Hurley v Suzuki 112 USA, LLC

[*1] Hurley v Suzuki 112 USA, LLC 2008 NY Slip Op 52633(U) [22 Misc 3d 1113(A)] Decided on December 18, 2008 District Court Of Suffolk County, Third District Hackeling, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 18, 2008
District Court of Suffolk County, Third District

Carol C. Hurley, Plaintiff(s)

against

Suzuki 112 USA, LLC, Defendant(s)



HUSC 363-08



Carol C. Hurley

Pro-se Plaintiff

Eric A. Sackstein, Esq.

P.O. Box 436

Port Jefferson, New York 11777

Attorney for the Defendants

C. Stephen Hackeling, J.

Undisputed Facts

Carol Hurley, the above captioned plaintiff, commenced this action pursuant to a small claims complaint dated June 2, 2008 seeking $5,000. It is undisputed that the plaintiff purchased a used 2000 Pontiac Montana on August 22, 2005 from the defendant, Suzuki 112 USA, LLC for $13,625. The "check engine" light went on in the car while the plaintiff was driving the car home from the dealership, and the vehicle ceased operating shortly thereafter. The car was off the road and being repaired on three to four occasions for in excess of 15 days until the final breakdown on November 26, 2005. On that date, the car had approximately 24,988 miles on its odometer. The non-operational car was repossessed by the financing bank at this point and sold at auction for $5,000 leaving the defendant with a significant car loan liability. The defendant has not in this case disputed plaintiff's factual claims of non-operability. This case is frustrated by the fact that the defendant, in response to the plaintiff's subpoenas seeking sale, repair and documentary records, advised that no documentation was in existence, such as the contract of sale, the warranty and the car's repair history reports.

Issues Presented

In a small claims action, the Court shall conduct hearings "in such a manner as to do substantial justice between the parties consistent with concepts of substantive law and shall not be bound by statutory provisions or rules of practice, procedure, pleading or evidence. . ." (UDCA 1804). A small claims litigant does not prepare or serve a formal pleading, rather he or someone on his behalf, delivers a statement of his claim to the clerk, who reduces same to "a concise written [*2]form. . ." (UDCA 1803). The informal nature of the layman facilitated small claims process dispenses with . . . the need for the plaintiffs to articulate all requisite elements of causes of action, or for the defendant to interpose a written answer, and instead places the responsibility on the tribunal to ascertain from the proof what legal issues" must be determined. Dvoskin v. Levitz Furniture Co., Inc. 9 Misc 3d 1125A (District Ct., Suffolk 2005).

It is apparent from the plaintiff's presentation of her case that she is pleading causes of action under New York's "Used Car Lemon Law" (Gen. Business Law. Sec. 198 (b), for breach of the warranty of merchantability (Uniform Commercial Code Sec. 2-314) and for breach of the warranty of serviceability (Vehicle & Traffic Law 417). By way of defense, the defendant argues that the Uniform Commercial Code and Vehicle and Traffic Law are inapplicable in "Lemon Law" circumstances and that the plaintiff is precluded from commencing this action as she failed to meet the Sec. 198 (b) (f) precondition of seeking statutory lemon law arbitration. For the reasons detailed hereafter, the Court finds the defendant's arguments unpersuasive, and awards judgment to the plaintiff.

Used Car Lemon Law

New York's used car lemon law (General Business Law 198 b), is a voluminous statute which provides in pertinent part:

(b) Written warranty required; terms. 1. No dealer shall sell or lease a used motor vehicle to a consumer without giving the consumer a written warranty which shall at minimum apply for the following terms. . .

(a) If the used motor vehicle has thirty-six thousand miles or less, the warranty shall be at minimum ninety days or four thousand miles, whichever comes first. . .

2. The written warranty shall require the dealer or his agent to repair or, at the election of the dealer, reimburse the consumer for the reasonable cost of repairing the failure of a covered part. Covered parts shall at least include the following items:

(a) Engine. All lubricated parts, water pump, fuel pump, manifolds. engine block, cylinder head, rotary engine housings and fly-wheel.

