Bruce Tammi v. Porsche Cars North America, In ( 2008 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 07-1832
BRUCE A. TAMMI,
Plaintiff-Appellee,
v.
PORSCHE CARS NORTH AMERICA, INC.,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 04 C 1059—Charles N. Clevert, Jr., Judge.
____________
ARGUED JANUARY 8, 2008—DECIDED JULY 14, 2008
____________
Before FLAUM, RIPPLE, and MANION, Circuit Judges.
MANION, Circuit Judge. Bruce Tammi filed suit against
Porsche Cars North America, Inc. (“Porsche”) in Wisconsin
state court seeking damages for violations of the Wiscon-
sin Lemon Law (“Lemon Law”), Wisconsin Statute Sec-
tion 218.0171, involving the 2003 Porsche 911 Turbo he
leased from US Bank. Porsche removed the case to federal
court on the basis of diversity jurisdiction where the
case proceeded to a jury trial. The jury entered a verdict
in favor of Tammi and awarded him $26,600.00 in dam-
ages. The parties filed post-trial motions. The district
2 No. 07-1832
court denied Porsche’s motion for judgment notwithstand-
ing the verdict and granted Tammi’s motion to alter the
verdict on damages awarding Tammi $266,159.76. Porsche
appeals. We affirm the jury’s verdict on the sufficiency
of the evidence. However, because Wisconsin law does not
provide sufficient guidance on the important issue of
pecuniary loss under its Lemon Law, we stay the remand
of this appeal and certify four questions to the Wis-
consin Supreme Court, pursuant to Circuit Rule 52 and
Wisconsin Statute § 821.01.
I.
On May 30, 2003, Bruce Tammi, a member of the Porsche
Club of America, leased a 2003 Porsche 911 Turbo.
Tammi’s lease through US Bank was for a 36-month
term and required an initial payment of $1,999.85 and
35 monthly payments of $1,912.35 (for a total amount of
lease payments of $68,844.50). The lease provided a
purchase option at the end of the lease for $64,344.10
plus taxes, and it imposed a $395.00 termination fee if
the lessee elected not to purchase the vehicle.
Tammi testified at trial that he leased the vehicle for use
in competitive car club events as well as for his work
commute, which consisted primarily of highway driving.
The car Tammi leased was equipped with a rear
spoiler that was designed to deploy automatically when
the vehicle exceeded 75 m.p.h. in order to provide aerody-
namic stability to the car. The spoiler was designed to
retract automatically at 40 m.p.h. While he did not experi-
ence any problems with the spoiler when participating
in auto-cross competitions, Tammi testified that on occa-
sion when he drove the car on the highway between
No. 07-1832 3
55 m.p.h. and 70 m.p.h., the spoiler failed. Specifically,
the spoiler would deploy, but would not retract. In addi-
tion, Tammi explained that when the spoiler failed, it
prompted an audible chime to ring intermittently, a red
warning light to illuminate, and a red warning message
image to display in the center instrument cluster. Tammi
stated that while he was able to temporarily stop the
warning lights and sounds by stopping the vehicle, upon
restarting the vehicle and returning to the highway, the
warning would reappear and sound approximately every
five minutes. Tammi found the warning light and the
chimes startling and distracting. Tammi also complained
that the car radio volume would blast upon start-up and
then resume a normal volume after a few minutes.
Tammi’s wife also testified at trial that when she was
driving the car no more than 65 m.p.h., the rear spoiler
system failed causing her to pull off the highway, turn off
the car, and call for assistance because she was unsure
whether the car was safe to drive. Moreover, Tammi’s
wife stated that the warning lights and sounds continued
after she restarted the car.
Tammi first took the car to Concours Service Inc.
(“Concours”), a certified Porsche service provider, on
March 2, 2004, noting that the rear spoiler failed to auto-
matically retract and the radio volume was very loud
when the car was first started. Between March 2004 and
August 13, 2004, Tammi took the car to Concours, Zimbrick
European of Madison, and International Autos at least
eight times for service on the spoiler because of recurring
failures without receiving a successful repair. Evidence
of these service visits was presented at trial. At oral
argument before this court, Porsche’s attorney conceded
that Tammi had taken his car in for repairs at least four
4 No. 07-1832
times. Tammi again experienced another spoiler failure
after the August 13, 2004, service visit at Zimbrick.
