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Mayberry v. Volkswagen of America2/16/2005
. This is an appeal from a published court of appeals decision, Mayberry v. Volkswagen of America Inc., 2004 WI App 64, 271 Wis. 2d 258, 678 N.W.2d 357, that reversed an order of the Outagamie County Circuit Court, Harold V. Froehlich, Judge, which granted summary judgment to Volkswagen and dismissed the plaintiff's claims for breach of warranty.
I. ISSUE
. The issue on appeal concerns the proper measure of damages under Wisconsin's Uniform Commercial Code in a breach of warranty action. We must determine what constitutes the appropriate measure of damages where the buyer alleges that the product was defective and not worth what she paid for it at the time of acceptance but nonetheless used the product for a significant period of time and later resold the product for more than its fair market value after the manufacturer made several attempts at repairing the product. Specifically, the issue before us is whether the "special circumstances" clause in Wis. Stat. § 402.714(2)(2001-02) requires damages in a breach of warranty action to be calculated based on the difference between the fair market value of the defective product at resale and the price the consumer actually obtained, such that a consumer's claim may be barred if she receives more than the fair market value for the defective product upon resale. This is an issue of first impression in Wisconsin.
. We reject Volkswagen's claim that the "special circumstances" language in § 402.714(2) prevents the plaintiff from maintaining her action by calculating damages based on the difference in market value and actual price at the time of resale. We hold that pursuant to § 402.714(2), the appropriate method for measuring damages in this case is the difference between the warranted value of the vehicle in question and its actual value at the time and place of acceptance. When the plaintiff has established a prima facie case of damages under this standard, the "special circumstances" clause of § 402.714(2) should not be construed so as to completely bar her breach of warranty claim simply because she used the defective product for a period of time and later resold it for more than its fair market value. We have found no authority that stands for the proposition that the proper measure of damages under the Uniform Commercial Code in such circumstances is the difference between the market value and actual price obtained for the defective product at the time and place of resale. However, the price of the defective product upon resale may be relevant insomuch as it constitutes circumstantial evidence of the actual value of the product in its defective condition at the time and place of acceptance.
. Because the circuit court applied an incorrect standard for measuring damages, we affirm the decision of the court of appeals reversing the circuit court's order of summary judgment.
II. FACTUAL BACKGROUND
. On October 14, 2000, the plaintiff, Jessica Mayberry, purchased a new 2001 galactic blue Volkswagen Jetta GLS from Van Dyn Hoven Imports in Appleton, Wisconsin. The cash price of the vehicle was $17,800. After sales tax, registration, title, and other fees, the price of the vehicle came to $18,526. However, according to Mayberry, the total purchase price of the vehicle came to $22,548 after adding finance charges. As part of the vehicle purchase, the manufacturer, Volkswagen, issued a two-year or 24,000 mile limited warranty for the Jetta. Under the terms of the written warranty, Volkswagen agreed to repair any manufacturer's defect in material or workmanship and replace defective parts free of charge for the warranty period. However, the warranty did not give Mayberry the right to a refund or
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