Pyskaty v. Wide World of Cars, LLC et al

Filing 121

OPINION AND ORDER re: 81 MOTION to Preclude Plaintiff's Expert. filed by Wide World of Cars, LLC, 90 MOTION for Summary Judgment in favor of Plaintiff. filed by Maya Pyskaty, 85 MOTION for Summary Judgment < i>. filed by BMW Bank of North America, 77 MOTION for Summary Judgment . filed by Wide World of Cars, LLC. For the foregoing reasons (1) WWC's motion to preclude Mr. Grismer's testimony is denied in part and granted in part; (2) WWC's motion for summary judgment is denied; (3) BMW Bank's motion for summary judgment in denied in part and granted in part; and (4) Plaintiff's motion for summary judgment is denied. The Clerk is respectfully requested to terminate the pending motions. (Docket Nos. 77, 81, 85, 90). The Court schedules a Status Conference for March 20, 2019 at 10:30 a.m. SO ORDERED. (Status Conference set for 3/20/2019 at 10:30 AM before Magistrate Judge Judith C. McCarthy.) (Signed by Magistrate Judge Judith C. McCarthy on 2/25/2019) (kv)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------X
MAYA PYSKATY,
Plaintiff,
OPINION AND ORDER
-against15 Civ. 1600 (JCM)
WIDE WORLD OF CARS, LLC D/B/A WIDE
WORLD BMW and BMW BANK OF NORTH
AMERICA,
Defendants.
--------------------------------------------------------------X
Plaintiff Maya Pyskaty (“Plaintiff”) commenced this action against Defendants Wide
World of Cars, LLC d/b/a Wide World BMW (“WWC”) and BMW Bank of North America
(“BMW Bank” and together with WWC “Defendants”). (Docket No. 1).1 Before this Court are
(1) WWC’s motion for summary judgment, (Docket No. 77); (2) WWC’s motion to preclude
Plaintiff’s expert, (Docket No. 81); (3) BMW Bank’s motion for summary judgment, (Docket
No. 85); and (4) Plaintiff’s motion for summary judgment, (Docket No. 90). For the reasons set
forth below, the Court (1) denies in part and grants in part WWC’s motion to preclude Mr.
Grismer’s testimony; (2) denies WWC’s motion for summary judgment; (3) denies in part and
grants in part BMW Bank’s motion for summary; and (4) denies Plaintiff’s motion for summary
judgment.
I. BACKGROUND
This case involves a certified pre-owned (“CPO”) 2010 BMW 750 LXI, VIN Number
WBAKC8C54ACY68053 (the “Vehicle”) purchased by Plaintiff from WWC on October 31,

1

This action is before this Court for all purposes on the consent of the parties, pursuant to 28 U.S.C. § 636(c).
(Docket No. 11).

1

2013 and financed by BMW Bank. The following facts are taken from the parties’ statements
and counter-statements of material facts submitted pursuant to Local Rule 56.1 of the United
States District Courts for the Southern and Eastern Districts of New York and the exhibits
submitted by the parties in support of their contentions.
The Certified Pre-Owned BMW Vehicle Program (“CPO Program”) is a marketing
program designed to capitalize on the consumer demand for pre-owned luxury vehicles. (CPO
Program Manual2 at 3). As set forth in the CPO Program Manual developed by BMW of North
America, LLC (“BMW NA”), dealers participating in and implementing the program “are
responsible to ensure that vehicles enrolled in the Certified Pre-Owned BMW Vehicle Program
and sold as BMW Certified Pre-Owned meet all eligibility requirements, enrollment and
inspection standards.” (Id. at 13). For example, the dealer is responsible for ensuring each CPO
vehicle is properly inspected and must complete a CPO vehicle inspection checklist (“Vehicle
Inspection Checklist”). (Id. at 3). Certain characteristics disqualify vehicles from enrollment in
the CPO Program, such as prior commercial use. (Id. at 8). Certification is not complete until the
dealer completes a Statement of Certification and provides it to the sales department for
presentation to the final retail customer. (Id. at 10). The CPO Program Manual states that at the
time of sale, the dealer should provide the purchaser with a copy of a Statement of Certification.
(Id.).
On October 31, 2013, Plaintiff visited WWC, an automobile dealership in Spring Valley
New York, seeking to purchase a CPO vehicle for her personal use. (Pl. 56.1 ¶ 88; WWC 56.1 ¶
7). Plaintiff was responding to an advertisement issued by WWC indicating that the CPO
designation was awarded “only to those used BMWs that meet our demanding standards and

2

Refers to Exhibit J-11 attached to Plaintiff’s motion for summary judgment. (Docket No. 93-11).

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pass a meticulous certification process.” (Pl. 56.1 ¶ 90). At the dealership, Plaintiff learned that
the vehicle in the advertisement was no longer available. (Id. ¶ 91). Plaintiff asked about a
second vehicle at WWC, but a WWC salesperson told Plaintiff the second vehicle was not CPO
but could be certified for an additional $2,000 to $3,000. (Id. ¶ 93). Plaintiff declined to
purchase the second vehicle.
As Plaintiff was leaving the dealership, she saw the Vehicle that she ultimately
purchased, which had been marked as a CPO vehicle with labels affixed to the windshield. (Id. ¶
97). Plaintiff asked WWC’s salesperson, Moon Hasan, about the Vehicle’s history and physical
condition, including whether the Vehicle had ever been in an accident. (Pl. 56.1 ¶ 99; BMW
Bank 56.1 ¶ 8; WWC 56.1 ¶ 8). Mr. Hasan informed Plaintiff that the Vehicle had no accident
history and provided Plaintiff with a copy of the CARFAX Vehicle History Report, which
showed no accident history. (Pl. 56.1 ¶ 100; BMW Bank 56.1 ¶ 8; WWC 56.1 ¶ 8). He also told
Plaintiff that the manager had driven the car and determined that it was a good car. (Pl. 56.1 ¶
101; WWC 56.1 ¶ 9).
On October 31, 2013, Plaintiff purchased the Vehicle from WWC for $51,195.00,
excluding taxes and fees. (Pl. 56.1 ¶ 102; BMW 56.1 ¶ 12l; WWC 56.1 ¶ 1). Plaintiff and WWC
executed a Retail Installment Contract, a Purchase Order, and a Buyer/Lessee Delivery
Acknowledgement. (Pl. 56.1 ¶ 103; BMW Bank 56.1 ¶¶ 10, 14; WWC 56.1 ¶¶ 13-16). WWC
also provided Plaintiff with a CARFAX report for the Vehicle, dated October 31, 2013, and a
Buyers Guide. (Pl. 56.1 ¶¶ 104, 105). The Vehicle came with a limited warranty and a CPO
warranty. (Buyers Guide).3 WWC did not provide Plaintiff with a Vehicle Inspection Checklist,

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The Buyers Guide is attached as Exhibit M to BMW Bank’s motion, (Docket No. 87-13), Exhibit F to WWC’s
motion, (Docket No. 79-6), and Exhibit J-26 to Plaintiff’s motion, (Docket No.93-23).

