Opinion ID: 1953696
Heading Depth: 1
Heading Rank: 8

Heading: Award of Consequential Damages and Attorney Fees Under the Magnuson-Moss Act.

Text: A. Scope of Review. Pursuant to the parties' pretrial stipulation, a claim for damages under the Magnuson-Moss Act was submitted to the court for determination. Unlike the Hylers' claim for rescission, the Magnuson-Moss claim was tried at law. Therefore, we review the trial court's award of consequential damages and attorney fees for errors of law. Iowa R.App.P. 4. The district court's findings of fact are binding on appeal if supported by substantial evidence. Iowa R.App.P. 14(f)(1). The Magnuson-Moss Act created a federal remedy for breach of written and implied warranties falling within the statute. Alberti v. General Motors Corp., 600 F.Supp. 1026, 1027 (D.D.C.1985). [A] consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation... under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal or equitable relief ... in any court of competent jurisdiction in any State.... 15 U.S.C. § 2310(d)(1)(A). If the consumer prevails, he may recover attorney fees and the costs and expenses associated with the action. Id. § 2310(d)(2). Autorama's primary dispute with respect to the applicability of the Act is whether Autorama qualifies as a warrantor. The term warrantor is defined in the Act as any supplier or other person who gives or offers to give a written warranty or who is or may be obligated under an implied warranty. Id. § 2301(5). The trial court found that Autorama was a warrantor as that term is defined in the Act for two reasons. First, it found Autorama had assumed the manufacturer's written warranty, and thereby became a person who gives ... a written warranty. Second, the court concluded Autorama was liable for breach of implied warranties of merchantability and fitness for a particular use despite its disclaimer at the time of sale because (1) Autorama waived its disclaimer when it agreed to assume the manufacturer's warranty obligations, and (2) such liability was imposed by Iowa Code section 613.18 (1993) because the manufacturer was judicially declared insolvent. Autorama claims it gave no warranties. We conclude Autorama has failed to demonstrate any reversible error with respect to its liability based on the implied warranty of fitness for a particular purpose. Because the breach of only one warranty is sufficient to sustain an award under the Magnuson-Moss Act, we do not discuss the Hylers' claims based on express written warranty and the implied warranty of merchantability. B. Was Autorama obligated under an implied warranty falling within the scope of the Magnuson-Moss Act? As noted above, a warrantor includes any person who is or may be obligated under an implied warranty. 15 U.S.C. § 2301(5). An implied warranty under the Act means an implied warranty arising under State law (as modified by sections 2308 and 2304(a) of this title) in connection with the sale by a supplier of a consumer product. Id. § 2301(7). In the purchase agreement between Autorama and the Hylers, Autorama disclaimed all implied warranties: You understand that the vehicle is sold as is with all faults and that we make no warranty of merchantability and no warranty that the vehicle is fit for any particular purpose. Garner himself testified, however, Autorama subsequently agreed to assume the manufacturer's warranty obligations. The manufacturer did not disclaim any implied warranties. Thus, there is substantial evidence to support the trial court's findings (1) Autorama waived its disclaimer, and (2) the obligations assumed by Autorama included liability for breach of the implied warranty of fitness for a particular purpose. [10] Autorama also argues it made no warranty enforceable under the Magnuson-Moss Act because the Act only applies to written implied warranties. The Act provides remedies for breach of an implied warranty, see 15 U.S.C. § 2310(d)(1), and the term implied warranty includes any implied warranty arising under State law, see id. § 2301(7). Autorama points to no specific language in the statute limiting its applicability to written implied warranties, nor have we found any. Similarly, Autorama contends the Act limits the recovery of attorney fees, costs and expenses to situations where a full written warranty is offered. This statement is simply not true. As previously discussed, section 2310 of the Act allows a consumer who has prevailed in an action against a warrantor for breach of a written warranty, implied warranty, or service contract to recover such sums. Freeman v. Hubco Leasing, Inc., 253 Ga. 698, 324 S.E.2d 462, 469 (1985) (permitting recovery of attorney fees under Act for breach of implied warranty); Champion Ford Sales, Inc. v. Levine, 49 Md.App. 547, 433 A.2d 1218, 1227 (1981) (same). This assignment of error is without merit. C. Did Autorama breach its implied warranty? Damages may not be recovered under the Magnuson-Moss Act unless the consumer shows the warrantor has failed to comply with a written warranty, implied warranty or service contract. 15 U.S.C. § 2310(d)(1). In determining whether Autorama breached its implied warranty of fitness for a particular purpose, we apply Iowa law. See Walsh v. Ford Motor Co., 807 F.2d 1000, 1012 (D.C.Cir.1986) (state warranty law applies in the absence of an express provision in the Magnuson-Moss Act), cert. denied, 482 U.S. 915, 107 S.Ct. 3188, 96 L.Ed.2d 677 (1987). We conclude this issue has not been properly presented for our review and consideration. Autorama discusses at length whether there was a defect in the motor home that substantially impairs its value to the Hylers. See Iowa Code § 554.2608 (1993) (allowing revocation of acceptance of product whose nonconformity substantially impairs its value to the buyer). The determining issue under the Hylers' Magnuson-Moss claim, however, was whether Autorama complied with the implied warranty of fitness for a particular purpose. See id. § 554.2714 (allowing recovery of damages for breach of warranty). There is no discussion of this issue in Autorama's briefs. In a case of this complexity, we will not speculate on the arguments Autorama might have made and then search for legal authority and comb the record for facts to support such arguments. Consequently, any error by the trial court in finding that Autorama breached an implied warranty was not preserved for our review. See Iowa R.App.P. 14(a)(3) (failure to argue an issue or cite authority in support if it in the brief may be deemed a waiver of that issue).