Further, Plaintiff has failed to present evidence to establish
that he complied with the terms of the Limited Warranty.
Defendants assert in their Local Rule 56.1 additional facts that
Plaintiff did not take the car to an authorized Porsche Dealer for
repairs as required under the warranty. (Def. St. Add. Fact,
§@ 58). Plaintiff did not respond to this assertion.

Instead, Plaintiff repeatedly urges the Court to accept as
undisputed fact alleged representations made by Copans’ counsel
that the Lease was “as is” or “without warranty” as evidence of
PCNA’s refusal to honor the Limited Warranty. Defendants object to
the alleged representations on the grounds that such “facts” are
immaterial, the affidavits are not supported by personal knowledge,
and the representations are inadmissible under Fed. R. Civ. P. 408
even if true because such statements were made during settlement
negotiations.

Here, all evidence must be construed in the light most
favorable to Defendants as non-movants. See Miller v. Am. Family
Mut. Ins. Co., 203 F.3d 997, 1003 (7th Cir. 2000). Further,
“affidavit in support of or opposing summary judgment must be made
on personal knowledge, fand] set forth facts that would be
admissible in evidence . . . Affidavits containing hearsay,
affidavits containing opinion testimony that would not be
admissible if testified to at the trial, and affidavits containing

conclusions of ultimate facts and law will be disregarded to the

-13-


and state laws. The Defendants removed the action to federal
court. The Court granted Defendants’ partial motions to dismiss
and dismissed all of Plaintiff's federal claims and most of
Plaintiff’s state law claims. The Court then remanded the
remaining state claims to state court. Plaintiff appealed. On
appeal, the Seventh Circuit affirmed and upheld the Court’s
dismissal of each claim except Plaintiff’s Count VIII for breach of
a written warranty under the Act. See Voelker v. Porsche Cars
North American, et. al, 353 F.3d 516 (7th Cir. 2003).

In affirming the dismissal of Plaintiff’s breach of express
warranty claim under Illinois UCC and Lemon Law, the Seventh
Circuit held that Plaintiff “failed to state a claim for breach of
express warranty.” Id. at 527. In so holding, the Court concluded
that Plaintiff’s Complaint alleged that the airbag’s failure to
deploy was a design defect, and that “Voelker points to no part of
the record showing that a warranty against defective design was
part of his. contract with any defendant.” Id. (emphasis added). The
Seventh Circuit further concluded that the “New Car Limited
Warranty was made by Porsche, not Copans.” Id. at 526, n, 3. The
Seventh Circuit also rejected Plaintiff’s argument that Defendants’
breached an express warranty to Plaintiff by failing to repair the
car after the accident. Id. at 526.

In affirming the dismissal of Plaintiff’s implied warranty of

merchantability claim under the Act, the Seventh Circuit concluded



an anticipatory repudiation. (Supp. Mem., at 3-4). Second, the
“failure by PCNA to fully, clearly and conspicuously state in the
written warranty that PCNA did not intend to honor claims made
under the written warranty (or reserved the right not to do so by
those who leased) .. . is itself a violation of the Act.” Id.
at 3. Finally, “the proper deployment of the air bags is a
warranted item,” so the failure to deploy is a breach of the
Limited Warranty under the Act. Id. at 4.

Defendants assert that Plaintiff has abandoned the theories of
liability in the Complaint, and has improperly offered three new
theories in supporting memorandum. Defendants respond to
Plaintiff's “as is” argument by contending that Copans is not
subject to liability under the Act because, as previously found by
the Seventh Circuit, “[t]he New Car Limited Warranty was made by
Porsche, not Copans.” Voelker, 353 F.3d at 525, n. 3. Thus,
“insofar as Copans is concerned, Plaintiff leased the Porsche ‘as
is.’” (Mem. In Opp., at 3).

