Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-01761/USCOURTS-casd-3_17-cv-01761-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ALAN FREAS, JR.,

Plaintiff,

v. 

BMW OF NORTH AMERICA, LLC, a 

Delaware corporation, 

Defendant.

Case No.: 3:17-cv-01761-H-AGS

ORDER DENYING MOTION FOR 

SUMMARY JUDGMENT

[Doc. No. 33] 

On May 25, 2018, Defendant BMW of North America, LLC (“BMW”) filed a 

motion for summary judgment. (Doc. No. 33.) Plaintiff Alan Freas, Jr. (“Freas”) opposed 

the motion on July 16, 2018, (Doc. No. 49), and BMW filed a reply on July 23, 2018. (Doc. 

No. 50.) The Court held a hearing on the matter on August 1, 2018. Timothy Whelan

appeared for Freas, while Michael J. Hurvitz appeared for BMW. For the reasons that 

follow, the Court denies the motion.

Background

I. Factual History

Freas is a San Diego area resident. (Doc. No. 1-3, Complaint, at ¶ 1.) BMW is the 

North American subsidiary of a major international luxury car manufacturer, and does 

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business in Las Vegas, Nevada, among other places. (Doc. No. 33-1, Defendant’s 

Statement of Facts, at ¶ 1.) On March 12, 2014, when Freas was living in Nevada,1 he 

purchased a certified used 2011 BMW 740i (“the Vehicle”) from BMW for a total financed 

price of $61,624.11. (Doc. No. 49-2, Plaintiff’s Statement of Facts, at ¶ 1.) 

Freas alleges that “since the sale, the car has been plagued by ongoing defects, 

including problems with the brakes, HVAC system, electrical system, and engine.” (Id. at 

¶ 3.) The Vehicle’s chief defect is “an ongoing engine performance problem,” whereby 

the Vehicle experiences “a loss of power and the illumination of the check engine light” 

during use, and cannot travel faster than “40 miles per hour or so.” (Id. at ¶ 4.) Freas

submitted the Vehicle for servicing eight times at BMW locations in Las Vegas from 2014 

to 2016, and an additional three times at BMW locations in Southern California from 2016 

to 2017. (Doc. No. 33, MSJ, at 3–4.) The Vehicle has been out of service for more than 

sixty cumulative days since its purchase. (Doc. No. 49-2 at ¶ 3.)

II. Procedural History

Freas filed suit in the San Diego County Superior Court on August 1, 2017, asserting 

claims for breach of warranty under California’s Song-Beverly Consumer Warranty Act, 

Civil Code § 1790 et seq., and the federal Magnuson-Moss Warranty Act, 15 U.S.C. 

§ 2301, et seq. (Doc. No. 1-3.) BMW removed that lawsuit to this District on August 31, 

2017, and answered the complaint.2 (Doc. Nos. 1, 2.) The Court dismissed Freas’ Song-

 

1

 Freas apparently lived in Las Vegas, Nevada until sometime in the fall of 2016, when he moved 

to San Diego. (Doc. No. 33-1 at ¶ 4.) 

2

 In its notice of removal, BMW asserts that the Court possesses both diversity jurisdiction and 

original jurisdiction under the Magnuson-Moss Warranty Act. (Doc. No. 1 at ¶¶ 3, 4.) Because the 

complaint is silent as to the value of the Vehicle and the amount of damages sought, the Court ordered the 

parties to submit supplemental briefing addressing whether the amount in controversy in this suit is at 

least $50,000, as required by Magnuson-Moss, see 15 U.S.C. § 2310(d)(1)(B), (3)(B), and $75,000, as 

required by the federal diversity statute, see 28 U.S.C. § 1332(a)(1), (b). (Doc. No. 19.) The parties’ 

submissions make clear that Freas is seeking to recover at least the approximately $61,000 he paid for the 

Vehicle, and thus the Court concludes that subject matter jurisdiction exists under Magnuson-Moss. The 

Court takes no position as to whether diversity jurisdiction also exists. 

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Beverly claim pursuant to a joint stipulation by the parties on October 3, 2017, leaving only 

his Magnuson-Moss claim. (Doc. No. 8.)