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a Statement of Certification, or damage disclosure notices for the Vehicle at the time of
purchase. (Pl. 56.1 ¶¶ 109-11).
Plaintiff financed the Vehicle in part through BMW Bank, and WWC assigned the Retail
Installment Contract to BMW Bank. (Pl. 56.1 ¶¶ 112-14). According to Plaintiff, the assignment
to BMW Bank was made pursuant to the Federal Trade Commission’s (“FTC”) Rule on the
Preservation of Claims and Defenses (“Holder Rule”), 16 C.F.R. 433.2, as evidenced by the
requisite notice in the Retail Installment Contract notifying BMW Bank that “any holder of this
consumer credit contract is subject to all claims and defenses which the debtor could assert
against the seller of the goods or services obtained pursuant hereto or with the proceeds hereof.”
(Retail Installment Contract § 19).4
Within one week after purchasing the Vehicle, Plaintiff began experiencing issues with
the Vehicle. In particular, she claims that the Vehicle began vibrating when she drove it and
consumed excessive amounts of oil. (Pl. 56.1 ¶¶ 115-17). As time went on, the Vehicle
continued to have problems, including malfunctioning door locks and lack of acceleration. (Id.
¶¶ 118-19). Plaintiff took the Vehicle to a local BMW service center on numerous occasions.
The service center made some repairs, but the problems with the Vehicle persisted. (Id. ¶¶ 11723). Plaintiff also purchased new tires and rims for the Vehicle, which she claims failed to fix
the Vehicle’s vibration issues. (Id. ¶ 121).
Plaintiff returned to WWC in early June 2014, and WWC provided Plaintiff with a copy
of the Vehicle Inspection Checklist. (Pl. 56.1 ¶ 125). Plaintiff informed WWC that she wanted
to revoke her acceptance of the Vehicle and arrange for a return, refund and rescission. (Id. ¶
128). WWC stated that it would be willing to take the Vehicle as a trade-in on another vehicle

4

The Retail Installment Contract is attached as Exhibit B to Plaintiff’s declaration in support of her motion for
summary judgment. (Docket No. 94-2).

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that Plaintiff would have to purchase from WWC and indicated that it would value the Vehicle at
$35,000 for a trade-in. (Id. ¶ 130). Plaintiff declined WWC’s offer. (Id. ¶ 132).
On June 12, 2014, Plaintiff obtained an AutoCheck Vehicle History Report (“AutoCheck
Report”) on the Vehicle, which showed that the Vehicle had been in a rear impact collision
before Plaintiff purchased it. (Pl. 56.1 ¶ 133-34). The AutoCheck Report also indicated that the
Vehicle had been previously used commercially. (Id. ¶¶ 135-37). According to Plaintiff, she felt
unsafe and uncomfortable driving the Vehicle given its numerous defects. (Id. ¶ 171). She took
the Vehicle off the road in July of 2014 and has kept it in a garage since that time. (Id.).
II. WWC’S MOTION TO PRECLUDE PLAINTIFF’S EXPERT
WWC moves to preclude the testimony of Plaintiff’s expert witness, Phillip Grismer.
(Docket No. 81). Specifically, WWC moves to exclude (1) Mr. Grismer’s opinion on the
Vehicle’s mechanical defects, and (2) Mr. Grismer’s opinion on the Vehicle’s diminished value.
(Docket No. 84 at 5, 7).
A. Legal Standards
Rule 702 of the Federal Rules of Evidence governs the testimony of experts and provides
as follows:
A witness who is qualified as an expert by knowledge, skill, experience, training,
or education may testify in the form of an opinion or otherwise if: (a) the expert’s
scientific, technical or other specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue; (b) the testimony is based
on sufficient facts or data; (c) the testimony is the product of reliable principles and
methods; and (d) the expert has reliably applied the principles and methods to the
facts of the case.
Fed. R. Evid. 702. It is a “well-accepted principle that Rule 702 embodies a liberal standard
of admissibility for expert opinions.” Nimely v. City of New York, 414 F.3d 381, 395 (2d
Cir. 2005).

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Whether an expert is qualified is a “threshold question” to be resolved by the Court
before addressing other inquiries. Nimely, 414 F.3d at 400 n. 11. The Federal Rules of
Evidence allow opinion testimony by experts when the witness is “qualified as an expert
by knowledge, skill, experience, training, or education.” Fed. R. Evid. 702. In analyzing
whether a proffered expert is qualified, the Court examines the totality of the expert’s
qualifications to determine if he or she possesses one or more of the five forms of
qualifications identified in Rule 702. See 523 IP LLC v. CureMD.Com, 48 F. Supp. 3d 600,
642 (S.D.N.Y. 2014). Courts in this Circuit have “liberally construed the qualification
requirements of Rule 702, ‘at least to the extent that a lack of formal training does not
necessarily disqualify an expert from testifying if he or she has equivalent relevant practical
experience.’” Id. at 642-43 (collecting cases).
After determining that a witness is qualified as an expert to testify, the Court must
determine whether the expert’s opinion was reached using reliable methodology. In
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), the United States
Supreme Court enumerated a non-exhaustive list of factors a court should consider in
assessing whether an expert’s methods are reliable: (1) whether the method has or could
be tested; (2) whether it has been subjected to peer review; (3) its error rate; and (4) the
existence and maintenance of standards controlling the method’s operation. Id. at 593-94.
There must be a sufficient analytical connection between the methodology used and the
expert’s conclusions. Therefore, “when an expert opinion is based on data, a methodology,
or studies that are simply inadequate to support the conclusions reached, Daubert and Rule
702 mandate the exclusion of that unreliable opinion testimony.” Amorgianos v. Nat’l R.R.
Passenger Corp., 303 F.3d 256, 266 (2d Cir. 2002).

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Finally, the court must assess under Rule 702 whether an expert’s testimony will
“assist the trier of fact.” Nimely, 414 F.3d at 397. Expert testimony may not “usurp either
the role of the trial judge in instructing the jury as to the applicable law or the role of the
jury in applying that law to the facts before it.” United States v. Bilzerian, 926 F.2d 1285,
1294 (2d Cir. 1991).
B. Mr. Grismer’s Qualifications
The Court first addresses whether Mr. Grismer is qualified to opine on the Vehicle’s
alleged mechanical defects and diminished value. Plaintiff proffers Mr. Grismer as an
expert in the automotive field. (Docket No. 106 at 5). The record shows that Mr. Grismer
has extensive experience in the purchase, sale and repair of vehicles. (Grismer Dep.5 at 1114, 19-20, 24). He has worked as an automobile inspector and appraiser through his
company, PJG Consulting and Appraisals, which has been in operation for 24 years. (Id. at
13-15). Mr. Grismer obtained his automotive service excellence (“ASE”) technician
certification, (id. at 7), and he is a certified recreational vehicle inspector and a certified
automotive instructor, (id. at 7-9).
WWC argues that Mr. Grismer is not qualified because he failed four sections of
his ASE recertification test in areas that he is offering testimony. (Docket No. 84 at 6). In
response, Plaintiff contends that Mr. Grismer was unable to obtain recertification as a result
of his health problems rather than lack of skill or knowledge. Plaintiff further argues that
Mr. Grismer’s ASE certification is not determinative of whether he possesses the requisite
expertise. (Docket No. 106 at 6).

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Refers to the transcript of Mr. Grismer’s deposition, attached as Exhibit Q to WWC’s affirmation in support of its
motion to exclude Plaintiff’s expert. (Docket No. 83-20).

