Laing v. Volkswagen of America, Inc.

DAVIS, J. Shortly after purchasing a 2004 Volkswagen Touareg, appellant, Calbert Augustus Laing, became dissatisfied with the vehicle and, nearly two years later, brought suit against appellee, Volkswagen of America, Inc., the manufacturer. In the complaint filed in February of 2006, appellant alleged three counts of statutory violations for breach of warranties under the Maryland Automotive Warranty Enforcement Act (Maryland Lemon Law) 1 and the Magnuson-Moss Warranty Act, a federal consumer protection oriented statute, for the alleged nonconformities. 2 In the third count, appellant ¹⁴⁰ claimed a violation of the Maryland Consumer Protection Act, which proscribes unfair and deceptive trade practices. 3 Appellant filed suit regarding three specific defects of the vehicle, in which he claimed that appellee’s failure to remedy those conditions constituted the three mentioned statutory violations. On September 26, 2006, appellee moved for summary judgment. The circuit court denied the motion.

On June 6, 2007, the day trial was to have commenced, appellee renewed the motion for summary judgment at the conclusion of all the evidence. With a jury already empaneled, the circuit court found that the undisputed material facts as established by the submissions pursuant to Maryland Rule 2-501 (a) were insufficient to generate an issue of fact for the jury to decide. Without expert testimony establishing a defect, the circuit court determined that appellant failed to establish a warranty claim as a matter of law; summary judgment was therefore entered. Appellant subsequently filed this appeal, raising the following issue, which we have rephrased and consolidated as follows: Whether the circuit court erred in granting a motion for summary judgment upon finding that appellant failed to establish legally sufficient evidence to pursue his claims under the Magnuson-Moss Warranty Act, the Maryland Automotive Warranty Enforcement Act 4 and the Maryland Consumer Protection Act.

For the following reasons, we affirm the circuit court’s deci ¹⁴¹ sion that each cause of action 5 required appellant to prove a defective condition through expert testimony to generate a triable issue for the jury to decide. FACTUAL BACKGROUND In October of 2004, appellant purchased a demonstrator 6 2004 Volkswagen Touareg from Darcars College Park Volkswagen (Darcars), operating as College Park Motor Cars, Inc., an authorized dealership of appellee, for $44,584. The odometer had a reading of 5,289 miles at the time of sale. A “Limited New Vehicle Warranty” accompanied the sale of the vehicle and covered the remaining portion of the original new car warranty for four years or fifty thousand miles, whichever occurred first.

The limited warranty provided for the repair or replacement of parts with defects in materials or workmanship, except for wheel alignment, tire balancing and repair or replacement of tires. Any Volkswagen dealership was authorized to perform the warranty services. Appellant also purchased a maintenance package from Darcars for $875, which stated an agreement that appellee would provide oil changes, tire balancing and rotation and seasonal inspections and appellant was obliged to avail himself of same as required. Appellant received a pamphlet, titled “Owner Information about Consumer Protection Laws,” with information regarding his ¹⁴² right to enforce warranties upon notifying appellee, in writing, of any nonconformity.

A. Service History Over the course of two years, appellant took the vehicle to the dealership “something like [twenty-four] times” for repairs. Repair orders from the dealership document the complaints lodged by appellant on each of those occasions and detail the extent of the services performed. The complaints ranged from pieces of trim on the interior of the vehicle coming loose to more serious issues. The odometer registered approximately 23,000 miles during those two years when many of the “minor” problems were repaired, including the replacement of two broken pieces of trim, application of paint sealant and repair of a loose rail, air bag light, trim on the grill and the horn.

According to appellant, there were three other “significant problems,” none of which has been resolved: the windshield wiper fluid emitted an odor that made appellant feel nauseous; the tires made “unusual” sounds; and the vehicle hesitated then surged after being stopped. Virtually each time that the vehicle was taken to the dealer for servicing, the dealer rotated the tires at appellant’s request. Nearly every 3,000 miles, appellant scheduled oil changes and had general maintenance services performed as recommended by the manufacturer. i. Window Washer Fluid On January 20, 2005, three months after appellant purchased the vehicle, appellant complained to the dealership of odors from the window washer fluid and exhaust fumes.

The dealer inspected the vehicle, but found no leaks. Appellant feared that, because window washer fluids contain poisonous substances, “constant inhaling of the substance can be a very serious health hazard.” Two months later, appellant returned to the dealership to complain again of the odor. This time, the dealership suggested that appellant utilize the recirculation setting on his heating and cooling system to prevent exterior odors from penetrating the interior of the vehicle. As part of ¹⁴³ the services performed on that day, the dealer rotated the tires. ii.

