Search

AT device warranty laws may provide affirmative defenses, such as that the condition or defect was caused by the consumer’s abuse or alteration of the device,⁷² or by the consumer’s neglect.⁷³ Nebraska’s AT device lemon law does not apply if the defect or condition is the result of abuse, neglect, or unauthorized modification or alteration by the consumer, or if the condition is the result of normal use, which could be resolved through appropriate adjustments, proper care, and cleaning.

In addition to claims under state AT device warranty laws, other causes of action can be brought on behalf of consumers with disabilities who have devices that are defective or do not perform as promised. These include claims under UCC Article 2,⁷⁸ the Magnuson-Moss Warranty Act,⁷⁹ and for breach of contract.⁸⁰

This appendix contains the sections of the National Manufactured Housing Construction and Safety Standards Act, 42 U.S.C. §§ 5401 to 5426, that are most relevant to consumer warranty cases. The full text of the Act is available as companion material to the digital edition of this treatise. In addition, the regulations adopted by the Department of Housing and Urban Development (HUD) under the Act, 24 C.F.R.

(a) Findings. Congress finds that—

(1) manufactured housing plays a vital role in meeting the housing needs of the Nation; and

(2) manufactured homes provide a significant resource for affordable homeownership and rental housing accessible to all Americans.

(b) Purposes. The purposes of this chapter are—

As used in this chapter, the term—

(1) “manufactured home construction” means all activities relating to the assembly and manufacture of a manufactured home including but not limited to those relating to durability, quality, and safety;

(2) “retailer” means any person engaged in the sale, leasing, or distribution of new manufactured homes primarily to persons who in good faith purchase or lease a manufactured home for purposes other than resale;

California allows a civil penalty of two times actual damages: (1) if the manufacturer willfully fails to comply with any obligation of the consumer warranty law or an express warranty or service contract;⁵⁷⁷ or (2) if the manufacturer of a new motor vehicle violates the refund-or-replace requirement, has been notified by the buyer after a presumptively reasonable number of repair attempts, and has not maintained a qualified third-party dispute resolution process.⁵⁷⁸ Willfulness is not required

Some lemon laws explicitly allow for equitable relief. The Wisconsin Supreme Court holds that a consumer may seek equitable relief under the lemon law without having suffered pecuniary damages.⁵⁹⁹ A consumer could seek an injunction against a manufacturer’s leasing arm that was continuing to demand lease payments from the consumer after the manufacturer had accepted return of the vehicle.

The availability of fees after a consumer has participated in an informal dispute resolution mechanism is discussed in § 14.2.10.6, supra. Many state lemon laws explicitly provide for the recovery of the consumer’s attorney fees after court litigation under the lemon law.⁶⁰¹

A consumer who recovers equitable relief on a lemon law claim is a prevailing party entitled to fees, even if the court does not award pecuniary damages.⁶¹¹ A consumer whose suit wins repurchase of the vehicle is the prevailing party even if the suit did not prevail on claims for lemon law civil penalties.⁶¹² When a successful lemon law action results in no monetary relief (because the use allowance offsets damages), the defendant still remains obligated to pay attorney fees.

Regardless of the type of claim, counsel should check the law of the relevant jurisdiction for a notice of defects statute.

To establish a prima facie case of breach of warranty, the homeowner need only establish the existence of a defect, and need not prove why a particular system failed, but only that it did fail.³⁴² For instance, a condominium unit owner’s testimony regarding high levels of mold sufficed to win summary judgment.³⁴³

In many states the measure of damages for breach of an implied warranty of habitability or of good workmanship is the cost to repair or, if necessary, the cost to replace the home’s defective component.³⁴⁹ This measure is also sometimes called the cost of construction and completion.

The benefit of the bargain measure grants damages based on the difference in value of the property with and without the defect or defects.³⁵⁴ However, given that the cost to repair the damage can be a component of the diminution in value, the line between the two measures of damages gets blurry when a court cites the diminution in value rule, but upholds an award based on evidence of the cost to repair.³⁵⁵

In some jurisdictions, the court will select between the two measures by awarding the lesser of the costs of repair or the diminution in value.³⁵⁶ Alternatively, a court may choose repair costs over diminution in value when the buyer has elected to make repairs to the home.³⁵⁷ Some courts choose the remedy based on the significance of the damage, awarding costs of repair for small defects, diminution in value for substantial defects.³⁵⁸

A court may refuse to award repair or replacement damages when the builder invokes the rule against economic waste, that is, when the cost of repair or replacement is far greater than the diminution in value to the property.³⁵⁹ A disproportionate difference between the two measures may lead a court to award the smaller amount on the grounds that it would be economically wasteful to require a builder to pay so much for a repair that will translate into only a small increase in the home’s value.

Consequential damages that are reasonably foreseeable as a result of a breach of warranty should be recoverable.³⁶³ For example, the buyer’s personal property may be ruined when a defective roof allows water to leak in or an inadequately insulated pipe bursts, and the warrantor should compensate the buyer for those losses.

A builder may argue that a buyer’s failure to mitigate or reduce a defect’s consequences should curtail the buyer’s recovery. Courts generally do not put too high a requirement on buyers to mitigate a builder’s defect.³⁶⁹ The builder has the burden of showing that the buyer’s inaction aggravated the damages,³⁷⁰ and a buyer is not required to accept a builder’s offer of a repair if the repair is likely to be unsatisfactory.³⁷¹

Generally courts do not allow punitive damages, particularly in jurisdictions that characterize a breach of implied warranty action as arising in contract.³⁷³ However punitive damages may be awarded if a jurisdiction allows them when a breach of contract is willful and wanton.³⁷⁴ Evidence of bad faith, fraud, or misrepresentation also may make a breach of warranty claim eligible for punitive damages.³⁷⁵ Punitive damages are particularly appropriate

Some home warranty statutes provide for specific performance.

The homeowner can obtain attorney fees if the contract allows such fees to the prevailing party in an action to enforce the contract.

The existence of a warranty establishes, for the benefit of the buyer and the seller, a contract standard for the goods, that is, a right in the buyer and an obligation in the seller.

The Uniform Commercial Code’s (UCC) notice of breach requirement is a significant legal limitation on a buyer’s ability to recover for a breach of warranty. Section 2-607(3)(a) requires a buyer to give the seller notice of breach within a reasonable time after the buyer discovers or should have discovered a breach or be barred from any remedy under the Code. Failure to give notice as required by the section precludes all Code remedies, including cancellation of the sale and damages.

The buyer need not give the seller the notice of breach when the buyer rejects the goods.

Similarly, section 2-607 does not require notice of breach in the case of no delivery or late delivery of the goods, because acceptance never occurs.¹¹ The buyer, obviously, cannot accept undelivered goods. In addition, the seller does not need the protection that notice provides from stale or bad faith claims because it is in a better position to know the situation than the buyer.

Failure to give notice may not be a defense to claims under the Magnuson-Moss Warranty Act.¹² While the Act does require that the consumer give the seller an opportunity to cure (or participate in an informal dispute resolution procedure), this requirement may be less demanding than notice.¹³ In particular, the Magnuson-Moss Warranty Act does not set any timing requirements for these steps, so a consumer who has failed to give notice of breach within a reasonable time as required by the UCC may be a