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Florida car lessees can sue automakers under federal warranty law.

Using its state's lemon law, the Florida Supreme Court has ruled that car lessees may sue for breach of warranty under the federal Magnuson-Moss Warranty Act (MMWA). (Am. Honda Motor Co. v. Cerasani, No. SC05-1907 (Fla. Apr. 12, 2007).) The MMWA allows consumers to sue for damages when product suppliers, warrantors, or service providers fail to comply with "a written warranty, implied warranty, or service contract."

The decision provides new remedies for Florida lessees. Appeals courts in this and earlier cases had reached conflicting conclusions, with at least one court holding that the MMWA applied only to product purchasers.

"I think the Florida Supreme Court wanted to recognize that you can't focus on one small aspect under the MMWA," said Scott Cohen, the Chicago attorney who represented the plaintiff. "Because it is a remedial consumer protection statute, they wanted to recognize another way in which consumers could have protection under it."

In 2002, Jennifer Cerasani leased a new Honda Civic from Honda Leasing. According to her complaint, the manufacturer supplied a written warranty for the car.

Shortly afterward, Cerasani allegedly experienced a number of problems with the car, including defective steering and a broken trunk latch. Despite attempts at repairs by Honda, the car's problems continued, Cerasani claimed, and she filed suit, citing breaches of written warranty and implied warranty under the MMWA.

A trial court dismissed the suit, saying the act covers only those who buy vehicles outright, not those who lease them. The appeals court affirmed the decision to dismiss the claim of breach of implied warranty but held that the claim based on the written warranty could go forward, finding that Cerasani was a "consumer" under the MMWA because, even as a lessee, she was entitled to enforce the warranty's terms.

As the court noted, Cerasani "took the vehicle to authorized Honda dealerships for repair on numerous occasions, and Honda never asserted that the vehicle was not covered by the written warranty." (Cerasani v. Am. Honda Motor Co., 916 So. 2d 843, 847 (Fla. Dist. App. 2005).)

The court pointed out that its holding conflicted with an earlier state appeals court ruling that held that "there must be an identifiable purchase and sale before the provisions of the Magnuson-Moss Act apply." (Sellers v. Frank Griffin AMC Jeep, Inc., 526 So. 2d 147, 156 (Fla. Dist. App. 1988).)

Writing for the state's highest court, Justice Barbara Pariente noted that a person qualifies as a consumer under the MMWA if he or she fits any one of three categories listed in the act's definition. The court found that Cerasani met the "Category Three" definition because she was entitled "under applicable state law"--in this case, Florida's Motor Vehicle Warranty Enforcement Act (the state's so-called lemon law)--to enforce the car's warranty. Pariente wrote that because Cerasani qualified as a Category Three consumer, the court did not need to address whether "a lessee can qualify as a consumer under [the] alternative criteria."

Honda had argued that Cerasani is not a consumer under the act because its Category Two definition of the term says that a consumer must have a "written warranty," which Honda claimed required the sale of a vehicle. High courts in New York and Arizona have determined that, in order to sue, Category Three consumers must have a "written warranty" obtained when buying a vehicle, while the Seventh Circuit and New Jersey's high court have reached the opposite conclusion.

Pariente noted that the pertinent Category Three clause refers simply to "the warranty."

"The type of warranty enforceable under state law that will enable a person to qualify as a Category Three consumer is not limited to the narrow definition of 'written warranty' provided in the MMWA," she wrote. Florida's lemon law not only defines a warranty as either written or simply an "affirmation of fact or promise," she continued, but it also says that "a sale is unnecessary to trigger the protections of the lemon law under a written warranty."

The court expressed concern that "requiting that the lease be in connection with a sale ... would lead to inequitable results," depending on the type of transaction that occurs, often involving third parties such as financing companies. "In authorizing coverage under the MMWA for warranties that are enforceable under state law," Pariente concluded, "Congress provided a means by which this type of hyper-technical distinction contrary to the act's purpose could be avoided."

Cohen said the court signaled that it was considering this rationale during oral argument.

"Justice Pariente asked ... why Congress would include the terminology to be able to enforce the warranty under state law if it didn't mean to provide greater protection for anybody who can enforce a warranty," he said.
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Title Annotation:news & trends
Author:Jablow, Valerie
Date:Jul 1, 2007
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