Tires On June 8, 2005, the dealer once again rotated the tires. Days later, appellant returned, this time complaining that the tires were making an “unusual sound.” Appellant claimed that, at first, the dealer did not “take the problem very serious[ly].” When appellant returned on June 22, 2005, one of the dealer’s technicians road tested the vehicle and concluded that the noise was caused by “cupping” or, in other words, the uneven wearing of the tread. The dealer informed appellant that cupping could not be corrected, but that it could be avoided by rotating the tires every 4,000 miles. Per appellant’s request, the tires were rotated and balanced.

On August 24,2005, rather than going directly to the dealer, appellant contacted “the people at Volkswagen” and persuaded them to pay to replace the tires. At that time, the odometer registered 14,714 miles. Appellee informed appellant that the tires were not covered under warranty, but agreed to replace two of the tires as a matter of goodwill as long as appellant paid for their installation. The replacement of the two tires “temporarily” corrected the problem.

Nearly 6,000 miles later, the cupping problem recurred. In early September of 2005, appellant contacted the manufacturer of the tires and persuaded it to replace the other two tires. The manufacturer sent appellant to Merchant’s Tire & Auto Centers, one of their suppliers, to perform the installation. iii. Hesitation Appellant’s most significant complaint was that, whenever he attempted to accelerate “the car would sit” and “then after a brief period of about ten seconds or so, it would jump off.” The hesitation problem was brought to the dealer’s attention on three different occasions.

The first time was on or about August 22, 2005. Appellant informed the dealer that he typically noticed hesitation in the mornings when it was cold ¹⁴⁴ outside. The dealer attempted to duplicate the hesitation by keeping the vehicle overnight and test driving it in the morning; however, the dealer’s test concluded that the vehicle was performing according to specifications. The second time that appellant complained about the hesitation problem was in mid-September of 2005.

In addition to hesitation, appellant reported that there was a “slight shimmy on the steering.” 7 To correct the shimmy, the dealer balanced the tires. Despite these efforts, appellant claims that the shimmy persisted. On that visit, the dealer also diagnosed the hesitation as a computer problem and, therefore, installed new computer parts. Shortly after the repairs, the hesitation problem recurred and appellant returned the vehicle for servicing.

This time, the dealer diagnosed the hesitation problem as an electrical malfunction in the fuel pump and then replaced the fuel pump. In mid-October of 2005, when appellant lodged his third complaint, the dealership informed appellant that they would need to schedule a test drive with a district representative from their regional office to try to ascertain the problem. Appellant was never contacted to schedule the test drive. 8 On that same visit, appellant notified the dealer about the window washer fluid odor and the vibration of the tires. Once again, the dealer rotated the tires.

Appellant also experienced other problems with the Touareg. In December of 2005, the dealer repaired the parking brake by replacing a cable. In January of 2006, appellant took the vehicle to the dealership, complaining that the locking system failed and that a piece of trim had fallen off the mechanism that operates the seat belt. The dealer replaced the trim, but determined that the locking system was performing to specifications.

In March of 2006, the dealer repaired the brake lights and, three months later, it repaired squeaky ¹⁴⁵ door hinges. In September of 2006, the dealer repaired the light inside the trunk that was falling off. B. The Complaint The genesis of this appeal is the lawsuit to redress the unrepaired conditions. On February 22, 2006, appellant filed a complaint in the circuit court, alleging the three statutory violations, seeking damages in the amount of the purchase price of the vehicle, consequential damages, attorneys’ fees and court costs.

In the first count, appellant alleged that, despite appellee’s attempts to have the conditions repaired, the conditions substantially impaired the vehicle’s use and diminished its market value, thereby constituting a breach of warranties in violation of the Maryland Automotive Warranty Enforcement Act. Under the Maryland Lemon Law, he averred, there is a presumption that a reasonable number of repair attempts have been made when the vehicle is subject to repair four times or when the vehicle has been out of service for a total of thirty calendar days due to the nonconformities. See generally Md. Code Ann., Com. Law § 14 — 1502(c)(1) and § 14 — 1502(d)(1), (2).

In the second count, appellant alleged violations of the Magnuson-Moss Warranty Act as a result of appellee’s failure to conform the vehicle to the warranties. As the foundation for the Magnuson-Moss Warranty Act claim, appellant alleged breach of express warranty, 9 implied warranty of merchantability, 10 implied warranty of fitness for a particular purpose 11 and breach of contract and unfair trade practices. ¹⁴⁶ In the third count of his complaint, appellant alleged unfair and deceptive trade practices under Maryland’s Consumer Protection Act, found in Title 13 of the Commercial Law Article, 12 derived from the alleged violation of the Maryland Automotive Warranty Enforcement Act, supra. A violation of the Maryland Automotive Warranty Enforcement Act constitutes an “an unfair or deceptive trade practice” under the Consumer Protection Act. See Md. Code Ann., Com.