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Under the liberal standards of assessing an expert’s qualifications, the Court finds
that Mr. Grismer is appropriately qualified to render an opinion on the Vehicle’s
mechanical defects and diminished value. Mr. Grismer has decades of practical experience
inspecting and appraising automobiles and has numerous certifications, such as a
certification as an automotive instructor issued by the Illinois Board of Education. WWC’s
objections to Mr. Grismer’s ASE recertification go to the weight, not to the admissibility
of his testimony, and are more appropriately addressed on cross-examination. See
McCullock v. H.B. Fuller Co., 61 F.3d 1038, 1043 (2d Cir. 1995).
C. Mr. Grismer’s Opinion on the Vehicle’s Mechanical Defects
In his initial expert report, Mr. Grismer opined that the vibrations in the Vehicle were the
result of defects in the Vehicle’s suspension systems and not the result of defective tires. (Docket
No. 83-13 at 9). WWC argues that in making this opinion, Mr. Grismer did not use reliable
principles and methods because he did not perform a complete road test of the Vehicle and he
failed to eliminate other possibilities for the Vehicle’s vibrations. (Docket No. 84 at 5-6).
Plaintiff responds that Mr. Grismer used many of the same methods utilized by WWC’s service
manager, including visually inspecting the Vehicle, hoisting the Vehicle to inspect the Vehicle’s
underside, road testing the Vehicle for three miles, and reviewing WWC’s inspection sheets,
WWC’s post-inspection report, five different repair orders, and reports from CARFAX and
Autocheck. (Docket No. 106 at 7).
WWC does not argue that conducting a road test or visual inspection are unreliable
methods for ascertaining mechanical defects in automobiles. Indeed, WWC’s own expert road
tested and visually inspected the Vehicle in forming his opinions. (Docket No. 82 at 9). Rather,
WWC argues that in this case Mr. Grismer’s methods were not reliable due to incompleteness.
(Docket No. 84 at 5-6). For example, WWC claims that the road test was incomplete because
8

Mr. Grismer was a passenger rather than the driver and because he did not conduct the road test
with the aftermarket wheels and tires that WWC maintains should have cured the vibrations. (Id.
at 6; WWC 56.1 ¶¶ 29, 33). Thus, according to WWC, it was improper for Mr. Grismer to rule
out defective wheels and tires as the source of the Vehicle’s vibrations.
The Court finds the methods used by Mr. Grismer to be reliable. In his expert report, Mr.
Grismer explained his observations during the road test and the results of his visual inspection,
and he summarized his review of documents available to him. Mr. Grismer ruled out defective
wheels as a cause of the vibrations in part based on the vibrations being felt through the steering
wheel, console and the seats on both sides of the vehicle. (Docket No. 83-13 at 9). Mr. Grismer
concluded that these types of vibrations were consistent with suspension defects. (Id.). He
further stated that during the road test he heard a loud metallic bang noise emanating from the
rear suspension. (Docket No. 83-13). Mr. Grismer provides an “explanation as to how [he] came
to his conclusion and what methodologies or evidence substantiate that conclusion,” Riegel v.
Medtronic, Inc., 451 F.3d 104, 127 (2d Cir. 2006), and Defendants are equipped at trial to
“challeng[e] reliable, albeit debatable, expert testimony.” Amorgianos, 303 F.3d at 267. While
WWC and its expert may disagree with the conclusions drawn from Mr. Grismer’s road test and
visual inspections, that disagreement does not render the methodology unreliable or his expert
analysis inadmissible. WWC is free to challenge the weight of the evidence presented by Mr.
Grismer to the trier of fact, but the Court will not preclude Mr. Grismer’s opinions at this stage.
D. Mr. Grismer’s Opinion on the Vehicle’s Diminished Value
Mr. Grismer concluded that, based on his inspection of the Vehicle and review of its
service history, the Vehicle had an actual value of $20,478.00 at the time of purchase. (Docket
No. 83-13 at 10). WWC moves to preclude this opinion on the grounds that Mr. Grismer did not

9

adhere to the standards and techniques typically used by appraisers when appraising the value of
a vehicle. (Docket No. 84 at 7-11).
WWC argues that Mr. Grismer should have only considered factors contemplated by
valuation guides such as the NADA Kelley Blue Book, Manheim and the Black Book.
Specifically, WWC contends that in making deductions to the Vehicle’s value, Mr. Grismer
should only have considered the “Year, Make, Model and Mileage and overall condition” at the
time of sale because these are the only factors considered by the valuation guides. (Docket No.
112 at 15). WWC also claims Mr. Grismer should not have considered repairs made subsequent
to the sale. In response, Plaintiff argues that Mr. Grismer was not limited to valuing the Vehicle
based on the factors considered by valuation guides, and he was free to draw upon his own
experience and expertise in determining the diminished value of the Vehicle. (Docket No. 106 at
9).
Valuation of personal assets is generally done on a case-by-case basis. The Court does
not find Mr. Grismer’s valuation methodology unreliable simply because he considered factors
not used by the valuation guides. While book values provided by industry valuation guides may
steer the evaluation of a Vehicle’s value, WWC does not cite and the Court does not identify any
authority that limits valuation of a particular Vehicle to the valuation guides. Indeed, there may
be unique attributes to a vehicle’s condition or history that may not be captured by the book
value.
In this case, Mr. Grismer explained his methodology and expressly detailed the factors he
considered in finding the Vehicle had a diminished value. According to Mr. Grismer, with a sale
price of $51,195.00, the Vehicle should have been in excellent condition. (Grismer Report at 1).
However, given the Vehicle’s history and his observations during the inspection, Mr. Grismer

