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Hughes v. BMW of North America, LLC

United States District Court, D. South Carolina, Florence Division

September 24, 2014

Michael Dante' Hughes and Angela Ann Hughes, Plaintiffs,
BMW of North America, LLC, Defendant.


R. BRYAN HARWELL, District Judge.

This matter is before the Court on Defendant BMW of North America, LLC's motion for summary judgment as to all claims asserted by Plaintiffs in their complaint. Mot. for Summ. J., ECF No. 25. Plaintiffs filed a timely response to the motion. ECF No. 28. A hearing was held on August 19, 2014.[1] After having carefully considered all matters presented to the Court, the Court finds that the undisputed and material evidence compels the Court to grant summary judgment in favor of Defendant on the basis that Plaintiffs' claims are barred by the applicable statutes of limitation.


On or about January 12, 2004, Plaintiffs purchased a 2004 BMW 545i from Hendrick BMW, an authorized dealership of Defendant's vehicles located in Charlotte, North Carolina. When Plaintiffs purchased the vehicle in 2004, Defendant issued a four-year, 50, 000-mile express written warranty to cover manufacturing defects in the vehicle. Plaintiffs allege that they began experiencing "catastrophic" problems with the vehicle's electrical and computer systems within months of its purchase. Plaintiffs took the vehicle to Hendrick BMW in Charlotte numerous times for inspection and repairs related to the problems giving rise to this action. Plaintiffs claim that, despite numerous attempts to repair the vehicle, Defendant failed to correct the alleged manufacturing defects during the warranty period.

At the time Plaintiffs purchased the vehicle, they were residents of North Carolina. In February 2010, however, Plaintiffs moved from Waxhaw, North Carolina, to Myrtle Beach, South Carolina. After nearly a decade of problems with their vehicle, they filed this action with this Court on March 11, 2013.[2] In their complaint, Plaintiffs allege breaches of both express and implied warranties, violations of the Magnuson-Moss Warranty Act, and a breach of the implied covenant of good faith and fair dealing. They seek to revoke acceptance of the vehicle and recover the purchase price. They also seek "consequential damages consisting of sales tax, license, registration and other fees, finance charge, towing expenses, rental expense, time and inconvenience, loss of business opportunity and all costs and expenses, including attorney fees, " as well as punitive damages. Defendant filed a motion for summary judgment, arguing that all of Plaintiffs' claims are barred by the applicable North Carolina statutes of limitations. Moreover, Defendant contends that Plaintiffs fail to show a genuine dispute of fact that any warranties were breached. Plaintiffs, on the other hand, argue that South Carolina law is applicable and that the applicable statutes of limitations are not in play. They assert they have met their burden to withstand summary judgment.


The Court shall grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(a). The movant bears the initial burden of demonstrating that summary judgment is appropriate; if the movant carries its burden, then the burden shifts to the non-movant to set forth specific facts showing that there is a genuine dispute for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If a movant asserts that a fact cannot be disputed, it must support that assertion either by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials;" or by "showing... that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1).

To prevail on a motion for summary judgment, the movant must demonstrate that (1) there is no genuine dispute as to any material fact and (2) that he is entitled to judgment as a matter of law. As to the first of these determinations, a fact is deemed "material" if proof of its existence or nonexistence would affect disposition of the case under applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute of material fact is "genuine" if the evidence offered is such that a reasonable jury might return a verdict for the non-movant. Id. at 257. In determining whether a genuine dispute has been raised, a court must construe all inferences and ambiguities against the movant and in favor of the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). The existence of a mere scintilla of evidence in support of the non-movant's position is insufficient to withstand a summary judgment motion. Id. at 252. Likewise, conclusory allegations or denials, without more, are insufficient to preclude the granting of the summary judgment motion. Ross v. Commc'n Satellite Corp., 759 F.2d 355, 365 (4th Cir. 1985). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248.


I. Plaintiff's Claims for Breach of Express and Implied Warranties

a. Application of North Carolina Law

The parties do not dispute that Plaintiffs' warranty claims are governed by state law, specifically Article 2 of the Uniform Commercial Code ("U.C.C."). They disagree, rather, about which state's U.C.C. and statute of limitations are applicable. Defendant argues that North Carolina's statute of limitations should apply; Plaintiffs contend that South Carolina's statute of limitations controls. For the following reasons, the Court finds that the statute of limitations provided in North Carolina's U.C.C. is applicable to Plaintiffs' warranty claims.

Because Plaintiffs have filed this action in South Carolina, the Court must look to South Carolina's law governing conflicts of law. CACI Int'l, Inc. v. St. Paul Fire & Marine Ins. Co., 566 F.3d 150, 154 (4th Cir. 2009) ("Because we have diversity jurisdiction in this case, we apply the choice of law rules of the forum state."). South Carolina's U.C.C. provides that when there is no agreement specifying the choice of law, then South Carolina law applies "to transactions bearing an appropriate relation to this State." S.C. Code Ann. § 36-1-105(1). The Fourth Circuit has adopted the "most significant relationship" test to determine whether a transaction has an appropriate relationship to South Carolina. In re Merrit Dredging Co., Inc., 839 F.2d at 207; Thornton v. Cessna, 886 F.2d 85, 89-90 (4th Cir. 1989). Under this approach, courts must apply the law of the state that has the most significant relationship to the transaction, taking into consideration such factors as the needs of the interstate system, the relevant policy of the forum, the relevant policies of other interested states and the relative interests of those states in the determination of the issue, the expectations of the parties, basic policies underlying the particular field of law, and certainty, predictability, and uniformity of result. In re Merritt, 839 F.2d at 207 (citing Restatement (Second) of Conflict of Laws §§ 6, 244). The Restatement further directs courts to consider such factors as the place of contracting, the place of negotiation, the place of performance, the location of the subject matter of the contract, and the domicile, residence, and place of business of the parties. Restatement (Second) of Conflict of Laws § 188(2) [hereinafter Restatement ].

Applying these factors, this Court finds that North Carolina has the most significant relationship to the transaction in this case. Generally, "the state whose interests are most deeply affected should have its local law applied." Restatement § 6 comment f. To that end, when appraising the relative interests of the states involved in the dispute, the Court may compare the relationships of the states to the parties, the conveyance, and the chattel conveyed. In re Merritt, 839 F.2d at 207. Here, it is plain that North Carolina is the state whose interests are most deeply affected in this case. First, Plaintiffs purchased the vehicle in North Carolina and acquired the protections of the warranty in North Carolina. Plaintiff Angela Hughes testified that they customordered the vehicle at the end of 2003, prior to the model being released, and they took delivery in January of 2004. All the ordering and negotiating was done with Hendrick BMW in Charlotte. Further, Plaintiffs resided in North Carolina at the time of purchase and afterwards up until 2010. Plaintiffs stored and maintained the vehicle in North Carolina for at least six years following the purchase. Additionally, Hendrick BMW in North Carolina performed all ...

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