On September 7, 2004, Tammi submitted to Porsche the
required notice under the Wisconsin Lemon Law, Wiscon-
sin Statute Section 218.0171. In that notice, Tammi indi-
cated that his vehicle had been “made available for re-
pair at least 4 times for the same defect during its first
year of warranty,” and demanded “[a] refund calculated
in accordance with the Lemon Law, plus collateral costs.”
Tammi also listed the date, dealership, and problems
reported for each service visit and indicated that the
vehicle was leased from US Bank. Porsche responded with
a letter dated October 6, 2004, rejecting Tammi’s Lemon
Law notice stating that it was its understanding that
Tammi’s vehicle had been repaired.
A little over a week later on October 14, 2004, Tammi
filed a complaint in Wisconsin state court alleging a
violation by Porsche of the Wisconsin Lemon Law,
Wisc. Stat. § 218.0171. Porsche removed the case to fed-
eral court, with the court having diversity jurisdiction
over the case because Tammi was a citizen of Wisconsin,
Porsche is a Delaware corporation with its principal place
of business in Georgia, and the amount in controversy
exceeded $75,000.
During the course of the lease, Tammi paid the $1,999.85
initial payment followed by 29 monthly payments of
$1,912.35 (for a total of $55,458.15), some of which were
paid after Tammi filed suit. As the litigation continued
and before his lease expired, Tammi purchased the car
in December 2005 with a final payment of $75,621.88,
No. 07-1832 5
despite the problems that persisted with the rear spoiler.1
Essentially, Tammi bought a vehicle that he claimed was a
lemon.
In August 2006, the case proceeded to a jury trial. Before
the case was submitted to the jury, the district court
held two hearings with Tammi, an attorney who was
proceeding pro se, and Porsche’s counsel, Jeffrey Fertl.
During the course of these hearings, the parties argued
about the proper scope of damages in this case. Tammi
stated that he was seeking recovery of his lease pay-
ments ($57,458.00), the amount he paid for the purchase
of the car under the buy-out option of the lease
($75,621.88), insurance ($2,457.85), winter tires ($2,044.11)
and floor mats and an auto manual ($788.71), for a total of
$138,370.55. In addition, Tammi sought to retain ownership
of the car. Porsche asserted that the lease payments Tammi
made were proper subjects of damage, but that the
other items were not related to the vehicle repairs. The
district court concluded that it was going to allow Tammi
“to seek damages for the insurance and the like and
reconsider after whatever verdict is returned.” The
parties stipulated that the mileage of the car as of the first
service date was 6,576 miles.
The parties also discussed jury instructions and questions
in the presence of the district court judge. The judge
handed the parties a set of proposed instructions and
1
Tammi testified at trial that he inspected the car’s electronic
scheme and replaced the fuse for the spoiler. At the time of
trial, Tammi had only experienced one spoiler failure after his
repair. At oral argument before this court, Tammi confirmed
that he had repaired the spoiler problem with only one sub-
sequent failure.
6 No. 07-1832
interrogatories, which they reviewed at that time. The first
proposed jury question read: “During the first year after
delivery of his 2003 Porsche, did the plaintiff have a
nonconformity covered by the manufacturer’s expressed
warranty which substantially impaired the use, value
or safety of his vehicle?” When the district court inquired
of the parties regarding the acceptability of this question,
Porsche’s counsel responded that his only objection
would be to the inclusion of all three terms (“use, value,
or safety”), because he did not think the evidence sup-
ported the inclusion of all of these. Porsche continued, “[I]f
the Court rules that there is sufficient evidence to sub-
mit use, value or safety to the jury, then the question is
acceptable. I want to make certain for the record that
I reserved or haven’t waived my right to challenge the
insufficiency of the evidence for any three of those.” This
first question remained unchanged, and the parties ap-
proved the remainder of the questions and instructions
after additional discussion.
The case was submitted to the jury, which received
instructions including instructions on the definition of
nonconformity, the necessity for four repair attempts, and
a general damages instruction. The jury returned a ver-
dict in favor of Tammi concluding that the vehicle Tammi
leased had a “nonconformity covered by the manufac-
turer’s express warranty which substantially impaired
the use, value or safety of his vehicle,” and that Tammi
had provided Porsche with at least four attempts to re-
pair the nonconformity, which continued. The jury also
awarded Tammi $26,600.00 for pecuniary loss resulting
from the nonconformity.
