Opinion
C.A. No. 04C-05-298 RRC.
Submitted: May 26, 2005.
Decided: August 17, 2005.
On Defendant's Motion to Dismiss.
GRANTED.Jennifer R. Hurvitz, Esquire, Kimmel Silverman, P.C., Silverside Executive Center, Wilmington, Delaware, Attorney for Plaintiff.
Jonathan Layton, Esquire, White and Williams LLP, Wilmington, Delaware, Attorney for Defendant.
Dear Counsel:
The case currently before this Court is, in essence, a "lemon law" claim in which Melissa Lorraine Jakotowicz ("Plaintiff") has filed suit against Hyundai Motor America ("Defendant") for allegedly selling her a defective car. Defendant, in turn, has filed a motion to dismiss the complaint on the grounds that Plaintiff's complaint is barred by Delaware's four-year statute of limitation for warranty claims, both express and implied. Plaintiff, conceding the four-year statute of limitations on express and implied warranties, relies on the so-called "future performance" exception to the four-year statute of limitations, which tolls the statute of limitations until a plaintiff discovers or should have discovered the breach of warranty. This Court finds that the "future performance" exception to the statute of limitations does not apply to Plaintiff's claim because her claim for breach of warranty is based on a "repair or replace" warranty and not a "future performance" warranty.
So styled in caption of complaint, but Plaintiff's complaint identifies Defendant as "Hyundai Motor Corporation." Compl. at ¶ 2.
Factual and Procedural Background
Plaintiff purchased a new 2000 Hyundai Accent from an authorized Hyundai dealership on March 7, 2000. The Accent came with a five-year/60,000 mile express manufacturer's new vehicle limited warranty, which stated that Hyundai would "repair or replace . . . any component originally manufactured or installed by Hyundai Motor Corporation or Hyundai Motor America (HMA) that is found to be defective in material or workmanship under normal use and maintenance." In addition, the car's powertrain had a ten-year/100,000 mile warranty, which also explicitly stated that the warranty was a "repair or replace" warranty that covered the car's engine, transmission and transaxle upon expiration of the five-year/60,000 mile new vehicle warranty.
Defendant's Opening Brief at Ex. A.
Defendant's Opening Brief at Ex. A.
Plaintiff first reported a transmission problem to Defendant on March 8, 2004. When Plaintiff brought her car in for service the first time presumably the car was still covered by the five-year/60,000 mile warranty, or at the very least, the ten-year/100,000 mile warranty. Plaintiff subsequently returned her car to Defendant for service relating to the transmission problem at least four times between March 8, 2004 and the filing of her complaint as evidenced by invoices from Defendant. Plaintiff claims to have returned the car for service three additional times.
Plaintiff then filed a complaint against Defendant on May 28, 2004 alleging four causes of action: 1) a violation of the Delaware Automobile Warranty Act, 2) a violation of the Magnuson-Moss (FTC) Warranty Improvement Act, 3) a violation of the Delaware Consumer Fraud Act, and 4) a violation of the Delaware Deceptive Trade Practices Statute. Plaintiff voluntarily dismissed Counts I, III and IV, thus leaving only Count II (the alleged violation of the Magnuson-Moss (FTC) Warranty Improvement Act), the subject of Defendant's motion to dismiss.
Contentions of the Parties
Defendant argues that Plaintiff's claim for breach of warranty is time-barred due to Delaware's four-year statute of limitations on warranty claims. Defendant contends that the statute of limitations "begins to run upon tender of delivery of the goods, regardless of whether the buyer is aware of the alleged defect at that time." Defendant further argues that "the date of delivery [for a car] is the date the vehicle is delivered to the retailer, not the date of delivery to the ultimate purchaser; however, when the exact date of delivery to the retailer is not available to the Court, the date of the dealer's sale to the original purchaser is the accrual date for the statute of limitations against the manufacturer." The ten-year/100,000 mile powertrain warranty is a "repair or replace" warranty and not a "future performance" warranty, according to Defendant. Defendant argues that the statute of limitations for Plaintiff's claim ran out sometime before March 7, 2004, which date is four years after the sale of the Accent to Plaintiff.
Defendant's Opening Brief at ¶ 4.
Defendant's Opening Brief at ¶ 5.
