Taylor v. Volvo North America Corp.

421 S.E.2d 617, 107 N.C. App. 678, 1992 N.C. App. LEXIS 792

• Court: Court of Appeals of North Carolina
• Decided: October 20, 1992
• Docket: No. 9118SC753
• Status: Published

Opinion

EAGLES, Judge.

Defendant raises four assignments of error. After careful consideration, we affirm.

I.

First, defendant argues that plaintiff’s evidence was insufficient as a matter of law to support his recovery. We disagree.

The New Motor Vehicles Warranties Act (the Act), Article 15A of Chapter 20, establishes a private remedy for consumers. G.S. §§ 20-351 — 20-351.10 (1989); see Anders v. Hyundai Motor America Corp., 104 N.C. App. 61, 64, 407 S.E.2d 618, 620, disc. rev. denied, 330 N.C. 440, 412 S.E.2d 69 (1991). Under the Act, a consumer may seek recovery from an automobile manufacturer for its failure to conform an automobile to its express warranties. Here, the Act is applicable to plaintiff as a “consumer” under G.S. § 20-351.1(1) and to the defendant as a “manufacturer” under G.S. § 20-351.1(2).

In Anders, 104 N.C. App. at 64, 407 S.E.2d at 620, it was held that “the Act imposes a duty on the manufacturer post-sale to conform the car to express warranties” as follows:

Express warranties for a new motor vehicle shall remain in effect at least one year or 12,000 miles. If a new motor vehicle does not conform to all applicable express warranties for a period of one year, or the term of the express warranties, whichever is greater, following the date of original delivery of the motor vehicle to the consumer, and the consumer reports the nonconformity to the manufacturer, its agent, or its authorized dealer during such period, the manufacturer shall make, or arrange to have made, repairs necessary to conform the vehicle to the express warranties, whether or not these repairs are made after the expiration of the applicable warranty period.

G.S. § 20-351.2(a). Defendant contends that the duty does not exist here because “plaintiff failed to introduce any evidence about the source or cause of the problems about which he complains.” The statute places no burden upon a consumer to identify the cause or source of the problems of which he complains. Instead, the statute requires the consumer to show a nonconformity that is covered by an express warranty.

Under G.S. § 20-351.2(a), the consumer must timely complain of the nonconformity to the manufacturer, its agent, or its authorized dealer. Here, plaintiff first complained of the automobile’s front end shimmy and vibration upon initially acquiring the car from the dealer on 27 December 1988, the beginning of the one year warranty period. Shortly thereafter, on 6 January 1989, plaintiff first complained of the clicking noise from the application of the brakes.

Then, the consumer must show that the nonconformity is covered by an express warranty. Here, defendant’s regional sales manager, who was a parts and service manager during the lease period, testified that he was familiar with defendant’s warranty policies and that the nonconformities were covered by a twelve month-unlimited mileage warranty for parts and workmanship. Specifically, he testified as follows:

Q: If there were a shimmy in the front wheels of this car, is that warranted under that 1989 warranty?

A: It would be warranted depending on what causes the shimmy.

Q: Were the brakes warranted on this car, this particular model for parts and workmanship?

A: Depending upon the condition of the brakes, yes, sir, they were.

Q: What did it depend on?

A: It would depend on what the problem was with the brakes.

Q: Well, if the problem was a clicking in the brakes that was unexplained and unrepaired, was that warrantied [sic] or not?

A: The clicking in the brakes?

Q: Yes, sir.

A: It would be warrantied [sic] if it were in fact a defect, yes, sir.

Paragraph 36 of the “Standard Provisions” of the “Closed End Lease Agreement” referred to the warranty. Further, the repair receipts indicated that the warranty was in effect.