(b) Transmission. The transmission case, internal parts, and the torque converter.

(c) Drive axle. Front and rear drive axle housings and internal parts, axle shafts, propeller shafts and universal joints.

(d) Brakes. Master cylinder, vacuum assist booster, wheel cylinders, hydraulic lines and fittings and disc brake calipers.

(e) Radiator.

(f) Steering. The steering gear housing and all internal parts, power steering pump, valve body, piston and rack.

(g) Alternator, generator, starter, ignition system excluding the [*3]

battery. . .

( c) Failure to honor warranty. 1. If the dealer or his agent fails to correct a malfunction or defect as required by the warranty specified in this section which substantially impairs the value of the used motor vehicle to the consumer after a reasonable period of time, the dealer shall accept return of the used motor vehicle from the consumer and refund to the consumer the full purchase price. . .

2. It shall be presumed that a dealer has had a reasonable opportunity to correct a malfunction or defect in a used motor vehicle, if:

(a) The same malfunction or defect has been subject to repair three or more times by the selling or leasing dealer or his agent within the warranty period, but such malfunction or defect continues to exist; or

b) The vehicle is out of service by reason of repair or malfunction or defect for a cumulative total of fifteen or more days during the warranty period.

(d) Waiver void. 1. Any agreement entered into be a consumer for the purchase or lease of a used motor vehicle which waives, limits or disclaims the rights set forth in this article shall be void as contrary to public policy. Further, if a dealer fails to give the written warranty required by this article, the dealer nevertheless shall be deemed to have given said warranty as a matter of law.

2. Nothing in this section shall in any way limit the rights or remedies which are otherwise available to a consumer under any other law. . .

(f) Arbitration and enforcement. 1. If a dealer has established or participates in an informal dispute settlement procedure which complies in all respects with the provisions of part seven hundred three of title sixteen of the code of federal regulations the provisions this article concerning refunds or replacement shall not apply to any consumer who has not first resorted to such procedure. . . .

(g) Notice of consumer rights. At the time of purchase or lease of a used motor vehicle from a dealer in this state, the dealer shall provide to the consumer a notice, printed in not less than eight point bold face type, entitled "Used Car Lemon Law Bill of Rights". The text of such notice shall be identical with the notice required by paragraph one of subdivision f of this section. Emphasis added.

Standing to Sue

The Court must first address the defendant's threshold argument that this action is barred by reason of the plaintiff's failure to submit the matter to "Lemon Law Arbitration". The plaintiff states that she did not seek arbitration as she was unaware that such avenue of relief existed. The question then addressed to the Court is whether use of arbitration is "always" an exclusive precondition to [*4]commencing a Lemon Law Court action. Unlike the Lemon Law situation with "new cars", which sets up mandatory arbitration and creates liability for the manufacturers; used cars are sold by a much more diverse universe of entities. The corner "used car lot" may or may not have the resources or wherewithal to implement an arbitration system which comports with the requirements of Federal and New York State Law.

