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Ruling that a federal warranty law may protect consumers who lease vehicles, a New York Suffolk County Supreme Court justice has denied DaimlerChrysler’s motion to dismiss claims arising from a soured car deal. In Beyer v. DaimlerChrysler Corp., 1065-00, Justice Robert W. Doyle rejected DaimlerChrysler’s argument that the Magnuson-Moss Warranty Act is not applicable to lease transactions and that no privity of contract existed between plaintiff and DaimlerChrysler. The Magnuson-Moss Warranty Act, 15 USC �2310[d][1], permits “consumers” to sue in federal or state court if they have been “damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under the Act, or under written warranty, implied warranty or service contract.” ISSUES REMAIN Doyle ruled that issues of fact remained in Elyse Beyer’s cause of action under the Magnuson-Moss Act for breach of implied and written warranty as well as her revocation of acceptance of the 1997 Jeep Cherokee. Beyer leased the vehicle from Storms Motors in Southampton, N.Y., in February 1997. She agreed to a three-year or 36,000-mile “bumper-to-bumper” warranty as well as standard warranties outlined in DaimlerChrysler’s new car warranty booklet. Two days after delivery, Beyer alleged she began experiencing a series of car troubles that spanned 14 months. Work performed to the car included replacement of the front seat, sunroof, fuel tank sending unit, engine, transmission and numerous adjustments of other parts. In addition, the sport utility vehicle had to be towed four times to an out of state dealer, which was servicing the vehicle. Beyer also incurred expenses for a rental vehicle when the Jeep was out of service for over 30 days while being repaired. Stating that she had lost confidence in the SUV’s reliability and integrity, Beyer sent a letter in April 1998 to DaimlerChrysler requesting that the vehicle be “switched for another one” or that she be “let out” of the lease. PROBLEMS CONTINUE The problems allegedly continued through the summer of 1999, including a defective roof rack, power steering pump, fuel tank and CD player. Beyer revoked her acceptance of the vehicle in writing to DaimlerChrysler in July 1999. In his decision issued last month, Doyle wrote that federal courts had not ruled consistently on whether the Act is applicable to leases, with some courts finding Magnuson-Moss does apply and others going the other way. Beyer argued that her case fell under the Magnuson-Moss Warranty Act because her lease included most of the characteristics of a sale. She asserted that her agreement was no different from a “conditional sales contract,” and should have been considered a “sale” for the purpose of a breach of implied warranty under the Magnuson-Moss Warranty Act. Doyle looked to case law that addressed how far the federal act can go in protecting consumers operating under an implied warranty. In New York, the court noted, there can be no implied warranty absent privity of contract where recovery is sought for economic loss alone, unless it can be shown that the dealerships with which plaintiff dealt were the manufacturer’s sales or leasing agents or it can be shown that the product is a source of danger. Here, Beyer argued that the dealership acted as the agent for the manufacturer within the purview of Magnuson-Moss because she had communication with both the dealer and DaimlerChrysler regarding her car troubles. PRIVITY DENIED DaimlerChrysler contended, however, that that no privity of contract existed between Beyer and DaimlerChrysler and that, therefore, the action to recover monetary damages for breach of written and implied warranties pursuant to the Magnuson-Moss Warranty Act should be dismissed. Doyle wrote that the Magnuson-Moss Act defines a consumer as not only a buyer, but “any person to whom such product is transferred during the duration of an implied or written warranty … and any other person who is entitled by the terms of such warranty … to enforce against the warrantor.” Doyle also pointed out that privity of contract is generally not required to assert an express warranty claim under the Uniform Commercial Code in New York. Furthermore, Doyle ruled that issues of fact remained as to whether “the scenario of breakdowns, towings, replacements, and repairs may support a breach of the written warranty” under the Act, since the plaintiff was provided with a warranty booklet that explicitly contained DaimlerChrysler limited warranties and directions to present the car to a dealer if warranty service was needed. Representing Beyer was New York City-based Sadis & Goldberg attorney Douglas R. Hirsch. Keith B. Rose of Albany-based Couch White represented DaimlerChrysler.

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