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HYLER v. GARNER5/22/1996
VIII. Award of Consequential Damages and Attorney Fees Under the Magnuson-Moss Act.
A. Scope of Review. Pursuant to the parties' pretrial stipulation, a claim for damages under the Magnuson-Moss Act was submitted to the court for determination. Unlike the Hylers' claim for rescission, the Magnuson-Moss claim was tried at law. Therefore, we review the trial court's award of consequential damages and attorney fees for errors of law. Iowa R. App. P. 4. The district court's findings of fact are binding on appeal if supported by substantial evidence. Iowa R. App. P. 14(f)(1).
The Magnuson-Moss Act created a federal remedy for breach of written and implied warranties falling within the statute. Alberti v. General Motors Corp., 600 F. Supp. 1026, 1027 (D.D.C. 1985).
consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation . . . under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal or equitable relief . . . in any court of competent jurisdiction in any State.
15 U.S.C. § 2310(d)(1)(A). If the consumer prevails, he may recover attorney fees and [548 NW2d Page 875]
the costs and expenses associated with the action. Id. § 2310(d)(2).
Autorama's primary dispute with respect to the applicability of the Act is whether Autorama qualifies as a "warrantor." The term "warrantor" is defined in the Act as "any supplier or other person who gives or offers to give a written warranty or who is or may be obligated under an implied warranty." Id. § 2301(5). The trial court found that Autorama was a "warrantor" as that term is defined in the Act for two reasons. First, it found Autorama had assumed the manufacturer's written warranty, and thereby became a person "who gives . . . a written warranty." Second, the court concluded Autorama was liable for breach of implied warranties of merchantability and fitness for a particular use despite its disclaimer at the time of sale because (1) Autorama waived its disclaimer when it agreed to assume the manufacturer's warranty obligations, and (2) such liability was imposed by Iowa Code section 613.18 (1993) because the manufacturer was judicially declared insolvent. Autorama claims it gave no warranties.
We conclude Autorama has failed to demonstrate any reversible error with respect to its liability based on the implied warranty of fitness for a particular purpose. Because the breach of only one warranty is sufficient to sustain an award under the Magnuson-Moss Act, we do not discuss the Hylers' claims based on express written warranty and the implied warranty of merchantability.
B. Was Autorama obligated under an implied warranty falling within the scope of the Magnuson-Moss Act? As noted above, a "warrantor" includes any person "who is or may be obligated under an implied warranty." 15 U.S.C. § 2301(5). An "implied warranty" under the Act "means an implied warranty arising under State law (as modified by sections 2308 and 2304(a) of this title) in connection with the sale by a supplier of a consumer product." Id. § 2301(7).
In the purchase agreement between Autorama and the Hylers, Autorama disclaimed all implied warranties:
You understand that the vehicle is sold "as is" with all faults and that we make no warranty of merchantability and no warranty that the vehicle is fit for any particular purpose.
Garner himself testified, however, Autorama subsequently agreed to assume the manufacturer's warranty obligations. The manufacturer did not disclaim any implied warranties. Thus, there is substantial evidence to support the trial court'
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