 BMW filed the instant summary judgment motion against Freas’ Magnuson-Moss 

claim on May 25, 2018. (Doc. No. 33.) The matter has been fully briefed and heard, and 

is now ripe for decision.3

 

Discussion

I. Legal Standards for Summary Judgment

Summary judgment is appropriate under Federal Rule of Civil Procedure 56 if the 

moving party demonstrates that there is no genuine issue of material fact and that it is 

entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 

U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it 

could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 

(1986); Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Mgmt., Inc., 618 F.3d 

1025, 1031 (9th Cir. 2010). “A genuine issue of material fact exists when the evidence is 

such that a reasonable jury could return a verdict for the nonmoving party.” Fortune 

Dynamic, 618 F.3d at 1031 (internal quotation marks and citations omitted); accord

Anderson, 477 U.S. at 248. “Disputes over irrelevant or unnecessary facts will not preclude 

a grant of summary judgment.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 

F.2d 626, 630 (9th Cir. 1987).

A party seeking summary judgment always bears the initial burden of establishing 

the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving 

party can satisfy this burden in two ways: (1) by presenting evidence that negates an 

essential element of the nonmoving party’s case; or (2) by demonstrating that the 

nonmoving party failed to establish an essential element of the nonmoving party’s case that 

 

3

 The Court grants BMW’s unopposed request for judicial notice of the alternative dispute resolution 

program it maintains in California. (Doc. No. 33-2.) The Court sustains Freas’ evidentiary objections 

where valid, and otherwise overrules them. (Doc. Nos. 48, 49-3, 49-4.) The Court reminds the parties 

that any evidence they seek to introduce at trial must be admissible under the Federal Rules of Evidence, 

regardless of whether the Court has adverted to such evidence in this Order. 

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the nonmoving party bears the burden of proving at trial. Id. at 322–23; Jones v. Williams, 

791 F.3d 1023, 1030 (9th Cir. 2015). Once the moving party establishes the absence of a 

genuine issue of material fact, the burden shifts to the nonmoving party to “set forth, by 

affidavit or as otherwise provided in Rule 56, ‘specific facts showing that there is a genuine 

issue for trial.’” T.W. Elec. Serv., 809 F.2d at 630 (quoting former Fed. R. Civ. P. 56(e)); 

accord Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th Cir. 2007). To carry 

this burden, the non-moving party “may not rest upon mere allegation or denials of his 

pleadings.” Anderson, 477 U.S. at 256; see also Behrens v. Pelletier, 516 U.S. 299, 309 

(1996) (“On summary judgment, . . . the plaintiff can no longer rest on the pleadings.”). 

Rather, the nonmoving party “must present affirmative evidence . . . from which a jury 

might return a verdict in his favor.” Anderson, 477 U.S. at 256. Questions of law are wellsuited to disposition via summary judgment. See, e.g., Pulte Home Corp. v. Am. Safety 

Indem. Co., 264 F. Supp. 3d 1073, 1077 (S.D. Cal. 2017).

When ruling on a summary judgment motion, the Court must view the facts and 

draw all reasonable inferences in the light most favorable to the non-moving party. Scott 

v. Harris, 550 U.S. 372, 378 (2007). The court should not weigh the evidence or make 

credibility determinations. See Anderson, 477 U.S. at 255. “The evidence of the nonmovant is to be believed.” Id. Further, the Court may consider other materials in the record 

not cited to by the parties, but it is not required to do so. See Fed. R. Civ. P. 56(c)(3); 

Simmons v. Navajo Cnty., 609 F.3d 1011, 1017 (9th Cir. 2010).

II. Analysis

BMW argues that: (i) Nevada law governs Freas’ Magnuson-Moss claim; (ii) this 

lawsuit should be dismissed because Freas did not engage in an informal dispute settlement

process prior to filing suit; (iii) Freas cannot recover for any breach of a written warranty 

because Nevada law precludes relief for used car purchasers, and his claims are otherwise 

time barred; and (iv) Plaintiff lacks sufficient evidence to create a triable fact issue as to 

whether the Vehicle was defective at the time of sale. (Doc. No. 33.) Freas disputes each 

of BMW’s legal arguments, and asserts that his lay testimony combined with the large 

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number of unsuccessful service attempts could convince a trier of fact that BMW breached 

express and implied warranties by delivering him a defective vehicle. (Doc. No. 49.)

