages for breach of warranty under the 
Uniform Commercial Code is where the buyer resells the defective 
goods for a profit:  "When the buyer sues the seller for 
warranty damages, the general rule specified by the Code for the 
measurement of the damages must be modified by deducting the 
profits made on resale."  Ronald A. Anderson, 4A Anderson on the 
Uniform Commercial Code § 2-714:223, at 488 (3d ed. rev. vol. 4A 
1997).  In Vorthman, 296 N.W.2d at 778, the court held that the 
damage instruction in the case before it constituted reversible 
error because it did not allow for the damage award to be 
adjusted to reflect the profit the plaintiff received upon 
resale of the defective goods at issue.  See also Lackawanna 
Leather Co. v. Martin & Stewart, Ltd., 730 F.2d 1197, 1203 (8th 
Cir. 1984)(ruling that a jury properly awarded damages in breach 
of warranty case under Uniform Commercial Code § 2-714 for 
defective 
cattle 
hides 
by 
reducing 
damages 
to 
reflect 
plaintiff's profit in resale of the goods); Ducheneaux v. 
Miller, 488 N.W.2d 902, 916 (S.D. 1992)(circuit court erred in 
failing to reduce plaintiff's damages by amount of profit 
No.  03-1621.jpw 
 
7 
 
plaintiff received upon resale of defective calves); Schmaltz v. 
Nissen, 431 N.W.2d 657, 664 (S.D. 1988)(holding it was proper 
under 
South 
Dakota's 
Uniform 
Commercial 
Code 
to 
reduce 
plaintiff's damages to reflect profit plaintiff made upon resale 
of inferior quality seed); Holm v. Hansen, 248 N.W.2d 503, 510-
11 (Iowa 1976)(ruling that where damages were to be calculated 
under "special circumstances" clause of Uniform Commercial Code, 
circuit court was required on remand to consider profits 
plaintiff received upon resale of defective livestock).  
¶57 Here, in an attempt to mitigate her damages, Mayberry 
resold the vehicle to another dealer for $15,100.  However, 
Mayberry conceded that the fair market value of the vehicle at 
the time of trade-in was $14,200.  Thus, assuming Mayberry is 
successful in convincing a jury that Volkswagen breached its 
warranties and that she suffered damages, Mayberry's damages 
should be reduced to reflect the net profit she obtained as a 
result of the resale of the vehicle.22  If this amount were not 
deducted from Mayberry's damages, the duty to mitigate would be 
meaningless.  While Mayberry is entitled to the difference 
between the warranted value of the vehicle and its actual value 
at the time and place of acceptance, she mitigated these damages 
by selling the vehicle for a profit.  If she were entitled to 
keep both the profit from the resale and the total benefit of 
                                                 
