By Jeffrey Chase
- This article was first published on Law.com
Network - March 10, 2014
Among the typical claims asserted in most consumer product class
actions is breach of express warranty. With a view toward
nationwide class certification, many experienced class counsel
believe they have their best chance for class certification due
to the facial similarity of warranty laws nationwide. In order
to circumvent a time/mileage limitation in the warranty, class
counsel often assert that the product “defect” existed at the
time of sale, was hidden by the manufacturer and only
“discovered” by the consumer after the expiration of the statute
of limitations. To further overcome this warranty-expiration
defense, there is often a pleading that any warranty time
limitation is unconscionable.
The recent case of McQueen
v. BMW of N. Am., LLC, 2014 U.S. Dist. LEXIS 21084 (D.N.J.
Feb. 20, 2014), provides an example of the belated defect
scenario. Plaintiff claimed that a transmission defect caused
the class vehicles to shift into neutral, rather than park, and
to roll away. Based on the text of the warranty, plaintiff
asserted the manufacturer’s “discovery” of a defect operated to
negate the time and mileage limitation of the warranty.
Plaintiff argued that, since BMW knew of the defect at the time
of sale and did nothing to correct the problem during the
warranty period, it breached the warranty. The McQueen court
rejected plaintiff’s interpretation of the warranty and
concluded that the warranty benefit was limited to the consumer
who must discover a defect and seek warranty service during the
specified warranty period.
The general rule is that a plaintiff who has not experienced a
problem or defect within the warranty period cannot state a
claim for breach of warranty. The rule was clearly defined by
the Second Circuit Court of Appeals in Abraham
v. Volkswagen of Am., Inc. , 795 F.2d 238, 250 (2d Cir.
[V]irtually all product failures discovered in automobiles after
expiration of the warranty can be attributed to a ‘latent
defect’ that existed at the time of sale or during the term of
the warranty. All parts will wear out sooner or later and thus
have a limited effective life. Manufacturers always have
knowledge regarding the effective life of particular parts and
the likelihood of their failing within a particular period of
time. Such knowledge is easily demonstrated by the fact that
manufacturers must predict rates of failure of particular parts
in order to price warranties and thus can always be said to
‘know’ that many parts will fail after the warranty period has
expired. A rule that would make failure of a part actionable
based on such ‘knowledge’ would render meaningless time/mileage
limitations in warranty coverage.*
Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 616
(3d Cir. 1995); Brisson
v. Ford Motor Co., 602 F. Supp. 2d 1227, 1231-32 (M.D.
Fla. Mar. 9, 2009), aff’d
in relevant part and vacated on other grounds, 349 Fed.
Appx. 433, 434 (11th Cir. 2009). Without enforcement of this
type of contractual limitation, a manufacturer would literally
stand in the role of a perpetual insurer of its products.
Recent case law has also rejected the assertion that a
defendant’s “knowledge” of a latent defect either at the time of
sale or during the warranty period is a basis for allowing the
breach of warranty claim to proceed when the defect manifests
itself only after the warranty period expired. Aprigliano
v. Am. Honda Motor Co., 2013 U.S. Dist. LEXIS 154539,
*23-24 (S.D. Fla. Oct. 28, 2013); McCabe
v. Daimler AG, 948 F. Supp. 2d 1347, 1359 (N.D. Ga.
The plaintiff in McQueen further
asserted that the warranty time and mileage limitations were
“unconscionable” because of BMW’s alleged knowledge of the
defect and its failure to disclose. This argument had been
rejected by the trial court in an earlier opinion and the court
rejected plaintiff’s attempt to revisit the issue based on the
claim that the cases relied on by the court did not involve
design defect claims.
A full discussion of the unconscionability doctrine is beyond
the scope of this post. However, in automotive litigation, many
cases have addressed the question of whether time or mileage
limitations shock the conscience of the court and have upheld
reasonable limitations. See, e.g., Broe
v. Oneonta Sales Co., Inc., 100 Misc. 2d 1099 (N.Y. Sup.
Ct. 1978); Bush
v. American Motors Sales Corp., 575 F. Supp. 1581 (D.
Colo. 1984); Hahn
v. Ford Motor Co., Inc., 434
N.E. 2d 943 (Ind. App. 1982); Moore
v. Coachmen Indus., Inc., 499 S.E.2d 772 (N.C. App. 1998)
(12 month/15,000 mile recreational vehicle warranty held not
In view of the proliferation of consumer product class actions,
it is anticipated that legal skirmishes regarding belated
defect/breach of warranty claims will continue.
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