Bonnette v. MG Fin. Enters. LLC – 11/30/2023

January 2, 2024

Arizona Court of Appeals Division Two holds that a plaintiff who succeeds on a state Lemon Law claim against the seller of a used vehicle is eligible for an award of attorneys’ fees under the Magnuson-Moss Warranty Act if the plaintiff succeeds on an implied-warranty claim that fits within the definition of Magnuson-Moss.

Plaintiff purchased a used minivan from Defendant.  He requested a refund because the minivan underwent a “violent kickback.”  Defendant refused, attempted to repair the transmission control module, and though the module was still malfunctioning, refused to make further repairs.  Plaintiff filed suit, claiming that Defendant breached the implied warranty of merchantability under the Arizona Motor Vehicles Warranties Act (“Lemon Law”) and the Arizona Uniform Commercial Code (“UCC”).  The case proceeded to trial.  The jury awarded no actual damages but $12,500 in punitive damages to Plaintiff and found for Plaintiff on his state Lemon Law claim, but not on his UCC claim.  Plaintiff applied for $160,000 in attorneys’ fees under the federal Magnuson-Moss Warranty Act.

The issue in dispute is whether Plaintiff is eligible to seek an award of attorneys’ fees under the Magnuson-Moss Warranty Act (15 U.S.C. § 2310(d)), which authorizes courts to award attorneys’ fees to consumers who succeed on certain state-law implied warranty claims.  The trial court found Plaintiff was not eligible for attorneys’ fees under Magnuson-Moss.  The Court of Appeals reversed.  Analyzing the Magnuson-Moss definition of “implied warranty,” the Court determined that its parenthetical language (“sections 2308 and 2304(a) of this title”) modify the general rule that an “implied warranty” is synonymous with a state-law implied warranty.  But since Section 2308 modifies “implied warranty” only in the context of a seller’s attempt to modify, disclaim, or limit a state-law implied warranty, and Defendant never argued that it attempted to limit the warranty in any way, Plaintiff succeeded on a qualifying implied-warranty claim under Magnuson-Moss. Thus, he is eligible for attorneys’ fees.

Judge Sklar authored the opinion, in which Judges Staring and O’Neil joined.

Posted by: Sarah Pook Lawson