Second, Defendants respond that the Limited Warranty does not
cover design defects or supply of replacement parts. In support of
its contention, Defendants cite to the Seventh Circuit’s holding
that Plaintiff did not present evidence that the Limited Warranty
covered the design defects Plaintiff alleged in the Complaint. See

Voekler, 353 F.3d at 526-527. Additionally, the Limited Warranty



is “material” if it could affect the outcome of the suit under the
governing law; a dispute is “genuine” where the evidence is such
that a. reasonable jury could return a verdict for the nonmoving
party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The burden is initially upon the movant to demonstrate the
absence of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). In assessing the movant’s
claim, the court must view all the evidence and any reasonable
inferences that may be drawn from that evidence in the light most
favorable to the nonmovant. Miller v. Am. Family Mut. Ins. Co.,
203 F.3d 997, 1003 (7th Cir. 2000). Once the moving party has met
its burden, the nonmoving party “may not rest upon the mere
allegations” contained in its pleading, but rather “must set forth
specific facts showing that there is a genuine issue for trial.”
FED. R. Civ. P. 56(e); Becker v. Tenenbaum-Hill Assoc., Inc., 914
F.2d 107, 110 (7th Cir. 1990); Schroeder v. Lufthansa German
Airlines, 875 F.2d 613, 620 (7th Cir. 1989). The nonmovant “must
do more than simply show that there is some metaphysical doubt as
to the material facts.” Matsushita Elec. Indus. Co. v. Zenith
Radio Corp.,.475 U.S. 574, 586 (1986).

B. Magnuson-Moss Act

The Act provides a right of action for a consumer of a

consumer product to bring suit against a supplier or warrantor for

failing to comply with the Act or a written or implied warranty.



that PCNA was properly dismissed because there was no privity of
contract between Plaintiff and PCNA. Id. at 525. The Seventh
Circuit also affirmed the dismissal of Copans because the Lease
contained a clear and conspicuous written disclaimer that
“sheild{ed] Copans from suit for breach of the implied warranty of
merchantability under Illinois law.” Id. at 526.

Despite its disposition of the implied warranty and express
warranty claims as discussed above, the Seventh Circuit reversed
the Court’s dismissal of Count VIII of Plaintiff's complaint for
breach of written warranty under the Act. The Seventh Circuit
disagreed with the Court’s disposition of the claim because the
Court dismissed on the grounds that as a lessee, Plaintiff did not
qualify as a “consumer” under the Act. The Seventh Circuit held
that “Plaintiff may proceed as a category three consumer regarding
his claim for breach of written warranty under the Magnuson-Moss
Act.” Id. at 525. Plaintiff now seeks summary judgment on
Count VIII.

II. LEGAL STANDARD
A. Summary Judgment

Summary judgment is appropriate 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.” Frp. R. Civ. P. 56(c). A fact



product. The Limited Warranty has been clearly and conspicuously
designated a “limited warranty,” see 15 U.S.C. § 2303, and as such,
is governed by the Illinois UCC. See Razor v. Hyundai Motor
America, 813 N.E.2d 247, 257 (Ill. App. Ct. 2004).

Plaintiff’s Complaint alleges the following with respect to
the Porsche’s airbags:

The subject vehicle’s side airbags are defective and non-

conforming in that they do not address “actual” or “real-

world” crash conditions as they do not deploy when the

subject vehicle is impacted in the driver’s door - even

at a rate of speed in excess of 25 miles per hour - by a

sports-utility vehicle (“SUV”) ... This defect or

condition is unique to the subject vehicle and other

1998, 1999, 2000, 2001, and 2002 model year 911 Porsche

Models. The subject vehicle has too few crash sensors or

trigger points to work properly and as represented to

work by Defendants and those crash sensors or trigger

points are too low to ground to deploy the side airbags.

The crash sensors are also believed to be of poor

quality.
Complaint, { 43-44) (emphasis added). Count VIII of Plaintiff's
Complaint alleges that Porsche, PCNA and Champion breached the
Limited Warranty because “the subject vehicle manifested various
non-conformities, including, but not limited to, non-operational
and defective side airbags and the lack of adequate repair parts to
repair the subject vehicle.” (Complaint, @ 122).

In his supporting memorandum, Plaintiff contends that
Defendants PCNA and Copans violated the Act in three ways. First,
Copans’ counsel made repeated representations to Plaintiff that the

lease was “as is” and “without warranty.” Such representations

constituted a refusal by PCNA to honor the warranty and amounted to

~ g8-



Minute Order Foi (06197)

United States District Court, Northern District of Illinois

N: f Assigned Jud; T Sitting Judge if Other
ier Magistrate Judge ; Harry D. Leinenweber than Assigned sudee
CASE NUMBER 02 C 4798 DATE 9/29/2004
CASE Daniel J. Voelker vs. Porsche Cars North America
TITLE

[in the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.)

MOTION; |.

DOCKET ENTRY:

g) Oo Filed motion of [ use listing in “Motion” box above.]

