Motor Vehicles; Warranties--breach of express warranty_-vehicle lease
The trial court did not err by granting summary judgment in favor of defendant lessor on
plaintiff lessee's claim seeking remedies under N.C. Gen. Stat. § 20-351 et seq. of the New
Motor Vehicles Warranties Act, because: (1) plaintiff has not forecast evidence that his vehicle
failed to conform to the express warranty, and thus, his claim is lacking in an essential element;
(2) defendant has established that a non-Ford part was installed on plaintiff's vehicle, that this
part is excluded from coverage under the express warranty, and the damage to the vehicle was
caused by the non-Ford part; (3) plaintiff's affidavit does not create an issue of material fact
regarding whether the manufacturer of the anti-theft device, DEI, was a Ford-authorized
manufacturer when the affidavit does not satisfy the personal knowledge requirement of
N.C.G.S. § 1A-1, Rule 56(e), and thus, it could not have been considered by the trial court in
ruling on the summary judgment motion; and (4) both of defendant's two affidavits state that the
information is based on the affiant's personal knowledge of Ford-authorized manufacturers
through employment positions.
Judge HUDSON dissenting.
Sigmon, Sigmon & Isenhower, by W. Gene Sigmon, for plaintiffs-
appellants.
Maupin Taylor, P.A., by M. Keith Kapp and Kevin W. Benedict,
for defendant-appellee.
ELMORE, Judge.
Eugene Tucker Builders, Inc. and Eugene Tucker (plaintiff)
appeal an order of the trial court granting summary judgment in
favor of Ford Motor Company (defendant). On 2 January 2001
plaintiff leased a new Lincoln Navigator from Town Square, an
authorized Ford dealership in Lincolnton, North Carolina. Defendant provided the vehicle with an express warranty, the “New
Vehicle Limited Warranty.” This warranty applied for four years or
50,000 miles, whichever occured first, and covered all parts except
tires that are defective in factory-supplied materials or
workmanship. The warranty stated that it did not cover damage
caused by “non-Ford parts installed after the vehicle leaves Ford's
control.”
At the time of the lease, on 2 January 2001, plaintiff
requested that Town Square install a remote start system in the
vehicle. On 3 January 2001 Southland Dealer Services (Southland)
sold and delivered a remote start system and an anti-theft bypass,
which is a device that connects the remote start system to the
vehicle. Southland is an authorized Ford parts distributor located
in Charlotte. Southland did not install either the remote start
system or the anti-theft bypass. Instead, Mobile Environment, Inc.
(Mobile Environment) installed the remote start system shipped by
Southland. Mobile Environment also installed an anti-theft bypass,
but this device was not the one manufactured by Ford and shipped by
Southland. The anti-theft device was manufactured by Directed
Electronics, Inc. (DEI).
Within one week of accepting delivery of the vehicle,
plaintiff began experiencing problems with the vehicle's electrical
system. Plaintiff alleged that the vehicle alarm began to go off
every thirty minutes and that the vehicle would suddenly stall
while driving on the road. Plaintiff also alleged that he returned
the vehicle to Town Square on eight or nine occasions for repair,most recently in December of 2002. By letter dated 7 March 2003
plaintiff informed defendant of his intention to pursue remedies
under N.C. Gen. Stat. § 20-351 et seq., the New Motor Vehicles
Warranties Act. In compliance with the statute, plaintiff
requested that defendant cure the alleged defects within 15 days of
receipt of the letter.
During this cure period, the vehicle was transported to an
authorized Ford dealership in Fort Mill, South Carolina.
Technicians at the Fort Mill dealership removed the remote start
system and the anti-theft bypass. After removal of these
accessories, the vehicle was transported back to Town Square. A
Ford Service Engineer at Town Square inspected the vehicle and
declared it to be in compliance with defendant's express limited
warranties.
Plaintiff filed the instant action on 11 July 2003. Defendant
filed its Answer on 16 September 2003 and moved for summary
judgment on 8 March 2004. Following a hearing, the trial court
granted defendant's motion for summary judgment and dismissed
plaintiff's action with prejudice. From this order entered 19 July
2004, plaintiff appeals.
The New Motor Vehicles Warranties Act provides that:
When consumer is a lessee, if the manufacturer
is unable, after a reasonable number of
attempts, to conform the motor vehicle to any
express warranty by repairing or correcting,
or arranging for the repair or correction of,
any defect or condition or series of defects
or conditions which substantially impair the
value of the motor vehicle to the consumer,
and which occurred no later than 24 months or
24,000 miles following original delivery ofthe vehicle, the manufacturer shall, at the
option of the consumer, replace the vehicle
with a comparable new motor vehicle or accept
return of the vehicle from the consumer and
refund the following:
(1) To the consumer:
a. All sums previously paid by the consumer
under the terms of the lease;
b. All sums previously paid by the consumer in
connection with entering into the lease
agreement, including, but not limited to, any
capitalized cost reduction, sales tax, license
and registration fees, and similar government
charges; and
c. Any incidental and monetary consequential
damages.
