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Klismet's 3 Squares Inc. v. Navistar, Inc.

Court of Appeals of Wisconsin, District IV

May 5, 2016

Klismet's 3 Squares Incorporated, Plaintiff-Respondent,
v.
Navistar, Inc., Defendant-Appellant.

APPEAL from judgments of the circuit court for Waupaca County, Cir. Ct. No. 2012CV323, RAYMOND S. HUBER, Judge.

Before Kloppenburg, P.J., Higginbotham and Sherman, JJ.

SHERMAN, J.

¶1 Navistar, Inc., appeals from judgments of the circuit court awarding Klismet's 3 Squares Incorporated damages under Wisconsin’s “Lemon Law, ” WIS. STAT. § 218.0171 (2011-12), [1] and awarding Klismet's' trial counsel attorney fees and costs. The circuit court awarded Klismet's damages in the amount of $199, 500.42. On appeal, Navistar contends that Klismet's' Lemon Law claim was barred and that the circuit court erred in the court's calculation of Klismet's' damages. For the reasons discussed below, we affirm.

BACKGROUND

¶2 In December 2011, Klismet's purchased a 2012 International 4300 truck. The purchase price of the truck was $96, 189, plus fees, collateral costs, and finance charges totaling $10, 849.85. The truck developed trouble, or "nonconformity" within the first year, after being driven 22, 777 miles, and at least four attempts at repair were unsuccessful. The vehicle was subject to an unlimited mileage factory warranty for the first year, and an extended service contract covering certain components of the vehicle, for sixty additional months.

¶3 On May 14, 2012, Klismet's sent Navistar a Lemon Law notice by certified mail to the address listed in the owners' manual. The notice demanded a refund under the Lemon Law in exchange for return of the vehicle.[2] Navistar received the notice on May 16, 2012. Navistar was required to pay the refund within thirty days, which would have been prior to June 15, 2012. See Wis. Stat. § 218.0171(2)(c). This did not occur.

¶4 Navistar computed what it considered a proper refund amount under Wis.Stat. § 218.0171(2)(c), and informed Klismet's of that amount. However, prior to the June 15, 2012 deadline, Klismet's notified Navistar that it disputed the amount of refund offered, including the calculation of the reasonable allowance for Klismet's' use of the vehicle, which Navistar calculated to be $21, 908.97.[3]

¶5 Although the attorneys for both parties communicated about the disputed amount, no agreement was reached and on June 19, 2012, four days after the statutory deadline, Navistar sent two checks totaling $83, 145.03 to the lienholder on the vehicle, TCF Equipment Finance, Inc., to pay off the outstanding loan balance on the vehicle, which TCF cashed, and a separate check to Klismet's in the amount of $2, 067.72. The amount sent to Klismet's represented the balance of the purchase price of the vehicle, less the payment of the outstanding loan balance and less Navistar's calculation of the reasonable allowance of Klismet's' use of the vehicle.

¶6 Klismet's did not cash the check sent to it and Klismet's did not authorize TCF to accept payment from Navistar. Rather than accept the amount tendered to it by Navistar, Klismet's retained the vehicle and filed this action on July 6, 2012, alleging that Navistar violated the Lemon Law. Navistar denied that it had violated the Lemon Law and counterclaimed, alleging in part that Klismet's had accepted Navistar's proffered refund and seeking a declaration of accord and satisfaction.

¶7 Both parties moved for summary judgment on Klismet's' claims. The circuit court granted partial summary judgment in favor of Klismet's only on the issue of whether Navistar failed to provide Klismet's with a refund within the statutory time period. However, the court denied the remainder of Klismet's' motion for summary judgment and it denied in its entirety Navistar's motion for summary judgment.

¶8 Following a trial to the circuit court, the court entered judgment in Klismet's' favor. Relevant to the three issues raised on appeal, first, the court concluded that Klismet's' Lemon Law claim against Navistar was not barred under the doctrine of accord and satisfaction. Second, the court concluded that Navistar's calculation of Klismet's' reasonable use of the vehicle was not reasonable and that in calculating the reasonable allowance of Klismet's' use of the vehicle in this case, a denominator of 100, 000 was not reasonable. The court concluded that a denominator of 300, 000 was reasonable and that Klismet's' reasonable allowance was $7, 288.64. The court concluded that Klismet's' damages amounted to $199, 500.42, which represents the purchase price of the vehicle plus Klismet's' fees and finance charges, less a reasonable allowance of $7, 288.64, and that Navistar was entitled to a credit of $83, 145.03 for its payment to TCF. Third, the court concluded that Klismet's did not prevent Navistar from providing Klismet's with a refund within the statutory time period. In a subsequent judgment, the court also entered judgment in favor of Klismet's' attorneys in the amount of $200, 507.98, for attorneys' fees and costs. Navistar appeals.

DISCUSSION

¶9 Navistar contends on appeal that the circuit court erred in: (1) determining that Klismet's' Lemon Law claim was not barred by accord and satisfaction, (2) calculating Klismet's' reasonable allowance for use, and (3) determining that Klismet's was not barred by its own conduct from claiming that Navistar's refund payment exceeded the thirty-day statutory time period.[4]

¶10 We begin our analysis with our standards of review. Our review of the circuit court's determination that Navistar and Klismet's did not reach an accord and satisfaction is a mixed question of fact and law. See Hoffman v. Ralston Purina Company, 86 Wis.2d 445, 452-53, 273 N.W.2d 214 (1979). We will uphold the court's findings of fact unless they are clearly erroneous, but review the application of the law to those facts de novo. See State v. Matek, 223 Wis.2d 611, 616, 589 N.W.2d 441 (Ct. App. 1998).

¶11 Our review of Navistar's second argument, the circuit court's calculation of the reasonable allowance for use, while also a mixed question of fact and law, hinges upon a question of statutory construction, which is a question of law that we review de novo. See State v. Cole, 2000 WI App. 52, ¶3, 233 Wis.2d 577, 608 N.W.2d 432.

¶12 To the extent that we understand Navistar's argument that Klismet's was barred by its own conduct from claiming that Navistar failed to timely provide the refund, it also presents a mixed question of fact and law and, to the extent that an issue in equity was established, whether or not to recognize that bar is an exercise of discretion by the circuit court that we review in the usual manner for an exercise of discretion. See State v. Jeske, 197 Wis.2d 905, 913, 541 N.W.2d 225 (Ct. App. 1995) (we will uphold the court's ...


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