LAY OPINION OKD FOR PROVING DAMAGES IN MAGNUSON-MOSS CASE

August 17, 2004

Steven P. Garmisa
Hoey & Farina Attorney
garmisa@hoeyfarina.com
1-888-425-1212

One day apart, the 1st District of the Illinois Appellate Court released two opinions with different approaches to the question of whether plaintiffs in cases involving defective automobiles can give lay opinion testimony on the value of the vehicle.

This article, the first of a three-part series, focuses on Razor v. Hyundai Motors, 2004 Ill.App. LEXIS 703 (1st Dist., 3d Div., June 16). Wednesday's Trial Notebook will look at the court's analysis of the same issue in Kim v. Mercedes Benz, 2004 WL 1366050 (1st Dist., 4th Div., June 17). And a third article on Thursday will cover some of the other issues addressed in Kim.

In the first case, Shante Razor filed a breach of warranty claim against Hyundai alleging that she had to bring her new Sonata back to the dealer five times for repairs because it would not start.
Razor did not present expert testimony on the question of the diminished value of the defective vehicle. Instead, here is how Razor proved the difference between the value of what she paid for and what she got:

"Plaintiff testified that, having previously owned a used car, the Sonata did not provide her with the type of transportation she expected from 'a brand new car.' She expected it to be 'perfect, flawless or minimal problems, certainly not the ones that I encountered here.' Plaintiff would not purchase the car 'today' because it had proved unreliable. She would not pay the price she paid because the problems she had with the new Sonata were akin to those she had with her previous car, which had been used and from which she had expected some problems. Plaintiff testified that, 'I would not pay that for a new car with used problems as it were.' "

The jury returned a verdict in favor of Razor, ordering Hyundai to pay $5,000 for breach of warranty damages, $3,000 for aggravation and inconvenience and $500 for loss of use.

Entering judgment on the verdict, the Cook County Circuit Court added $12,277 for fees and costs. Hyundai appealed.

Here are some highlights of Justice Themis N. Karnezis' opinion (with various omissions not noted in the quoted text):
"Defendant first argues that the judgment must be reversed because plaintiff failed to prove damages, an essential element of her prima facie case for breach of warranty.

"Plaintiff filed her action for breach of warranties pursuant to the Magnuson-Moss Act, which provides that 'a consumer who is damaged by the failure of a supplier, warrantor or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty or service contract, may bring suit for damages and other legal and equitable relief.' 15 U.S.C. [sec]2310(d)(1).

"By implication, because the Magnuson-Moss Act does not address damages for breach of limited and implied warranties, the Uniform Commercial Code, 810 ILCS 5/1 et seq., is used for such determinations.

"Section 2-714 of the UCC provides that '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.' 810 ILCS 5/2-714(2).

"The UCC also provides for incidental and consequential damages in proper cases. 810 ILCS 5/2-714(3). The special circumstances exception to section 2-714(2) must be read in conjunction with section 1-106 of the UCC, which provides that remedies found in the UCC 'shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed.' Dynamic Recycling Services Inc. v. Shred Pax Corp., 210 Ill.App.3d 602 (1991).

"Plaintiff presented evidence of the purchase price of the car, the car's chronic failure to start, the number of times the car was taken for repair and the amount of time she was without the car. She testified that the value of the car she received (a vehicle that intermittently failed to start) was less than the value of the car she thought she was buying (a new car with no such problems, i.e., a car that was capable of starting and being driven on demand).

"She testified that, if she had known at the time of purchase what she knew at trial, she would not have bought the car and would certainly not have paid the price she paid for 'a new car with used problems.' She testified that she missed work and that she and her family suffered inconvenience and aggravation as a result of the car's failure to start.

"The jury found for plaintiff and awarded her damages for breach of the limited and implied warranties, loss of use and for aggravation and inconvenience damages.

"Mathematical precision is not required in proof of loss, especially in the determination of consequential damages. Rather, the amount of damages is determined by the trier of fact in the exercise of sound discretion and in any manner reasonable under the circumstances, as long as the award is not punitive. Where the right to recovery exists, the defendant cannot escape liability because the damages are difficult to prove.

"Here, the court properly instructed the jury that plaintiff had to prove that she sustained damages as a proximate cause of defendant's breach and that the jury need not be mathematically precise in its damages determination and could use a 'reasonable basis for damages.'

"Based on its own experience and plaintiff's testimony, the jury could reasonably determine the difference between the value of the car as promised (a problem-free, reliable car capable of being driven at will) and the value of the car as plaintiff actually received it (an unreliable car, prone to not starting and, on such occasions, incapable of being driven), as well as incidental and consequential damages.

"We do not find 'a total failure or lack of evidence to prove' the damages element necessary to the plaintiff's case such that [a judgment notwithstanding the verdict] was warranted."

The day after the opinion was filed in Razor, a different Appellate Court division opted for a different approach to lay opinion testimony from the plaintiff in breach of warranty cases; the ruling in Kim v. Mercedes Benz will be covered in the next Trial Notebook.

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