Plaintiff responds that the "future performance" exception to the four-year statute of limitations applies to her claim tolling the statute of limitations. Plaintiff contends that the statute of limitations for a breach of warranty under the "future performance" exception did not begin to run until "it is determined that the manufacturer was unable to repair a defect within a reasonable number of attempts." Plaintiff argues that her claim is subject to the applicability of the "future performance" exception because the manufacturer's warranties (the five-year/60,000 mile or ten-year/100,000 mile powertrain warranties) are longer than the four year statute of limitations under Delaware law, thereby allowing a breach of the warranty to occur after the statute of limitations. Plaintiff argues that the ten-year/100,000 mile powertrain warranty is both a "repair or replace" warranty and a "future performance" warranty.
Plaintiff's Response at 3.
Plaintiff's Supplemental Response at 4.
Discussion
A. The warranty in question is a "repair or replace" warranty and not a "future performance" warranty.
The first issue for this Court to decide is whether the warranty in question is a "repair or replace" warranty or a "future performance" warranty. The Court holds for the reasons stated below that the two warranties (the five-year/60,000 mile warranty and the ten-year/100,000 mile powertrain warranty) are "repair or replace" warranties and not "future performance" warranties.
6 Del. C. § 2-725 provides in pertinent part that
(1) [a]n action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitations to not less than one year but may not extend it.
(2) [a] cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach . . . [t]he breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered."
6 Del. C. § 2-725(1) and (2).
The United States District Court for the District of Delaware, applying Delaware law, has explained that
[t]he U.C.C. provides the ["future performance"] exception in § 2-725(2) because without it, a situation could arise where a buyer, after tender of delivery, could be awaiting such future performance only to have the four year limitation period expire and the future performance promised subsequently fail to occur, thereby leaving the buyer without legal recourse upon such an expressed warranty.
Ontario, 569 F.Supp. at 1266. Ontario Hydro v. Zallea Systems, Inc, 569 F.Supp. 1261, 1266 (D. Del. 1983) (holding that "[t]here is a vast difference between a warranty of future performance and a repair or replacement warranty because the latter will not have any effect upon the § 2-725(1) limitation period").
A "future performance" warranty is different from a "repair or replace" warranty in that a "future performance" warranty "expressly provide[s] some form of guarantee that the product will perform in the future as promised." In contrast, "a repair or replacement warranty does not warrant how the goods will perform in the future. [Citation omitted.] Rather, [a repair or replace] warranty simply provides that if a product fails or becomes defective, the seller will replace or repair within a stated period."
Ontario, 569 F.Supp. at 1266.
Ontario, 569 F.Supp. at 1266.
A warranty cannot be both a "repair or replace" warranty and a "future performance" warranty. This Court has recently held that "[d]istinguishing between the two, a repair or replacement warranty "merely provides a remedy if the product becomes defective," while a future performance warranty " guarantees the performance of the product itself. . . ." This Court has noted that "[a] warranty extending to future performance . . . is a very narrow exception to the limitations period.
Ontario, 569 F.Supp. at 1266.
Pender v. DaimlerChysler Corp., 2004 Del. Super. LEXIS 275 at *16, quoting Ontario, 569 F.Supp. at 1266.
Burrows v. Masten Lumber and Supply Co., 1986 Del. Super. LEXIS 1385 at *3.
In order for a warranty to be a "future performance" warranty, as provided for in § 2-725(2), the warranty must explicitly so state; "future performance" cannot be inferred. To find a valid "future performance" warranty, this Court has held that
[t]o extend a contract warranty beyond the four-year statute of limitations, there must be evidence of an express warranty extending to, or beginning after, a specific future point in time beyond the four-year window. An implied warranty, by its very nature, cannot extend to future performance because it makes no explicit representations concerning longevity. Therefore, only an express warranty that speaks to a specific point in the future falls within this "future performance exception."
SR Associates, L.P., III, v. Shell Oil Co., 725 A.2d 431, 435 (Del.Super. 1998) (holding that the defendant did not intend to provide a "future performance" warranty on its polybutylene piping when the defendant stated that polybutylene is comparable to copper piping), citing Pack Process, Inc. v. Celotex Corp., Del. Super., 503 A.2d 646, 652 (1985) and Lecates v. Hertrich Pontiac Buick Co., 515 A.2d 163, n. 15. (Del.Super. 1986).
The drafters of the Uniform Commercial Code, upon which 6 Del. C. § 2-725 is based, "decided that the seller's need to have some clearly defined limit on the period of its potential liability outweighed the buyer's interest in an extended warranty and reserved the benefits of an extended warranty [a "future performance" warranty] to those who explicitly bargain for them."