In his post-trial motion, Tammi argued that rather
than the general damages instruction it received, the jury
should have received a specific Lemon Law damages
No. 07-1832 7
instruction. Porsche, in turn, filed a motion for judg-
ment notwithstanding the verdict. The district court
denied Porsche’s motion, but granted Tammi’s motion
holding that as a matter of law Tammi was entitled to
$266,159.76. Specifically, the district court concluded that
Tammi was entitled to the $57,458.00 he paid in lease
payments and the $75,621.88 purchase price he paid for
the vehicle. The district court then doubled the sum of
those two amounts as provided by Wisconsin Statute
Section 218.0171(7) which provides for pecuniary loss to
be doubled. The district court also concluded that Tammi
was not entitled to the cost of the floor mats, winter
tires, or insurance. Finally, the district court concluded
that subsection 7 of the Lemon Law requires neither a
reduction in pecuniary loss for use of the vehicle nor a
return of the vehicle. Thus, the district court awarded
Tammi $266,159.76 and retention of the car.
Porsche appeals, asserting that there was insufficient
evidence for the jury to conclude that the vehicle had a
nonconformity and that it violated the Lemon Law. In
the alternative, Porsche requests a new trial on the issue
of liability because it claims it was prejudiced when the
district court submitted to the jury a question regarding
substantial impairment of use, value or safety when
there was no credible evidence to establish all three
items and the verdict was against the overwhelming
weight of the evidence. Finally, Porsche also contends that
the district court erred in calculating Tammi’s damage
award.
II.
Porsche argues that the district court erred when it
denied its motion for a directed verdict before and after
8 No. 07-1832
the case was presented to the jury on the grounds that
Tammi had failed to establish that there was a substan-
tial impairment of his car’s use, value, or safety. We review
a motion for judgment as a matter of law de novo. Because
this case is here on diversity jurisdiction, we look to the
applicable state law for the standard for reviewing a
motion for judgment as a matter of law. Sokol Crystal
Prod., Inc. v. DSC Commc’ns Corp., 15 F.3d 1427, 1431-32
(7th Cir. 1994). “In Wisconsin, a motion challenging the
sufficiency of the evidence is to be denied unless ‘the
court is satisfied that, considering all credible evidence
and reasonable inferences therefrom in the light most
favorable to the party against whom the motion is made,
there is no credible evidence to sustain’ the verdict.” Id.
(quoting Wis. Stat. § 805.14(1)).
Against this backdrop, we consider the standards for
Lemon Law cases. The Lemon Law is triggered if a vehicle
contains a nonconformity, that is, a “condition or defect
which substantially impairs the use, value or safety of
the motor vehicle, and is covered by an express warranty
applicable to the motor vehicle.” Wis. Stat. § 218.0171(1)(f).
This impairment “must be more than a minor annoyance
or inconvenience.” Wisconsin Civil Jury Instruction 3301.
However, a vehicle may possess a nonconformity even
if the vehicle is drivable. Dobratz Trucking & Excavating,
Inc. v. Paccar, Inc., 647 N.W.2d 315, 320 (Wis. Ct. App. 2002)
(citations omitted). Even vehicles with significant mileage
have been found to possess nonconformities. Chmill v.
Friendly Ford-Mercury of Janesville, Inc., 424 N.W.2d 747, 750-
51 (Wis. Ct. App. 1988) (affirming a finding of noncon-
formity on a vehicle with 78,000 miles). Jury findings
of nonconformities have been affirmed in cases where a
dump truck’s power steering would not work when the
No. 07-1832 9
vehicle was stationary thereby impeding its ability to
maneuver into tight spots at construction sites, Dobratz
Trucking, 647 N.W.2d at 320-21, where a vehicle con-
tinually pulled to the left, Chmill, 424 N.W.2d at 751,
and where a malfunction in a truck caused the vehicle to
be out of service for 49 days and its owner to have to turn
down three to five jobs while the truck was in the shop,
Schonscheck v. Paccar, Inc., 661 N.W.2d 476, 482 (Wis. Ct.
App. 2003).
When reviewing a jury verdict in a Lemon Law case, “the
determination whether a vehicle has a defect that sub-
stantially impairs its value, use or safety requires factual
findings that are interconnected with a legal conclusion.”
Dobratz Trucking, 647 N.W.2d at 320 (citing Chmill, 424
N.W.2d at 750). “As a result, we give weight to the fact
finder’s decision, but not controlling weight.” Id. “This
standard of review is appropriate because the determina-
tion that something is ‘substantial’ requires a value judg-
ment heavily dependent upon interpretation and analysis
of underlying facts.” Chmill, 424 N.W.2d at 750.