As explained below, the Court agrees with BMW that Nevada law controls Freas’ 

Magnuson-Moss claim. However, the Court concludes that: (i) Freas was not required to 

engage in an informal dispute settlement process before filing this suit; (ii) Freas’ express 

warranty theory is not barred by any provision of Nevada’s Lemon Law; and 

(iii) there are genuine issues of material fact as to whether BMW breached the implied 

warranty of merchantability created by Nevada’s Uniform Commercial Code. The Court 

accordingly declines to enter summary judgment for BMW. 

A. Choice of Law

Freas’ sole claim is that BMW violated the federal Magnuson-Moss Warranty Act, 

15 U.S.C. § 2301 et seq., by breaching written and implied warranties created at the time 

the Vehicle was sold. As the Ninth Circuit has explained, “the Magnuson-Moss Warranty 

Act creates a private cause of action for a warrantor’s failure to comply with the terms of 

a . . . warranty.” Milicevic v. Fletcher Jones Imports, Ltd., 402 F.3d 912, 918 (9th Cir. 

2005); see also 15 U.S.C. § 2310(d)(1) (A “consumer who is damaged by the failure of a

. . . warrantor . . . to comply with any obligation . . . under a written warranty, implied 

warranty, or service contract” may bring suit in federal court.). However, except “in the 

specific instances in which Magnuson-Moss expressly prescribes a regulating rule, the Act 

calls for the application of state written and implied warranty law, not the creation of 

additional federal law.” Milicevic, 402 F.3d at 918 (quoting Walsh v. Ford Motor Co., 807 

F.2d 1000, 1012 (D.C. Cir. 1986)); accord Brown v. Electrolux Home Prods., Inc., 817 

F.3d 1225, 1231 (11th Cir. 2016); Carlson v. Gen. Motors Corp., 883 F.2d 287, 291 (4th 

Cir. 1989). Thus, in order to recover under Magnuson-Moss, Freas must show a violation 

of an express or implied warranty created and governed by state law. See, e.g., Birdsong 

v. Apple, Inc., 590 F.3d 955, 958 n.2 (9th Cir. 2009) (“Under [Magnuson-Moss], the court 

applies state warranty law.”); Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 & 

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n.3 (9th Cir. 2008) (holding that “claims under the Magnuson-Moss Act stand or fall with 

[a plaintiff’s] express and implied warranty claims under state law”).

The parties dispute which state’s law governs the warranties underlying Freas’

Magnuson-Moss claim. BMW argues that the Court should apply Nevada law. (Doc. No. 

33 at 6–12.) Freas does not take a definitive position as to which state’s law should apply 

in his summary judgment briefing, although he argued for California law earlier in this 

litigation. (Doc. No. 16 at 18.)

The Court agrees with BMW. Federal courts exercising jurisdiction under the 

Magnuson-Moss Warranty Act apply the forum state’s choice of law rules when selecting 

which state’s warranty laws govern the plaintiff’s claims. See, e.g., David v. Am. Suzuki 

Motor Corp., 629 F. Supp. 2d 1309, 1315 (S.D. Fla. 2009); Feinstein v. Firestone Tire & 

Rubber Co., 535 F. Supp. 595, 606 (S.D.N.Y. 1982) (“[T]his federal court sitting in New 

York is required, either under Magnuson-Moss jurisdiction or diversity jurisdiction, to look 

to New York choice-of-law rules.”). Under California law, a claim for breach of express 

or implied warranties “necessarily sounds in contract.” Wyatt v. Cadillac Motor Car 

Division, 145 Cal. App. 2d 423, 426 (1956), abrogated on other grounds by Sabella v. 

Wisler, 59 Cal. 2d 21, 29 (1963); see also Hauter v. Zogarts, 14 Cal. 3d 104, 117 (1975). 

The Court must therefore apply Civil Code § 1646 in determining whether Nevada or 

California warranty law governs this case.

4

 See Frontier Oil Corp. v. RLI Ins. Co., 153 

Cal. App. 4th 1436, 1454–60 (2007) (holding that Civil Code § 1646 supplies the correct 

choice of law rule for contract issues); accord Alkayali v. den Hoed, No. 3:18-cv-777-HJMA, 2018 WL 3425980, at *4 (S.D. Cal. July 16, 2018) (Huff, J.).