The Act provides that a lessee is entitled to a recovery “if the manufacturer is unable, after a reasonable number of attempts, to conform the motor vehicle to any express warranty by repairing or correcting, or arranging for the repair or correction of, any defect or condition or series of defects or conditions which substantially impair the value of the motor vehicle to the consumer.” G.S. § 20-351.3(b). The Act “assist[s] a consumer in showing a manufacturer’s failure to conform the vehicle to express warranties,” Anders, 104 N.C. App. at 64, 407 S.E.2d at 620, by providing that it is to be “presumed that a reasonable number of attempts have been undertaken to conform a motor vehicle to the applicable express warranties if: (1) The same nonconformity has been presented for repair to the manufacturer, its agent, or its authorized dealer four or more times but the same nonconformity continues to exist.” G.S. § 20-351.5(a). By bringing the automobile to the dealer at least four times regarding the same nonconformity, plaintiff here was entitled to the statutory presumption that a reasonable number of attempts had been undertaken to conform the car to the express warranties. Despite these visits to the dealer, the defect was not repaired. Additionally, defendant failed to prove any of the affirmative defenses under G.S. § 20-351.4. Accordingly, we hold that the trial court correctly held that the Act had been violated and that plaintiff was entitled to recover.

II.

Second, defendant argues that the trial court erred in trebling damages because plaintiff introduced evidence insufficient as a matter of law to show that defendant unreasonably refused to comply with G.S. §§ 20-351.2 and 20-351.3. We disagree.

G.S. § 20-351.8(2) provides that monetary damages to an injured consumer “shall be trebled upon a finding that the manufacturer unreasonably refused to comply with G.S. 20-351.2 or G.S. 20-351.3.” The Act is a “consumer protection statute,” and is to be interpreted by an “examination of the plain language of the statute.” Anders, 104 N.C. App. at 65, 67, 407 S.E.2d at 621-622. After appropriate notice from plaintiff, defendant here failed to cure the defect within 15 days, the maximum statutory period. G.S. § 20-351.5(a). See G.S. § 20-351.2(a); G.S. § 20-351.3(b). Defendant’s only attempt at compliance was one unsuccessful effort to call plaintiff’s attorney approximately one month after plaintiff mailed his notification letter. Given plaintiff’s repeated attempts to have the automobile repaired over a period of approximately eight months and defendant’s continuing inaction, the trial court could reasonably conclude that defendant unreasonably refused to comply with the statute and that plaintiff was entitled to treble damages.

III.

Third, defendant contends that the trial court erred by trebling damages prior to deducting an amount representing a reasonable allowance for plaintiff’s use of the vehicle. We disagree. This issue is not explicitly addressed by the statute. Accordingly, we proceed by examining the language and structure of the statute, prior decisions interpreting statutes with similar language, and the legislature’s intent in establishing this statutorily-created cause of action.

Initially, we turn to the broad language of the portion of the Act entitled “Remedies,” which provides:

In any action brought under this Article, the court may grant as relief:

(1) A permanent or temporary injunction or other equitable relief as the court deems just;

(2) Monetary damages to the injured consumer in the amount fixed by the verdict. Such damages shall be trebled upon a finding that the manufacturer unreasonably refused to comply with G.S. 20-351.2 or G.S. 20-351.3. The jury may consider as damages all items listed for refund under G.S. 20-351.3.

G.S. § 20-351.8 (emphasis added). Defendant contends that once plaintiff’s damages ($4,511.95) are offset by the reasonable allowance for plaintiff’s use ($5,429.00), “the ‘amount fixed by the verdict’ is zero, and there is nothing to treble.” We disagree. The “items listed for refund” constituting the “damages” that “shall be trebled” under G.S. § 20-351.8(2) are found for a lessee under G.S. § 20-351.3(b), which provides that the manufacturer shall

accept return of the vehicle from the consumer and refund the following:

(1) To the consumer:

a. All sums previously paid by the consumer under the terms of the lease;

b. All sums previously paid by the consumer in connection with entering into the lease agreement including, but not limited to, any capitalized cost reduction, sales tax, license and registration fees, and similar government charges; and

c. Any incidental and monetary consequential damages.