Taking the evidence presented in this case in the light
most favorable to Tammi, we conclude that there was
sufficient evidence presented that the vehicle Tammi leased
suffered a nonconformity that substantially impaired its
use. Based on Tammi’s testimony, the vehicle suffered a
rear spoiler failure approximately every third time the car
was driven. This failure was not limited to the spoiler not
retracting, but prompted recurring audible chimes and
flashing warning symbols on the dash. These lights and
noises could only be stopped, or rather paused because the
cessation was temporary, by pulling the vehicle off the
highway, turning off the car, and restarting it. Porsche
seems to make light of the repeated lights and sounds by
10 No. 07-1832
noting that they did not constitute a substantial impairment
because the warning could be reset by turning off the
vehicle and removing the key. Tammi purchased the car for
his work commute as well as for participation in car
competitions. The jury could reasonably conclude that his
use was substantially impaired when what would other-
wise be a normal driving experience was punctuated by
frequent chiming and flashing lights on his car’s deck.
Moreover, when the spoiler failed, Tammi’s trips were
interrupted because he had to stop the vehicle in order to
put an end to a dinging, only to have the sound and
flashing lights return once he resumed his trip. A pur-
chaser of a brand new car, particularly a Porsche, would
not expect to encounter such disruptions every third time
he drives that vehicle. In light of this evidence and the
weight afforded to a fact finder’s decision on the existence
of a nonconformity, we conclude that the evidence was
sufficient for the jury to conclude that the rear spoiler
failure constituted a substantial impairment of the use of
the vehicle. Therefore, we affirm the district court’s denial
of Porsche’s motion for judgment notwithstanding the
verdict.2
In the alternative, Porsche requests a new trial arguing
that it was prejudiced when the district court submitted
2
Porsche also challenges the sufficiency of the evidence as to
the substantial impairment of the value and safety to the vehicle
resulting from the rear spoiler malfunction as well as the
sufficiency of the evidence related to Tammi’s claim that the
radio malfunctioned. Because the statute only requires that there
be a substantial impairment of either the use, value, or safety
and we conclude that there was sufficient evidence to support
the jury’s finding of a nonconformity as it relates to use, we need
not address these additional arguments.
No. 07-1832 11
to the jury “a question regarding substantial impairment
of the use, value or safety when there was no credible
evidence to establish all three items, as well as on the
ground that the verdict was contrary to the clear weight
of the evidence.” In other words, Porsche contends that
the evidence on the safety and value of the vehicle was
insufficient for the district court to have submitted to
the jury the question of substantial impairment on the
theories of safety and value. Despite our conclusion that
there was sufficient evidence for the jury to conclude that
there was a substantial impairment based on use, we
will address this alternate argument because Porsche
asserts that a new trial is warranted because “the jury’s
verdict does not allow one to conclude whether any of
these improper bases were considered by the jury [in
entering its verdict].” We review a district court’s deci-
sion whether to grant a new trial for an abuse of discretion
and will only disturb that decision under exceptional
circumstances. David v. Caterpillar, 324 F.3d 851, 863 (7th
Cir. 2003). “A new trial may be granted if the verdict
is against the clear weight of the evidence or the trial
was unfair to the moving party.” Id.
For the reasons discussed above, the jury’s verdict in
this case was not against the clear weight of the evidence
regarding the substantial impairment of the use of the
vehicle. Nor was the conduct of the trial unfair to
Porsche. Porsche is correct that “a jury should not
be instructed on a[n] [issue] for which there is so little
evidentiary support that no rational jury could accept [it].”
