Opinion ID: 1595696
Heading Depth: 1
Heading Rank: 17

Heading: Dismissal of Warranty Act Claim

Text: The Genettis contend that the district court erred when it dismissed their Warranty Act claim, finding that the Warranty Act was in equity and that the Genettis had an adequate remedy at law under the U.C.C. We have not previously addressed whether the Warranty Act is an action at law or an action in equity. We have, however, set out general principles for determining whether a cause of action is equitable or at law. The essential character of a cause of action and the remedy or relief it seeks as shown by the allegation of the complaint determine whether a particular action is one at law or in equity. Dillon Tire, Inc. v. Fifer, 256 Neb. 147, 589 N.W.2d 137 (1999). The nature of an action, whether legal or equitable, is determinable from its main object, as disclosed by the averments of the pleadings and the relief sought. Id. This determination is unaffected by the conclusions of the pleader or what the pleader calls it. Id. Where a statute provides an adequate remedy at law, equity will not entertain jurisdiction, and the statutory remedy must be exhausted before equity may be resorted to. Southwest Trinity Constr. v. St. Paul Fire & Marine, 243 Neb. 55, 497 N.W.2d 366 (1993). In determining that an action under the Warranty Act is in equity, the district court relied on Motor Vehicle Mfrs. v. State, 75 N.Y.2d 175, 551 N.Y.S.2d 470, 550 N.E.2d 919 (1990). In that case, the New York Court of Appeals addressed the constitutionality of a mandatory arbitration clause under the state's warranty act based on the argument that an action under the act was at law, thus affording the right to a jury trial. The court further concluded that an action under the act was in equity. In reaching this conclusion, the court reasoned that the replacement remedy provided for under New York's warranty act was akin to specific performance, an equitable remedy. The court determined that the refund remedy was like the remedy of rescission, also an equitable remedy. The court distinguished the state's warranty act remedies from a similar remedy under the U.C.C. for remedy of revocation of acceptance on the basis that under the state's warranty act, cancellation of the contract does not occur before litigation. See, also, Motor Vehicle Manufacturers Assn. of the United States v. O'Neill, 212 Conn. 83, 561 A.2d 917 (1989) (no right to jury trial under state warranty act because it was essentially equitable claim for specific performance or rescission; superseded by statute on other grounds as stated in General Motors Corp. v. Dohmann, 247 Conn. 274, 722 A.2d 1205 (1998)). We are not persuaded by the reasoning of these cases. The New York Court of Appeals considered the state's warranty act before it as providing for a cancellation of the contract after litigation. We do not interpret Nebraska's Warranty Act in this manner. Although the remedy afforded by the Warranty Act is similar to the remedy of rescission, not all forms of rescission are in equity. In particular, the remedy of revocation of acceptance under the U.C.C., a remedy similar to the remedy afforded under the Warranty Act, yet also much like an action based on rescission, is an action at law and not in equity. Koperski v. Husker Dodge, Inc., 208 Neb. 29, 302 N.W.2d 655 (1981). See Neb. U.C.C. § 2-608 (Reissue 1992). In Koperski, we stated: Although rescission was originally an equitable remedy, it is now clear that there are two types of rescission, one being applied to a law action and the other designated as equitable rescission.... The Uniform Commercial Code, however, does not use the term rescission with reference to Neb. U.C.C. § 2-608 (Reissue 1971), but refers to that remedy under its statutory provisions as revocation of acceptance. In White & Summers, Uniform Commercial Code (2d ed.1980), these authorities discuss the relationship between rescission and revocation of acceptance in § 8-1 at 295 as follows: A word should be devoted to the ambiguous action called `rescission.' Some use the word rescission to encompass what the Code defines as a rejection or revocation of acceptance; others use it to mean simply the buyer's act in returning the goods; still others use it to cover the buyer's cancellation of the executory terms of the contract; and finally some might call it the buyer's cause of action for fraud, (including presumably the return of the goods, cancellation of the executory portion of the contract and the return of money paid). It is the apparent intention of the drafters to restrict the word rescission to a rather limited number of cases, those involving a mistake or in which the seller has committed fraud, duress, or the like. 208 Neb. at 37-38, 302 N.W.2d at 660, citing § 2-608, comment 1. We then held that since the plaintiff's action was based on the U.C.C., the action was at law. Koperski, supra . See, also, G.M.A.C. v. Jankowitz, 216 N.J.Super. 313, 523 A.2d 695 (1987) (since revocation of acceptance is statutory remedy and not equitable action for rescission, it is action at law). We are persuaded that the remedy under the Warranty Act is essentially the same in character as the U.C.C. remedy of revocation of acceptance. Unlike a true equitable rescission, the Warranty Act does not base its provision of a remedy on fraud or mistake. Compare State ex rel. Douglas v. Schroeder, 222 Neb. 473, 384 N.W.2d 626 (1986) (principal thrust of Nebraska Consumer Protection Act is to prevent unfair or deceptive practices, thus the act is in equity). Rather, the Warranty Act provides a remedy essentially the same as revocation of acceptance, but removes what were viewed as some roadblocks to recovery under the U.C.C. Therefore, we determine that the appropriate analogy is to revocation of acceptance rather than to equitable recision. As we explained in Koperski, such a remedy is obtained through an action at law. Accordingly, we hold that an action under the Warranty Act is an action at law and that the district court erred when it dismissed the Genettis' claim under the Warranty Act.