Court Opinion

ID: 9514954
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:52:42.674956+00
Date Added: 2024-06-11T09:06:23.192693
License: Public Domain

MARTIN, Circuit Judge
[¶ 1.] Mercedes-Benz of North America, Inc. (Mercedes-Benz) appeals from a judgment determining that it breached an express warranty for a used Mercedes automobile purchased by Frank Alvine. We affirm all issues but remand issue 4 in part.
FACTS
[¶ 2.] In 1992, Mercedes-Benz introduced a new model automobile, the 500 *610SEL. Everything on this model was new except the engine. Mercedes-Benz offered a limited written warranty with this vehicle, which provided in part:
Mercedes-Benz of North America, Inc. (MBNA) warrants to the original and each subsequent owner of a new Mercedes-Benz passenger car that any authorized Mercedes-Benz Dealer will make any repairs or replacements necessary, to correct defects in material or workmanship.
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Our intention is to repair under the warranty, without charge to you, anything that goes wrong with your car during the warranty period which is our fault. All we ask that you properly maintain and care for the car and that you have warranty repairs or adjustments performed by an authorized Mercedes-Benz dealer.
(emphasis added).
[If S.] The warranty period was forty-eight months or 50,000 miles, whichever came first. The limited warranty provided in part, “[t]he warranty period starts on the date the car is delivered to the first retail purchaser or put in service as a dealer demonstrator or MBNA Company Car.” The first purchaser, Jerry Berger, purchased the vehicle on February 18, 1992 and kept it until October 27, 1993. Vaughn Woodward and his wife were the second purchasers, owning the car from February 2, 1994 until the summer of 1995. Alvine was the third owner, acquiring the vehicle on September 23, 1995 for $57,000. At that time, the vehicle had just under 44,661 miles and there were approximately five months left on the warranty. He purchased the vehicle from Superior Lexus Motor Company in Kansas City, Missouri and the dealership had it driven to Sioux Falls. Alvine was unaware of any problems with the vehicle.
[¶ 4.] On January 15, 1996, while the warranty was still in effect, the vehicle simply stopped running and would not restart. It had to be pushed off the street and towed to the local Mercedes dealer, Vern Eide Motorcars, Inc. (Vern Eide). Alvine had similar experiences eight more times in less than 3,000 miles. These incidents occurred after the term of the express warranty expired in February 1996. The vehicle was towed to Vern Eide each time and repair attempts were made, but were unsuccessful. Alvine registered complaints to Mercedes Benz, but its involvement did not cure the problem. Finally, in the summer of 1997, Alvine had enough and tried to return the car by leaving it at Vern Eide, but it refused the vehicle and delivered it back to Alvine. Mercedes-Benz believed its obligation under its warranty expired when the warranty term expired.
[¶ 5.] Alvine commenced a lawsuit against Mercedes-Benz for breach of express warranty. At trial, the jury awarded Alvine damages in the amount of $70,-440. This figure represented the $57,000 purchase price of the vehicle, plus $1,440 for storage and $12,000 for the lease of a replacement vehicle. In addition, the trial court awarded attorney fees in the amount of $47,328.50. Mercedes-Benz appealed, raising five issues. By notice of review, Alvine appealed the denial of his motion for new trial based on the failure to award prejudgment interest.
[¶ 6.] 1. Whether the trial court erred in denying Mercedes-Benz’ motion for directed verdict and in allowing the jury to decide if the vehicle had been repaired per the express warranty.
[¶ 7.] The jury heard testimony from Alvine regarding the problems with the vehicle stalling and also heard extensive testimony from Mercedes-Benz about this model, including the reasons for the stalling problem, the problems of this particular vehicle, and the repair attempts made thereto. The jury had the opportunity to consider all this testimony and observe the witnesses.
*611[¶ 8.] Reasonable minds could differ whether the problems experienced by Alvine after the warranty expired were the same as the problems experienced within the warranty period. This issue was properly presented to the jury. McDonough v. Kahle, 1999 SD 14, ¶ 8, 588 N.W.2d 600, 602. Put another way, whether the problems incurred by Alvine after the warranty term expired were latent in nature or caused by a failure of the dealer to appropriately fix the problems that occurred during the warranty period was a jury question. Defects occurring before the expiration of the warranty period should be repaired in accordance with the warranty, and, if not, then a warrantor’s liability for breach of warranty continues even after the expiration of the term of express warranty. Johnson v. John Deere Co., 306 N.W.2d 231, 235 (S.D.1981); Durant v. Palmetto Chevrolet Co., 241 S.C. 508, 129 S.E.2d 323, 326 (S.C.1963); Nearhouse v. Volkswagen of America, Inc., 42 Ohio App.3d 42, 536 N.E.2d 46, 48 (1987). The trial court did not err in denying the motion for directed verdict.
