Opinion
No. CV 89 07 2203.
Decided June 15, 1990.
A. Edward Bonetti, Jr., for plaintiffs.
Thompson, Hine Flory, Kevin J. Breen and David L. Parham, for defendants.
This matter came on for the court's independent review and analysis of the issues, appropriate rules of law, applicable to the issues in this case, and the court's review and analysis of the Referee's Report, dated May 21, 1990, filed in this case pursuant to Civ.R. 53(E).
The court first finds that the parties in this case have not caused to be filed any objections to the Referee's Report pursuant to Civ.R. 53(E)(2).
The court next proceeds to determine whether or not there is any error of law, or defect on the face of the Referee's Report and the court finds neither to be present.
The court further finds that the Referee's Report contains sufficient findings of fact and conclusions of law to allow the court to make its own independent analysis of the issues and to apply the appropriate rules of law in making its final judgment order and entry in these matters.
Therefore, the court shall adopt the Referee's Report (attached and designated "Exhibit A"), its conclusions, findings and recommendations as the court's own, and the recommendations shall serve and be the final judgment entry and order of the court.
Judgment accordingly.
EXHIBIT A
JOHN H. SHOEMAKER, Referee.
To the Honorable James R. Williams, Judge of the Court of Common Pleas, Summit County, Ohio:
Pursuant to Civ.R. 53, Local Rule of Practice 18, and the Order of Reference made in this case, the Referee hereby reports these Findings of Fact, Conclusions of Law, and Recommendations to the Court, based upon the evidence and exhibits adduced at the trial on the matter.
This matter came on for trial before the Referee on April 13, 1990.
Findings of Fact
1. The litigation in this matter arose over plaintiff Robert D. Lyons' purchase of a 1988 Merkur Scorpio four-door sedan from a local Lincoln-Mercury dealer in Cuyahoga Falls, Ohio, Morgo Lincoln-Mercury, Inc. The written sales contract entered into between the parties dated July 15, 1988 provided that the cash price of the automobile was $31,170. The total payments under the financing, which was to be done by co-defendant Ford Motor Credit Corporation, resulted in the plaintiffs being obligated to pay a total of $45,682.20. The total number of payments, in monthly installments, was fifty-nine. The payments on the automobile were $761.37 per month. When plaintiffs purchased the car, it was a demonstrator with approximately 2,400 miles on it, but it was sold with a new car guarantee just as if it were a new car.
2. Pursuant to the stipulations of the parties in this case, co-defendant Cross Roads Lincoln-Mercury, Inc. was dismissed as a party. The circumstances of such dismissal were based on the fact that the original selling dealer, Morgo Lincoln-Mercury, Inc., sold its assets to Cross Roads Lincoln-Mercury, Inc. which entered into operation of the Lincoln-Mercury dealership in the same location in Cuyahoga Falls. Cross Roads Lincoln-Mercury was not a successor in interest for all the obligations or liabilities generated by Morgo. Cross Roads, however, did perform certain warranty work and other related work on the Merkur Scorpio automobile.
3. Plaintiff stated that he purchased the car as he felt it was a top-of-the-line vehicle and that it would provide him good service since he was a salesman and spent a considerable portion of each day of each week in his automobile. Plaintiff testified at trial that he put approximately 3,000 to 5,000 miles per month on the car, ninety percent of which was business mileage. At the time he purchased the car, his wife was also employed by the United States Postal Service in Kent, Ohio, though she left that employment in the fall of 1988.
4. In May 1989, plaintiff returned the car to the local dealership in Cuyahoga Falls, claiming that it was a lemon and did not provide him with the kind of service which was represented to him by the previously authorized dealer when he purchased the automobile.
5. Two people testified in this trial with information about the facts and circumstances. One of these witnesses was the plaintiff Robert D. Lyons. Lyons demonstrated that, while he had driven automobiles for a rather extensive period of time, his mechanical knowledge about the "ins and outs" of automobile repairs and diagnosis was extremely limited. His nonmechanical knowledge about vehicles stems from his rather long driving experience and from purchasing and owning different cars. The other party who testified worked for co-defendant Ford Motor Company. She was the luxury car representative in the local area. Her function was to deal with customer complaints regarding luxury cars which were not able to be dealt with through the dealer. While she had somewhat more knowledge than the average driver, inasmuch as she deals with automobiles in her current and past job assignments, she also had a rather generalized or austere knowledge about mechanics and diagnostic matters. Her testimony relates that while she does have a generalized knowledge about the various products of which she deals with for Ford Motor Company, she is not a mechanic and is unable to add any expert testimony concerning the issues in this case. Her testimony was basically related to her generalized experience as an automobile driver who is called upon from time to time to deal with various customer complaints.