Law § 14-1504 (a) and § 13-301 (14)(xi). In May of 2006, appellant designated James E. Lewis of Valley Automotive Consulting as an expert witness. Lewis neither inspected nor road tested the vehicle, but was expected to testify as to the repair history and diminution in value. In a report submitted to the court, Lewis described as “significant facts” the three complaints related to the engine management system, the two complaints involving the electrical system and the two complaints involving the braking system.” 13 C. Motion For Summary Judgment On September 27, 2006, appellee moved for summary judgment.

Appellee argued that the Maryland Automotive Warranty Enforcement Act is inapplicable to the claim as it only applies to “new vehicles.” 14 Alternatively, even if it were ¹⁴⁷ applicable, appellee argued that appellant may not pursue remedies under the Lemon Law because he failed to notify the manufacturer of the defects. 15 See Md. Code Ann., Com. Law § 14-1502 (b)(l). Appellee also argued that Lewis’s opinion should be excluded because he had not used any diagnostic test nor road-tested the vehicle and he had formulated an opinion based solely on the repair orders. Appellant had not disclosed any plans to produce any other expert witness to testify as to any defect in materials or workmanship.

Thus, appellee averred that appellant’s claim solely consisted of his complaints to the dealership, which, in appellee’s view, constituted descriptions of symptoms, not allegations of defects in materials or workmanship. With respect to the count for federal law violations, appellee challenged the implied warranty of fitness for a particular purpose claim on grounds that there was a lack of evidence indicating a particular purpose. Regarding breach of express warranty and implied warranty of merchantability, appellee contended that appellant failed to produce evidence sufficient to establish a defect. Concerning the breach of contract and unfair trade practices, appellee maintained that the Magnuson-Moss Warranty Act simply did not provide any remedy for those alleged violations.

For the aforementioned reasons, appellee asserted that it was entitled to judgment as a matter of law on the undisputed facts to support a claim under the Maryland Consumer Protection Act. On February 28, 2007, the court denied appellee’s Motion for Summary Judgment. ¹⁴⁸ D. The Hearing A hearing was held on June 6, 2007. Prior to the commencement of the hearing, appellee renewed its motion for summary judgment, which was denied. Exhibits were then entered into evidence, including the sales contract, Perfect Delivery Inspection document, Disclosure of Prior Vehicle Use for Dealership or Commercial Purposes document, Maryland Certificate of Title, the warranty, twenty repair orders, the buyer’s guide and photographs of the vehicle.

Appellant testified regarding his various complaints and he explained how these conditions have impaired his use of the vehicle. He stated that he purchased a luxury vehicle, believing that it would give him “a nice, smooth ride,” but did not believe that he received the benefit of that bargain. “A set of tires,” he said, do not last “more than 6,000 miles without the noise.” He asserted, therefore, that there was some defective component that was causing the tires to wear unevenly. He also testified that nothing had been done to alleviate the problem with the odor from the window washer fluid, which limited his use of the windshield wipers during rain or snow. Likewise, nothing — other than replacing the fuel pump — had been done to alleviate the hesitation problem, which he claimed “[was] a very serious problem” that could lead to a “serious accident” if he did not pay “special attention.” The defense called Lawrence West, a product liaison engineer for Volkswagen of America, to testify.

West inspected and test drove the vehicle in August of 2006. He did not hear any noise coming from the tires, nor did he experience the hesitation, nor did he detect the washer fluid odor. West testified that there were several possible causes of the cupping, including air pressurization and wheel alignment. Large vehicles, such as the Touareg, are “off road style vehiele[s] so the tire blocks tend to be quite large.” He explained that, “[w]hen you have a tire that large in circumference, the steel belts that criss-cross and zigzag across the whole tire, they tend to flex and move with time and wear.” When air pressure is low, he said, “the tire can run much hotter than it ¹⁴⁹ was normally designed to, which could also cause the belts to shift and the tires could wear funny, the rubber gets much softer, so it starts wearing.” He added that failure to monitor the air pressure can cause premature wear.

