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 AUGUST 4, 2008
____________
Before FLAUM, RIPPLE, and MANION, Circuit Judges.
MANION, Circuit Judge. Bruce Tammi filed suit against
Porsche Cars North America, Inc. (“Porsche”) in Wis-
consin state court seeking damages for violations of the
Wisconsin Lemon Law (“Lemon Law”), Wisconsin
Statute Section 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 damages. The parties filed post-trial motions. The
2 No. 07-1832
district court denied Porsche’s motion for judgment
notwithstanding 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 Wisconsin Supreme Court, pursuant to
Circuit Rule 52 and Wisconsin Statute Section 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 ex-
perience any problems with the spoiler when
participating in auto-cross competitions, Tammi testified
that on occasion when he drove the car on the highway
No. 07-1832 3
between 55 m.p.h. and 70 m.p.h., the spoiler failed. Specifi-
cally, the spoiler would deploy, but would not retract.
In addition, 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 ap-
proximately 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 con-
ceded that Tammi had taken his car in for repairs at least
4 No. 07-1832
four 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,
Wisconsin Statute Section 218.0171. In that notice, Tammi
indicated that his vehicle had been “made available for
repair at least 4 times for the same defect during its
first year of warranty,” and demanded “[a] refund calcu-
lated in accordance with the Lemon Law, plus collateral
costs.” Tammi also listed the date, dealership, and prob-
lems 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, Wiscon-
sin Statute Section 218.0171. Porsche removed the case to
federal 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 contro-
versy 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, despite
No. 07-1832 5
the problems that persisted with the rear spoiler.1 Essen-
tially, 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 owner-
ship 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 ques-
tions in the presence of the district court judge. The
judge handed the parties a set of proposed instructions
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
and 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 ex-
pressed 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 supported the inclusion of all of these. Porsche
continued, “[I]f the Court rules that there is sufficient
evidence to submit 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 approved 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
verdict in favor of Tammi concluding that the vehicle
Tammi leased had a “nonconformity covered by the
manufacturer’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 repair the nonconformity, which continued. The jury
also awarded Tammi $26,600.00 for pecuniary loss re-
sulting 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 district court’s grant or denial of motion for
judgment as a matter of law de novo. Campbell v. Miller,
499 F.3d 711, 716 (7th Cir. 2007). “Our inquiry is limited
to the question whether the evidence presented, com-
bined with all reasonable inferences permissibly drawn
therefrom, is sufficient to support the verdict when
viewed in the light most favorable to the party against
whom the motion is directed.” Id. (internal citations and
quotations omitted).
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 war-
ranty 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 non-
conformity 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 noncon-
formities. Chmill v. Friendly Ford-Mercury of Janesville, Inc.,
424 N.W.2d 747, 750-51 (Wis. Ct. App. 1988) (affirming
a finding of nonconformity on a vehicle with 78,000
miles). Jury findings of nonconformities have been af-
firmed in cases where a dump truck’s power steering
would not work when the vehicle was stationary thereby
impeding its ability to maneuver into tight spots at con-
struction sites, Dobratz Trucking, 647 N.W.2d at 320-21,
No. 07-1832 9
where a vehicle continually 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).
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 im-
paired 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 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 com-
petitions. 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
10 No. 07-1832
not expect to encounter such disruptions every third time
he drives that vehicle. In light of this evidence, we con-
clude that the evidence was sufficient for the jury to
conclude that the rear spoiler failure constituted a sub-
stantial 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
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
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
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 eviden-
tiary 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
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
confusion, 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 ques-
tions 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 in-
structions were being specifically discussed, Porsche
only sought to preserve its sufficiency of the evidence
12 No. 07-1832
challenge 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 evi-
dence on an individual issue in which the jury found a
nonconformity, but it cannot now claim it was prejudiced
when all of the different types of nonconformity (i.e., use,
value, or safety) were presented to the jury in the disjunc-
tive in a single question. Id. at 622 (noting that if the
appellant had asked the district judge to submit an inter-
rogatory 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 conclude 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
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-
No. 07-1832 13
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 volun-
tarily purchases a vehicle after a lease expires, the pur-
chase price paid is not a damage “caused by a violation” 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 statutory
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
keeping with the Lemon Law’s purpose of protecting
consumers and that without the recovery of the amount
he paid in purchasing the car, there would not be a suf-
ficient motivation for Porsche to comply with the Lemon
Law in future cases.
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 mis-
chief and advance the remedy the statute intended to
afford.” Id. at 149-50.
14 No. 07-1832
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
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 fol-
lowing at the consumer’s direction:
No. 07-1832 15
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 consumer
at the point of sale and collateral costs, less a reason-
able 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.
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.
Wis. 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
16 No. 07-1832
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 termination
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
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.
Wis. 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
No. 07-1832 17
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 borrowed
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.
In the context of a consumer who is a lessee, the Wiscon-
sin 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 pecuniary loss
does not include the current value of the written 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
18 No. 07-1832
mention the current value of the written lease.” Id. at 639.3
The Riley court continued, “[t]he consumer’s pecuniary
loss does not include the termination 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 compensated 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 pur-
chase 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
Motors Corporation, 626 N.W. 2d 346 (Wis. 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 pur-
chase, 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
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
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 unsuccess-
ful), “is no longer a consumer within the meaning of
[§ 218.0171(1)(b)4].” Id. at 355. Despite Porsche’s invoca-
tion, 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
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
20 No. 07-1832
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.
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 question to
be certified is outcome determinative of the case, and
where the state supreme court has yet to have an op-
portunity to illuminate a clear path on the issue.” Plastics
Eng’g Co. v. Liberty Mut. Ins. Co., 514 F.3d 651, 659 (7th Cir.
No. 07-1832 21
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, how-
ever, 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 manu-
facturers 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 concern to the citizens of Wisconsin and manufac-
turers 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 auto-
mobile lease and the issues that surround it are ones
that will likely recur. Further, resolution of these ques-
tions 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 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
administration 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).
22 No. 07-1832
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 affir-
mative, is the consumer permitted to keep the pur-
chased vehicle in addition to the receipt of the dam-
age 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—8-4-08