Sec. 198-b (f)'s arbitration language begins with the word "if". It states that "If a dealer has established or participates in an informal dispute settlement procedure, which complies in all respects with the provisions of part seven hundred three of title XVI of the code of federal regulations, the provisions of the Used Car Lemon Law concerning refunds or replacement will not apply to any consumer who has not first resorted to such procedure. (Emphasis added) "Dealers utilizing informal dispute settlement procedures must insure that arbitrators participating in such informal dispute settlement procedures are familiar with the provisions of the Law and must provide to arbitrators and consumers who seek arbitration, a copy of the provisions of the Law together with a notice, entitled "Used Car Lemon Law Bill of Rights" in conspicuous 10 point boldface type...." N.Y Gen. Bus. Law. 198-b (f)(1). Clearly the legislature considered and established the operative word in this statute to be "If". As the word "If" is not defined in either the statute itself, or the New York "General Construction Law"; Secs. 76 and 92 (b) of the New York Statutes Law requires that it be given its plain construction, unencumbered by alternative interpretation. See, Generally, People Ex rel. New York C. & HRR Co. v. Woobury, 208 NY 421 (N. Y.1913); See also, Oneida Savings Bank v. Tese,108 AD2d 1042 ( NYAD 3rd 1985) indirectly interpreting a statute utilizing the word "If". Black's Law Dictionary defines "If" to mean " implies a condition precedent". Fourteenth Edition 1968 at pg. 881.Webster's New World Dictionary concurs and defines "If" as " a condition or supposition". Fifteenth Edition 1960 at pg. 370.

NY Gen. Bus. Law 198-b (9) specifically provides that "if the dealer does not have an arbitration procedure, you may resort to any remedy provided by law" . . . Utilizing a plain meaning definition, the statute clearly states that arbitration is a pre condition to suit, only in situations where the defendant/dealer creates same. Accordingly, arbitration is an affirmative defense to a Court action; the proponent of which has the burden of proof to establish. NY CPLR Sec. 3018 Mayer v. Chamberlain, 178 AD 326 (NYAD 3rd Dept. 1917); Fireman's Fund Ins. Co. v. Farrel ____ NYS 2 2008 W.L. 5263822, NY AD 2nd Dept. 12-16-08. As the record is devoid of any proof of the existence of any warranty/arbitration agreement or other proof that the defendant established or participated in arbitration procedures or that the plaintiff was given the requisite notification of same in a consumer bill of rights; any precondition as could prevent a consumer from seeking refunds or replacement does not exist. In the absence of established arbitration procedures, an absence as is notable here, the plaintiff may resort to any remedy provided by law and plaintiff's cause of action under the lemon law is not barred on the ground that defendant did not participate in arbitration.

Used Car Lemon Law

Prima Facie Elements

Pursuant to statute, the plaintiff received a 90 day/4,000 mile warranty regardless of whether [*5]same was tendered. Generally speaking, the used car purchaser must be given a full refund if the dealer cannot correct a defective covered component after at lest three attempts or for which the repair time is greater than fifteen (15) days. It is not seriously contested that the plaintiff meets the three repair/fifteen day components of the warranty. However, the prosecution of the instant proceeding is hampered by the fact that no documentary evidence is available concerning the car's repair history. The defendant avers that it cannot comply with the plaintiff's subpoenas for purchase and service records as same were destroyed via a casualty accident prior to this litigation. The plaintiff's records were limited to a loaner car receipt; car fax report dated November 26, 2005; Kraus Auto Technician report bill, and a rental credit card receipt. (Exhibit No.2). The defendant's subpoenaed technicians who testified exhibited little personal memory or knowledge of the plaintiff's repairs except that their testimony did not contradict the plaintiff's testimony that the car had a serious problem on the day of sale (August 5, 2005); and thereafter on October 16 through November 16, 2005; November 26, 2005 and March 2006.

Unfortunately, this record is insufficient to establish the prima facie element that the alleged defect involved a "warranty covered part". See, Sec. 198 (b) (c) (2). The plaintiff produced no expert witness of her own and did not make a formal tender demand pursuant to the used car Lemon Law. She also lost possession of the vehicle which may have impaired the defendant's ability to establish a defense. See, Diaz v. Audi of America, Inc., 19AD 3rd 357 (NY AD2d 2005). Under this fact pattern, the plaintiff's claim must be denied as unfounded. This conclusion is required, even if the Court were to find that the defendants had withheld evidence and had drawn the strongest possible inference in seeking to sustain the plaintiff's case. See, Noce Bros. v. Kaufman, 2 NY2d 347 (NY 957).