The provision for offset to which defendant refers is found in the next subsection of G.S. § 20-351.3, which provides in pertinent part:

The refund to the consumer shall be reduced by a reasonable allowance for the consumer’s use of the vehicle. A reasonable allowance for use is that amount directly attributable to use by the consumer prior to his first report of the nonconformity to the manufacturer, its agent, or its authorized dealer, and during any subsequent period when the vehicle is not out of service because of repair.

G.S. § 20-351.3(c). Accordingly, since the “items listed for refund” that constitute the “damages” that “shall be trebled” under G.S. § 20-351.8 and the offset are found in different subsections of G.S. § 20-351.3, we hold that defendant is entitled to an offset only after plaintiff’s damages under G.S. § 20-351.3(b) have been trebled.

Additionally, defendant’s interpretation of the remedies statute is inconsistent with prior interpretations of similar statutory language. The phrase “the amount fixed by the verdict” also appears in G.S. § 75-16 (1988), another consumer protection act which provides for treble damages. Marshall v. Miller, 302 N.C. 539, 543, 276 S.E.2d 397, 400 (1981). In Seafare Corp. v. Trenor Corp., 88 N.C. App. 404, 416-17, 363 S.E.2d 643, 652-53, disc. rev. denied, 322 N.C. 113, 367 S.E.2d 917 (1988), this Court held under G.S. § 75-16 that the credit was to be deducted from the plaintiff’s award after trebling plaintiff’s damages, rather than before trebling the damages. See Washburn v. Vandiver, 93 N.C. App. 657, 664, 379 S.E.2d 65, 69-70 (1989); see also Providence Hospital v. Truly, 611 S.W. 2d 127, 136 (Tex. Civ. App. 1980) (statute similar to N.C.G.S. § 75-16); Flintkote Company v. Lysfjord, 246 F.2d 368, 398 (9th Cir.), cert. denied, 355 U.S. 835, 2 L.Ed.2d 46 (1957) (Clayton Act).

Furthermore, in interpreting the treble damages provisions of G.S. § 75-16, our Supreme Court in Marshall, 302 N.C. at 549, 276 S.E.2d at 403, noted that the overall purpose for which the statute was enacted should be considered. There, the Court observed that a “statutory provision for treble damages . . . serves two purposes. First, it makes more economically feasible the bringing of an action where the possible money damages are limited, and thus encourages private enforcement. Second, it increases the incentive for reaching a settlement.” Id. at 549, 276 S.E.2d at 403-04 (citation omitted). Were we to follow defendant’s suggested interpretation, we would seriously erode both these purposes, reduce the effectiveness of the Act, and circumvent the intent of the legislature. Defendant’s interpretation would also defeat the legislature’s intent in enacting a new statutory scheme creating a cause of action for automobile consumers more broad than traditional common law actions. Accordingly, defendant’s interpretation fails.

IV.

Finally, defendant argues that the trial court erred in cancelling, pursuant to G.S. § 20-351.3(b), the lease that existed between plaintiff and the lessor, Volvo Finance of North America, Inc. Defendant argued in its brief and at oral argument that defendant and Volvo Finance were “separate corporations.” Accordingly, we hold that defendant does not have standing to raise this issue on behalf of Volvo Finance of North America, Inc. See Lowder v. All Star Mills, 91 N.C. App. 621, 624-25, 372 S.E.2d 739, 741 (1988), disc. rev. denied, 324 N.C. 113, 377 S.E.2d 234 (1989); Lone Star Industries v. Ready Mixed Concrete, 68 N.C. App. 308, 309, 314 S.E.2d 302, 303 (1984) (“Under our law, it is rudimentary that the only person who may appeal is the ‘party aggrieved.’ ”).

V.

In conclusion, we hold that the trial court correctly found a violation of the New Motor Vehicles Warranties Act and correctly computed plaintiffs damages.

Affirmed.

Judges Johnson and Parker concur.