E. Trading Co. v. Refco, Inc., 229 F.3d 617, 621 (7th Cir. 2000).
However, presentation of such issues in the jury instruc-
tions does not necessitate that a verdict be set aside. As
we have previously noted, “[i]t cannot just be assumed
12 No. 07-1832
that the jury must have been confused and therefore that
the verdict is tainted, unreliable.” Id. at 622. “This is just
a case of surplusage, where the only danger is con-
fusion, and reversal requires a showing that the jury
probably was confused.” Id. (citation omitted). Porsche
does not assert that the jury was confused. Moreover,
Porsche had the opportunity to argue for separate jury
questions on each of the bases for nonconformity: value,
safety, and use, as well as having each of these questions
posed for both the spoiler and the radio. Porsche did not
request such jury questions either at the hearing or in
its proposed verdict form. Rather, when the jury instruc-
tions were being specifically discussed, Porsche only
sought to preserve its sufficiency of the evidence chal-
lenge and did not request an instruction other than the
one that was actually posed to the jury. Had Porsche
made such a request, it might have been able to demon-
strate that the jury was confused if there was no evid-
ence on an individual issue in which the jury found a
nonconformity, but it cannot now claim it was prej-
udiced when all of the different types of nonconformity
(i.e. use, value, or safety) were presented to the jury in
the disjunctive in a single question. Id. at 622 (noting
that if the appellant had asked the district judge to sub-
mit an interrogatory to the jury on the contested issue
and the jury had checked the box in favor of the appellee,
then the appellant “would then have had a solid basis
for seeking a new trial.”). In light of the evidence presented
at trial and the lack of prejudice to Porsche, we con-
clude that the district court did not abuse its discretion
in denying Porsche’s motion for a new trial.
We now turn to the issue of damages. At trial, Tammi
sought recovery of his lease payments ($57,458.00), the
No. 07-1832 13
amount he paid to purchase the car ($75,621.88), the cost
of insurance ($2,457.85), winter tires ($2,044.11), floor mats,
and an auto manual ($788.71) for a total of $138,370.55. In
addition, Tammi sought to retain the car. The district
court granted Tammi his lease payments and purchase
price, which it doubled in accordance with subsection
(7) of the Lemon Law. The court also permitted Tammi to
keep the car.
Porsche asserts that the district court’s award of
$266,159.76 in damages was in error. Obviously, it does
not challenge the district court’s rejection of Tammi’s
request for insurance, tire, floor mat, and manual costs.
Porsche insists that Tammi is only entitled to the repay-
ment of his lease payments with that amount being dou-
bled pursuant to subsection (7). Porsche and amici both
contend that under subsection (7) a consumer is only
entitled to recover damages “caused by a violation” of
the Lemon Law. Their position is that when a lessee
voluntarily purchases a vehicle after a lease expires, the
purchase price paid is not a damage “caused by a viola-
tion” of the Lemon Law. Moreover, they assert that any
loss suffered is self-inflicted. His voluntary purchase is,
thus, “not a cost incurred by him as a result of any statu-
tory violation.” And even if he is entitled to that amount,
Porsche claims it certainly should not be subject to the
Lemon Law’s doubling provision. Finally, Porsche asserts
that it was error for the district court to permit Tammi to
retain the car and not reduce the damage award by a
reasonable allowance for Tammi’s use of the car. Tammi
responds that district court’s damage award was in keep-
ing with the Lemon Law’s purpose of protecting consum-
ers and that without the recovery of the amount he paid in
purchasing the car, there would not be a sufficient motiva-
tion for Porsche to comply with the Lemon Law in future
cases.
14 No. 07-1832
We review questions regarding the interpretation of
statutes de novo. United States v. Genendo Pharm., N.V.,
485 F.3d 958, 962 (7th Cir. 2007). In Wisconsin, “[t]he
cardinal rule of statutory interpretation . . . is to discern the
intent of the legislature.” Hughes v. Chrysler Motor Corp., 542
N.W.2d 148, 149 (Wis. 1996) (internal quotation and citation
omitted). The legislative intent is ascertained by reviewing
the statutory language, history, subject matter, purpose,
and scope. Id. In the case of remedial statutes, they
“should be liberally construed to suppress the mischief
and advance the remedy the statute intended to afford.”
Id. at 149-50.
The Wisconsin Lemon Law is a remedial statute
through which the legislature intended to “improve auto
manufacturers’ quality control . . . [and] reduce the incon-
venience, the expense, the frustration, the fear and [the]
emotional trauma that lemon owners endure.” Hughes,
542 N.W.2d at 151 (citation omitted). The principal motiva-
tion of the Lemon Law “is not to punish the manufacturer
who, after all, would far prefer that no ‘lemons’ escape
their line. Rather, it seeks to provide an incentive to
that manufacturer to promptly return those unfortunate
consumers back to where they thought they were
when they first purchased that new automobile.” Id. at 152-
53.