10

calculated the Vehicle’s fair market value at the time of the purchase by reducing the sale price
by 60%. (Grismer Dep. at 94). At his deposition, the following exchange occurred regarding Mr.
Grismer’s method for applying a 60% reduction:
Q. Now, is there any published guideline book reference material that you use in
reaching those percentages that you did here?
A. No, there is an established difference between what is considered excellent,
good, fair, poor, that sort of thing, and for the most part, the difference between
those categories is roughly 10 to 15 percent.
Q. Are you talking like the NADA Kelley Blue Book and the Black Book
conditions for –
A. Each of those valuation guides has parameters that they apply and they are pretty
much the same. In the definitions of what is considered excellent, what is
considered good, what is considered fair. Most of them, in fact, all of them, do not
list anything below that. This is left up to appraiser to do that.
(Grismer Dep. at 96-97). Mr. Grismer explained that he reduced the Vehicle’s value by
30% based on the nature of the subsequent repairs, by 20% due to the fact that the Vehicle
had previously been leased commercially, and by 10% based on the Vehicle’s paint
conditions at the time of purchase. (Id. at 94-95). He explained that he considered repairs
made shortly after the purchase of the Vehicle because they occurred close in time to the
sale. (Id. at 82). WWC has credible challenges to why Mr. Grismer reached the conclusions
he did, but in this case, “[v]igorous cross-examination, presentation of contrary evidence,
and careful instruction on the burden of proof” are the appropriate means of “attacking
shaky but admissible evidence.” Amorgianos, 303 F.3d at 267 (quoting Daubert, 509 U.S.
at 596)).
E. Spoliation of Evidence
Finally, WWC moves to preclude Mr. Grismer’s opinion on the ground that photographs
Mr. Grismer took of the condition of the car during his inspection have been lost by Plaintiff’s
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counsel and not retained by Mr. Grismer. Plaintiff claims that Mr. Grismer did not retain the
photographs because he provided them to Plaintiff’s counsel. (Docket No. 106 at 10). Upon
learning that the photographs were missing, Mr. Grismer took new photographs and served those
photographs with an addendum that the Vehicle’s condition had not changed between the time of
the original inspection and the subsequent inspection. (Id.). Plaintiff offers no explanation for
how or why her counsel lost the original photographs.
“Spoliation refers to the destruction or material alteration of evidence or to the failure to
preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.”
Passlogix, Inc. v. 2FA Tech., LLC, 708 F. Supp. 2d 378, 410 (S.D.N.Y. Apr. 27, 2010) (citation
and internal quotation marks omitted). “The right to impose sanctions for spoliation arises from
a court’s inherent power to control the judicial process and litigation, but the power is limited to
that necessary to redress conduct ‘which abuses the judicial process.’” Id. (citation omitted).
“Before the extreme sanction of preclusion may be used by the district court, a judge should
inquire more fully into the actual difficulties which the violation causes, and must consider less
drastic responses.” Cedar Petrochemicals, Inc. v. Dongbu Hannong Chemical Co., Ltd., 769 F.
Supp. 2d 269, 278 (S.D.N.Y. 2011) (citation and internal quotation marks omitted).
A party seeking spoliation sanctions must demonstrate:
(1) that the party having control over the evidence had an obligation to preserve
it at the time it was destroyed; (2) that the records were destroyed with a
“culpable state of mind” and (3) that the destroyed evidence was “relevant” to
the party’s claim or defense such that a reasonable trier of fact could find that
it would support that claim or defense.
Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 430 (S.D.N.Y. 2004). The duty to
“preserve evidence arises when the party has notice that the evidence is relevant to
litigation or when a party should have known that the evidence may be relevant to future

12

litigation.” United States v. Barnes, 411 Fed. Appx. 365, 368 (2d Cir. 2011) (citation and
internal quotation marks omitted). First, Plaintiff and Mr. Grismer had a duty to preserve
the photographs Mr. Grismer took in connection with his inspection as they should have
anticipated litigation at the time of the initial inspection. Mr. Grismer also provided the
photographs to Plaintiff’s counsel, signaling that litigation was either underway or
imminent. Moreover, Mr. Grismer cited to the photographs in his expert report as
corroborative evidence of his conclusions that have been used in this litigation. (Grismer
Report at 2).
Second, for purposes of spoliation a “culpable state of mind” includes ordinary
negligence. Orbit One Commc’ns, Inc. v. Numerex Corp., 271 F.R.D. 429, 438 (S.D.N.Y.
2010); see also Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 108 (2d
Cir. 2002) (sanctions “should be available even for the negligent destruction of documents
if that is necessary to further the remedial purpose of the inference.”). Here, Plaintiff offers
no explanation for why the photographs provided to her counsel were lost or what efforts
were made to locate the original photographs. It is not clear if the photographs were lost
in transit or if Plaintiff obtained the photographs and then misplaced them. Although there
is insufficient evidence before the Court to find bad faith, counsel’s inability to locate the
photographs without explanation constitutes ordinary negligence.
Third, the Court finds that the photographs would be relevant to WWC’s claims or
defenses because Mr. Grismer cited the photographs in support of his conclusions.
(Grismer Report at 2). WWC should have been free to review the photographs to confirm
Mr. Grismer’s statements and, if appropriate, use the photographs to challenge the accuracy
of Mr. Grismer’s observations and conclusions. However, by not being provided with the

13

contemporaneous photographs, WWC lost the opportunity to challenge evidence created
by Mr. Grismer that he then used in support of his opinion.
Based on the findings here, the Court has considerable discretion in fashioning the
appropriate remedy. See West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 780 (2d Cir.
1999). While WWC seeks preclusion of Mr. Grismer’s testimony, the Court finds that this
sanction is not appropriate under these circumstances. Indeed, “severe sanctions should be
imposed only in extreme circumstances, usually after consideration of alternative, less
drastic sanctions.” CAT3, LLC v. Black Lineage, Inc., 164 F. Supp. 3d 488, 501 (S.D.N.Y.
2016) (citation and internal quotation marks omitted); see also Passlogix, 708 F. Supp. 2d
at 421 (“Preclusion is a harsh sanction preserved for exceptional cases where a . . . party’s
failure to provide the requested discovery results in prejudice to the requesting party.”)
(citation and internal quotation marks omitted). Instead of precluding Mr. Grismer from
testifying, the Court will permit WWC to offer evidence of the spoliation at trial and the
jury will be permitted, but not required, to draw an adverse inference based on the missing
evidence. See Zimmermann v. Assocs. First Capital Corp., 251 F.3d 376, 383-84 (2d Cir.
2001) (jury charge “permitting an adverse inference was fully warranted” based on a
party’s spoliation of evidence). Furthermore, the Court will preclude Mr. Grismer from
representing that the photographs included in his supplemental report, which were taken
years after his inspection, were identical to the original photographs. WWC, and the Court,
have no way of comparing the two sets of photographs, and as an appropriate sanction for
the loss of the original photographs, Mr. Grismer is not permitted to represent that the
subsequent photographs, taken approximately three years after the initial inspection, are
identical.

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III. DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT
Defendants move for summary judgment on the following claims: breach of the implied
warranty of merchantability under the Magnuson-Moss Warranty Act (“MMWA”) and N.Y.
U.C.C. § 2-314, breach of express written warranty under the MMWA and N.Y. U.C.C. § 2-313,
violations of New York General Business Law § 349 and § 350, and common law fraud. After
discussing the applicable legal standards, the Court will address each claim in turn.
A. Legal Standards
Summary judgment is appropriate where “the movant shows that there is no genuine
dispute as to any material fact.” Fed. R. Civ. P. 56(a). The moving party has the initial burden of
showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). If the moving party meets its burden, “the nonmoving party must come
forward with admissible evidence sufficient to raise a genuine issue of fact for trial in order to
avoid summary judgment.” Jaramillo v. Weyerhaeuser Co., 536 F.3d 140, 145 (2d Cir. 2008).
An issue of fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.” SCR Joint Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir.
2009) (citation and internal quotation marks omitted). A fact is “material” if it might “affect the
outcome of the suit under the governing law.” Id.
In considering a motion for summary judgment, the Court must “construe the facts in the
light most favorable to the non-moving party and must resolve all ambiguities and draw all
reasonable inferences against the movant.” Brod v. Omya, Inc., 653 F.3d 156, 164 (2d Cir. 2011)
(citation and internal quotation marks omitted). However, the nonmovant cannot defeat a motion
for summary judgment by relying on unsupported assertions, conjecture or surmise. See
Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995). The
nonmovant must also do more than show that there is “some metaphysical doubt as to the
15

