Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-07-01832/USCOURTS-ca7-07-01832-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 07-1832

BRUCE A. TAMMI,

Plaintiff-Appellee,

v.

PORSCHE CARS NORTH AMERICA, INC.,

Defendant-Appellant.

____________

Appeal from the United States District Court

for the Eastern District of Wisconsin.

No. 04 C 1059—Charles N. Clevert, Jr., Judge.

____________

ARGUED JANUARY 8, 2008—DECIDED AUGUST 4, 2008

____________

Before FLAUM, RIPPLE, and MANION, Circuit Judges.

MANION, Circuit Judge. Bruce Tammi filed suit against

Porsche Cars North America, Inc. (“Porsche”) in Wisconsin state court seeking damages for violations of the

Wisconsin Lemon Law (“Lemon Law”), Wisconsin

Statute Section 218.0171, involving the 2003 Porsche 911

Turbo he leased from US Bank. Porsche removed the

case to federal court on the basis of diversity jurisdiction

where the case proceeded to a jury trial. The jury entered

a verdict in favor of Tammi and awarded him $26,600.00

in damages. The parties filed post-trial motions. The

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2 No. 07-1832

district court denied Porsche’s motion for judgment

notwithstanding the verdict and granted Tammi’s motion

to alter the verdict on damages awarding Tammi

$266,159.76. Porsche appeals. We affirm the jury’s verdict

on the sufficiency of the evidence. However, because

Wisconsin law does not provide sufficient guidance on

the important issue of pecuniary loss under its Lemon

Law, we stay the remand of this appeal and certify four

questions to the Wisconsin Supreme Court, pursuant to

Circuit Rule 52 and Wisconsin Statute Section 821.01.

I.

On May 30, 2003, Bruce Tammi, a member of the Porsche

Club of America, leased a 2003 Porsche 911 Turbo.

Tammi’s lease through US Bank was for a 36-month term

and required an initial payment of $1,999.85 and 35

monthly payments of $1,912.35 (for a total amount of

lease payments of $68,844.50). The lease provided a

purchase option at the end of the lease for $64,344.10 plus

taxes, and it imposed a $395.00 termination fee if the

lessee elected not to purchase the vehicle.

Tammi testified at trial that he leased the vehicle for use

in competitive car club events as well as for his work

commute, which consisted primarily of highway driving.

The car Tammi leased was equipped with a rear spoiler

that was designed to deploy automatically when the

vehicle exceeded 75 m.p.h. in order to provide aerodynamic stability to the car. The spoiler was designed to

retract automatically at 40 m.p.h. While he did not experience any problems with the spoiler when

participating in auto-cross competitions, Tammi testified

that on occasion when he drove the car on the highway

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No. 07-1832 3

between 55 m.p.h. and 70 m.p.h., the spoiler failed. Specifically, the spoiler would deploy, but would not retract.

In addition, Tammi explained that when the spoiler

failed, it prompted an audible chime to ring intermittently,

a red warning light to illuminate, and a red warning

message image to display in the center instrument

cluster. Tammi stated that while he was able to temporarily

stop the warning lights and sounds by stopping the

vehicle, upon restarting the vehicle and returning to the

highway, the warning would reappear and sound approximately every five minutes. Tammi found the

warning light and the chimes startling and distracting.

Tammi also complained that the car radio volume

would blast upon start-up and then resume a normal

volume after a few minutes. Tammi’s wife also testified at

trial that when she was driving the car no more than 65

m.p.h., the rear spoiler system failed causing her to pull off

the highway, turn off the car, and call for assistance

because she was unsure whether the car was safe to drive.

Moreover, Tammi’s wife stated that the warning lights

and sounds continued after she restarted the car.

Tammi first took the car to Concours Service Inc.

(“Concours”), a certified Porsche service provider, on

March 2, 2004, noting that the rear spoiler failed to automatically retract and the radio volume was very loud

when the car was first started. Between March 2004

and August 13, 2004, Tammi took the car to Concours,

Zimbrick European of Madison, and International Autos

at least eight times for service on the spoiler because of

recurring failures without receiving a successful repair.

Evidence of these service visits was presented at trial. At

oral argument before this court, Porsche’s attorney conceded that Tammi had taken his car in for repairs at least

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four times. Tammi again experienced another spoiler

failure after the August 13, 2004, service visit at Zimbrick.

