Diaz v Your Favorite Auto RPR & DI
Annotate this CaseDecided on May 29, 2012
Civil Court of the City of New York, Kings County
Alex Diaz, Claimant,
against
Your Favorite Auto RPR and DI, Defendant.
SCK 4404/2011
Alex Diaz
Claimant, Pro Se
367 South 5th Street, #4C
Brooklyn NY 11211
Sean Smith, Esq.
Attorney for Defendant
26 Court Street, Suite 1700
Brooklyn NY 11242
Reginald A. Boddie, J.
Claimant commenced this small claims action against defendant to recover $3,000 for the cost of repairs to an allegedly defective vehicle he purchased from defendant on April 28, 2011. Claimant purchased a 2002 Audi A6 with 122,519 miles on the odometer. Claimant alleges that within two weeks of purchase he returned with the vehicle because it was not running properly. Claimant alleges the timing belt, water pump, pulley, fan belt, torque converter, and transmission were defective and needed to be replaced. Defendant admits that claimant returned to the dealership with the vehicle and acknowledges that the transmission needed to be replaced. Defendant indicated the water pump was replaced prior to selling the vehicle. Defendant contends that it was not required to replace the transmission because the anticipated cost, $2,200, was greater than the alleged profit on the sale, $350. Defendant further contends that because the vehicle's mileage exceeded 100,000 at the time of sale warranty of the vehicle is excluded under NY Gen Business Law 198-b, commonly referred to as the "Used Car Lemon Law," and claimant has no remedy in law.
The court disagrees. The Used Car Lemon Law is not an exclusive remedy (NY Gen Business Law 198-b [d] [2]). Article 2 of the Uniform Commercial Code also governs contracts for the sale of automobiles, as here. Claimant's purchase of the vehicle from defendant on April 28, 2011, for $5,200, is a contract for the sale of goods governed by UCC 2-201. Section 2-105 (1) of the Uniform Commercial Code defines goods, in relevant part, as "all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid." The vehicle at issue is considered a good under UCC 2-105 (1). Contracts for the sale of goods by a merchant, by their very nature, include an implied warranty of merchantability (UCC 2-314 [1]). The defendant here is a merchant since his principle business includes the sale and repair of automobiles (UCC 2-104 [*2][1]). Therefore, unless such warranty is waived or modified, the implied warranty of merchantability guarantees that the goods are fit for the ordinary purposes for which such goods are used (UCC 2-314 [2] [c]). It is well-settled under New York law that "to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in the case of a writing must be conspicuous" (UCC 2-316 [2]).
Here, the defendant merchant failed to effectively disclaim the implied warranty of merchantability. Defendant merely indicated "over 100k, no warranty" on the bill of sale. The court finds that these words alone are not conspicuous as required by UCC 1-201 (10) and are insufficient to disclaim the implied warranty of merchantability (UCC 2-316 [2]; Bimini Boat Sales, Inc. v Luhrs Corp., 69 AD3d 782, 783 [2d Dept 2010], [holding that defendant failed to effectively disclaim the implied warranty of merchantability since the purported disclaimer did not mention "merchantability"]).
Furthermore, here claimant alleges the vehicle was not fit for ordinary use due to a failed transmission and it required a timing belt, fan belt, torque converter, pulley and water pump. The defendant did not dispute that the vehicle required a transmission and water pump. Defendant however states the water pump was replaced prior to sale of the vehicle. Claimant tendered two estimates for replacement of the water pump and no paid receipt. The court finds defendant's testimony regarding replacement of the water pump more credible than claimant.
The court also finds that although the vehicle may require a new timing belt, fan belt, and pulley, such are part of a regular tune up and did not render the vehicle unfit for normal use. Nor did claimant establish that defendant knew or had reason to know that replacement of the timing belt, fan belt, and pulley were necessary. Claimant also did not establish the need for a new torque converter.
Finally, the court finds that the vehicle as sold was not merchantable due to the defective transmission, which defendant should have known at the time of sale, and acknowledged shortly thereafter (UCC 2-314; McCormack v Lynn Imports, Inc., 114 Misc 2d 905, 910-911 [Nassau Dist Ct 1982]). At the very least, a car must be sold in a condition fit for reasonable and safe use on the road (McCormack, 114 Misc 2d at 910-911). A car cannot be operated safely and in a reasonable fashion on the roads with a defective transmission (McCormack at 910-911). The fact that repairing such costs more than defendant alleges it received as a profit is not a defense. In any event, defendant did not establish the amount of profit with admissible evidence.
Section 2—714 (1) of the Uniform Commercial Code allows a buyer who has accepted goods and given proper notification, as here, to recover "damages for any non-conformity of tender the loss resulting in the ordinary course of events from the seller's breach as determined in any manner which is reasonable." Non-conformity includes breach of warranties, as here (UCC 2-714 [1], Comment 2).
"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" (UCC 2-714 [2]). "Put another way, the measure of damages for breach of contract or warranty with respect to accepted goods is the difference between the fair market value of the goods accepted and their fair market value if they had been as warranted" (Ferraro v Perry's Brick Co., 30 Misc 3d 1213 [A],2011 NY Slip Op 50055[U] [2011], citations omitted). However, Official Comment 3 to UCC § 2—714 (2) makes clear that the standard of damages set forth in section 2—714 (2) "is not intended as an exclusive measure." "Read together, [*3]subsections (1) and (2) of section 2—714 provide that plaintiff may recover for its direct damages in any manner which is reasonable" (Ferraro, 2011 NY Slip Op 50055[U], *8, quoting Am. Elec. Power Co. v Westinghouse Elec. Corp., 418 F Supp 435, 454 n 34 [SD NY 1976], citing see Happy Dack Trading Co. Ltd. v Agro—Industries, Inc. et al, 602 F Supp 986, 994 [SD NY 1984]).
In this case, it is the mandate of the Small Claims Court to provide the parties with substantial justice according to the rules of substantive law (UCCA 1804, 1805 [a]). Here, claimant proffered two estimates of the cost to replace the transmission in the amounts of $1,102.73 and $922.50. Accordingly, judgment is granted to the claimant in the amount of $922.50, plus statutory costs and interest from August 3, 2011. The remainder of the claim is dismissed.
This constitutes the decision and order of the court.
Dated: Brooklyn, NY
May 29, 2012
________________________
Hon. Reginald A. Boddie
J.C.C.
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