The Lemon Law achieves this goal through the protection
of consumers. A “consumer” under the Lemon Law
includes a purchaser of a new motor vehicle, a person
who can enforce a warranty, and “[a] person who leases
a motor vehicle from a motor vehicle lessor under a writ-
ten lease.” Wis. Stat. § 218.0171(1)(b)(1), (3), & (4). If a
consumer reports a nonconformity to the manufacturer
and makes “the motor vehicle available for repair before
No. 07-1832 15
the expiration of the warranty or one year after first
delivery of the motor vehicle to a consumer, whichever
is sooner, the nonconformity shall be repaired.” Wis. Stat.
§ 218.0171(2)(a).
If the nonconformity is not repaired after at least four
tries or if the vehicle is out of service for at least thirty
days due to nonconformities, the Lemon Law directs
how the manufacturer is to proceed depending on the
type of consumer involved. If the consumer is either a
purchaser of a new motor vehicle or a person who may
enforce a warranty, the manufacturer must do one of the
following at the consumer’s direction:
Accept return of the motor vehicle and replace the
motor vehicle with a comparable new motor vehicle
and refund any collateral costs.
[or]
Accept return of the motor vehicle and refund to the
consumer and to any holder of a perfected security
interest in the consumer’s motor vehicle, as their
interest may appear, the full purchase price plus any
sales tax, finance charge, amount paid by the con-
sumer at the point of sale and collateral costs, less a
reasonable allowance for use. Under this subdivision,
a reasonable allowance for use may not exceed the
amount obtained by multiplying the full purchase
price of the motor vehicle by a fraction, the denomina-
tor of which is 100,000 or, for a motorcycle, 20,000, and
the numerator of which is the number of miles the
motor vehicle was driven before the consumer first
reported the nonconformity to the motor vehicle
dealer.
Wis. Stat. § 218.0171(2)(b)2a&b.
16 No. 07-1832
If the consumer is a lessor, the manufacturer shall
accept return of the motor vehicle, refund to the
motor vehicle lessor and to any holder of a perfected
security interest in the motor vehicle, as their inter-
ests may appear, the current value of the written lease
and refund to the consumer the amount the consumer
paid under the written lease plus any sales tax and
collateral costs, less a reasonable allowance for use.
Wisc. Stat. § 218.0171(2)(b)3a. The statute goes on to define
“current value of the written lease” as follows:
[T]he current value of the written lease equals the total
amount for which that lease obligates the consumer
during the period of the lease remaining after its early
termination, plus the motor vehicle dealer’s early
termination costs and the value of the motor vehicle
at the lease expiration date if the lease sets forth that
value, less the motor vehicle lessor’s early termina-
tion savings.
Wis. Stat. § 218.0171(2)(b)3b.
The manufacturer has thirty days in which to provide a
refund or replacement after the consumer presents it
with the vehicle. Wis. Stat. § 218.0171(2)(c) & (cm). Failure
to provide a refund is a violation of the Lemon Law. Varda
v. Gen. Motors Corp., 626 N.W.2d 346, 358 n.13 (Wis. Ct.
App. 2001) (citing Church v. Chrysler Corp., 585 N.W.2d 685
(Wis. Ct. App. 1998)). In the instance where the manufac-
turer neither repairs the nonconformity nor accepts return
of the vehicle and gives a refund, the consumer is not
without recourse because the Lemon Law also provides
that,
a consumer may bring an action to recover for any
damages caused by a violation of this section. The
No. 07-1832 17
court shall award a consumer who prevails in such
an action twice the amount of any pecuniary loss,
together with costs, disbursements and reasonable
attorney fees, and any equitable relief the court deter-
mines appropriate.
Wisc. Stat. § 218.0171(7). The statute does not define
“pecuniary loss,” which is the core issue in this case,
though it is clear and undisputed that, whatever that
amount might be, it is entitled to doubling under sub-
section (7).
Wisconsin law provides minimal guidance on what
constitutes pecuniary loss. In the context of a consumer
who is a purchaser, the Wisconsin Supreme Court has
held that pecuniary loss consists of the vehicle’s full
purchase price regardless of the amount the consumer
actually paid. Hughes, 542 N.W.2d at 151-52. Hughes
overturned the Wisconsin appellate court’s earlier opin-
ion, Nick v. Toyota Motor Sales, 466 N.W.2d 215 (Wis.
Ct. App. 1991), which relied upon subsection (2)(b)2b of
the Lemon Law to conclude that the pecuniary loss in the
case of a new vehicle purchaser included the amount of
the purchase price the consumer actually paid. Noting
that Nick did not address the double damage disparity
that would result depending on whether a consumer
paid for the vehicle with his own money or with bor-
rowed funds, Hughes concluded that
[t]his result is inconsistent with the legislative goal of
encouraging manufacturers to deal promptly and fairly
with all purchasers of new vehicles. For that reason,
any language in Nick contrary to our holding here
that pecuniary loss includes the full purchase price of
the vehicle to the consumer is overruled.