6. In any event, both parties put together lists which relate the various complaints regarding Lyons' automobile from the time he purchased it. Both lists show a substantial similarity in the work that was done. The evidence established that the most cogent problems involving this automobile, which prevailed throughout its ownership by Lyons, were brake and front end related problems. As found from the testimony from both of the parties, the front-end problems emanated from the front brake system problems.
7. Initially, in August 1988, the car was in for servicing for brake squeal. The brakes were cleaned up. At that point the automobile had 6,609 miles on it. Thus the plaintiff had put on approximately 4,209 since he purchased the car the preceding month. The car was next in for brake service on October 4, 1988 with a mileage reading of 11,016 miles. The complaints were pulsating brakes and front-end shake. The service tickets or job invoices reflect that the brake rotors were turned and the brake pads were deglazed. By October 4, an additional approximate 4,550 miles were placed upon the automobile. The car was next in for brake service on December 13, 1988. By this point the automobile showed on the work invoice to have 16,940 miles or an additional gain of almost 6,000 miles. The complaint at this point was brake vibration. The solution, indicated by the work tickets from Morgo Lincoln-Mercury, was to deglaze the brake pads. The brake rotors were also replaced, and the calipers rebuilt. The vehicle was next in for brake service early the following year on February 7, 1989. The complaint at that time was squealing brakes. The job ticket from that particular time (for reasons unknown) does not reflect the mileage, although it does reflect that the service performed by the new dealership at that point (Cross Roads Lincoln-Mercury) consisted of turning the brake rotors, replacing the brake pads, and rebuilding the brake calipers. On February 23, 1989 there was an additional complaint made about front-end shake by Lyons. The invoice for that particular task reflected that the dealer replaced the front brake rotors and checked the tires. The mileage on the vehicle on this date was 23,410. Thus, in a little over two months (December 13, 1988 to February 23, 1989) plaintiff had put an additional approximate 6,500 miles on the vehicle.
8. Plaintiff testified that, in regard to the front-end and brake problems, he never had to pay out any money as all the work was done under warranty. He also testified that he was always provided with a loaner car during the times that the car was in for service, as that was part of the original contract for the purchase of the Scorpio. Plaintiff testified as a result of these problems that at most he was inconvenienced by the circumstances related to this particular problem. The company's luxury car representative further testified that in her judgment there was no safety problem with the vehicle at the times she considered the plaintiff's complaints. No expert on behalf of either the plaintiff or Ford Motor Company testified in this matter concerning the circumstances related to the front-end/brake problem. The only other testimony was provided by a Ford Motor Credit Corporation representative on matters unrelated to the brake issue. The parties note that the only claim involving Ford Motor Credit Corporation in this matter is its cross-claim against plaintiffs for the balance which is due upon the automobile at the present time of $23,801.13. This amount is a calculation based upon the stipulated fact that the vehicle was resold by co-defendant Ford Motor Credit Corporation and the balance obtained thereby applied to the then existing balance owed by the plaintiffs.
9. During the course of the trial no testimony was presented by anyone to establish that this particular type of automobile was subject to any manufacturer's recalls for brake or front-end problems or that the local dealer and/or Ford Motor Company had any specific knowledge about design defects or other such type information. There was some testimony presented by the parties regarding a computerized trouble-shooting system known as "Oasis," which was a system that allowed dealers to call upon a computer base to assist them in determining how other entities had diagnosed and possibly solved mechanical problems. The Oasis information, which was admitted in evidence, does not demonstrate that the plaintiff's problem concerning his brakes was a common phenomenon unique to the Scorpio automobile. The information provided in that system was of a generalized nature related to things besides brake calipers and brake rotors. It included such things as wheel bearings and the automobile's anti-lock braking system.
10. The warranty provided on this automobile, though comprehensive, had an exclusion for noncovered items such as brake linings, brake pads, brake rotors, and brake drums. However, it is clear that in an effort to seek to alleviate the customer's concerns, the local dealership in fact did do service work on those noncovered items, and in fact replaced the rotors, all without charge to the plaintiff.