Uniform Commercial Code § 2-314

Vehicle and Traffic Law § 417

The Court now considers the alternate theories of the plaintiff's case, which rely principally on Uniform Commercial Code § 2-314, which requires "an implied warranty of merchantability. This statutory warranty requires that goods must be fit for the ordinary purposes for which such goods are used. NY U.C.C, 2-314 (2)(c)."A warranty of fitness for ordinary purposes does not mean that the product will fulfill a buyer's every expectation, rather the warranty provides for a minimal level of quality. The goods need to be reasonably fit for their intended purpose. The inquiry focuses on the expectations of he product's performance when used in the customary, usual and reasonably forseeable manner." (93 NY Jur, 2d Sales, Section 240)

General Business Law 198-b, by it's express statutory language makes the legal remedy of an action for breach of the implied warranty of merchantability available as it specifically provides "that nothing in this section shall in any way limit the rights of remedies which are otherwise available'. . .UCC 2-314 requires that "a car must enable the purchaser to transport herself upon the streets and highways of this State or any other in a reasonably safe manner." Raymond v. Van Deugen, 183 Misc 2d 81 (J.C. Columbia Co. 1998), citing to McCormack v. Lynn Imports, Inc., 114 [*6]Misc 2d 905 (Nas. Co. Dist. Ct. 1982).

New York Vehicle and Traffic Law Sec. 417 codifies the U.C.C."warranty of merchantability," as to automobiles, by creating the concept of a "warranty of servicability", requiring that a used car be delivered "in a condition . . . to . . . satisfactory and adequate service upon the public highway". Armstrong v. Boyce, 135 Misc 2d 148 (NY City Ct., 1987). VTL 417 requires used car dealers to inspect vehicles and to deliver a certificate to buyers stating that the vehicle is "in condition and repair to render, under normal use, satisfactory and adequate service upon the public highway at the time of delivery". This warranty of serviceability goes beyond the implied warranties of the U.C.C. and is non waivable. Dato v. Vatland, 36 Misc 2d 636 (Dist. Ct. Nassau 1962) Dato v. Vatland, supra , Winsley v. Spitzer Motor Sales, Inc., 12 Misc 2d 56, See also Mc Cormack v. Lynn Imports, supra . This condition is considered satisfied if the car passes a motor vehicle inspection by the dealer and the purchaser is supplied a statement concerning inspection and a certification is noted upon the bill of sale. See 15 NYCRR Sec. 78.13. See also, Rayhn v. Martin Nemez Volkswagon, Corp., 77 AD2d 397 (NYAD 3rd Dept. 1980).

A dealer's transferring title of an used vehicle without a bill of sale containing the VTL 417 statement as provided for under 15 NYCRR 78.13(b), creates a presumption that the vehicle is not in condition and repair to render, under normal use, satisfactory and adequate service upon the public highway at the time of delivery". (VTL 417; Armstrong v. Boyce, supra at 153; see also, Natale v. Martin Volkswagon, Inc., 92 Misc 2d 1046 (NY City Ct. 1978). In the face of this presumption, it is the defendant dealer who must submit rebuttal evidence that it either expressly excluded or modified the UCC 2-314 merchantability warranty; or complied with same via tender of the NYCRR Sec. 78.13 servicability "bill of sale" certification. The record presented does neither. Like the proverbial two edge sword, the same absence of all the documents which undercut the plaintiff's Lemon Law claim now cuts harshly against the defendant in that no evidence exists to rebut the presumption of non serviceability. This situation necessitates a finding of the breach of the warranty of serviceability and of the warranty of merchantability, which entitles the plaintiff to recover damages from the defendant.

The record presented details the plaintiff's out of pocket damages at $7,794.00 which the Court adopts as fact, and directs the Clerk of the Court to enter judgment for the plaintiff against the defendant in the small claims jurisdictional maximum amount of $5,000.00 together with statutory interest from August 22, 2005, costs and disbursements.

Dated:___________________________________________________

J.D.C.