[¶ 9.] 2. Whether the trial court abused its discretion in allowing testimony of a prior lawsuit and complaints from previous lawsuit and complaints from previous owners regarding the vehicle in determining damages.
[¶ 10.] The trial court allowed the jury to hear testimony from the two previous owners regarding their problems with this vehicle, as well as evidence from Mercedes-Benz about the problems with this car. This vehicle had 73 warranty claims between February 18, 1992 and July 6, 1995 and went to the repair shop 35 times before Alvine purchased it. A problem experienced by all of the owners was that the vehicle would, without warning, simply quit and not restart. The first two owners also experienced problems with this vehicle involving windows not working, computer replacement, replacement of contact rings and brush set in motor, seals on windows leaking, vehicle hesitating on acceleration, replacement of mirror motors, transmission shifting jerkily, doors out of alignment, and the trunk, air conditioner, and phone not working. Both owners were allowed to testify that a national class action lawsuit had been brought involving this make and model for tire and vibration problems.
[¶ 11.] Admissibility of evidence is within the sound discretion of the trial court. The trial court has broad discretion in balancing the probative value of evidence against its prejudicial effect and its ruling will not be disturbed on appeal absent abuse of discretion. Schaffer v. Edward D. Jones & Co., 521 N.W.2d 921, 925 (S.D.1994); Time Out, Inc., v. Karras, 469 N.W.2d 380, 384 (S.D.1991). An abuse of discretion refers to a discretion exercised to an end or purpose not justified by, and clearly against reason and evidence. Harter v. Plains Ins. Co., Inc., 1998 SD 59, ¶ 13, 579 N.W.2d 625, 629.
[¶ 12.] The decision by the trial court to allow such testimony has not been shown to be an abuse of discretion. This evidence may have been probative to the jury in determining the amount of damages for breach of warranty. In addition, Mercedes Benz cannot be heard to complain since it made no timely objection nor motion to strike this evidence. SDCL 19-9-3(1); Andreson v. Black Hills Power & Light, 1997 SD 12, ¶ 19, 559 N.W.2d 886, 890; Bakker v. Irvine, 519 N.W.2d 41, 47 (S.D.1994). Mercedes-Benz made a motion in limine regarding this testimony but failed to specifically object during the trial, and is foreclosed from raising this issue on appeal. State v. Gallipo, 460 N.W.2d 739, 743 (S.D.1990).
[¶ 13.] 3. Whether the trial court erred in denying Mercedes-Benz’ motion for directed verdict regarding consequential damages.
[¶ 14.] At the conclusion of Al-vine’s evidence, Mercedes Benz made a *612motion for a directed verdict on the issue of consequential damages. However, Mercedes-Benz failed to renew its motion at the close of all the evidence. Thus, it is not reviewable on appeal. Pearson v. Adams, 279 N.W.2d 674, 677 (S.D.1979). In addition, Mercedes-Benz made no objection to this evidence nor to the jury instruction on the measure of damages. This instruction provided in part,
In this case, the measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.
This instruction permitted the jury to determine if special circumstances were present making the usual measure of damages inadequate in this case. Mercedes-Benz cannot now be heard to complain. No error has been shown, on this record, in the trial court’s ruling denying the motion for directed verdict on consequential damages.
[¶ 15.] 4. Whether the trial court erred in denying Mercedes-Benz’ motions for remittitur and judgment notwithstanding the verdict.
[¶ 16.] Mercedes-Benz claims that the damages for the vehicle of $57,000, storage costs of $1,440, and replacement rental loss of $12,000 should be remitted. The jury was instructed, with the concurrence of Mercedes-Benz, that “the measure of damages is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.”
[¶ 17.] The standard regarding a motion for remittitur is that:
The damages, therefore, must be so excessive as to strike mankind, at first blush, as being, beyond all measure, unreasonable and outrageous, and such as manifestly show the jury to have been actuated by passion, partiality, prejudice or corruption. In short, the damages must be flagrantly outrageous and extravagant, or the court cannot undertake to draw the line; for they have no standards by which to ascertain the excess.
Stormo v. Strong, 469 N.W.2d 816, 826 (S.D.1991) (quoting Schuler v. City of Mobridge, 44 S.D. 488, 493, 184 N.W. 281, 283 (1921)).
[¶ 18.] In this case, the jury heard evidence of the purchase value, the problems suffered by Alvine during his ownership, Alvine’s inability to use the vehicle because of the problems, the time the dealer had the vehicle for repairs, the many attempts by the dealer to cure the problem, the depreciation of the vehicle as presented by Mercedes-Benz, Blue Book evidence, Mercedes-Benz’ current value of the vehicle and its trade-in value, the problematic history of the vehicle, the value testimony of Alvine, and the ultimate refusal of the dealer or Mercedes-Benz to take back the vehicle. Mercedes-Benz further testified that the Kelly Blue Book provided that: “[suggested retail represents a price a dealership might ask for this make and model vehicle. This represents a fully reconditioned vehicle in excellent condition with clean title history.” Mercedes-Benz testified to values for a 1992-500 SEL Mercedes-Benz from the Kelly Blue Book rather than the value of the vehicle owned by Alvine. Mercedes-Benz had the opportunity to present evidence of the current value of the vehicle in question, with all its imperfections, but instead chose to testify in generic terms. The owner, Alvine, testified that the vehicle was basically unusable and its value was zero.