Conclusions of Law
1. A significant portion of the plaintiffs' complaint is based on their assertion that the automobile manufacturer failed to comply with R.C. 1345.72 and related sections. This particular chapter of the Revised Code is also known as the "Lemon Law." R.C. 1345.72, which became effective on October 22, 1987, provides that if a new motor vehicle does not conform to the motor vehicle's express warranties when, by the actions of the local authorized dealer to make such warranty corrections and as a result such defects or condition "substantially impairs the use, safety, or value of the motor vehicle to the consumer after a reasonable number of repair attempts," the auto manufacturer is required to either replace the motor vehicle with a new motor vehicle acceptable to the consumer, or, in the alternative, accept a return of the vehicle from the consumer and refund, in essence, the purchase price. A related section, R.C. 1345.73, deals with presumptions regarding the reasonable number of attempts to repair.
2. In evaluating the defects asserted by the plaintiff, the Referee concludes that none of the circumstances relating to the brake system was either a condition or a defect that "substantially impair[ed]" the use of the vehicle, the safety of the vehicle, or the value of the motor vehicle as required under R.C. 1345.72(B). The evidence establishes that the plaintiff's use of the motor vehicle in the short time that he had it was significant. The mileage alone supports that fact. There is no proof that the high number of miles put on the car by the plaintiff was not the cause of the brake problems described on the various invoices, and that these problems were but a natural consequence of normal wear which would be fully consistent with such high mileage. In other words, there is absolutely no proof that the wearing or lack of proper functioning, which was diagnosed from time to time and repaired, was what would have occurred in that vehicle had it been driven the same number of miles over an expanded period of years or months. In order for plaintiffs to prevail on an R.C. 1345.72 claim, they must establish that the defect or condition "substantially impair[ed] the use, safety, or value of the motor vehicle * * *." Plaintiffs have failed to do so. Further, plaintiffs have failed to establish that even if these defects were present, they were covered by any express or implied warranty. The warranty provided by the automobile manufacturer specifically excluded a number of the items concerning the rotor and pads which were the cause of the complaints by plaintiff. The fact that the local automobile dealership and/or Ford Motor Company voluntarily consented to expend labor and funds to correct these defects outside of its obligation under warranty does not convert that activity into an express or implied warranty. Further, there is no indication or proof that the wearing of the particular brake components described herein was a failure of a warranty, or some design defect, as opposed to causation by normal wearing of that car's brake system after that many miles.
3. Additionally, the Referee concludes that R.C. 1345.73 likewise does not apply. R.C. 1345.73 is inapplicable unless R.C. 1345.72 is first shown to apply, and the plaintiffs have failed to demonstrate that particular application of R.C. 1345.72.
4. It is also concluded that there has been no breach of any express warranty. Specifically, the brake components which are involved in this case were excluded from the warranty and, as indicated above, the fact that the company sought to keep up the good customer relationship by volunteering repair work through its local dealer is not the creation of a warranty situation upon which the plaintiffs can rely.
5. Additionally, plaintiffs complain of an implied warranty for fitness for a particular purpose under R.C. 1302.28. There is no proof in this case that there was any implied warranty created by the fact that the plaintiff husband came in, specifically discussed his needs of an automobile with the local dealer and sales personnel, the amount of miles he drove, and/or the type of usage he was planning to put the automobile to, with the local dealer, in turn, indicating an understanding and awareness of such requirement and furnishing the particular automobile in question based upon that request for fitness for a particular purpose. Further, even if for argument sake, such had been done, there is absolutely no proof that the local dealer was in a position to make such implied warranties and, in fact, such implied warranties are specifically excluded under the warranty information given to the plaintiffs from Ford Motor Company.
6. Wherefore, it is next concluded, based upon the foregoing, that since the plaintiffs have failed to demonstrate a right to recovery under any of their three claims (the "Lemon Law," an express warranty, and/or an implied warranty) against co-defendant Ford Motor Credit Corporation (which has established by stipulation the amount of money due it), plaintiffs' claim against Ford Motor Credit Corporation shall be dismissed, but that Ford Motor Credit Corporation is owed the balance on the contractual obligation between itself and the plaintiffs.
7. Wherefore, it is recommended that judgment be given be given to co-defendant Ford Motor Company and that the plaintiffs' complaint against it, based upon claims of the "Lemon Law," express warranty, and implied warranty, be dismissed and that the plaintiffs pay the court costs in this action. Further, it is recommended that co-defendant Ford Motor Credit Corporation be given judgment jointly and severally against plaintiffs in the amount of the outstanding balance, which is $23,801.13 plus interest at the maximum legal rate as prescribed for in the contract between the parties as of June 1, 1989.