material facts.” McClellan v. Smith, 439 F.3d 137, 144 (2d Cir. 2006) (quoting Matsushita Elec.
Indus Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). To survive a motion for summary
judgment, “the non-moving party must set forth significant, probative evidence on which a
reasonable fact-finder could decide in its favor.” Senno v. Elmsford Union Free School Dist., 812
F. Supp. 2d 454, 467-68 (S.D.N.Y. 2011) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
256-57 (1986)).
B. Breach of Express Warranty under the New York Uniform Commercial Code
“‘Any description of the goods which is made part of the basis of the bargain creates an
express warranty that the goods shall conform to the description.’” Sitt v. Nature’s Bounty, Inc.,
No. 15-CV-4199 (MKB), 2016 WL 5372794, at *15 (E.D.N.Y. Sept. 26, 2016) (quoting N.Y.
U.C.C. § 2-313(1)(b)); see also Goldemberg v. Johnson & Johnson Consumer Cos., 8 F. Supp.
3d 467, 482 (S.D.N.Y. 2014) (“Any affirmation of fact or promise made by the seller to the
buyer which relates to the goods and becomes part of the basis of the bargain creates an express
warranty that the goods shall conform to the affirmation or promise.”) (citation and internal
quotation marks omitted). Under New York law, a breach of express warranty claim requires
“(1) the existence of a material statement amounting to a warranty, (2) the buyer’s reliance on
this warranty as a basis for the contract with the immediate seller, (3) breach of the warranty, and
(4) injury to the buyer caused by the breach.” Id. While a seller need not use words such as
“warrant” or “guarantee” to create an express warranty, “[g]eneralized statements by a
defendant, however, do not support an express warranty claim if they are such that a reasonable
consumer would not interpret the statement as a factual claim upon which he or she could rely.”
Sitt, 2016 WL 5372794, at *15 (citations and internal quotation marks omitted).
WWC argues that Plaintiff failed to raise triable issues as to the existence of an express
warranty or a breach of said warranty. (Docket No. 80 at 7-11). BMW Bank argues that because
16

the claim against WWC fails, the claim against BMW Bank, as assignee, also fails. (Docket No.
89 at 11-16).
The Court finds that Plaintiff has raised triable issues of fact as to her breach of express
warranty claim under New York law. Plaintiff sets forth sufficient evidence that she purchased
the Vehicle based on WWC’s representation that the Vehicle was CPO, and therefore met the
eligibility requirements of BMW’s CPO Program. As evidence of the existence of an express
warranty, Plaintiff points to the labels affixed on the Vehicle’s windshield indicating that it was a
CPO vehicle, WWC’s advertisements that CPO vehicles undergo a certification process, WWC’s
agent’s representations that the Vehicle was CPO, a representation in the Buyers Guide that the
Vehicle came with a CPO warranty, and WWC’s sale of the Vehicle pursuant to a deal only
afforded to CPO vehicles. (Docket No. 102 at 9-12). See, e.g., Goldemberg, 8 F. Supp. 3d at 48283 (labels and advertising conveying factual promises about a product can give rise to an
actionable breach of express warranty claim); Sitt, 2016 WL 5372794, at *17 (seller’s
representations in “sales materials and advertisements” formed a basis for plaintiff’s breach of
express warranty claim). A reasonable juror could find that WWC’s decision to market the
Vehicle with a CPO designation indicated to Plaintiff that the vehicle she was purchasing had
undergone the requisite inspection, conformed with the requirements of the CPO Program
Manual, and met the eligibility requirements for the program.
Plaintiff also adduced evidence that WWC may have breached the express warranty it
created by marketing the Vehicle as CPO. On this point, Defendants argue that there can be no
breach because it is undisputed that BMW NA honored the CPO warranty. (Docket No. 89 at 1213). The fact that BMW NA may have honored the CPO warranty does not dispose of Plaintiff’s
claim because a reasonable juror could find that the “CPO” designation misled Plaintiff about the

17

history of the Vehicle and is objective qualities. For example, a reasonable consumer could
interpret the representation that a vehicle is “Certified Pre-Owned” or “CPO” as a factual
representation that the vehicle had undergone the proper certification process before receiving its
designation and possessed the specific attributes required for certification. Here, Plaintiff
presents evidence that the Vehicle had a prior history of commercial use, which rendered it
ineligible for a CPO designation. Plaintiff also presented evidence that WWC was aware of the
Vehicle’s prior commercial use at the time it designated the Vehicle as CPO because it was in
possession of a disqualifying CARFAX Report. This evidence is sufficient to create a genuine
issue of material fact on Plaintiff’s breach of express warranty claim under New York law.
Defendants further argue that they cannot be held liable in connection with the CPO
Program as a matter of law because the CPO Program is administered by a separate entity, BMW
NA, a non-party to this litigation. (Docket No. 89 at 12; Docket No. 116 at 8). This argument is
unavailing. The CPO Program Manual places the onus on WWC, as the dealer selling CPO
vehicles, to conduct inspections and ensure each vehicle sold as CPO meets the standards and
eligibility requirements of the program. WWC is the entity that completed the Vehicle
Inspection Checklist and presented the Vehicle as CPO when marketing it to potential customers.
WWC also specifically represented that the Vehicle was a CPO vehicle to Plaintiff as evidenced
by the labels on the Vehicle at the time Plaintiff purchased it and the representation in the Buyers
Guide that the Vehicle came with a CPO warranty.
Finally, BMW Bank cannot escape liability on summary judgment because, as the
assignee, it “stands in the shoes of its assignor and takes subject to those liabilities of its assignor
that were in existence prior to the assignment . . .” Pierre v. Planet Automotive, Inc., 193 F.

18

Supp. 3d 157, 176 (E.D.N.Y. 2016) (quoting Diesel Props S.r.l. v. Greystone Bus. Credit II LLC,
631 F.3d 42, 55 (2d Cir. 2011)).
Accordingly, Defendants’ motion for summary judgment as to Count III, the breach of
express warranty claim under New York law, is denied.
C. Breach of Express Warranty under the MMWA
The MMWA affords recourse to consumers damaged by a warrantor’s failure to comply
with its obligations under a written warranty. See Wilbur v. Toyota Motor Sales, U.S.A., Inc., 86
F.3d 23, 26 (2d Cir. 1996). It “is a remedial statute designed to protect consumers against
deceptive warranty practices.” Ray v. Samsung Electronics Am., Inc., No. 15-cv-8540 (DLC),
2016 WL 3406127, at *7 (S.D.N.Y. June 17, 2016) (citations and internal quotations omitted). A
written warranty under the MMWA is defined as:
(A) any written affirmation of fact or written promise made in connection with
the sale of a consumer product by a supplier to a buyer which relates to the nature
of the material or workmanship and affirms or promises that such material or
workmanship is defect free or will meet a specified level of performance over a
specified period of time, or
(B) any undertaking in writing in connection with the sale by a supplier of
a consumer product to refund, repair, replace, or take other remedial action with
respect to such product in the event that such product fails to meet the specifications
set forth in the undertaking,
which written affirmation, promise, or undertaking becomes part of the basis of the
bargain between a supplier and a buyer for purposes other than resale of such
product.
15 U.S.C. § 2301(6). The MMWA “incorporates and federalizes state-law breach of
warranty claims, including state-law standards for liability and damages.” Ebin v. Kangadis
Food Inc., No. 13 Civ. 2311 (JSR), 2013 WL 3936193, at *3 n. 2 (S.D.N.Y. July 26, 2013);
see also Diaz v. Paragon Motors of Woodside, Inc., 424 F. Supp. 2d 519, 540 (E.D.N.Y.