On September 7, 2004, Tammi submitted to Porsche

the required notice under the Wisconsin Lemon Law,

Wisconsin Statute Section 218.0171. In that notice, Tammi

indicated that his vehicle had been “made available for

repair at least 4 times for the same defect during its

first year of warranty,” and demanded “[a] refund calculated in accordance with the Lemon Law, plus collateral

costs.” Tammi also listed the date, dealership, and problems reported for each service visit and indicated that the

vehicle was leased from US Bank. Porsche responded

with a letter dated October 6, 2004, rejecting Tammi’s

Lemon Law notice stating that it was its understanding

that Tammi’s vehicle had been repaired.

A little over a week later on October 14, 2004, Tammi

filed a complaint in Wisconsin state court alleging a

violation by Porsche of the Wisconsin Lemon Law, Wisconsin Statute Section 218.0171. Porsche removed the case to

federal court, with the court having diversity jurisdiction

over the case because Tammi was a citizen of Wisconsin,

Porsche is a Delaware corporation with its principal

place of business in Georgia, and the amount in controversy exceeded $75,000.

During the course of the lease, Tammi paid the $1,999.85

initial payment followed by 29 monthly payments of

$1,912.35 (for a total of $55,458.15), some of which were

paid after Tammi filed suit. As the litigation continued

and before his lease expired, Tammi purchased the car in

December 2005 with a final payment of $75,621.88, despite

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No. 07-1832 5

1 Tammi testified at trial that he inspected the car’s electronic

scheme and replaced the fuse for the spoiler. At the time of trial,

Tammi had only experienced one spoiler failure after his

repair. At oral argument before this court, Tammi confirmed

that he had repaired the spoiler problem with only one subsequent failure.

the problems that persisted with the rear spoiler.1 Essentially, Tammi bought a vehicle that he claimed was a

lemon.

In August 2006, the case proceeded to a jury trial. Before

the case was submitted to the jury, the district court

held two hearings with Tammi, an attorney who was

proceeding pro se, and Porsche’s counsel, Jeffrey Fertl.

During the course of these hearings, the parties argued

about the proper scope of damages in this case. Tammi

stated that he was seeking recovery of his lease payments ($57,458.00), the amount he paid for the purchase

of the car under the buy-out option of the lease

($75,621.88), insurance ($2,457.85), winter tires ($2,044.11)

and floor mats and an auto manual ($788.71), for a total

of $138,370.55. In addition, Tammi sought to retain ownership of the car. Porsche asserted that the lease payments

Tammi made were proper subjects of damage, but that

the other items were not related to the vehicle repairs. The

district court concluded that it was going to allow Tammi

“to seek damages for the insurance and the like and

reconsider after whatever verdict is returned.” The

parties stipulated that the mileage of the car as of the

first service date was 6,576 miles.

The parties also discussed jury instructions and questions in the presence of the district court judge. The

judge handed the parties a set of proposed instructions

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6 No. 07-1832

and interrogatories, which they reviewed at that time. The

first proposed jury question read: “During the first year

after delivery of his 2003 Porsche, did the plaintiff have

a nonconformity covered by the manufacturer’s expressed warranty which substantially impaired the use,

value or safety of his vehicle?” When the district court

inquired of the parties regarding the acceptability of

this question, Porsche’s counsel responded that his only

objection would be to the inclusion of all three terms

(“use, value, or safety”), because he did not think the

evidence supported the inclusion of all of these. Porsche

continued, “[I]f the Court rules that there is sufficient

evidence to submit use, value or safety to the jury, then

the question is acceptable. I want to make certain for the

record that I reserved or haven’t waived my right to

challenge the insufficiency of the evidence for any three

of those.” This first question remained unchanged, and

the parties approved the remainder of the questions and

instructions after additional discussion.

The case was submitted to the jury, which received

instructions including instructions on the definition of

nonconformity, the necessity for four repair attempts,

and a general damages instruction. The jury returned a

verdict in favor of Tammi concluding that the vehicle

Tammi leased had a “nonconformity covered by the

manufacturer’s express warranty which substantially

impaired the use, value or safety of his vehicle,” and that

Tammi had provided Porsche with at least four attempts

to repair the nonconformity, which continued. The jury

also awarded Tammi $26,600.00 for pecuniary loss resulting from the nonconformity.

