Court Opinion

ID: 4246743
Source: CourtListenerOpinion
Date Created: 2018-02-21 10:12:23.35911+00
Date Added: 2024-06-11T14:44:12.076695
License: Public Domain

STATE OF MICHIGAN

                              COURT OF APPEALS

MIGUEL GOMEZ and M. G. FLOORING,                                       UNPUBLISHED
                                                                       February 20, 2018
                 Plaintiffs-Appellants,

v                                                                      No. 335661
                                                                       Macomb Circuit Court
MERCEDES-BENZ USA, LLC and PRESTIGE                                    LC No. 2015-004292-CZ
AUTOHAUS, INC., also known as MERCEDES-
BENZ OF ST. CLAIR SHORES,

                 Defendants-Appellees.

Before: TALBOT, C.J., and METER and TUKEL, JJ.

PER CURIAM.

        This matter arises out of plaintiff’s1 purchase of a 2014 Mercedes-Benz Sprinter 2500
(“the vehicle”) from defendant Prestige Autohaus, doing business as Mercedes-Benz of St. Clair
Shores (“MBSCS”). Plaintiff sued for breach of express warranty, breach of implied warranty of
merchantability, breach of implied warranty of fitness for a particular purpose, and revocation of
acceptance. The trial court granted summary disposition in favor of defendants on all of
plaintiff’s claims pursuant to MCR 2.116(C)(10). Plaintiff appeals as of right, and we affirm in
part, reverse in part, and remand for further proceedings.

                                           I. BASIC FACTS

        Plaintiff purchased the vehicle from MBSCS in September 2014. The vehicle was
covered under a limited warranty, which “warrants to the original and each subsequent owner of
a new Sprinter vehicle that any authorized Sprinter Dealer will make any necessary repairs or
replacements necessary to correct defects in material or workmanship arising during the warranty
period.” The warranty further states that “[a]ny authorized Sprinter dealer of the owner’s choice
will perform warranty repairs or replacements. The vehicle should be delivered to an authorized
Sprinter dealer during normal service hours. A reasonable time should be allowed after taking
the vehicle to an authorized Sprinter dealer for performance of the repair.” The warranty also
included the following disclaimer:

1
    Our use of the singular term, “plaintiff,” will refer to plaintiff Miguel Gomez.

                                                   -1-
       The limited warranties contained in this booklet are the only express warranties
       that the vehicle warrantor makes for your vehicle. These limited warranties give
       you specific legal rights. You may also have other rights that vary from state to
       state.

       For example, you may have some implied warranties, depending on the state
       where your vehicle was sold or is registered.

       These implied warranties are limited, to the extent allowed by law, to the time
       periods covered by the express written warranties contained in this booklet. If
       you use your vehicle primarily for business or commercial purposes, then these
       implied warranties do not apply and the vehicle warrantor completely disclaims
       them to the extent allowed by law. And the implied warranty of fitness for a
       particular purpose does not apply if your vehicle is used for racing, even if the
       vehicle is equipped for racing.

                                              * * *

       NO PAYMENT OR OTHER COMPENSATION WILL BE MADE FOR
       INDIRECT OR CONSEQUENTIAL DAMAGE SUCH AS DAMAGE OR
       INJURY TO PERSON OR PROPERTY OR LOSS OF REVENUE WHICH
       MIGHT BE PAID, INCURRED OR SUSTAINED BY REASON OF THE
       FAILURE OF ANY PART OR ASSEMBLY WHICH MAY BE REPAIRED OR
       REPLACED IN ACCORDANCE WITH THE TERMS OF THIS WARRANTY.

        Following his purchase of the vehicle in September 2014, plaintiff presented the vehicle
for repair and maintenance on five different occasions between April and October of 2015 to
address what he described as a stalling and acceleration issue. It is undisputed that each time
plaintiff presented the vehicle for service, he was not charged pursuant to the vehicle’s limited
warranty. Plaintiff testified that despite the repeated attempts to fix the stalling and acceleration
issue, the problem continued to persist.

