James Michael Leasing Company v. Paccar, Incorporated
772 F.3d 815
7th Cir.2014Background
- JM Leasing purchased a new 2008 Kenworth T800 from PACCAR in 2007 and financed it through PACCAR Financial. After ~4 years and ~3,076 miles the truck proved defective and JM Leasing invoked Wisconsin’s Lemon Law (Wis. Stat. § 218.0171) seeking a refund.
- JM Leasing timely served notice (June 7, 2011). PACCAR calculated a refund and mailed two checks (one to pay off the lien and one to JM Leasing) within the 30‑day statutory window but JM Leasing rejected them, disputing a $53 title fee and PACCAR’s “reasonable allowance for use.”
- PACCAR insisted it would handle lien payoff and reoffered a refund; JM Leasing persisted in objecting to the mileage/use deduction, returned the truck to the dealer, then retrieved it and filed suit on July 15, 2011. JM Leasing retained possession and continued making loan payments.
- The district court granted JM Leasing summary judgment in part, holding PACCAR violated the Lemon Law by failing to timely refund and pay the lien holder, and construed ‘‘pecuniary loss’’ to include the vehicle’s full purchase price. The parties later stipulated to a pecuniary‑loss figure of $184,598.03; the court doubled it under the statute and awarded attorneys’ fees and interest, yielding a judgment for JM Leasing.
- PACCAR appealed, arguing (1) its tender and assurances satisfied the statute, (2) it was not required to pay the lien until JM Leasing accepted the refund, (3) its mileage deduction complied with the statutory formula, and (4) pecuniary loss should be limited to the difference between the parties’ use‑allowance calculations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether manufacturer satisfied Lemon Law by tendering checks and promising to pay lien rather than actually paying lienholder within 30 days | JM Leasing: manufacturer must actually refund and pay lienholder within 30 days after consumer offers title | PACCAR: timely tender and promise to pay lien satisfied statutory duty | Held: Manufacturer must actually refund and directly pay the lienholder within 30 days; mere assurances or tender to consumer/dealer are insufficient |
| Whether consumer’s refusal to accept refund absolves manufacturer of duty to pay lien within 30 days | JM Leasing: refusal does not relieve manufacturer; manufacturer’s obligations are triggered by consumer’s offer to transfer title | PACCAR: JM Leasing’s rejection and refusal to return vehicle relieved PACCAR of duty | Held: Consumer’s obligation to return title follows manufacturer’s timely refund; consumer refusal does not excuse manufacturer’s duty absent bad‑faith interference by consumer |
| Scope of “pecuniary loss” under the pre‑amendment Lemon Law | JM Leasing: pecuniary loss includes full purchase price and related amounts | PACCAR: pecuniary loss should be limited to actual out‑of‑pocket difference between competing use allowances | Held: Pecuniary loss includes the purchase price per Hughes; statutory doubling therefore applies to that broader measure |
| Whether statutory formula for ‘‘reasonable allowance for use’’ provides a safe harbor that automatically justifies the deduction PACCAR applied | JM Leasing: formula is a ceiling; deduction must still be reasonable in context | PACCAR: following the statutory formula necessarily produced a lawful deduction | Held: Formula creates a ceiling, not an automatic safe harbor; reasonableness may still be contested (district court didn’t need to decide here because parties stipulated a reasonable figure) |
Key Cases Cited
- Hughes v. Chrysler Motor Corp., 542 N.W.2d 148 (Wis. 1996) (holds pecuniary loss under pre‑amendment Lemon Law includes purchase price)
- Marquez v. Mercedes‑Benz USA, LLC, 815 N.W.2d 314 (Wis. 2012) (characterizes Wisconsin Lemon Law as particularly pro‑consumer and places burden on manufacturer to timely refund)
- Tammi v. Porsche Cars N. Am., Inc., 768 N.W.2d 783 (Wis. 2009) (statutory mileage formula is a ceiling; allowance must still be reasonable)
- Burzlaff v. Thoroughbred Motorsports, Inc., 758 F.3d 841 (7th Cir. 2014) (federal court applies Wisconsin Supreme Court interpretations of Lemon Law)
- Rodas v. Seidlin, 656 F.3d 610 (7th Cir. 2011) (standard of de novo review for summary judgment and state‑law interpretation)
- Weigle v. SPX Corp., 729 F.3d 724 (7th Cir. 2013) (federal courts may look to state intermediate appellate decisions absent authoritative state high‑court guidance)
- Church v. Chrysler Corp., 585 N.W.2d 685 (Wis. Ct. App. 1998) (manufacturer must timely issue refund within 30 days; when in doubt must pay purchaser’s demanded amount or manufacturer’s own within period)
- Herzberg v. Ford Motor Co., 626 N.W.2d 67 (Wis. Ct. App. 2001) (distinguishes standing‑ready contexts and involved a consumer standing ready, not a manufacturer)
- Estate of Riley ex rel. Riley v. Ford Motor Co., 635 N.W.2d 635 (Wis. Ct. App. 2001) (delivery of a refund check to a dealership manager is not equivalent to timely delivery to consumer)