In his post-trial motion, Tammi argued that rather

than the general damages instruction it received, the jury

should have received a specific Lemon Law damages

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No. 07-1832 7

instruction. Porsche, in turn, filed a motion for judgment notwithstanding the verdict. The district court

denied Porsche’s motion, but granted Tammi’s motion

holding that as a matter of law Tammi was entitled to

$266,159.76. Specifically, the district court concluded

that Tammi was entitled to the $57,458.00 he paid in lease

payments and the $75,621.88 purchase price he paid for

the vehicle. The district court then doubled the sum of

those two amounts as provided by Wisconsin Statute

Section 218.0171(7) which provides for pecuniary loss to

be doubled. The district court also concluded that Tammi

was not entitled to the cost of the floor mats, winter

tires, or insurance. Finally, the district court concluded

that subsection 7 of the Lemon Law requires neither a

reduction in pecuniary loss for use of the vehicle nor a

return of the vehicle. Thus, the district court awarded

Tammi $266,159.76 and retention of the car.

Porsche appeals, asserting that there was insufficient

evidence for the jury to conclude that the vehicle had a

nonconformity and that it violated the Lemon Law. In

the alternative, Porsche requests a new trial on the issue

of liability because it claims it was prejudiced when the

district court submitted to the jury a question regarding

substantial impairment of use, value, or safety when

there was no credible evidence to establish all three

items and the verdict was against the overwhelming

weight of the evidence. Finally, Porsche also contends that

the district court erred in calculating Tammi’s damage

award.

II.

Porsche argues that the district court erred when it

denied its motion for a directed verdict before and after

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8 No. 07-1832

the case was presented to the jury on the grounds that

Tammi had failed to establish that there was a substantial impairment of his car’s use, value, or safety. We

review a district court’s grant or denial of motion for

judgment as a matter of law de novo. Campbell v. Miller,

499 F.3d 711, 716 (7th Cir. 2007). “Our inquiry is limited

to the question whether the evidence presented, combined with all reasonable inferences permissibly drawn

therefrom, is sufficient to support the verdict when

viewed in the light most favorable to the party against

whom the motion is directed.” Id. (internal citations and

quotations omitted).

Against this backdrop, we consider the standards for

Lemon Law cases. The Lemon Law is triggered if a vehicle

contains a nonconformity, that is, a “condition or defect

which substantially impairs the use, value or safety of

the motor vehicle, and is covered by an express warranty applicable to the motor vehicle.” Wis. Stat.

§ 218.0171(1)(f). This impairment “must be more than a

minor annoyance or inconvenience.” Wisconsin Civil Jury

Instruction 3301. However, a vehicle may possess a nonconformity even if the vehicle is drivable. Dobratz Trucking

& Excavating, Inc. v. Paccar, Inc., 647 N.W.2d 315, 320 (Wis.

Ct. App. 2002) (citations omitted). Even vehicles with

significant mileage have been found to possess nonconformities. Chmill v. Friendly Ford-Mercury of Janesville, Inc.,

424 N.W.2d 747, 750-51 (Wis. Ct. App. 1988) (affirming

a finding of nonconformity on a vehicle with 78,000

miles). Jury findings of nonconformities have been affirmed in cases where a dump truck’s power steering

would not work when the vehicle was stationary thereby

impeding its ability to maneuver into tight spots at construction sites, Dobratz Trucking, 647 N.W.2d at 320-21,

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No. 07-1832 9

where a vehicle continually pulled to the left, Chmill,

424 N.W.2d at 751, and where a malfunction in a truck

caused the vehicle to be out of service for 49 days and

its owner to have to turn down three to five jobs while

the truck was in the shop, Schonscheck v. Paccar, Inc., 661

N.W.2d 476, 482 (Wis. Ct. App. 2003).