Hughes, 542 N.W.2d at 152.
18 No. 07-1832
In the context of a consumer who is a lessee, the Wis-
consin Court of Appeals in Estate of Riley v. Ford Motor Co.,
635 N.W.2d 635 (Wis. Ct. App. 2001), vacated a trial
court’s award of pecuniary loss concluding that pecu-
niary loss does not include the current value of the writ-
ten lease. The Wisconsin Court of Appeals noted that
“[w]hen the consumer brings an action in court, he or
she is limited to the remedies under § 218.015(7). This
section does not mention the current value of the writ-
ten lease.” Id. at 639.3 The Riley court continued, “[t]he
consumer’s pecuniary loss does not include the termina-
tion value of the vehicle because the consumer is not out
of that money. The ‘lessor’ (and/or holder) owns a
leased vehicle and, if it is a lemon, the lessor owns a
lemon. When the consumer chooses a refund, he or she
must return the vehicle to the manufacturer; therefore,
the lessor does not have the vehicle and must be com-
pensated for the value of the vehicle.” Id. Riley did not
address whether the scope of pecuniary loss is limited,
as Porsche contends, to the lease payments or whether
it encompasses the purchase price a lessee pays when
exercising the purchase option under the lease.
Porsche argues that Tammi is not entitled to the pur-
chase amount he paid and that pecuniary loss is limited
to the relief provided in subsection (2)(b)3, noting that
nowhere in the Lemon Law does it permit a lessee to
recover the remaining value of the leased vehicle. In
support of this position, Porsche cites Varda v. General
3
The Lemon Law was renumbered in 1999 from Wisconsin
Statute Section 218.015 to Section 218.0171, but the substance of
the law was unchanged. Kiss v. Gen. Motors Corp., 630 N.W.2d
742, 744 n.1 (Wis. Ct. App. 2001).
No. 07-1832 19
Motors Corporation, 626 N.W.2d 346 (Wisc. Ct. App. 2001).
In Varda, the plaintiff leased a vehicle in 1996 that began
having brake problems that same year. Upon the lease’s
expiration in 1998, Varda purchased the vehicle pursuant
to the lease terms. Then in 1999 after the purchase, Varda
made a Lemon Law demand claiming the status of a
consumer who is a lessee as described in subsection (1)(b)4.
Id. at 349. The Wisconsin Court of Appeals concluded that a
person who purchases a vehicle at the conclusion of the
lease and then attempts to invoke relief under subsection
(2)(b)3 (the subsection directing how a manufacturer
should respond to a lessee’s Lemon Law demand after
repairs are unsuccessful), “is no longer a consumer with-
in the meaning of [§ 218.0171(1)(b)4].” Id. at 355. Despite
Porsche’s invocation, Varda is not on point because that
case involved an individual who sought the relief that the
Lemon Law affords lessees when that person was no longer
a lessee. Porsche posits that “[a]t the time of purchase,
Tammi was no longer a consumer under the statute who
was entitled to recover the amounts paid to purchase the
vehicle[, thus] he is only entitled to the relief that was
available at the time he initiated the subject action.” Varda
still does not buttress Porsche’s positions or resolve the
question of what constitutes pecuniary loss because of the
factual distinctions between it and Tammi’s case. Tammi
made his Lemon Law demand while still a lessee, and
purchased his vehicle only after Porsche rejected his Lemon
Law demand and after he sought relief under subsection
(7).
Relying upon the requirement that a lessee return a
vehicle when given a refund under subsection (2)(b)3a,
Porsche asserts that Tammi is not allowed to keep the
car and also recover double the amount of his pecuniary
20 No. 07-1832
loss under subsection (7). Porsche also seeks a reduction
in Tammi’s damage recovery for reasonable use as pro-
vided in subsection (2)(b)2b when the consumer is a
purchaser or one who can enforce a warranty. Wisconsin
law, both case and statutory, is silent on these questions,
and as such, guidance from the Wisconsin Supreme
Court on how to resolve these issues would be most
helpful. Resolution of these issues and the others presented
in this case about the scope of pecuniary loss implicates
important policy considerations that inform the Wiscon-
sin Lemon Law, and we believe that the Wisconsin Su-
preme Court is best suited to resolve them.