[¶ 19.] The jury heard all the testimony and had the opportunity to observe the witnesses. By its verdict, it appears the jury chose to believe Alvine and adopted his value of the vehicle, rejecting Mercedes-Benz’ testimony in this regard. The jury also adopted Alvine’s testimony re*613garding storage costs and expense of the replacement rental.
[¶ 20.] The decision of the jury, under these facts, was not flagrantly unreasonable or outrageous and therefore the motion for remittitur and the motion for judgment NOV must fail. There is no showing that the trial court abused its discretion in denying these motions.
[¶ 21.] We realize that Alvine earlier attempted to return the vehicle to Mercedes-Benz and it refused the vehicle. However, by virtue of the damages awarded in this case we feel that Alvine should not also be entitled to retain the vehicle. Therefore, we remand to require Alvine to make the vehicle available for return to Mercedes-Benz for 30 days from remitti-tur at the option of Mercedes-Benz.
[¶ 22.] 5. Whether the trial court abused its discretion in awarding attorney fees to Alvine.
[¶ 23.] Alvine submitted documentation of time spent by his attorney and the trial court approved the same in the amount of $47,328.50. Mercedes-Benz claims this amount includes time and expense attributable to legal theories upon which plaintiff did not prevail and therefore should not recover.
[¶ 24.] Alvine alleged in his complaint that Mercedes-Benz was in violation of the Magnuson-Moss Warranty Act which entitled Alvine to recover attorney fees and costs in an amount to be determined by the court. The Magnuson-Moss Warranty Act provides:
If a consumer finally prevails in any action brought under paragraph (1) of this subsection, he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses (including attorneys’ fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such an award of attorneys’ fees would be inappropriate.
15 USC § 2310(d)(2).
[¶ 25.] In Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), the United States Supreme Court held that even though the jury did not adopt every theory advanced, and plaintiff did not prevail on every motion, he would still be entitled to recover his full attorney fees. The Court stated:
[w]here a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation, and indeed in some cases of exceptional success an enhanced award may be justified. In these circumstances the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court’s rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee. The result is what matters.
Id., 461 U.S. at 435, 103 S.Ct. at 1940, 76 L.Ed.2d at 52 (internal citation omitted). Reasonable attorney fees are determined by calculating the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. Id., 461 U.S. at 433, 103 S.Ct. at 1939, 76 L.Ed.2d at 50.
[¶ 26.] Mercedes-Benz has not shown an abuse of discretion by the trial court in awarding reasonable attorney fees to Al-vine.
[¶ 27.] 6. Whether the trial court erred in denying Alvine’s motion for a new trial based on the failure to grant prejudgment interest.
[¶28.] Under SDCL 21-1-13.1: [a]ny person who is entitled to recover damages ... is entitled to recover interest thereon from the day that the loss or *614damage occurred.... If there is a question of fact as to when the loss or damage occurred, prejudgment interest shall commence on the date specified in the verdict or decision.... If necessary, special interrogatories shall be submitted to the jury. Prejudgment interest on damages arising from a contract shall be at the contract rate, if so provided in the contract; otherwise, if prejudgment interest is awarded, it shall be the Category B rate specified in § 54-3-16. The court shall compute and award the interest provided in this section and shall include such interest in the judgment in the same manner as it taxes costs.
(emphasis added).
[¶ 29.] Prejudgment interest is now mandatory, not discretionary. However, in this case, the jury was instructed that the allowance of prejudgment interest was in its discretion. Also, the instruction did not set forth an individual line for each loss incurred (vehicle, storage, and rental replacement) and the respective time of loss (for each). This instruction was given with the concurrence of Advine and .no special interrogatories were submitted to the jury. Alvine will not now be heard to complain.
[¶ 30.] In the future, it is recommended that a jury instruction on prejudgment interest provide that the same is mandatory when damages are recoverable, and request the jury to determine the amount of loss and the date of loss. Special interrogatories may also be submitted. The court will then compute the interest award.
[¶ 31.] We affirm all issues but remand Issue 4 in part.
[¶ 32.] SABERS and KONENKAMP, Justices, concur.
[¶ 33.] GILBERTSON, Justice, concurs in part and dissents in part.
[¶ 34.] AMUNDSON, Justice, concurs in part and dissents in part.
[¶ 35.] MARTIN, Circuit Judge, for MILLER, Chief Justice, disqualified.