Taking the evidence presented in this case in the light

most favorable to Tammi, we conclude that there was

sufficient evidence presented that the vehicle Tammi

leased suffered a nonconformity that substantially impaired its use. Based on Tammi’s testimony, the vehicle

suffered a rear spoiler failure approximately every third

time the car was driven. This failure was not limited to

the spoiler not retracting, but prompted recurring

audible chimes and flashing warning symbols on the

dash. These lights and noises could only be stopped, or

rather paused because the cessation was temporary, by

pulling the vehicle off the highway, turning off the car,

and restarting it. Porsche seems to make light of the

repeated lights and sounds by noting that they did not

constitute a substantial impairment because the

warning could be reset by turning off the vehicle and

removing the key. Tammi purchased the car for his

work commute as well as for participation in car competitions. The jury could reasonably conclude that his

use was substantially impaired when what would otherwise be a normal driving experience was punctuated by

frequent chiming and flashing lights on his car’s deck.

Moreover, when the spoiler failed, Tammi’s trips were

interrupted because he had to stop the vehicle in order

to put an end to a dinging, only to have the sound and

flashing lights return once he resumed his trip. A purchaser of a brand new car, particularly a Porsche, would

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10 No. 07-1832

2 Porsche also challenges the sufficiency of the evidence as to

the substantial impairment of the value and safety to the

vehicle resulting from the rear spoiler malfunction as well as

the sufficiency of the evidence related to Tammi’s claim that

the radio malfunctioned. Because the statute only requires that

there be a substantial impairment of either the use, value, or

safety and we conclude that there was sufficient evidence to

support the jury’s finding of a nonconformity as it relates to

use, we need not address these additional arguments.

not expect to encounter such disruptions every third time

he drives that vehicle. In light of this evidence, we conclude that the evidence was sufficient for the jury to

conclude that the rear spoiler failure constituted a substantial impairment of the use of the vehicle. Therefore,

we affirm the district court’s denial of Porsche’s motion

for judgment notwithstanding the verdict.2

In the alternative, Porsche requests a new trial arguing

that it was prejudiced when the district court submitted

to the jury “a question regarding substantial impairment

of the use, value or safety when there was no credible

evidence to establish all three items, as well as on the

ground that the verdict was contrary to the clear weight

of the evidence.” In other words, Porsche contends that

the evidence on the safety and value of the vehicle was

insufficient for the district court to have submitted to

the jury the question of substantial impairment on the

theories of safety and value. Despite our conclusion

that there was sufficient evidence for the jury to conclude

that there was a substantial impairment based on use, we

will address this alternate argument because Porsche

asserts that a new trial is warranted because “the jury’s

verdict does not allow one to conclude whether any of

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No. 07-1832 11

these improper bases were considered by the jury [in

entering its verdict].” We review a district court’s decision whether to grant a new trial for an abuse of discretion

and will only disturb that decision under exceptional

circumstances. David v. Caterpillar, 324 F.3d 851, 863 (7th

Cir. 2003). “A new trial may be granted if the verdict is

against the clear weight of the evidence or the trial was

unfair to the moving party.” Id.

For the reasons discussed above, the jury’s verdict in

this case was not against the clear weight of the evidence

regarding the substantial impairment of the use of the

vehicle. Nor was the conduct of the trial unfair to

Porsche. Porsche is correct that “a jury should not be

instructed on a[n] [issue] for which there is so little evidentiary support that no rational jury could accept [it].” E.

Trading Co. v. Refco, Inc., 229 F.3d 617, 621 (7th Cir. 2000).

However, presentation of such issues in the jury instructions does not necessitate that a verdict be set aside. As

we have previously noted, “[i]t cannot just be assumed

that the jury must have been confused and therefore

that the verdict is tainted, unreliable.” Id. at 622. “This

is just a case of surplusage, where the only danger is

confusion, and reversal requires a showing that the jury

probably was confused.” Id. (citation omitted). Porsche

does not assert that the jury was confused. Moreover,

Porsche had the opportunity to argue for separate jury

questions on each of the bases for nonconformity: value,

safety, and use, as well as having each of these questions posed for both the spoiler and the radio. Porsche did

not request such jury questions either at the hearing or

in its proposed verdict form. Rather, when the jury instructions were being specifically discussed, Porsche

only sought to preserve its sufficiency of the evidence

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12 No. 07-1832

challenge and did not request an instruction other than

the one that was actually posed to the jury. Had Porsche

made such a request, it might have been able to demonstrate that the jury was confused if there was no evidence on an individual issue in which the jury found a

nonconformity, but it cannot now claim it was prejudiced

when all of the different types of nonconformity (i.e., use,

value, or safety) were presented to the jury in the disjunctive in a single question. Id. at 622 (noting that if the

appellant had asked the district judge to submit an interrogatory to the jury on the contested issue and the jury

had checked the box in favor of the appellee, then the

appellant “would then have had a solid basis for seeking

a new trial.”). In light of the evidence presented at trial

and the lack of prejudice to Porsche, we conclude that

the district court did not abuse its discretion in denying

Porsche’s motion for a new trial.