22 Of course, it is left to the jury to decide whether 
$15,100 accurately reflects the price obtained for the vehicle 
at trade in, given the entire structure of the trade-in 
arrangement.    
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the bargain damages, she would be placed in a better position 
than had the Jetta not been defective.   
¶58 In addition, a consumer's damages may be reduced in a 
breach of warranty case to reflect any value added to the 
defective product as a result of successful repairs under the 
warranty.  As one commentator has observed:  
By definition, repairs made by the seller are not 
relevant to the claim of the buyer for damages under 
UCC § 2-714.   
The buyer may not recover damages for defects 
that have been corrected by the seller pursuant to its 
warranty to repair.  This result is achieved by 
awarding the plaintiff the difference in the fair 
market value of the goods and their condition at the 
time and place of acceptance, increased by the value 
of repairs and replacement made in compliance with the 
warranty, and the fair market value of the goods had 
they been as warranted. 
Ronald A. Anderson, 4A Anderson on the Uniform Commercial Code 
§ 2-714:131, at 452-53 (3d ed. rev. vol. 4A 1997).  See also 
James J. White & Robert S. Summers, 1 Uniform Commercial Code 
§ 10-2, at 555 (4th ed. 1995)(accord).   
¶59 Thus, in Stutts v. Green Ford, Inc., 267 S.E.2d 919, 
926 (N.C. Ct. App. 1980), the court held that the "special 
circumstances" clause of the Uniform Commercial Code allowed for 
the plaintiff's damages to be reduced in light of the fact that 
the seller made numerous repairs to the vehicle in question 
under its warranty, and thereby increased the value of the 
vehicle.  The court reasoned:  
At 
the 
end 
of 
the 
warranty 
period, 
the 
only 
nonconformity of which plaintiff complains and of 
which 
there 
is 
evidence 
of 
defective 
parts 
or 
workmanship is the oil leakage.  Under the special 
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facts of this case, we hold, then that an appropriate 
measure of damages would be the difference in the fair 
market value of the truck in its condition at the time 
and place of acceptance, increased by the value of 
repairs and replacements made in compliance with the 
warranty, and its fair market value had it been as 
warranted.  This, in effect, would permit plaintiff to 
recover damages compensating him for the loss in value 
due to the persistent oil problem, while preventing 
him from receiving windfall damages for defects which 
were subsequently successfully repaired.   
Id. (citation omitted).   
¶60 Mayberry attempted to mitigate her damages by having 
the Jetta serviced under the warranty Volkswagen provided.  
Volkswagen made several repairs to the vehicle at no charge to 
Mayberry.  While the record is silent as to whether Volkswagen 
ever successfully remedied the engine problem, it does seem that 
Volkswagen may have successfully rectified the other problems.  
Thus, Mayberry's damages should be reduced by any value that was 
added to the defective vehicle as a result of any successful 
repairs made by Volkswagen pursuant to the warranty.  Mayberry 
should not be able to recover for repairs that were successfully 
made free of charge in compliance with the warranty.   
¶61 As such, I would hold that pursuant to § 402.714(2), 
the starting point for calculating damages in this case is the 
difference in value at the time and place of acceptance, but 
that figure may be adjusted downward to take into account any 
damages 
that 
Mayberry 
mitigated 
under 
the 
"special 
circumstances" clause.  I agree with the court of appeals that 
"based on the statutory measure of damages in § 402.714(2), a 
genuine issue of fact exists on the question of damages.  
Mayberry has offered evidence of the Jetta's value at the time 
No.  03-1621.jpw 
 
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and place of acceptance.  Volkswagen, however, has offered 
evidence suggesting 'proximate damages of a different amount.'"  
Mayberry v. Volkswagen of America, 2004 WI App, ¶15, 271 
Wis. 2d 258, 678 N.W.2d 357.   
¶62 In sum, I would hold, consistent with the numerous 
cases and authorities that have considered the issue, that once 
the plaintiff has established a prima facie case of damages 
under the standard method of calculation in § 402.714(2), her 
damages may be reduced under the "special circumstances" clause 
of § 402.714(2) to reflect any damages she may have mitigated.  
That is, a plaintiff's damages, as calculated under the 
difference in value at acceptance standard, should be adjusted 
under the "special circumstances" clause to reflect the actual 
damages suffered.  A plaintiff's damages should be reduced under 
the "special circumstances" clause of § 402.714(2) in the amount 
of any net profit the consumer obtained upon the resale of the 
vehicle.  In addition, if the manufacturer made successful 
repairs to the vehicle under its warranty, the plaintiff's 
damages should be reduced to reflect the increased value of the 
vehicle as a result of such repairs.  The plaintiff is entitled 
to the benefit of her bargain, no more, no less.  Assuming 
Mayberry can establish the other prerequisites for liability, 
her damages, as calculated under § 402.714(2), should be 
adjusted to reflect any net profit she obtained as a result of 
the resale and any value added to the defective vehicle as a 
result of any successful repairs made by Volkswagen.   
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¶63 I am authorized to state that Justices DAVID T. 
PROSSER, JR. and PATIENCE D. ROGGENSACK join this opinion.   
 
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