Under Civil Code § 1646, a “contract is to be interpreted according to the law and 

usage of the place where it is to be performed; or, if it does not indicate a place of 

 

4

 In this context, a warranty is an “express or implied promise that something in furtherance of the 

contract is guaranteed by one of the contracting parties; esp[ecially], a seller’s promise that the thing being 

sold is as represented or promised.” Black’s Law Dictionary (10th ed. 2014). Thus, although a warranty 

is not always a contract per se, it is inextricably linked to contract rights and interpretation, and is properly 

subject to contractual choice of law rules. 

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performance, according to the law and usage of the place where it is made.” Here, the sales 

contract that gave rise to the express and implied warranties at issue was made in Nevada, 

where Freas purchased, first used, and primarily serviced the Vehicle. The Court 

accordingly concludes that all warranties relevant to Freas’ Magnuson-Moss claim arise 

under and are governed by Nevada law.5

B. Informal Dispute Settlement Procedure

The Magnuson-Moss Warranty Act provides that if a warrantor establishes “an 

informal dispute settlement procedure which meets the requirements of the [Federal Trade] 

Commission’s rules” and “he incorporates in a written warranty a requirement that the 

consumer resort to such procedure before pursuing any legal remedy under this section 

respecting such warranty, then (i) the consumer may not commence a civil action . . . under 

. . . [the Act] unless he initially resorts to such procedure[.]” 15 U.S.C. § 2310(a)(3). BMW 

maintains an informal dispute settlement procedure (the Better Business Bureau’s AUTO 

LINE program) in Arkansas, California, Georgia, Idaho, Iowa, Kentucky, Maryland, 

Massachusetts, Minnesota, Pennsylvania, Ohio, and Virginia. (Doc. No. 49, Exh. 1, 

PageID 677.) BMW argues that the Court should dismiss this suit because Freas did not 

resort to the AUTO LINE program in California before filing. (Doc. No. 33 at 17–18.) 

Freas counters that he was not required to use AUTO LINE because BMW failed to provide 

proper notice of the program in its warranty booklet. (Doc. No. 49 at 15–19.) 

The Court rejects BMW’s position for two reasons. First, BMW failed to comply 

with the Federal Trade Commission’s regulations in seeking to require Freas to make use 

 

5

 The Court notes that it would reach the same result if it applied § 191 of the Second Restatement 

of Conflict of Laws, as urged by BMW, or California’s governmental interest test. See Arno v. Club Med. 

Inc., 22 F.3d 1464, 1467 (9th Cir. 1994) (describing the governmental interest test). Assuming that there 

are relevant differences between California and Nevada law in this area, Nevada has a much more 

significant relationship to this dispute, and its laws would be more greatly impaired if they were not 

applied. The Vehicle was sold in Nevada to a then-Nevada-resident, and was serviced eight times in 

Nevada as compared to only three in California. The most significant connection that California has to 

this dispute is that Freas is now a California resident, a fact that is relatively inconsequential when 

compared to this suit’s greater contacts with Nevada. 

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of the AUTO LINE program. Federal law provides that a “warrantor shall disclose clearly 

and conspicuously at least the following information on the face of the written warranty:” 

(1) A statement of the availability of the informal dispute settlement 

mechanism;

(2) The name and address of the Mechanism, or the name and a telephone 

number of the Mechanism which consumers may use without charge;

(3) A statement of any requirement that the consumer resort to the 

Mechanism before exercising rights or seeking remedies created by Title 

I of the [Magnuson-Moss Warranty] Act; together with the disclosure that 

if a consumer chooses to seek redress by pursuing rights and remedies not 

created by Title I of the Act, resort to the Mechanism would not be 

required by any provision of the Act; and

(4) A statement, if applicable, indicating where further information on the 

Mechanism can be found in materials accompanying the product, as 

provided in § 703.2(c) of this section.

16 C.F.R. § 703.2(b). “If the warranty is included as part of a longer document, such as a 

use and care manual,” the phrase “[o]n the face of the warranty” means “the page in such 

document on which the warranty text begins.” Id. § 703.1(h)(2). 

Here, it is undisputed that BMW’s written warranty begins on page 26 of its 2011 7 

Series Service and Warranty Information Booklet. (Doc. No. 33-1 at ¶ 11.) It is likewise 

undisputed that page 26 contains none of the information required by 16 C.F.R. § 703.2(b); 

rather, that information is provided on page 22 of the booklet. (Id. at ¶ 10.) Because BMW 

failed to provide the information required by 16 C.F.R. § 703.2(b) “on the face of the 

written warranty,” as defined by federal law, Freas was not required to use AUTO LINE 

before filing this suit.