West testified that he examined the vehicle and its suspension components and “found no play in any of the ball joints or the tie-rod ends,” “[t]he steering rack was dry and clean” and there were no leaks. He “looked at the control arms, which are the arms that go from the center of the car and actually go out to the wheels and hold everything in place” and “[t]hey were all in good shape.” West suggested several possible causes of the vehicle’s hesitation, including problems with “electrical controls, any of the sensors, or additionally things like the oxygen sensor, the mass air flow sensor, and position sensors [and] the crank shaft position sensors.” He explained that it may also have been due to “actual mechanical problems” where something shifts inside the engine, dragging brakes or a transmission that does not shift properly. On the other hand, it may have been the result of some external cause, such as the type of gasoline put in the automobile. Another cause may have been that the vehicle has adapted to appellant’s driving style.

He explained that “[m]ost cars [nowadays] have computers that are actually a little smarter than us sometimes, and they actually adapt to the way you drive.” The Touareg’s transmission has a system that “mimics” different driving styles. For example, when appellant operates the vehicle after another driver has driven, it will take some time before the transmission readjusts to his driving style. The odor, he explained, could only penetrate the interior through the ventilation for the heating and air conditioning. But, he did not smell any odor when he test drove the car.

E. The Court’s Ruling At the close of the evidence, appellee renewed its motion for summary judgment. The court granted the motion and entered judgment in favor of appellee, reasoning that ¹⁵⁰ [appellant] has produced no expert evidence of an actual defect, condition, malfunction, or nonconformity in the vehicle that he purchased sufficient in the Court’s view to sustain a breach of Expressed Warranty or Implied Warranty of fitness for a particular purpose or an Implied Warranty of merchantability. And I say that because there’s simply no evidence of the cause of these symptoms in the complaints registered by [appellant]. There’s no evidence of the specific defect or defects or conditions existing in the vehicle.

Without such proof, submission of this case to a jury would require the jury to speculate as to the existence of the underlying defect or conditions. The Court believes that [appellant] is required to show more than his complaints and symptoms. He’s got to show the cause of those to get to the jury. The defects that he complains about, hesitation, tire cupping, windshield wiper smell, are matters in the Court’s view that lie beyond the knowledge of an average person, and expert testimony is required to establish the existence of these kinds of defects.

When a vehicle has these kinds of defects, it could be due to any number of reasons. It’s [appellant’s] burden to negate other reasons if he has any chance of prevailing in his claim using only circumstantial evidence to prove a defect. And in cases like this, expert testimony is required. With regard to the state law claim of breach of warranty, whether it’s expressed or implied, proof of defect is required to prevail on such cause of action in Maryland.

Similarly in a case of a breach of Implied Warranty of merchantability, [appellant] has the burden of proving the defect. * * * [Appellant] describes the symptoms, and he’s able to describe what does and doesn’t work; however, he’s simply unable in this case to prove the specific actual defect in the subject vehicle. ¹⁵¹ In addition, we have in this case testimony from an expert. [Appellee] produced an expert, Lawrence West, who inspected the car, drove it, and monitored it with an on board system’s diagnostic computer. He concluded that he reviewed all of the vehicle’s systems, found them to be in proper working order, and it was his expert opinion that to a reasonable degree of mechanical certainty, there are no existing defects in material or workmanship of the vehicle. So in sum, because [appellant] has failed to forecast sufficient evidence with respect to the existence of these alleged defects or conditions, [appellant’s] cause of action under all three counts fail, and the Court will not submit this case to the jury. Additional facts will be provided as necessary.

LEGAL ANALYSIS Initially, appellant contends that, in enacting the current Lemon Law, the Maryland General Assembly intended to distinguish breach of warranty claims brought under the Maryland Automotive Warranty Enforcement Act from product liability claims. He posits that Congress had the same intention when enacting the Magnuson-Moss Warranty Act. According to appellant, the relevant distinguishing factor of breach of warranty claims is that the plaintiff is required only to prove that the warrantor failed to remedy a defective condition. The unsuccessful attempts to repair his vehicle were evidence of defect, malfunction and nonconformity; thus, there was no need for expert testimony.

In distinguishing breach of warranty from product liability claims, appellant maintains that, “even for the higher standards of in [sic] products liability cases expert testimony is recognized as important, but not critical.” He insists that a defective condition may be inferred from circumstantial evidence that establishes that the vehicle was not functioning properly. In appellant’s view, the repair orders presented circumstantial evidence from which the jury could infer defects and that such evidence was sufficient to raise a triable ¹⁵² issue under the Maryland Lemon Law and the MagnusonMoss Warranty Act. Consequently, the court’s grant of summary judgment was erroneous. Appellant contends that the same principles apply to claims brought under the Magnuson-Moss Warranty Act because it simply applies substantive state law.