N.C. Gen. Stat. § 20-351.3(b) (2003). As such, a lessee seeking
recovery under this Act must show “(1) the terms of the
manufacturer's express warranty, (2) that the vehicle failed to
conform to those terms in the warranty, and (3) that after a
reasonable number of attempts to remedy that breach of the warranty
(4) the vehicle still failed to conform.” Taylor v. Volvo North
America Corp., 339 N.C. 238, 245, 451 S.E.2d 618, 622 (1994).
Plaintiff assigns error to the trial court's grant of summary
judgment on the basis that issues of material fact exist which
should be presented to a jury. Specifically, plaintiff contends
that the remote start system and the anti-theft bypass installed on
the vehicle were Ford parts covered by the express warranty.
Defendants argue, in contrast, that the anti-theft bypass was not
manufactured by a Ford-authorized manufacturer and was not
installed by a Ford-authorized installer. Initially, we note the parties agree that a Ford-authorized
parts distributor, Southland, sold and shipped the accessory parts
to Town Square. The dispute involves the question of whether the
company that manufactured the anti-theft bypass, DEI, is a Ford-
authorized manufacturer such that this part was covered by
defendant's express warranty. Defendant contends that summary
judgment was properly granted because it is undisputed that a non-
Ford part was installed in the vehicle and the plain language of
the express warranty excludes damage caused by non-Ford parts.
(See footnote 1)
The express warranty provides, in pertinent part:
WHAT IS NOT COVERED?
Damage Caused By:
. . .
1 *
non-Ford parts installed after the
vehicle leaves Ford's control. For
example, but not limited to, cellular
phones, alarm systems, and automatic
starting systems
. . .
Other Items and Conditions Not Covered
Your New Vehicle Limited Warranty does not
cover:
2 *
non-Ford parts of your vehicle, for
example, parts (including glass)
installed by body builders or
manufacturers other than Ford, or damage
to Ford components caused by installation
of non-Ford parts
Defendant cites to a case in another jurisdiction, Malone v.
Nissan Motor Corp., 526 N.W.2d 841 (Wis. Ct. App. 1994), in which
an appellate court determined that an after-market added accessory
did not come within a new vehicle express limited warranty. In
Malone, the plaintiff argued that a spoiler added to a new vehicle
by the dealer was covered by Nissan's new vehicle limited warranty.
However, the court determined that there was no evidence that
Nissan manufactured the spoiler and, since Nissan's warranty
covered only parts supplied by Nissan, that the warranty did not
include the defective spoiler. Id. at 843. We also determine that
under the express warranty here, damage caused by non-Ford parts
are excluded from Ford's express warranty coverage and thus cannot
be the basis of relief under the New Motor Vehicles Warranties Act.
If the part was not manufactured by Ford, then summary judgment was
proper in favor of defendant. Thus, we now consider whether there
is evidence in the instant case that DEI, the manufacturer of one
of the accessory parts installed, was a Ford-authorized
manufacturer.
Both parties filed affidavits in connection with the summary
judgment hearing. Defendant submitted to the trial court the
affidavit of Brett Little, who is employed by Ford Motor Company as
an Office Operations Specialist and previously held a position as
Ford Service Engineer. Mr. Little stated that these positions
required his familiarity with Ford-manufactured parts and
accessories. Mr. Little stated that, upon his inspection, theremote start system was a Ford part but the anti-theft bypass was
a cheaper non-Ford part. Mr. Little further stated that plaintiff
experienced problems with the remote start system because the anti-
theft bypass was not a Ford part.
Plaintiff submitted to the court the affidavit of James R.
Rhyne, a former manager of the Charlotte, North Carolina office of
Mobile Environment. Mr. Rhyne testified that Mobile Environment
installed the anti-theft bypass device in plaintiff's vehicle and
that Mobile Environment is an authorized service and installation
representative of Ford Motor Company. He also stated that the
manufacturer of the bypass device, DEI, is an authorized
manufacturer of Ford Motor Company electronic systems.
Thereafter, defendant submitted the affidavit of Jim Cooper,
an employee of Visteon Corporation, a parts supplier for Ford Motor
Company. Mr. Cooper stated that he had reviewed the affidavit of
James R. Rhyne. Mr. Cooper stated that, contrary to Mr. Rhyne's
statement, Mobile Environment was not affiliated with Ford in any
way prior to 25 February 2004. Mr. Cooper also stated that DEI
manufactures an anti-theft bypass that is compatible with Ford
vehicles but that DEI does not have any relationship with Ford and
does not manufacture an anti-theft bypass device for Ford.