(2) C....... Brief in support of motion due

(3) i) Answer brief to motiondue___—.- Reply to answer briefdue___

(4) ia) Ruling/Hearing on setfor at

(5) Qo Status hearing[held/continued to] [set for/re-set for] on setfor_ at.

(6) a Pretrial conference[held/continued to] [set for/re-set for]on__—ssetfor__——sat_
(7) Oo Trial[set for/re-set for]on____at

(8) o [Bench/Jury trial] [Hearing] held/continued to___at

(9) Q This, case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

CUFRCP4(m) (Local Rule 41.1 CFRCP41(a\(1) OO FRCP41(a)(2).

ao ff [Other docket entry) ENTER MEMORANDUM OPINION AND ORDER: Plaintiffs Motion for
Summary Judgment is DENIED. The Court sua sponte GRANTS Summary Judgment on Count VII in
favor.of Defendants. Given the proximity to the trial date, the Court will continue to exercise its
supplemental jurisdiction over Plaintiff's remaining state law claims.

(11) @f [For further detail see order attached to the original minute order

No notices required, advised in open court.

No notices required. number of notices

SEP 3.0 2004

date docketed

Notices maifed by judge’s staff.

Notified counsel! by telephone.

Y | Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

id “Sn

courtroom
WAP deputy's
initials

4e02

Date/time rece}ved ini
central Clerk’s Office’

mailing deputy initials



Defendants’ answer to interrogatory 3 does not support Plaintiff's
assertion because such answer relates to one subject car’s airbag
operation rather than airbag operational problems affecting
multiple models of cars as alleged in Plaintiff’s Complaint. See
id.; Complaint, @ 43. Plaintiff additionally states that “we may
never know whether the side airbags of only the subject vehicle
were defective and needed to be repaired or replaced or whether the
side airbags in all Porsche 911’s are defective and need to be
repaired or replaced. This is not a so-called design defect, but
instead, is a defect in the operation of the side airbags in
Plaintiffs vehicle.” Id. at 7 (emphasis added).

Under Illinois law, to prove that Defendant breached the
Limited Warranty, the Plaintiff must first show that the automobile
had a defect that is covered by the warranty. See Razor v. Hyundai
Motor America, 813 N.E.2d 247, 257 (Ill. App. Ct. 2004). It is
uncontroverted that the Porsche’s air bag did not deploy in the
accident, The initial inquiry is whether Plaintiff alleged a
defect in the Complaint that was covered by the Limited Warranty.
In the Complaint, the Plaintiff alleged that the failure to deploy
was a design defect with the airbag, “. . . This defect or
condition is unique to the subject vehicle and other 1998, 1999
2000, 2001, and 2002 model year 911 Porsche Models.” (Complaint,

G@ 43) (emphasis added).



does not make representations regarding the supply of replacement
parts for accidents.

Finally, Defendants respond that any representations made by
or on behalf of Copans to Plaintiff were made in the course of
settlement discussions and are inadmissible under FED. R. Civ
P. 408, Additionally, any such statements do not amount to a
refusal by PCNA to honor the warranty as the statements were
allegedly made by Copans rather than PCNA, and that Plaintiff has
“submit [ted] no evidence that he was denied repairs that should
have been covered by the New Car Limited Warranty.” (Mem. In Opp.,
at 5).

Plaintiffs reply that Defendants have failed to controvert
Plaintiffs proposed undisputed facts regarding the “as is” and
“without warranty” representations by or on behalf of Copans, and
“consequently, this Court should grant Plaintiff’s motion and enter
judgment in Plaintiff’s favor as requested.” (Reply Mem. At 3).
Further, the representations are relevant and were not made in the
course of settlement discussions.

Plaintiffs also respond that “Plaintiff's uncontroverted facts
show that . . . the proper operation of the side airbags was a
warranted item.” (Reply Mem., at 6). As support, Plaintiff cites
to an answer by PCNA that the proper operation of the air bag
installed on the subject vehicle is covered under the new vehicle