BMW asks the Court to excuse its technical noncompliance with the FTC’s 

regulations and asserts that there “is no authority to support [Freas’] draconian 

interpretation of [16 C.F.R. § 703.2(b)’s] disclosure requirements.” (Doc. No. 33 at 18.) 

However, Magnuson-Moss itself expressly provides that a consumer is only required to 

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pursue an informal dispute settlement procedure prior to filing suit if “such procedure, and

its implementation, meets the requirements of [the FTC’s] rules[.]” 15 U.S.C. 

§ 2310(a)(3)(B) (emphasis added); see also id. § 2310(a)(2) (giving the FTC the authority 

to “prescribe rules setting forth minimum requirements for any informal dispute settlement 

procedure which is incorporated into the terms of a written warranty”). Because Congress 

has conditioned the informal dispute settlement requirement on the warrantor’s compliance 

with FTC rules, it would be inappropriate for the Court to excuse BMW’s failure to fully 

adhere to 16 C.F.R. § 703.2(b). See, e.g., Henson v. Santander Consumer USA Inc., 137 

S. Ct. 1718, 1725 (2017) (“[I]t is [the courts’] job to apply faithfully the law Congress has 

written[.]”). Moreover, as the Third Circuit has explained, “the FTC regulations 

promulgated to guide providers of alternative dispute resolution mechanisms are slanted 

toward the consumer: consumers must comply with only minimal requirements, while the 

warrantors must follow more elaborate and more burdensome rules[.]” Harrison v. Nissan 

Motor Corp. in U.S.A., 111 F.3d 343, 351 (3d Cir. 1997). Requiring technical compliance 

with the FTC’s disclosure requirements makes practical sense; as the FTC put it, alternative 

dispute resolution procedures are only “useful if consumers realize they exist.” F.T.C. 

Statement of Basis and Purpose for 16 C.F.R. § 703, 40 Fed. Reg. 60,190, 60,194 (1975)

(footnote omitted). 

Second, Freas was not required to make use of the AUTO LINE program prior to 

filing suit because the program does not exist in Nevada, where Freas purchased the 

Vehicle. (Doc. No. 49-1, Romano Decl., ¶ 22; see also Doc. No. 49 at PageID 677.) 

Although neither Magnuson-Moss nor the FTC’s regulations address the scenario before 

the Court—Freas purchased the Vehicle in a state where BMW does not maintain a 

qualified informal dispute settlement procedure (Nevada), but then subsequently moved to 

a state where BMW does maintain such a procedure (California)—dismissing Freas’ suit 

would make little sense. The express purpose of the informal dispute settlement

requirement is “to encourage warrantors to establish procedures whereby consumer 

disputes are fairly and expeditiously settled through informal dispute resolution 

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mechanisms.” 15 U.S.C. § 2310(a)(1) (emphasis added). This Congressional policy would 

not be furthered by allowing BMW to benefit from the sheer accident that Freas moved to 

an AUTO LINE state after purchasing the Vehicle, when BMW itself elected not to 

establish a similar dispute resolution mechanism in Nevada. 

The Court accordingly declines to stay or dismiss this lawsuit and order Freas to use 

the AUTO LINE procedure, which would be non-binding in any event. See 16 C.F.R. 

§ 703.5(j) (“Decisions of the [informal dispute settlement procedure] shall not be legally 

binding on any person.”); Cunningham v. Fleetwood Homes of Ga., Inc., 253 F.3d 611, 

618 (11th Cir. 2001) (The “informal dispute settlement procedure of § 2310(a)(3) is a nonbinding mechanism, in that it serves at most as a prerequisite, and not a bar, to relief in 

court.”). 

C. Express Warranty Theory

BMW argues that Freas’ breach of express warranty theory fails as a matter of law 

because: (i) the remedies provided by Nevada’s Lemon Law, Nev. Rev. Stat. 

§ 597.600 et seq., are available only to purchasers of new cars, and thus Freas has no 

remedy as a user car purchaser; and (ii) the Lemon Law’s statute of limitations, Nev. Rev. 

Stat. § 597.650, bars Freas’ claim. (Doc. No. 33 at 12–14.) The Court rejects both 

arguments. 