Pursuant to Circuit Rule 52:
When the rules of the highest court of a state provide
for certification to that court by a federal court of
questions arising under the laws of that state which
will control the outcome of a case pending in the
federal court, this court, sua sponte or on motion of a
party, may certify such a question to the state court
in accordance with the rules of that court, and may
stay the case in this court to await the state court’s
decision of the question certified. The certification
will be made after the briefs are filed in this court. A
motion for certification shall be included in the
moving party’s brief.
The Wisconsin Supreme Court is permitted to answer
certified questions from this court “which may be deter-
minative of the cause then pending in the certifying court
and as to which it appears to the certifying court there is
no controlling precedent in the decisions of the supreme
court and the court of appeals of [Wisconsin].” Wis. Stat.
§ 821.01.
No. 07-1832 21
Certification is appropriate in a case which “concerns a
matter of vital public concern, where the issue will
likely recur in other cases, where resolution of the ques-
tion to be certified is outcome determinative of the case,
and where the state supreme court has yet to have an
opportunity to illuminate a clear path on the issue.” Plastics
Eng’g Co. v. Liberty Mut. Ins. Co., 514 F.3d 651, 659 (7th
Cir. 2008) (citation omitted). Other considerations are the
interest the state supreme court has in the development
of state law and “the likelihood that the result of the
decision will almost exclusively impact citizens of that
state.” State Farm Mut. Auto. Ins. Co. v. Pate, 275 F.3d
666, 672 (7th Cir. 2001). Certification is not appropriate,
however, for decisions that are highly fact-specific and
lack general significance. Id.
This case is well-suited for certification. We recognize
the import of this decision on the sale of motor vehicles
throughout Wisconsin for consumers and manufacturers
alike. The submission of an amicus brief by various
auto manufacturer associations and recreational vehicle
manufacturers demonstrates the significance of this
decision. The resolution of what constitutes pecuniary
loss when the consumer is a lessee is of vital public con-
cern to the citizens of Wisconsin and manufacturers
whose vehicles those citizens purchase. While based on
the specific lease and facts in this case, the damages
sought are not unique in the context of an automobile
lease and the issues that surround it are ones that will
likely recur. Further, resolution of these questions by the
Wisconsin Supreme Court will resolve this case and
provide it “an opportunity to illuminate a clear path on
the issue.” Because the answers to these questions rely
heavily upon the intent of the legislature and their
22 No. 07-1832
policy considerations in enacting the Lemon Law, we
conclude that the Wisconsin Supreme Court is “far more
familiar with the policy choices that have been made,
and have far more direct responsibility for the administra-
tion of justice within the state than do members of this
court.” Allstate Ins. Co. v. Menards, Inc., 285 F.3d 630, 639
(7th Cir. 2002).
Accordingly, we respectfully certify the following
questions to the Wisconsin Supreme Court on the issue of
pecuniary loss under Wisconsin Statute Section 218.0171:
1. When a consumer defined in Wisconsin Statute
Section 218.0171(1)(b)4 brings an action pursuant to
subsection (7), if that consumer, after making his
Lemon Law demand, then exercises an option to
purchase and buys the vehicle as provided in the lease,
is the consumer then entitled to recover the amount of
the purchase price?
2. If the consumer defined in Wisconsin Statute Section
218.0171(1)(b)(4) is entitled to recover the vehicle
purchase price when he exercises the purchase option
provided in the lease, does the purchase amount
qualify as pecuniary loss subject to the doubling
provision in subsection (7)?
3. If the answers to questions 1 and 2 are in the affirma-
tive, is the consumer permitted to keep the purchased
vehicle in addition to the receipt of the damage award
or must the vehicle be returned to the manufacturer?
4. Is a damage award under subsection (7) subject to a
reduction for reasonable use of the vehicle?
To the extent that they think it necessary, we invite the
Justices of the Wisconsin Supreme Court to reformulate
these questions and expand their inquiry.
No. 07-1832 23
The Clerk of the Court is directed to transmit the briefs
and appendices in this case as well as a copy of this
opinion. The Clerk shall also transmit any part of the
record that the Wisconsin Supreme Court might request,
and we stay this matter in this court while the Wis-
consin Supreme Court considers this matter.
AFFIRMED, in part; QUESTIONS CERTIFIED.
USCA-02-C-0072—7-14-08