warranty. (Defendants Ans., 4 3). The Court notes that

- 10-



eT TT

See 15. U.S.C. § 2310(d) (1). Under the Act, a warrantor must

“conspicuously designat{e]” a warranty as either a “full (statement
of duration) warranty” or a “limited warranty.” Id. at § 2303.
The Act sets out minimum standards for full warranties but not
limited warranties. See id. § 2304. “Limited warranties are,
therefore, not governed by the Magnuson-Moss Act but by the [state]
ucc.” Razor v. Hyundai Motor America, 813 N.E.2d 247, 257 (Ill.
App. Ct. 2004). Under the Illinois UCC, to prove that a defendant
breached a written limited warranty, a “plaintiff ha[s] to prove:
‘(1) the existence of a defect in the automobile covered by a
warranty; (2) compliance with the terms of the warranty by
plaintiff; (3) plaintiff afforded defendant a reasonable
opportunity to repair the defect; and (4) defendant was unable to
repair the defect after a reasonable time or a reasonable number of
attempts.’” Id. at 258 (citations omitted) (emphasis added). See
also Hasek v. Daimlerchrysler Corp., 745 N.E.2d 627, 639(I1l. App.
Ct. 2001) (holding that the Act applied to the written warranty,
and noting that the “elements necessary to prove a cause of action
under the UCC for breach of express warranty are, in essence, the
same under the Act”).
III. DISCUSSION

As discussed, the Seventh Circuit has already held that

Plaintiff qualifies as a category three consumer under the Act, and

there is no dispute that an automobile qualifies as a consumer



This Warranty Does Not Cover:
. . Improper repairs by someone other than Porsche Cars
N.A. or its authorized dealers
. . Abuse, accident, acts of God, competition, racing
or track use or other events beyond the control of
Porsche Cars N.A.
(DJV 0618-9) (emphasis added). The Limited Warranty booklet
also contained the following disclaimer:

All of the Warranties described in this Booklet are
Subject to the Following Limitations and Disclaimers

Responsibilities

Porsche Cars N.A. disclaims any responsibility for loss

of time or use of your car as well as any other

incidental or consequential expenses or damages
(DJV_0615) .

‘The collision rendered the Porsche inoperable, and it was
towed to Europa Imports for repairs. Under the Lease, only Porsche
parts could be utilized for repair. Plaintiff requested that
Europa Imports order the necessary Porsche parts for repair from
Porsche Exchange, an authorized Porsche dealer. After waiting two
months, the replacement parts were still unavailable and the car
remained inoperable. Plaintiff grew frustrated and informed PFS
that he did not intend to make further payments on the car, and at
some point stopped making payments. The replacement parts remained
unavailable. Plaintiff voluntarily surrendered the Porsche on
July 5, 2002.

B. Procedural History and Seventh Circuit Decision

Plaintiff filed an eighteen-count Complaint in the Circuit
Court of Cook County alleging that Defendants violated both federal

-3-



extent of the impropriety.” Bunty v. Shell Oil Co., 1972 WL 643 *4
(D. Nev. 1972). Here, the Court notes that such allegedly
undisputed facts are principally supported by Plaintiff's own
affidavit and contain hearsay. The Court further observes that the
alleged representations are not material to resolving the issues
presented by Count VIII under [Illinois law, namely whether
Plaintiff alleged in the Complaint a defect covered by the Limited
Warranty and complied with Limited Warranty. Due to Plaintiff's
failure to prove the initial two prongs of Defendants’ liability
for breaching the Limited Warranty under the applicable law,
Plaintiff’s Motion for Summary Judgment is DENIED.

There are no issues of fact that exist with regard to the
breach of written warranty under the Act. The Court, therefore,
sua sponte evaluates whether Defendants are entitled to summary
judgment on Count VIII. The Seventh Circuit has advised that
“{g]ranting summary judgment sua sponte warrants special caution.
Summary judgment may be granted by a district court ‘for a party
without a motion, when the outcome is clear, so long as the
opposing party has had an adequate opportunity to respond.’”
Sawyer v. United States, 831 F.2d 755, 759 (7th Cir. 1987)
(citations omitted). See also Giard v. Powers, II., 2003 WL
1888758, *4 (N.D. Ill. 2003). Here, Plaintiff has had the
opportunity to be heard on Count VIII of the Complaint and has

fully briefed and argued this issue in connection with Plaintiff's

- 14 -



(“PFS”) for a 2001 Porsche 911 Turbo coupe automobile (the
“Lease”). On September 20, 2001, Plaintiff was involved in a motor
vehicle accident with Walter Dreikosen in Illinois. Dreikosen,
while driving a sports-utility vehicle, ran a stop sign and, at a
speed of about 25 miles per hour, collided into the driver’s side
of Plaintiff’s Porsche. The side airbag system in the Porsche did
not deploy during the collision. Plaintiff was injured from the
collision, and the Porsche sustained substantial damages.
According to the Lease, Plaintiff’s Porsche was covered hy a
“standard manufacturer’s new vehicle warranty” (Lease, {1 12). The
Porsche’s limited warranty, entitled “New Car Limited Warranty”
(the “Limited, Warranty”), was offered by PCNA and provided to
Plaintiff, in writing, at the time that he entered into the lease.
(DIV 0609, 0618). The Limited Warranty provided, in relevant part:
Warranty Coverage
Porsche Cars N.A. will repair or replace with a new or
remanufactured part distributed by Porsche Cars N.A., at
its sole option, any factory installed part that is
defective in material or workmanship under normal use.
(Normal vehicle use is described in this Booklet.)