19

2006) (“The MMWA . . . creates no additional bases for liability, but allows a consumer to
recover damages under existing state law, and attorneys fees.”).
Plaintiff concedes that Section 2310(f) of the MMWA bars her breach of express
warranty claim premised on the MMWA against BMW Bank. (Docket No. 102 at 27-28).
Generally, the Holder Rule6 preserves a consumer’s right to assert the legal claims and
defenses against the assignee of a credit contract that the consumer could have asserted
against the assignor. See Diaz, 424 F. Supp. 2d at 543. In tension with the Holder Rule,
Section 2310(f) circumscribes MMWA liability for breach of express warranty to “the
warrantor actually making a written affirmation of fact, promise or undertaking” and limits
enforcement “against such warrantor and no other person.” Given Plaintiff’s agreement to
withdraw its MMWA breach of express warranty claim against BMW Bank, the Court will
dismiss Count II against BMW Bank.
As for the MMWA claim against WWC, for the reasons discussed above, Plaintiff
has raised triable issues of fact as to the existence and breach of an express warranty, and
WWC’s motion for summary judgment on Count II is denied. See Section III.B, supra.
D. Breach of Implied Warranty Under the MMWA and New York Law
The MMWA defines “implied warranty” as “an implied warranty arising under State law
. . . in connection with the sale by a supplier of a consumer good.” 15 U.S.C. § 2301(7). In this
case, the implied warranty of merchantability under N.Y. U.C.C. § 2-314 requires that the
product sold be reasonably fit for the ordinary purpose for which it was intended. Under New
York law, at a bare minimum the ordinary purpose for a used car is to “enable the purchaser to

6

The FTC’s Holder Rule requires all consumer installment contracts to contain the following provision: “Notice:
Any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert
against the seller of goods or services obtained pursuant hereto or with the proceeds hereof. Recovery hereunder by
the debtor shall not exceed amounts paid by the debtor hereunder.” 16 C.F.R. § 433.2(a).

20

transport herself upon the streets and highways of this state or any other in a reasonably safe
manner.” Diaz, 424 F. Supp. 2d at 541 (citation omitted). An implied warranty provides for a
“minimal level of quality” and “arises automatically in every sale of goods by one who is a
merchant in those goods.” Meserole v. Sony Corp. of Am., Inc., No. 08 CV 8987 (RPP), 2009
WL 1403933, at *8 (S.D.N.Y. May 19, 2009) (citation and internal quotation marks omitted).
Plaintiff argues that the Vehicle would not pass without objection in the trade and defects in the
Vehicle rendered it unfit for the purpose of safe transportation.
1. Claim Asserted Against BMW Bank
BMW Bank argues that it cannot be held liable for breach of implied warranty as a matter
of law because it is not in privity with Plaintiff. (Docket No. 89 at 19). In response, Plaintiff
maintains that the FTC’s Holder Rule, 16 C.F.R. § 433.2, and its New York State analog, N.Y.
Personal Property Law § 302(9), make BMW Bank, as the current holder of the Retail
Installment Contract, liable for WWC’s misconduct, including breach of implied warranty.
(Docket No. 102 at 26). Plaintiff further argues that the MMWA does not contain any provision
barring breach of implied warranty claims against an assignee. (Id. at 27-28).
BMW Bank relies upon the well-established principle in New York that, absent privity, a
plaintiff cannot recover damages for economic loss based upon breach of implied warranty. See
Catalano v. BMW of N. Am., LLC, 167 F. Supp. 3d 540, 556 (S.D.N.Y. 2016) (“New York courts
continue to require privity between a plaintiff and defendant with respect to claims for breach of
the implied warranties of merchantability and fitness for a particular purpose where the only loss
alleged is economic.”). The privity requirement also applies to implied warranty claims brought
under the MMWA. See Abraham v. Volkswagen of Am., Inc., 795 F.2d 238, 249 (2d Cir. 1986)
(“[W]e believe that state law, including privity requirements, governs implied warranties except
where explicitly modified by Sections 2308 and 2304(a)”).
21

Plaintiff relies upon the Holder Rule, a regulation promulgated by the FTC, and its New
York state analog. See 16 C.F.R. § 433.2; N.Y. Personal Property Law § 302(9). The FTC’s
Holder Rule “preserves a consumer’s right to assert the same legal claims and defenses against
the assignee of a credit contract as that consumer could have asserted against the assignor.”
Pierre, 193 F. Supp. 3d at 174; see also Diaz, 424 F. Supp. 2d at 543-44. New York’s Personal
Property Law § 302(9) similarly preserves “consumer claims and defenses by mandating that
‘[a]ny holder of [a] consumer credit contract is subject to all claims and defenses which the
debtor could assert against the seller of goods or services obtained.’” Ramirez v. Nat’l Co-op.
Bank (NCB), 938 N.Y.S.2d 280, 280 (1st Dep’t 2011).
The Court will first address Plaintiff’s claim for breach of implied warranty arising under
New York law. The Retail Installment Contract in this case contains the requisite provision
putting BMW Bank on notice that it is “subject to all claims and defenses” Plaintiff could assert
against WWC. (Retail Installment Contract § 19). Neither BMW Bank nor WWC have raised
lack of privity as a defense against Plaintiff’s claim against WWC. Thus, because Plaintiff has
an actionable claim for breach of implied warranty against WWC (see Section III.D.2-3, infra),
the FTC’s Holder Rule and its New York state analog preserve Plaintiff’s ability to bring her
validly asserted breach of implied warranty claim against BMW Bank under New York law.
The survival of Plaintiff’s claim for breach of implied warranty premised on the MMWA
necessitates additional analysis. Cases addressing whether the MMWA permits assignee liability
have resulted in different outcomes. Relying upon the Holder Rule, the court in Diaz v. Paragon
Motors of Woodside, 424 F. Supp. 2d 519 (E.D.N.Y. 2006) permitted the plaintiff’s claim for
breach of implied warranty under the MMWA against the assignee as the holder of the
applicable consumer installment contract. Id. at 544. The court in Dees v. Bob O’Connor Ford,

22

Inc., No. 94 C. 7083, 1995 WL 441629 (N.D. Ill. July 20, 1995) reached a similar result when it
found that the Holder Rule’s notice provisions in the retail installment contract allowed “plaintiff
as a consumer, to assert claims against [the] assignee-creditor, including breach of warranty
claims [under the MMWA] which previously have only been asserted against a seller . . .” Id. at
*3. In contrast, the court in Pierre concluded that the limitation contained in section 2310(f) of
the MMWA expressly prohibited assignee liability under the MMWA, notwithstanding the
mandate of the Holder Rule. 193 F. Supp. 3d at 175. Plaintiff argues that the statutory provision
relied upon in Pierre only applies to written warranties under the MMWA, not implied
warranties, and therefore the Pierre holding and section 2310(f) do not foreclose BMW Bank’s
liability for breach of implied warranty under the MMWA. (Docket No. 102 at 27-28).
Any analysis of liability under the MMWA begins with the plain text of the statute. See K
Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988) (“In ascertaining the plain meaning of the
statute, the court must look to the particular statutory language at issue, as well as the language
and design of the statute as a whole.”). Thus, the Court will first determine whether the plain
language of the MMWA limits assignee liability in breach of express warranty claims only,
while still allowing assignee liability for other violations of the MMWA.
The MMWA distinguishes between warranties created through written warranties (see 15
U.S.C. § 2301(6)) and implied warranties (see id. § 2301(7)). Section 2310(f) limits liability as
follows:
For purposes of this section, only the warrantor actually making a written
affirmation of fact, promise, or undertaking shall be deemed to have created
a written warranty, and any rights arising thereunder may be enforced under this
section only against such warrantor and no other person.
15 U.S.C. § 2310(f). Plaintiff correctly asserts that there is no comparable limitation on liability
for those charged with breaching an implied warranty arising under state law. It is a canon of
23