        On October 30, 2015, plaintiff’s counsel sent a correspondence to defendant Mercedes-
Benz USA (“MBUSA”), which indicated that plaintiff rejected and revoked acceptance of the
vehicle and rescinded the vehicle sales contract. The correspondence stated that plaintiff had
“parked the vehicle and is not using it” and that “[h]e intends on covering the contract by either
renting or purchasing an alternative vehicle.” The correspondence further stated that plaintiff
would be discontinuing the vehicle insurance coverage within five days and that he would
discontinue monthly payments on the vehicle. On November 25, 2015, MBUSA responded and
indicated that the vehicle did not qualify for a refund or replacement but that it would “continue
to honor all of the terms of any remaining Mercedes-Benz Warranty.” Five days later, plaintiff
filed his complaint.

        Plaintiff testified at his May 2016 deposition that he had been driving the vehicle “[e]very
day right now,” but in a subsequent October 2016 affidavit, he stated that he had “parked the
subject van and [did] not use it.”

                                                -2-
        The trial court later granted defendants’ motion for summary disposition on all of
plaintiff’s counts.

                                 II. STANDARD OF REVIEW

        This Court reviews de novo a trial court’s decision on a motion for summary disposition.
Veenstra v Washtenaw Country Club, 466 Mich. 155, 159; 645 NW2d 643 (2002). Defendants
moved for summary disposition pursuant to MCR 2.116(C)(10). A motion under this subrule
tests the factual sufficiency of the plaintiff’s complaint. Spiek v Dep’t of Transp, 456 Mich. 331,
337; 572 NW2d 201 (1998). In reviewing a motion under MCR 2.116(C)(10), this Court must
consider “the pleadings, admissions, affidavits, and other relevant documentary evidence of
record in the light most favorable to the nonmoving party to determine whether any genuine
issue of material fact exists to warrant a trial.” Walsh v Taylor, 263 Mich. App. 618, 621; 689
NW2d 506 (2004). The motion is properly granted if there is no genuine issue regarding any
material fact and the moving party is entitled to judgment as a matter of law. Smith v Globe Life
Ins Co, 460 Mich. 446, 454-455; 597 NW2d 28 (1999).

                                       III. DISCUSSION

        Plaintiff argues that the trial court erred when it granted defendants’ motion for summary
disposition on each of his claims. For the reasons provided below, we hold that the trial court
erred when it granted the motion with respect to the breach of express warranty claim but that it
properly granted the motion with respect to the remaining claims.

                           A. BREACH OF EXPRESS WARRANTY

        Under Michigan law, a seller of goods can create an express warranty three different
ways:

                (a) An affirmation of fact or promise made by the seller to the buyer which
        relates to the goods and becomes part of the basis of the bargain creates an
        express warranty that the goods shall conform to the affirmation or promise.

               (b) A description of the goods which is made part of the basis of the
        bargain creates an express warranty that the goods shall conform to the
        description.

               (c) A sample or model which is made part of the basis of the bargain
        creates an express warranty that the whole of the goods shall conform to the
        sample or model. [MCL 440.2313(1).]

        “An express warranty may be created only between a seller and a buyer, and any such
express warranty becomes a term of the contract itself.” Heritage Resources, Inc v Caterpillar
Fin Servs Corp, 284 Mich. App. 617, 634; 774 NW2d 332 (2009). Plaintiff bears “the burden of
establishing that defendants breached the written limited warranty, i.e., that during the period of
the warranty defendants were notified of a defect that they failed to repair.” Gorman v American
Honda Motor Co, Inc, 302 Mich. App. 113, 117; 839 NW2d 223 (2013).

                                                -3-
       Further, MCL 440.2719 states:

       (1) Subject to the provisions of subsections (2) and (3) of this section and of the
       preceding section on liquidation and limitation of damages

               (a) the agreement may provide for remedies in addition to or in
       substitution for those provided in this article and may limit or alter the measure of
       damages recoverable under this article, as by limiting the buyer’s remedies to
       return of the goods and repayment of the price or to repair and replacement of
       nonconforming goods or parts; and

              (b) resort to a remedy as provided is optional unless the remedy is
       expressly agreed to be exclusive, in which case it is the sole remedy.

       (2) Where circumstances cause an exclusive or limited remedy to fail of its
       essential purpose, remedy may be had as provided in this act.

       (3) Consequential damages may be limited or excluded unless the limitation or
       exclusion is unconscionable. Limitation of consequential damages for injury to
       the person in the case of consumer goods is prima facie unconscionable but
       limitation of damages where the loss is commercial is not.