Warranty repairs will be made free of charge for parts
and labor at an authorized Porsche automobile dealer ..

To Get Warranty Service Under the New Car Limited
Warranty

You must. take your car, along with proof of purchase
date, to an authorized Porsche automobile dealer during
normal service hours. If the car is not driveable
because of a defect covered by this warranty, call for
Porsche Roadside Assistance and your Porsche automobile
will be transported to the nearest authorized Porsche
dealership .



ee OTT TT «I

IN THE UNITED STATES DISTRICT court Fe { 1 E >)
FOR THE NORTHERN DISTRICT OF ILLINOI
EASTERN DIVISION

SEP 2 9 2004

JUDGE HARRY b, LEINENWERER
Plaintife, U.S. DISTRICT COURT JUDGE

Case No. 02 C 4798

DANIEL J. VOELKER,

v.
Hon. Harry D. Leinenweber

DOCKET:
SEP 3 @ 2004

PORSCHE CARS NORTH AMERICA,

Defendant.

MEMORANDUM OPINION AND ORDER

This case involves the lease of a Porsche 911°Turbo coupe (the
“Porsche”). Before the Court is Plaintiff’s (hereinafter,
“Plaintiff”) Motion for Summary Judgment on Count VIII of the
Complaint for breach of a written warranty under the Magnuson-Moss
Warranty Federal Trade Commission Improvement Act (“the Act”), 15
U.S.C.. § 2301 et. seq against Defendants Porsche Cars of North
America (hereinafter, “PCNA”) and Copans Motors, Inc. d/b/a
Champion Motors (hereinafter “Copans”). For the following reasons,
the Court DENIES Plaintiff’s Motion for Summary Judgment, and sua
sponte GRANTS Summary Judgment in favor of the Defendants.

I. INTRODUCTION
A. Factual Context

The following material facts are either undisputed, deemed
admitted by operation of Local Rule 56.1, or taken in the light
most favorable to the non-movants. In June 2001, Plaintiff entered

into a lease. agreement with Copans and Porsche Financial Services



Here, the plain language of the Limited Warranty does not does
mention or cover design defects and makes no representations about
the supply of replacement parts. Additionally, the plain language
of the Limited Warranty explicitly excludes accidents from
coverage, and disclaims “any responsibility for loss of time or use
of your car.” (DIV, 0619, 0615). The Seventh Circuit already
concluded that Plaintiff alleged a design defect with the airbag
deployment in the Complaint, and that Plaintiff failed to point to
evidence that the defect was covered by the Limited Warranty.
Voelker, 353 F.3d at 527. The Seventh Circuit accordingly held
that “Voelker has failed to state a claim for breach of express
warranty insofar as he relies on the allegedly defective design of
the airbag system.” Id. Plaintiff did not seek leave to amend the
Complaint and has not amended the Complaint to include other
_allegations regarding the air bag deployment problem. In fact,
Plaintiff appears to raise the air bag deployment as anything other
than a design defect for the first time in supporting memorandum.
The Court disagrees with Plaintiff’s assertion that the
uncontroverted facts show that the Limited Warranty covered the
defect. Thus, the Court concludes that Plaintiff has failed to
establish that the car had a defect that was covered under the
Limited Warranty, and as such, has failed to prove that Defendants

breached the Limited Warranty.



own motion. Accordingly, summary judgment is GRANTED in favor of
Defendants on Count VIII of the Complaint.
Iv. CONCLUSION
For the foregoing reasons, Plaintiff’s Motion for Summary

Judgment is DENIED. The Court sua sponte GRANTS Summary Judgment

on Count VIII in favor of Defendants. Given the proximity to the

trial date, the Court will continue to e

jurisdiction over Plaintiff's remainin

IT IS SO ORDERED.

Harry De Leinekudder, Judge
United States District Court

Dated: aif

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