statutory interpretation that “the express mention of one thing excludes all others,” meaning that
Congress’ limitation of assignee liability for breach of written warranties (and only written
warranties) does not permit an inference that Congress also intended to limit assignee liability for
breach of implied warranties. See Rivas v. Fischer, 687 F.3d 514, 551 (2d Cir. 2012)
(interpreting list of available statutory exceptions in a federal statute based on the doctrine of
“expressio unius est exclusio alterius (express mention of one thing excludes all others)”).
Accordingly, the Court agrees with Plaintiff’s interpretation of the reach of section 2310(f), and
declines to find that its limitation bars assignee liability for breach of implied warranty claims.
Given the Holder Rule’s express mandate that assignees are subject to all claims a
purchaser can bring against the seller, and the absence of a provision in the MMWA expressly
limiting assignee liability for breach of implied warranty, the Court denies BMW Bank’s motion
for summary judgment on Count I.
2. Existence of an Implied Warranty
Defendants argue that WWC effectively disclaimed any implied warranties associated
with the sale of the Vehicle. (Docket No. 80 at 16; Docket No. 89 at 16-18). Plaintiff contends
that because WWC provided Plaintiff with written warranties, it is barred from disclaiming
implied warranties. (Docket No. 102 at 18-19). Plaintiff further argues that the Retail
Installment Contract expressly provides for implied warranties, and any conflict between the
terms of the Retail Installment Contract and the Purchase Order should be construed in Plaintiff’s
favor. (Id. at 19-20).
“Congress passed the MMWA ‘to restrict the ability of sellers to disclaim the warranties
implied under state law.’” Garcia v. Chrysler Grp. LLC, 127 F. Supp. 3d 212, 232 (S.D.N.Y.
2015) (quoting Abraham, 795 F.2d at 247). In particular, the MMWA prohibits a seller from
disclaiming or modifying “any implied warranty to a consumer with respect to such consumer
24

product if (1) such supplier makes any written warranty to the consumer with respect to such
consumer product, or (2) at the time of sale, or within 90 days thereafter, such supplier enters
into a service contract with the consumer which applies to such consumer product.” 15 U.S.C. §
2308(a). However, an implied warranty may be “limited in duration to the duration of a written
warranty of reasonable duration, if such limitation is conscionable and is set forth in clear and
unmistakable language and prominently displayed on the face of the warranty.” Id. § 2308(b).
Any disclaimer made in violation of the MMWA is deemed ineffective. Id. § 2308(c).
In this case, Defendants rely on the following disclaimer contained in the Purchase Order
as evidence that WWC purportedly disclaimed all implied warranties:
Disclaimer of Warranties. DEALER MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, REGARDING THE VEHICLE AND THERE ARE NO IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. HOWEVER, THIS PROVISION DOES NOT
AFFECT (1) ANY WARRANTIES COVERING THE VEHICLE THAT THE
MANUFACTURER OR SUPPLIER MAY PROVIDE, (2) DOES NOT LIMIT
ANY IMPLIED OR OTHER WARRANTIES IMPOSED AS A MATTER OF
LAW (e.g. LEMON LAWS) AND (3) DOES NOT LIMIT ANY WARRANTY
DESCRIBED IN THIS AGREEMENT OR IN A SEPARATE WRITING GIVEN
IN CONNECTION WITH THIS TRANSACTION. ADDITIONALLY, EXCEPT
AS REQUIRED BY LAW, DEALER IS NOT LIABLE FOR INCIDENTAL OR
CONSEQUENTIAL DAMAGES RESULTING FROM THE SALE OF THIS
VEHICLE.
(Purchase Order § 8).7 The Purchase Order’s disclaimer notably does not disclaim warranties (1)
supplied by the manufacturer or supplier, (2) provided by law, or (3) provided to Plaintiff in a
separate writing in connection with the transaction. (Id.) Thus, by the plain terms of WWC’s
disclaimer, WWC has not disclaimed the express written warranties it provided to Plaintiff in the
Buyers Guide, including the limited warranty or the CPO warranty, or implied warranties
preserved by state law or the MMWA. In this case, because WWC provided Plaintiff with a

7

The Purchase Order is attached as Exhibit E to WWC’s motion, (Docket No. 79-5), and Exhibit C to BMW Bank’s
motion, (Docket No. 87-3).

25

limited warranty, the MMWA prohibits WWC from disclaiming implied warranties for the
duration of the limited warranty. See Abraham, 795 F.2d at 247-48 (“Several sections of the
[MMWA] thus ensure that a consumer with a written warranty also enjoys implied warranty
protection . . . A seller is thus still free to offer a relatively worthless written warranty . . . but by
doing so is barred from disclaiming implied warranties arising under state law.”).
Moreover, the disclaimer contained in the Purchase Order does not, by its own terms,
affect the preservation of implied warranties contained in the Retail Installment Contract.
Section 15 of the Retail Installment Contract provides that “[i]f Seller extends, or the Vehicle’s
manufacturer extends, a written warranty or service contract covering the Vehicle within 90 days
from the date of this Contract, [Plaintiff] get[s] implied warranties of merchantability and fitness
for a particular purpose covering the Vehicle.” (Retail Installment Contract § 15). As discussed
above, the Buyers Guide, provided to Plaintiff in connection with the sale of the Vehicle,
indicates that the Vehicle was subject to both a limited warranty and a CPO warranty. The
written warranties in the Buyers Guide triggered the implied warranties contemplated within the
Retail Installment Contract and do not conflict with the disclaimer in the Purchase Order, which
expressly preserves “any warranty described . . . in a separate writing given in connection with
this transaction.” (Purchase Order § 8). Accordingly, the Court finds that summary judgment in
Defendants’ favor on the ground that WWC disclaimed implied warranties is not warranted.
3. Breach of an Implied Warranty
Triable issues of fact exist as to whether the Vehicle sold to Plaintiff violated the implied
warranty of merchantability. Plaintiff presents evidence that the Vehicle would not pass without
objection in the trade and had defects that rendered it unsafe and unfit for driving as early as one
week after the sale. Plaintiff relies upon her own firsthand knowledge of the Vehicle’s
performance as well as the expert testimony of Mr. Grismer. Conversely, Defendants present
26