        “Where a manufacturer or dealer has limited its obligation under the sales agreement to
repair or replace defective parts[,] the seller does not have an unlimited time to make the repairs,
but rather must repair or replace the parts within a reasonable time.” Kelynack v Yamaha Motor
Corp, USA, 152 Mich. App. 105, 112; 394 NW2d 17 (1986). “Commendable efforts alone do not
relieve a seller of his obligation to repair.” Id. (quotation marks and citation omitted). “[T]he
manufacturer’s or dealer’s failure to make repairs need not be willfully dilatory or even negligent
for the damage to the buyer is the same whether the seller acts in good faith or in bad” because
“[i]n either case, the buyer loses the substantial benefit of his bargain.” Id. Further, what
constitutes a reasonable time “depends on the nature and circumstances of the case.” Id. at 113.

         “A warranty fails of its essential purpose where unanticipated circumstances preclude the
seller from providing the buyer with the remedy to which the parties agreed, in which event the
buyer is entitled to seek remedies under the standard UCC warranty provisions.” Computer
Network, Inc v AM Gen Corp, 265 Mich. App. 309, 314-315; 696 NW2d 49 (2005).

       Here, the vehicle warranty information pertinently provides:

       The New Vehicle Limited Warranty warrants to the original and each subsequent
       owner of a new Sprinter vehicle that any authorized Sprinter Dealer will make
       any necessary repairs or replacements necessary to correct defects in material or
       workmanship arising during the warranty period.

                                              * * *

       Any authorized Sprinter dealer of the owner’s choice will perform warranty
       repairs or replacements. The vehicle should be delivered to an authorized

                                                -4-
       Sprinter dealer during normal service hours. A reasonable time should be allowed
       after taking the vehicle to an authorized Sprinter dealer for performance of the
       repair.

       Plaintiff bears the burden of establishing “that during the period of the warranty
defendants were notified of a defect that they failed to repair.” Gorman, 302 Mich. App. at 117.
The record indicates that plaintiff brought the vehicle to an authorized dealer for repairs on five
separate occasions, between May and October of 2015, and that plaintiff has not presented the
vehicle for service since then. It is undisputed that plaintiff was never charged for any repairs,
and the record further indicates that each time plaintiff presented the vehicle for repair at an
authorized dealer, defendants never refused warranty-covered service. Indeed, defendants have
maintained throughout these proceedings that they will honor the warranty.

        Plaintiff asserts that he experiences the same stalling issue for which he initially
presented the vehicle for service, in spite of defendants having performed services free of charge
on five different occasions. This Court has noted that “[c]ommendable efforts alone do not
relieve a seller of his obligation to repair.” Kelynack, 152 Mich. App. at 112. Moreover,
notwithstanding defendants’ ostensible good faith in performing the repairs, there appears to be
an issue of fact as to whether plaintiff has lost the benefit of his bargain because his affidavit
reveals that the vehicle was still defective even after defendants performed repair work.2

         The trial court appears to have erroneously determined that there was no breach of
warranty because “repairs were never refused by defendants.” The court also determined that the
warranty did not fail its essential purpose or deprive plaintiff of the benefit of his bargain
because “[plaintiff] received the remedy to which the parties agree[d]—free repair.” But this
analysis misses the point. The purpose of the warranty is to actually fix or repair any defect in a
reasonable amount of time, not merely to attempt to fix or repair. See id. Because of the
numerous times plaintiff submitted the vehicle for repair over a five-month period and because
the evidence, when viewed in a light most favorable to plaintiff, shows that the problem still
exists, there is an issue of fact as to whether the warranty failed of its essential purpose, thereby
denying plaintiff a substantial benefit of his bargain. Accordingly, we reverse the grant of
summary disposition on this count.

                           B. BREACH OF IMPLIED WARRANTIES

2
  Defendants’ reliance on a technician’s testimony, where the technician stated that on May 5,
2016, when he inspected the vehicle, “all systems operated as designed,” is misplaced. Plaintiff
explained that the problem was intermittent (“[s]ometimes it starts, sometimes it does not”).
Thus, the fact that the problem was not apparent on that particular day does not establish that the
vehicle was actually free from defects, especially when plaintiff stated in an affidavit that the
problem manifested itself again after May 2016. Moreover, even the technician admitted that
“[d]iagnosing and solving a stalling complaint is complex in nature because of the multiple
variables.”