The federal Act merely allows consumers to pursue their breach of warranty claims in both federal and state courts. 16 Appellant postulates that Congress and the Maryland General Assembly, by enacting these statutes, intended to provide consumers with a remedy against automobile manufacturers without requiring the consumer to prove a specific defect or to show causation. Rather, both legislative bodies intended to provide consumers with a mechanism for pursuing claims by demonstrating that a defective condition could not be remedied. Appellant maintains that requiring him to prove the existence of a specific defect thwarts this intent and overburdens plaintiffs because manufacturers are better situated to diagnose defective conditions. I STANDARD OF REVIEW In granting appellee’s motion for summary judgment, the circuit court determined that the evidence was insufficient to generate an issue of material fact for the jury to decide.

Summary judgment is proper where the trial court determines that there are no genuine disputes as to any material fact and that the moving party is entitled to judgment as a matter of law. See Md. Rule 2-501. The trial court should not resolve any issue regarding the credibility of witnesses as those matters are left to the trier of fact. Syme v. Marks Rentals, Inc., 70 Md.App. 235, 238 , 520 A.2d 1110 (1987).

In reviewing the grant of a motion for summary judgment, appellate courts focus on whether the trial court’s ¹⁵³ grant of the motion was legally correct. Wood v. Toyota Motor Corp., 134 Md.App. 512, 516 , 760 A.2d 315 (2000) (citing Beatty v. Trailmaster Products, Inc., 330 Md. 726, 737 , 625 A.2d 1005 (1993)). The parameter for appellate review is determining “whether a fair minded jury could find for the plaintiff in light of the pleadings and the evidence presented, and there must be more than a scintilla of evidence in order to proceed to trial____” Id. Additionally, if the facts are susceptible to more than one inference, the court must view the inferences in the light most favorable to the non-moving party.

Id.; see Delia v. Berkey, 41 Md.App. 47 , 395 A.2d 1189 (1978), aff'd, 287 Md. 302 , 413 A.2d 170 (1980). In granting appellee’ motion for summary judgment, the circuit court determined that the evidence supplied was insufficient to make a prima facie case. Appellant challenges that ruling by disputing the circuit court’s understanding of the elements necessary to make a breach of warranty claim under the state and federal automotive warranty enforcement laws. We initially consider appellant’s arguments based on federal law.

II MAGNUSON-MOSS WARRANTY ACT Appellant claims that the recurrence of the language, “defect, malfunction, or failure to conform,” in the MagnusonMoss Warranty Act indicates Congress’ intent to “widen the definition of a covered condition from a defect to a defect, or a malfunction, or a failure to conform.” Thus, appellant argues that his testimony in conjunction with the repair orders supplied sufficient evidence of a malfunction to prevail under the federal Act. The Magnuson-Moss Warranty Act was enacted in 1975 “to improve the adequacy of information available to consumers, prevent deception, and improve competition in the marketing of consumer products.” 15 U.S.C.A. § 2302 (a) (1975). The legislation was enacted in response to consumer complaints regarding express warranties and disclaimers. Thus, the ¹⁵⁴ purpose of this legislation is “(1) to make warranties on consumer products more readily understood and enforceable, (2) to provide the Federal Trade Commission (FTC) with means of better protecting consumers and (3) to authorize appropriations for the operations of FTC----” H.R.Rep.

No. 93-1107 (1974), reprinted in 1974 U.S.C.C.A.N. 7702, 7702 (1974). The Act empowers the Federal Trade Commission to prescribe the rules necessary to achieve these objectives. 15 U.S.C.A. § 2302 (b). It allows a consumer “who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract” to “bring suit for damages and other legal and equitable relief ... in any court of competent jurisdiction in any State or the District of Columbia.” 15 U.S.C.A. § 2310 (d)(1) (1975). Warranties fall within one of two categories under the Act.

An “implied warranty” means “an implied warranty arising under State law.” 15 U.S.C.A. § 2301 (7) (1975). ‘Written warranty” means (A) any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time, or (B) any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking which written affirmation, promise, or undertaking becomes part of the basis of the bargain between a supplier and a buyer for purposes other than resale of such product. 15 U.S.C.A. § 2301 (6). The Magnuson-Moss Warranty Act further delineates two types of written warranties. Any warrantor who issues a ¹⁵⁵ written warranty shall “clearly and conspicuously” designate the warranty as “full” or “limited.” 15 U.S.C.A. § 2303 (1975). By designating the warranty as “full,” the warrantor incorporates the established federal minimum standards. 15 U.S.C.A. § 2304 (e) (1975).

Section 2304 imposes federal minimum standards for “full warranties” and sets out the minimum remedies for breach. Those federal minimum standards are as follows: (1) such warrantor must as a minimum remedy such consumer product within a reasonable time and without charge, in the case of a defect,