After carefully reviewing the record, we conclude that
plaintiff's affidavit does not create an issue of material fact
regarding whether the manufacturer of the anti-theft device, DEI,
was a Ford-authorized manufacturer. “[W]hen affidavits are offered
in opposition to a motion for summary judgment, they must 'be madeon personal knowledge, . . . set forth such facts as would be
admissible in evidence, and . . . show affirmatively that the
affiant is competent to testify to the matters stated therein.'”
Weatherford v. Glassman, 129 N.C. App. 618, 623, 500 S.E.2d 466,
469 (1998) (quoting N.C. Gen. Stat. § 1A-1, Rule 56(e)). Here, Mr.
Rhyne's affidavit does not indicate how he had personal knowledge
that DEI is an authorized Ford parts manufacturer. It appears that
the source of Mr. Rhyne's information is an exhibit attached to his
affidavit, which is a diagram published by DEI illustrating how to
wire an anti-theft bypass to a Ford vehicle. This document does
not establish that DEI is a Ford-authorized manufacturer. The
document was not published by Ford, and Mr. Rhyne avers no other
affiliation with Ford Motor Company or Ford-authorized
manufacturers. Also, Mr. Rhyne does not assert that his knowledge
is based upon business records that he reviewed in the course of
his employment. Cf. Moore v. Coachmen Industries, Inc., 129 N.C.
App. 389, 396, 499 S.E.2d 772, 777 (1998) (affiant's statements
based upon review of his employer's business records in course of
his employment satisfied personal knowledge requirement of Rule
56(e)). As the content of the Rhyne affidavit does not satisfy the
personal knowledge requirement of Rule 56(e), it could not have
been considered by the trial court in ruling on the summary
judgment motion. See Strickland v. Doe, 156 N.C. App. 292, 295-96,
577 S.E.2d 124, 128-29 (trial court may not consider portions of
affidavit which were not made on affiant's personal knowledge),
disc. review denied, 357 N.C. 169, 581 S.E.2d 447 (2003); Hylton v.Koontz, 138 N.C. App. 629, 634, 532 S.E.2d 252, 256 (2000)
(“content and context [of Rule 56 affidavit] must show its material
parts are founded on the affiant's personal knowledge”), disc.
review denied, 353 N.C. 373, 546 S.E.2d 603 (2001).
In contrast, both the Cooper and Little affidavits submitted
by defendant state that the information is based on the affiant's
personal knowledge. Moreover, the content of each affidavit
reveals that the affiant has personal knowledge of Ford-authorized
manufacturers through employment positions. As the moving party,
defendant has established that a non-Ford part was installed on
plaintiff's vehicle and that this part is excluded from coverage
under the express warranty. Also, defendant has shown that the
damage to the vehicle was caused by the non-Ford part. Brett
Little stated in his affidavit that plaintiff experienced problems
with the remote start system because the anti-theft bypass was not
a Ford part. Plaintiff provides no argument or forecast of
evidence on this point, and thus has not placed this fact in
dispute. As plaintiff has not forecast evidence that his vehicle
failed to conform to the express warranty, his claim is lacking in
an essential element. See Taylor, 339 N.C. at 245, 451 S.E.2d at
622 (lessee must show that vehicle failed to conform to
manufacturer's express warranty). Accordingly, we hold that the
trial court properly granted summary judgment to defendant.
Affirmed.
Judge LEWIS concurs.
Judge HUDSON dissents.
HUDSON, Judge, dissenting.
Having carefully reviewed the affidavits submitted to the
trial court, I do not agree that plaintiff has failed to forecast
an issue of fact as to whether DEI was a Ford-authorized
manufacturer. As the majority accurately notes, Mr. Rhyne's
affidavit clearly states that “Mobil Environment installed the
bypass device, which is a piece known as a 555F made by Directed
Electronics, Inc., or DEI, also an authorized manufacturer of Ford
Motor Company electronic systems.” The majority rejects these
assertions in the affidavit, on the basis that the affidavit does
not show how Mr. Rhyne had personal knowledge of these facts. I
believe that the additional statements in the affidavit and the
documents attached, which show that Mr. Rhyne “was the Manager of
the Charlotte, North Carolina office of Mobile Environment, Inc.,”
which company installed the parts referred to above, sufficiently
showed a basis for his personal knowledge and created an issue of
fact regarding whether DEI was a Ford-authorized manufacturer.
Thus, I would reverse the grant of summary judgment on this basis,
and I respectfully dissent.
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