We now turn to the issue of damages. At trial, Tammi

sought recovery of his lease payments ($57,458.00), the

amount he paid to purchase the car ($75,621.88), the cost

of insurance ($2,457.85), winter tires ($2,044.11), floor

mats, and an auto manual ($788.71) for a total of

$138,370.55. In addition, Tammi sought to retain the car.

The district court granted Tammi his lease payments and

purchase price, which it doubled in accordance with

subsection (7) of the Lemon Law. The court also permitted

Tammi to keep the car.

Porsche asserts that the district court’s award of

$266,159.76 in damages was in error. Obviously, it does

not challenge the district court’s rejection of Tammi’s

request for insurance, tire, floor mat, and manual costs.

Porsche insists that Tammi is only entitled to the repayment of his lease payments with that amount being douCase: 07-1832 Document: 29 Filed: 08/04/2008 Pages: 23
No. 07-1832 13

bled pursuant to subsection (7). Porsche and amici both

contend that under subsection (7) a consumer is only

entitled to recover damages “caused by a violation” of the

Lemon Law. Their position is that when a lessee voluntarily purchases a vehicle after a lease expires, the purchase price paid is not a damage “caused by a violation” of

the Lemon Law. Moreover, they assert that any loss

suffered is self-inflicted. His voluntary purchase is, thus,

“not a cost incurred by him as a result of any statutory

violation.” And even if he is entitled to that amount,

Porsche claims it certainly should not be subject to the

Lemon Law’s doubling provision. Finally, Porsche asserts

that it was error for the district court to permit Tammi to

retain the car and not reduce the damage award by a

reasonable allowance for Tammi’s use of the car. Tammi

responds that district court’s damage award was in

keeping with the Lemon Law’s purpose of protecting

consumers and that without the recovery of the amount

he paid in purchasing the car, there would not be a sufficient motivation for Porsche to comply with the Lemon

Law in future cases.

We review questions regarding the interpretation of

statutes de novo. United States v. Genendo Pharm., N.V.,

485 F.3d 958, 962 (7th Cir. 2007). In Wisconsin, “[t]he

cardinal rule of statutory interpretation . . . is to discern the

intent of the legislature.” Hughes v. Chrysler Motor Corp.,

542 N.W.2d 148, 149 (Wis. 1996) (internal quotation and

citation omitted). The legislative intent is ascertained by

reviewing the statutory language, history, subject matter,

purpose, and scope. Id. In the case of remedial statutes,

they “should be liberally construed to suppress the mischief and advance the remedy the statute intended to

afford.” Id. at 149-50.

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The Wisconsin Lemon Law is a remedial statute

through which the legislature intended to “improve auto

manufacturers’ quality control . . . [and] reduce the inconvenience, the expense, the frustration, the fear and [the]

emotional trauma that lemon owners endure.” Hughes,

542 N.W.2d at 151 (citation omitted). The principal motivation of the Lemon Law “is not to punish the manufacturer

who, after all, would far prefer that no ‘lemons’ escape

their line. Rather, it seeks to provide an incentive to that

manufacturer to promptly return those unfortunate

consumers back to where they thought they were when

they first purchased that new automobile.” Id. at 152-53.

The Lemon Law achieves this goal through the protection

of consumers. A “consumer” under the Lemon Law

includes a purchaser of a new motor vehicle, a person

who can enforce a warranty, and “[a] person who leases

a motor vehicle from a motor vehicle lessor under a written lease.” Wis. Stat. § 218.0171(1)(b)(1), (3), & (4). If a

consumer reports a nonconformity to the manufacturer

and makes “the motor vehicle available for repair before

the expiration of the warranty or one year after first

delivery of the motor vehicle to a consumer, whichever

is sooner, the nonconformity shall be repaired.” Wis. Stat.

§ 218.0171(2)(a).