As an initial matter, BMW is correct that the Nevada Lemon Law only regulates 

warranties arising from the sale of new vehicles. See Nev. Dep’t of Taxation v. Chrysler 

Group LLC, 300 P.3d 713, 716 (Nev. 2013) (“We . . . note that the legislative intent behind 

Nevada’s lemon law was to protect buyers who purchased defective new vehicles.”). But 

it does not then follow that purchasers of used vehicles have no remedies at all if the seller 

breaches an express warranty. Nothing in the statute states that the Lemon Law provides 

the sole and exclusive remedies for all car purchasers in Nevada, or purports to pre-empt, 

for example, the remedies available under Nevada’s Uniform Commercial Code for 

purchasers of defective goods. See Nev. Rev. Stat. § 104.2601. In fact, the statute says 

just the opposite: “The provisions of [the Lemon Law] do not limit any other right or 

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remedy which the buyer may have by law or by agreement.” Nev. Rev. Stat. § 597.670. 

The better way to read the Lemon Law—and the interpretation most faithful to its status as 

“a remedial statute that should be read broadly in favor of the consumers the law was 

designed to protect,” Milicevic v. Mercedes-Benz USA, LLC, 256 F. Supp. 2d 1168, 1175 

(D. Nev. 2003), aff’d 402 F.3d 912 (9th Cir. 2005)—is that it has nothing at all to say about 

used vehicles one way or another. This interpretation is particularly preferable because 

accepting BMW’s argument would render illusory all of the express warranties BMW

issued to buyers of its certified pre-owned vehicles in Nevada. 

Relatedly, because Nevada’s Lemon Law only applies to new vehicles, BMW’s 

statute of limitations argument also fails. Although Nev. Rev. Stat. § 597.650 provides 

that breach of warranty claims “must be commenced within 18 months after the date of the 

original delivery of the motor vehicle to the buyer,” by its own terms, this limitations period 

applies only to “action[s] brought pursuant to [the Lemon Law].” Because Freas’ warranty 

claims relate to a used vehicle, and are thus not brought pursuant to the Lemon Law, 

§ 597.650 is inapplicable. 

Rather, the correct statute of limitations is found in Nevada’s Uniform Commercial 

Code, which states that: “An action for breach of any contract for sale must be commenced 

within 4 years after the cause of action has accrued.” Nev. Rev. Stat. § 104.2725(1).

6

 “A 

cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of 

 

6

 Nevada’s UCC statute of limitations is applicable, even though this action was commenced in 

California, because of Civil Code § 361. See Flowers v. Carville, 310 F.3d 1118, 1123 (9th Cir. 2002) 

(holding that federal courts applying state law must apply the forum state’s borrowing statute in 

determining which state’s statute of limitations governs). That section states that when “a cause of action 

has arisen in another State . . . and by the laws thereof an action thereon cannot there be maintained against 

a person by reason of the lapse of time, an action thereon shall not be maintained against him in 

[California], except in favor of one who has been a citizen of [California], and who has held the cause of 

action from the time it accrued.” Cal. Civil Code § 361. Because Freas was a Nevada citizen at the time 

his cause of action accrued (the day BMW delivered the Vehicle to him, see Nev. Rev. Stat. 

§ 104.2725(2)), Freas is not eligible for § 361’s carve-out for California citizens. See McCann v. Foster 

Wheeler LLC, 48 Cal. 4th 68, 85 (2010) (“Past cases establish that [§ 361’s] exception applies only where 

the plaintiff was a California citizen at the time the cause of action accrued, and does not extend to a 

plaintiff who became a citizen of California after the cause of action accrued but before the lawsuit in 

question was filed.”). Freas’ claims are thus subject to any applicable Nevada limitations periods. 

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knowledge of the breach.” Id. § 104.2725(2). “A breach of warranty occurs when the 

tender of delivery is made . . . .” Id. Here, Freas purchased the vehicle on March 12, 2014, 

and commenced this lawsuit on August 1, 2017. Because this lawsuit was “commenced 

within 4 years after the cause of action . . . accrued,” it is not time barred. Id. § 104.2725(1). 

Accordingly, the Court denies BMW’s motion for summary judgment as to Freas’

Magnuson-Moss/breach of express warranty theory.