Raymond-Dravo-Langenfelder v. Microdot, Inc., 425 F.Supp. 614, 618 (D. Del. 1976) (holding that "[the defendant] base[d] its whole argument that the warranty in question extended to future performance on [the defendant's] inability to discover any breach until the pier form was actually put into service . . . [the defendant] points to no language in the contract, however, that explicitly warrants any future performance").
There is no evidence to show that Plaintiff and Defendant explicitly bargained for or intended that either warranty (the five-year/60,000 mile warranty or the ten-year/100,000 mile powertrain warranty) was to be a "future performance" warranty and thereby potentially extend the statute of limitations. Section 2-725(1), specifically states that "parties may reduce the period of limitations to not less than one year but may not extend it."
The only language in the warranties that Plaintiff points out to support her argument that the manufacturer's warranties are both "repair or replace" warranties and "future performance" warranties is the fact that the warranties, which are either five years or ten years long depending on the problem, extend beyond the four-year statute of limitations in § 2-725. This argument fails because this Court has held that the "future performance" exception is inapplicable to an extended service contract. The Pender court found that the language of the warranty was the controlling factor in determining if the warranty was a "future performance" warranty or not. the language in the two warranties explicitly state that they are "repair or replace" warranties. Absent explicit language in the warranty in this case guaranteeing performance or that repairs would be unnecessary, this Court finds that Plaintiff's claim for breach of warranty is subject to the four year statute of limitations in 6 Del. C. § 2-275(1).
B. The four-year statute of limitations of 6 Del. C. § 2-725(1) bars Plaintiff's claim.
Pender, 2004 Del. Super. LEXIS 275 at *16.
Pender, 2004 Del. Super. LEXIS 275 at *16 (holding that "under the service contract of six years or 75,000 miles, whichever occurred first, [the defendant] agreed to pay the total cost to correct any defective, covered component . . . the warranties do not include performance assurances by Defendant or guarantees that repairs will be unnecessary").
Plaintiff relies on a bench ruling by this Court in Barnes v. Hyundai Motor America, Del. Super., C.A. No. 04C-10-272, Toliver, J. (March 14, 2005) (ORDER). In Barnes, this Court denied a motion to dismiss on statute of limitations grounds; however the Court appears to have based its denial of the motion because of an apparent factual question of whether the defendant had made representations to the plaintiff that his car had been fixed and whether the plaintiff then relied on those representations to not file suit, thus missing the statute of limitations deadline.
Having found that the manufacturer's warranties are "repair or replace" warranties and not "future performance" warranties and therefore subject to the four-year statute of limitations in § 2-725, this Court must now decide if the statute of limitations had expired and if Plaintiff's complaint was timely filed. Under § 2-725(2) "[a] cause of action accrues when the breach occurs . . . [and] [a] breach of warranty occurs when tender of delivery is made." This Court has held that "[t]he statute indicates that a `breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance.'" This Court has held that in cases involving cars "the date of delivery by the manufacturer to the dealer is the accrual date for a cause of action against the manufacturer." When the date of delivery by the manufacturer to the dealer is unknown, this Court has held that "[because] the date the manufacturer delivered the car to the dealer could not . . . have been later than the date the dealer sold the car to a consumer," then the date of the sale to the consumer could be found to be the date when tender of delivery was made."
SR Associates, L.P., III, 725 A.2d at 435.
Wilson v. Class, 605 A.2d 907 (Del.Super. 1992).
Wilson v. Class, 605 A.2d 907 (Del.Super. 1992).
In the instant case, no evidence was presented as to the date the Accent was delivered to the dealership. It is not apparent from the record if this date can or cannot be established; however, given the facts in this case, it is unnecessary for this Court to determine the date when tender of delivery was made to the dealer. The warranty states that "[t]he warranty period is limited to 60 months from the date of original retail delivery or date of first use, or 60,000 miles." The Court finds that whether it uses the date the Accent was purchased by Plaintiff (March 7, 2000) or an earlier date of delivery to the dealer is immaterial. Plaintiff's complaint was untimely filed because she filed the complaint on May 28, 2004 and the latest possible statute of limitations ran on March 7, 2004.
Defendant's Opening Brief at Ex. A.
Fore the foregoing reasons, the Defendant's motion to dismiss is GRANTED.