                                                -5-
       Plaintiff alleged in his complaint that defendants breached the implied warranties of
merchantability and fitness for a particular purpose. We agree that summary disposition was
properly granted in favor of defendants on these claims.

        Generally, “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.” MCL 440.2314(1). In
other words, “[e]very contract for the sale of goods carries an implied warranty of
merchantability unless such warranty is excluded or modified.” Davis v LaFontaine Motors, Inc,
271 Mich. App. 68, 76; 719 NW2d 890 (2006). This Court has explained that the implied
warranty of merchantability “requires that the goods sold be of average quality within the
industry.” Computer Network, 265 Mich. App. at 316. Notably, “[m]erchantable is not a
synonym for perfect.” Id. at 317 (quotation marks and citation omitted). Instead, “[t]he
warranty of merchantability is that goods are of average quality in the industry.” Id. (quotation
marks and citation omitted).

        “A warranty of fitness for a particular purpose requires that the goods sold be fit for the
purpose for which they are intended; in order to take advantage of this type of warranty, the
seller must know, at the time of sale, the particular purpose for which the goods are required and
also that the buyer is relying on the seller to select or furnish suitable goods.” Id. at 316
(quotation marks and citation omitted).

       A seller, however, is allowed to disclaim these implied warranties. With respect to the
warranty of merchantability, a seller can disclaim it as long as the language of the disclaimer
mentions “merchantability” and is “conspicuous.” MCL 440.2316(2). And to exclude or modify
any implied warranty of fitness, “the exclusion must be by a writing and [be] conspicuous.” Id.

       MCL 440.1201(j) defines a “conspicuous” term as one

       so written, displayed, or presented that a reasonable person against which it is to
       operate ought to have noticed it. Whether a term is “conspicuous” or not is a
       decision for the court. Conspicuous terms include any of the following:

                                             * * *

       (ii) Language in the body of a record or display in larger type than the
       surrounding text, or in contrasting type, font, or color to surrounding text of the
       same size, or set off from surrounding text of the same size by symbols or other
       marks that call attention to the language.”

       Here, plaintiff wholly ignores the purchase agreement between plaintiff and MBSCS,
which included an additional terms and conditions attachment that states:

       Unless a separate written document showing the terms of any dealer warranty or
       service contract is furnished by the Dealer to the Purchaser, any warranty on any
       new vehicle or used vehicle still subject to Manufacturer’s warranty is that made
       by the Manufacturer only. THE DEALER HEREBY DISCLAIMS, TO THE
       EXTENT PERMITTED UNDER APPLICABLE STATE LAW, ALL
       WARRANTIES EXPRESSED OR IMPLIED INCLUDING ANY IMPLIED

                                                -6-
       WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
       PURPOSE.

Because the above disclaimer of warranty is written in all capital letters, distinct from the
surrounding text, there is no question of fact that MBSCS’s waiver of implied warranties was
conspicuous to satisfy the statute’s requirements. Indeed, plaintiff fails to address how this
waiver is not effectual. Accordingly, the trial court here did not err when it granted summary
disposition in favor of MBSCS on plaintiff’s two claims related to breaches of the implied
warranties of merchantability and fitness for a particular purpose because MBSCS had waived
those warranties. We note that plaintiff’s reliance on Computer Network, 265 Mich. App. 309, is
misplaced because the Court in that case held that “summary disposition was appropriate for [the
defendant dealer] because it properly disclaimed conspicuously and in writing any implied
warranty of merchantability.” Id. at 315-316.

        With respect to the claims against MBUSA, the trial court determined that plaintiff’s
claims failed because there was no genuine issue of material fact that the vehicle was defective
when it left MBUSA’s possession. The trial court did not err. Recall that “[t]o establish a prima
facie case of breach of implied warranty, a plaintiff must show that goods were defective when
they left the possession of the manufacturer or seller.” Id. at 316 (quotation marks and citation
omitted). Here, the evidence shows that the vehicle was free of ascertainable defects when
plaintiff took possession. Indeed, plaintiff testified that the problem first occurred in
approximately May 2015,3 which was eight months after he purchased the vehicle and after he
had driven approximately 18,000 miles. With this evidence, plaintiff cannot prove that the
vehicle had this stalling defect when he first received the vehicle, and his claims against MBUSA
for breaches of implied warranties must fail. 4

       As a result, the trial court did not err when it granted summary disposition to defendants
on these claims.