If the nonconformity is not repaired after at least four

tries or if the vehicle is out of service for at least thirty

days due to nonconformities, the Lemon Law directs how

the manufacturer is to proceed depending on the type of

consumer involved. If the consumer is either a purchaser

of a new motor vehicle or a person who may enforce

a warranty, the manufacturer must do one of the following at the consumer’s direction:

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No. 07-1832 15

Accept return of the motor vehicle and replace the

motor vehicle with a comparable new motor vehicle

and refund any collateral costs.

[or]

Accept return of the motor vehicle and refund to the

consumer and to any holder of a perfected security

interest in the consumer’s motor vehicle, as their

interest may appear, the full purchase price plus any

sales tax, finance charge, amount paid by the consumer

at the point of sale and collateral costs, less a reasonable allowance for use. Under this subdivision, a

reasonable allowance for use may not exceed the

amount obtained by multiplying the full purchase

price of the motor vehicle by a fraction, the denominator of which is 100,000 or, for a motorcycle, 20,000,

and the numerator of which is the number of miles

the motor vehicle was driven before the consumer

first reported the nonconformity to the motor vehicle

dealer.

Wis. Stat. § 218.0171(2)(b)2a & b.

If the consumer is a lessor, the manufacturer shall

accept return of the motor vehicle, refund to the

motor vehicle lessor and to any holder of a perfected

security interest in the motor vehicle, as their interests may appear, the current value of the written lease

and refund to the consumer the amount the consumer

paid under the written lease plus any sales tax and

collateral costs, less a reasonable allowance for use.

Wis. Stat. § 218.0171(2)(b)3a. The statute goes on to

define “current value of the written lease” as follows:

[T]he current value of the written lease equals the total

amount for which that lease obligates the consumer

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16 No. 07-1832

during the period of the lease remaining after its early

termination, plus the motor vehicle dealer’s early

termination costs and the value of the motor vehicle

at the lease expiration date if the lease sets forth that

value, less the motor vehicle lessor’s early termination

savings.

Wis. Stat. § 218.0171(2)(b)3b.

The manufacturer has thirty days in which to provide

a refund or replacement after the consumer presents it

with the vehicle. Wis. Stat. § 218.0171(2)(c) & (cm). Failure

to provide a refund is a violation of the Lemon Law. Varda

v. Gen. Motors Corp., 626 N.W.2d 346, 358 n.13 (Wis. Ct.

App. 2001) (citing Church v. Chrysler Corp., 585 N.W.2d 685

(Wis. Ct. App. 1998)). In the instance where the manufacturer neither repairs the nonconformity nor accepts

return of the vehicle and gives a refund, the consumer

is not without recourse because the Lemon Law also

provides that,

a consumer may bring an action to recover for any

damages caused by a violation of this section. The

court shall award a consumer who prevails in such

an action twice the amount of any pecuniary loss,

together with costs, disbursements and reasonable

attorney fees, and any equitable relief the court determines appropriate.

Wis. Stat. § 218.0171(7). The statute does not define

“pecuniary loss,” which is the core issue in this case,

though it is clear and undisputed that, whatever that

amount might be, it is entitled to doubling under subsection (7).

Wisconsin law provides minimal guidance on what

constitutes pecuniary loss. In the context of a consumer

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No. 07-1832 17

who is a purchaser, the Wisconsin Supreme Court has

held that pecuniary loss consists of the vehicle’s full

purchase price regardless of the amount the consumer

actually paid. Hughes, 542 N.W.2d at 151-52. Hughes

overturned the Wisconsin appellate court’s earlier opinion, Nick v. Toyota Motor Sales, 466 N.W.2d 215 (Wis. Ct.

App. 1991), which relied upon subsection (2)(b)2b of the

Lemon Law to conclude that the pecuniary loss in the

case of a new vehicle purchaser included the amount of

the purchase price the consumer actually paid. Noting

that Nick did not address the double damage disparity

that would result depending on whether a consumer

paid for the vehicle with his own money or with borrowed

funds, Hughes concluded that

[t]his result is inconsistent with the legislative goal

of encouraging manufacturers to deal promptly and

fairly with all purchasers of new vehicles. For that

reason, any language in Nick contrary to our holding

here that pecuniary loss includes the full purchase

price of the vehicle to the consumer is overruled.