D. Implied Warranty of Merchantability Theory

Freas also claims that BMW breached the implied warranty of merchantability 

created by Nevada’s Uniform Commercial Code. See Nev. Rev. Stat. § 104.2314(1) (“[A] 

warranty that the goods shall be merchantable is implied in a contract for their sale if the 

seller is a merchant with respect to goods of that kind.”). Relevant here, Nevada law would 

consider the Vehicle merchantable if it: (i) could “[p]ass without objection in the trade 

under the contract description;” and (ii) was “fit for the ordinary purposes for which 

[vehicles] are used.” Id. § 104.2314(2)(a), (c).7

 

BMW argues that it is entitled to summary judgment on Freas’ implied warranty 

theory because: (i) Freas has allegedly presented no evidence that the Vehicle does not 

meet the standards for merchantability set by Nev. Rev. Stat. § 104.2314(2); and (ii) BMW 

allegedly fixed each individual problem raised during Freas’ eleven servicing requests. 

(Doc. No. 33 at 15–17.) As Freas rightly rejoins however, BMW’s arguments ring hollow 

and would require the Court to apply an overly rigid construction of the law. 

At bottom, Freas’ theory of the case is a simple one. He paid a substantial sum of 

money for a used luxury vehicle from a reputable dealer, and expected the vehicle to run 

as advertised. Instead, the Vehicle allegedly has serious engine problems that have not 

been resolved despite eleven service requests and more than sixty days in the shop. A 

reasonable trier of fact could find that the Vehicle was not merchantable when delivered, 

 

7

 Although Nevada’s UCC contains other requirements for goods to be merchantable, none of the 

others appear applicable to automobiles. Nev. Rev. Stat. § 104.2314(2)(b), (d)–(f).

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and was not subsequently made merchantable by BMW’s servicing attempts, based on 

Freas’ testimony and the number of service requests involved. See Nev. Contract Servs., 

Inc. v. Squirrel Cos., Inc., 68 P.3d 896, 899–900 (Nev. 2003) (reversing grant of summary 

judgment in case where liquor dispenser suffered from unexplained malfunctions and 

holding “that it is too burdensome to require a plaintiff to prove precisely why a product 

does not work in a breach of warranty action, specifically in instances . . . where a product 

integrating electronic and mechanical components is involved” (footnote omitted)). 

Havas v. Love, 514 P.2d 1187 (Nev. 1973) is instructive. There, the plaintiff bought 

a motor bus from the defendant. Id. at 1188. “On the day that [the plaintiff] was to accept 

delivery of the bus he noticed smoke coming from the air conditioning unit.” Id. “After a 

wait of three or four hours during which the [defendant] attempted to repair the bus [the 

plaintiff] again observed smoke and fumes coming out of the motor and from underneath 

the hood of the vehicle.” Id. The Nevada Supreme Court held that the plaintiff’s lay 

observations were sufficient to support “a finding that the motor bus . . . was not fit for its 

intended use and failed to conform to the implied warranty of merchantability contained in 

the purchase agreement.” Id. The same reasoning is equally applicable here—if the trier 

of fact believes Freas’ representations about the Vehicle’s defects, it could conclude that 

the Vehicle was not merchantable when delivered. See also Stover v. Findlay RV Ctr., 

Inc., No. 2:09–cv–01859–GMN–RJJ, 2010 WL 3328068, at *7 (D. Nev. Aug. 20, 2010) 

(declining to dismiss breach of warranty action over defective motor home where the 

plaintiffs alleged “numerous defects” that prevented them from using the motor home for 

lengthy periods).

Accordingly, the Court also denies BMW’s motion for summary judgment as to 

Freas’ Magnuson-Moss/breach of implied warranty theory. 

///

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Conclusion

For the foregoing reasons, the Court concludes that: (i) Nevada law governs Freas’

Magnuson-Moss claim; (ii) Freas did not violate Magnuson-Moss’ informal dispute 

resolution requirement; (iii) Freas’ express warranty theory is not barred by Nevada’s 

Lemon Law, or the Lemon Law’s statute of limitations; and (iv) genuine issues of material 

fact preclude summary judgment on Freas’ implied warranty of merchantability theory. 

The Court accordingly denies BMW’s motion for summary judgment. 

IT IS SO ORDERED.

DATED: August 1, 2018

 

 MARILYN L. HUFF, District Judge

 UNITED STATES DISTRICT COURT

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