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Resolving an issue that has split New York courts and continues to divide courts in other states, the Court of Appeals on Wednesday reversed a 1st Department appellate panel and held that the federal Magnuson-Moss Warranty Act applies only to sold — and not to leased — products. But the unanimous court observed that while the plaintiff in this case, DiCintio v. DaimlerChrysler, has no remedy under the federal statute, lessees are protected under New York laws. The case involves a man, Mark A. DiCintio, who leased a new Jeep Grand Cherokee Laredo sport utility vehicle from Adzam Auto Sales Inc. of Bedford Hills, N.Y., in June 1999. After experiencing a series of mechanical problems, DiCintio advised Adzam that he wanted to terminate the lease or obtain another vehicle. Adzam refused. DiCintio then notified DaimlerChrysler that he was revoking acceptance of the SUV. DaimlerChrysler refused the revocation, resulting in DiCintio’s action under the Magnuson-Moss Warranty Act. Magnuson-Moss, passed by Congress in 1975, is primarily a disclosure act that requires manufacturers and sellers to abide by certain standards when they offer a warranty. It requires the warrantor to afford the consumer either a refund or replacement, and allows the buyer to pursue a legal claim under the act in any court of general jurisdiction. Courts, however, have differed on how or whether to apply the act with regard to leased vehicles. In this matter, both the supreme court and the Appellate Division, 1st Department, said the act applies. The 1st Department held that a lease with an option to buy is sufficiently similar to a sale as to invoke Magnuson-Moss. But the Court of Appeals unanimously disagreed in an opinion by Chief Judge Judith S. Kaye. NO SALE MADE Kaye said the plain language of the statute refers to “consumers” and “sales.” Here, she said, DiCintio is not a consumer because there was no sale. “Despite the similarities between DiCintio’s lease and a sale, we cannot accept that the lease qualifies as a sale under the Warranty Act, even assuming that the Act requires courts to analyze this issue in functional terms and without regard to the passage of title,” Kaye wrote. “Unlike a buyer, a lessee like DiCintio remains free not to exercise the option to buy.” The court noted that states are free to expand consumer protection laws beyond the requirements of Magnuson-Moss, and that New York did so in 1986 when it amended its Lemon Law to cover lessees. Appearing were Paul A. Feigenbaum of Couch White in Albany, N.Y., for DaimlerChrysler, and Douglas R. Hirsch of Sadis & Goldberg in Manhattan for DiCintio.

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