                            C. REVOCATION OF ACCEPTANCE

3
  Specifically, plaintiff stated during his May 2016 deposition that the problem first occurred
“[on] a sunny day, . . . I think it was in summertime because I bought the vehicle in October or
something like that [it was September] and the first problem, it was like at this time last year.”
Plaintiff further stated that at the time of delivery, the vehicle “was working good.”
4
  Additionally, we note that with respect to the implied warranty of fitness for a particular
purpose, plaintiff also cannot prove the essential element that MBUSA knew of his alleged
specific purpose of hauling carpet. See Leavitt v Monaco Coach Corp, 241 Mich. App. 288, 293;
616 NW2d 175 (2000) “[T]he seller must know, at the time of sale, the particular purpose for
which the goods are required and also that the buyer is relying on the seller to select or furnish
suitable goods.” (quotation marks and citation omitted). Thus, summary disposition was
warranted for this count on this basis as well.

                                               -7-
       MCL 440.2608 details how a buyer may revoke his acceptance of goods:

       (1) The buyer may revoke his acceptance of a lot or commercial unit whose
       nonconformity substantially impairs its value to him if he has accepted it

               (a) on the reasonable assumption that its nonconformity would be cured
       and it has not been seasonably cured; or

               (b) without discovery of such nonconformity if his acceptance was
       reasonably induced either by the difficulty of discovery before acceptance or by
       the seller’s assurances.

       (2) Revocation of acceptance must occur within a reasonable time after the buyer
       discovers or should have discovered the ground for it and before any substantial
       change in condition of the goods which is not caused by their own defects. It is
       not effective until the buyer notifies the seller of it.

       (3) A buyer who so revokes has the same rights and duties with regard to the
       goods involved as if he had rejected them.

       “[F]or the purposes of revocation under MCL 440.2608, nonconformity is a failure of the
goods sold to conform to legitimate expectations arising from the contract.” Davis, 271 Mich
App at 82. Moreover, the “buyer must show the nonconformity has a special devaluing effect on
him and that the buyer’s assessment of it is factually correct.” Colonial Dodge, Inc v Miller, 420
Mich. 452, 458; 362 NW2d 704 (1984).

        Generally, if the buyer rejects the goods he is in possession of, he “is under a duty after
rejection to hold them with reasonable care at the seller’s disposition for a time sufficient to
permit the seller to remove them.” MCL 440.2602(2)(b). And because a buyer who revokes his
acceptance of goods “has the same rights and duties with regard to the goods involved as if he
had rejected them” initially, MCL 440.2608(3), “[c]ontinued use of the goods is not an option,”
Computer Network, 265 Mich. App. at 323. As a result, once the buyer revokes his acceptance of
the goods, “any exercise of ownership by the buyer with respect to any commercial unit is
wrongful as against the seller.” MCL 440.2602(2)(a).

        Here, plaintiff’s counsel sent correspondence to MBUSA on October 30, 2015, stating
that he rejected and revoked acceptance of the vehicle and rescinded the vehicle sales contract.
The correspondence stated that plaintiff had “parked the vehicle and is not using it” and that
plaintiff intended to cover “the contract by either renting or purchasing an alternative vehicle.”
However, at his May 2016 deposition, plaintiff admitted that he had been driving the vehicle
“[e]very day right now.” And when asked how many miles were on the vehicle, plaintiff
answered that there was “a little bit” over 35,000 miles. Thus, after he had purportedly revoked
his acceptance, plaintiff had driven the vehicle approximately 7,000 miles.5 Therefore, because

5
 The record shows that just two days before he revoked his acceptance, the vehicle had 28,304
miles on it.

                                                -8-
there is no question of fact that plaintiff continued to use the vehicle for at least six or seven
months after attempting to revoke his acceptance, his revocation was ineffective. See Computer
Network, 265 Mich. App. at 324. Consequently, we affirm the trial court’s grant of defendants’
motion for summary disposition on this count.

        Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. No taxable costs, as no party prevailed in full. MCR 7.219.

                                                            /s/ Michael J. Talbot
                                                            /s/ Patrick M. Meter
                                                            /s/ Jonathan Tukel

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