Hughes, 542 N.W.2d at 152.

In the context of a consumer who is a lessee, the Wisconsin Court of Appeals in Estate of Riley v. Ford Motor Co., 635

N.W.2d 635 (Wis. Ct. App. 2001), vacated a trial court’s

award of pecuniary loss concluding that pecuniary loss

does not include the current value of the written lease. The

Wisconsin Court of Appeals noted that “[w]hen the

consumer brings an action in court, he or she is limited to

the remedies under § 218.015(7). This section does not

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18 No. 07-1832

3 The Lemon Law was renumbered in 1999 from Wisconsin

Statute Section 218.015 to Section 218.0171, but the substance

of the law was unchanged. Kiss v. Gen. Motors Corp., 630

N.W.2d 742, 744 n.1 (Wis. Ct. App. 2001).

mention the current value of the written lease.” Id. at 639.3

The Riley court continued, “[t]he consumer’s pecuniary

loss does not include the termination value of the

vehicle because the consumer is not out of that money. The

‘lessor’ (and/or holder) owns a leased vehicle and, if it is

a lemon, the lessor owns a lemon. When the consumer

chooses a refund, he or she must return the vehicle to

the manufacturer; therefore, the lessor does not have

the vehicle and must be compensated for the value of

the vehicle.” Id. Riley did not address whether the scope

of pecuniary loss is limited, as Porsche contends, to the

lease payments or whether it encompasses the purchase price a lessee pays when exercising the purchase

option under the lease.

Porsche argues that Tammi is not entitled to the purchase amount he paid and that pecuniary loss is limited

to the relief provided in subsection (2)(b)3, noting that

nowhere in the Lemon Law does it permit a lessee to

recover the remaining value of the leased vehicle. In

support of this position, Porsche cites Varda v. General

Motors Corporation, 626 N.W. 2d 346 (Wis. Ct. App. 2001).

In Varda, the plaintiff leased a vehicle in 1996 that

began having brake problems that same year. Upon the

lease’s expiration in 1998, Varda purchased the vehicle

pursuant to the lease terms. Then in 1999 after the purchase, Varda made a Lemon Law demand claiming the

status of a consumer who is a lessee as described in

subsection (1)(b)4. Id. at 349. The Wisconsin Court of

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No. 07-1832 19

Appeals concluded that a person who purchases a

vehicle at the conclusion of the lease and then attempts

to invoke relief under subsection (2)(b)3 (the subsection

directing how a manufacturer should respond to a

lessee’s Lemon Law demand after repairs are unsuccessful), “is no longer a consumer within the meaning of

[§ 218.0171(1)(b)4].” Id. at 355. Despite Porsche’s invocation, Varda is not on point because that case involved an

individual who sought the relief that the Lemon Law

affords lessees when that person was no longer a lessee.

Porsche posits that “[a]t the time of purchase, Tammi

was no longer a consumer under the statute who was

entitled to recover the amounts paid to purchase the

vehicle[, thus] he is only entitled to the relief that was

available at the time he initiated the subject action.” Varda

still does not buttress Porsche’s positions or resolve the

question of what constitutes pecuniary loss because of the

factual distinctions between it and Tammi’s case. Tammi

made his Lemon Law demand while still a lessee, and

purchased his vehicle only after Porsche rejected his

Lemon Law demand and after he sought relief under

subsection (7).

Relying upon the requirement that a lessee return a

vehicle when given a refund under subsection (2)(b)3a,

Porsche asserts that Tammi is not allowed to keep the

car and also recover double the amount of his pecuniary

loss under subsection (7). Porsche also seeks a reduction

in Tammi’s damage recovery for reasonable use as provided in subsection (2)(b)2b when the consumer is a

purchaser or one who can enforce a warranty. Wisconsin

law, both case and statutory, is silent on these questions,

and as such, guidance from the Wisconsin Supreme

Court on how to resolve these issues would be most

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20 No. 07-1832

helpful. Resolution of these issues and the others presented

in this case about the scope of pecuniary loss implicates

important policy considerations that inform the Wisconsin Lemon Law, and we believe that the Wisconsin Supreme Court is best suited to resolve them.

Pursuant to Circuit Rule 52:

When the rules of the highest court of a state provide

for certification to that court by a federal court of

questions arising under the laws of that state which

will control the outcome of a case pending in the

federal court, this court, sua sponte or on motion of a

party, may certify such a question to the state court

in accordance with the rules of that court, and may

stay the case in this court to await the state court’s

decision of the question certified. The certification

will be made after the briefs are filed in this court. A

motion for certification shall be included in the moving

party’s brief.

The Wisconsin Supreme Court is permitted to answer

certified questions from this court “which may be determinative of the cause then pending in the certifying

court and as to which it appears to the certifying court

there is no controlling precedent in the decisions of the

supreme court and the court of appeals of [Wisconsin].”

Wis. Stat. § 821.01.

Certification is appropriate in a case which “concerns a

matter of vital public concern, where the issue will likely

recur in other cases, where resolution of the question to

be certified is outcome determinative of the case, and

where the state supreme court has yet to have an opportunity to illuminate a clear path on the issue.” Plastics

Eng’g Co. v. Liberty Mut. Ins. Co., 514 F.3d 651, 659 (7th Cir.

Case: 07-1832 Document: 29 Filed: 08/04/2008 Pages: 23
No. 07-1832 21

2008) (citation omitted). Other considerations are the

interest the state supreme court has in the development

of state law and “the likelihood that the result of the

decision will almost exclusively impact citizens of that

state.” State Farm Mut. Auto. Ins. Co. v. Pate, 275 F.3d 666,

672 (7th Cir. 2001). Certification is not appropriate, however, for decisions that are highly fact-specific and lack

general significance. Id.

This case is well-suited for certification. We recognize

the import of this decision on the sale of motor

vehicles throughout Wisconsin for consumers and manufacturers alike. The submission of an amicus brief by

various auto manufacturer associations and recreational

vehicle manufacturers demonstrates the significance of

this decision. The resolution of what constitutes

pecuniary loss when the consumer is a lessee is of vital

public concern to the citizens of Wisconsin and manufacturers whose vehicles those citizens purchase. While

based on the specific lease and facts in this case, the

damages sought are not unique in the context of an automobile lease and the issues that surround it are ones

that will likely recur. Further, resolution of these questions by the Wisconsin Supreme Court will resolve this

case and provide it “an opportunity to illuminate a

clear path on the issue.” Because the answers to these

questions rely heavily upon the intent of the legislature

and their policy considerations in enacting the Lemon

Law, we conclude that the Wisconsin Supreme Court is

“far more familiar with the policy choices that have been

made, and have far more direct responsibility for the

administration of justice within the state than do members

of this court.” Allstate Ins. Co. v. Menards, Inc., 285 F.3d 630,

639 (7th Cir. 2002).

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22 No. 07-1832

Accordingly, we respectfully certify the following

questions to the Wisconsin Supreme Court on the issue of

pecuniary loss under Wisconsin Statute Section 218.0171:

1. When a consumer defined in Wisconsin Statute

Section 218.0171(1)(b)4 brings an action pursuant to

subsection (7), if that consumer, after making his

Lemon Law demand, then exercises an option to

purchase and buys the vehicle as provided in the

lease, is the consumer then entitled to recover the

amount of the purchase price?

2. If the consumer defined in Wisconsin Statute Section

218.0171(1)(b)(4) is entitled to recover the vehicle

purchase price when he exercises the purchase option

provided in the lease, does the purchase amount

qualify as pecuniary loss subject to the doubling

provision in subsection (7)?

3. If the answers to questions 1 and 2 are in the affirmative, is the consumer permitted to keep the purchased vehicle in addition to the receipt of the damage award or must the vehicle be returned to the

manufacturer?

4. Is a damage award under subsection (7) subject to

a reduction for reasonable use of the vehicle?

To the extent that they think it necessary, we invite the

Justices of the Wisconsin Supreme Court to reformulate

these questions and expand their inquiry.

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No. 07-1832 23

The Clerk of the Court is directed to transmit the briefs

and appendices in this case as well as a copy of this

opinion. The Clerk shall also transmit any part of the

record that the Wisconsin Supreme Court might request,

and we stay this matter in this court while the Wisconsin Supreme Court considers this matter.

AFFIRMED, in part; QUESTIONS CERTIFIED.

USCA-02-C-0072—8-4-08

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