evidence that the Vehicle performed as warranted and any alleged defects were the result of
Plaintiff’s misuse of the Vehicle. Resolution of these factual disputes is not appropriate for
summary judgment. Thus, Defendants’ motions for summary judgment on Counts I and IV are
denied.
E. Common Law Fraud
Under New York law, common law fraud requires “a misrepresentation or a material
omission of fact which was false and known to be false by [the] defendant, made for the purpose
of inducing the other party to rely upon it, justifiable reliance of the other party on the
misrepresentation or material omission, and injury.” Ambac Assurance Corp. v. Countrywide
Home Loans, Inc., 81 N.Y.S.3d 816, 822 (2018). Findings of fraudulent intent and reasonable
reliance are often fact-specific inquiries left for a jury to decide. See Banque Nationale de Paris
v. Prudential Sec., Inc., No. 95 CIV. 0990 (DC), 1997 WL 639257, at *2 (S.D.N.Y. Oct. 16,
1997) (“[F]indings as to fraudulent intent are peculiarly fact-intensive and an affirmative finding
can rarely be made as a matter of law.”) (citation and internal quotation marks omitted);
Silvercreek Mgmt., Inc. v. Citigroup, Inc., No. 02-CV-8881 (JPO), 2018 WL 4682783, at *5
(S.D.N.Y. Sept. 28, 2018) (“Reasonable reliance is therefore a question normally reserved for the
finder of fact and not usually amenable to summary judgment.”) (citation and internal quotation
marks omitted).
Defendants argue that the fraud claim fails because there is no evidence that WWC knew
the CARFAX report provided to Plaintiff was inaccurate or that WWC was aware the Vehicle
had prior accident damage. (Docket No. 80 at 16-17; Docket No. 89 at 22-23). Defendants
further argue that WWC disclaimed the reliability of the information contained in the CARFAX
report. (Docket No. 80 at 17; Docket No. 89 at 22). Plaintiff maintains that the crux of her fraud

27

claim is that “WWC represented and sold the Vehicle to [Plaintiff] as CPO when it did not
qualify for the CPO program.” (Docket No. 102 at 25). Plaintiff also contends that Mr. Hasan’s
representations to Plaintiff that the Vehicle was “accident free,” “perfect” and a “good car”
create triable issues of fact that preclude summary judgment. (Id.).
Evidence that WWC sold the Vehicle as CPO despite being in possession of a
disqualifying CARFAX Report raises a genuine issue of material fact. Defendants’ argument
that they cannot be responsible for false information in the CARFAX Report misses the thrust of
Plaintiff’s argument. In this case, the CARFAX Report in WWC’s possession showed that the
Vehicle had prior commercial use, rendering it ineligible for the CPO Program. The evidence
shows that WWC nonetheless marketed and sold the Vehicle with a CPO designation. The Court
notes that WWC provided Plaintiff with a copy of the CARFAX Report, which raises a question
over whether it was appropriate for Plaintiff to reasonably rely upon WWC’s representation that
the Vehicle met the CPO Program’s eligibility requirements. That is a question for a jury,
however, and not for the Court to decide. See Silvercreek, 2018 WL 4682783, at *5.
Moreover, there is a factual dispute as to whether Mr. Hasan, WWC’s salesperson,
independently verified that the Vehicle was accident-free or if he simply provided Plaintiff with
the CARFAX Report, which inaccurately showed that the Vehicle had no prior accident history.
Plaintiff claims that Mr. Hasan affirmatively represented that the Vehicle was accident-free, even
though the Vehicle had previously been in a rear-end collision.8 In contrast, Defendants take the
position that Mr. Hasan merely provided Plaintiff with a copy of the CARFAX Report, which

8

BMW Bank argues that Plaintiff made this factual contention for the first time in her summary judgment affidavit,
contradicting her deposition testimony. (Docket No. 113 at 11-12). A court may disregard an affidavit submitted in
opposition to summary judgment if it “by omission or addition, contradicts the affiant’s previous deposition
testimony.” Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473, 482 (2d Cir. 2014). In this case, Plaintiff’s
affidavit expands upon her interactions with Mr. Hasan and does not clearly contradict her prior testimony.
Accordingly, the Court will consider Plaintiff’s affidavit on summary judgment.

28

WWC specifically disclaimed the accuracy of. Resolution of the parties’ conflicting factual
accounts is for the fact finder in this case.
Accordingly, fact questions preclude summary judgment on the common law fraud claim.
F. New York General Business Law § 349 and § 350
New York General Business Law § 349 (“GBL § 349”) makes unlawful “[d]eceptive acts
or practices in the conduct of any business, trade or commerce or in the furnishing of any service
in [the State of New York].” GBL § 349 “is a broad, remedial statute” and “the provision
creating a private right of action employs expansive language.” Blue Cross & Blue Shield of N.J.,
Inc v. Philip Morris USA Inc., 785 N.Y.S.2d 399, 403 (2004). Accordingly, GBL § 349 applies
to “virtually all economic activity,” and its application is correspondingly broad in order to
“provide[] needed authority to cope with the numerous, ever-changing types of false and
deceptive business practices which plague consumers in [New York] State.” Karlin v. IVF Am.,
Inc., 690 N.Y.S. 2d 495, 498 (1999) (citation and internal quotation marks omitted). To
demonstrate a GBL § 349 claim, a plaintiff must prove that a defendant engaged in “(1)
consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury
as a result of the allegedly deceptive act or practice.” Orlander v. Staples, Inc., 802 F.3d 289,
300 (2d Cir. 2015) (citation and internal quotation marks omitted).
New York General Business Law § 350 (“GBL § 350”) declares unlawful “false
advertising in the conduct of any business, trade, or commerce in the furnishing of any service”
in the State of New York. False advertising is defined as advertising that is “misleading in a
material respect.” GBL § 350(a)(1). “The standard for recovery under General Business Law §
350, while specific to false advertising, is otherwise identical to section 349.” New World
Solutions, Inc. v. NameMedia Inc., 150 F. Supp. 3d 287, 330 (S.D.N.Y. 2015).

29

Defendants argue that Plaintiff’s claims under the GBL amount to nothing more than an
isolated dispute between the parties, and Plaintiff has not presented evidence of a pattern of
recurring misconduct that impacts the public at large. (Docket No. 80 at 18-19; Docket No. 89 at
20). Plaintiff maintains that WWC’s actions were “consumer-oriented” within the meaning of
the statute because WWC held the Vehicle out to the consuming public as CPO. (Docket No. 102
at 21-22).
Plaintiff argues correctly that a pattern of deception is not necessary for a GBL § 349 or a
§ 350 claim to survive. See also Oswego Laborers’ Local 214 Pension Fund v. Marine Midland
Bank, N.A., 85 N.Y.2d 20, 25 (1995) (“Consumer-oriented conduct does not require a repetition
or pattern of deceptive behavior. The statute itself does not require recurring conduct.”).
Instead, a plaintiff bringing a GBL § 349 or § 350 claim must demonstrate that “the disputed acts
or practices have a broader impact on consumers at large” though the statute “does not
necessarily require repetition or a pattern of deceptive behavior.” Exxonmobil Inter-Am., Inc. v.
Advanced Info. Eng’g Servs., Inc., 328 F. Supp. 2d 443, 447 (S.D.N.Y. 2004); see also
Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 256, 264 (2d Cir. 1995) (“It is clear that ‘the
gravamen of [the claim] must be consumer injury or harm to the public interest.’”) (citation
omitted). “Private contract disputes, unique to the parties . . . would not fall within the ambit of
the statute.” Oswego, 85 N.Y.2d at 25.9

9

WWC cites New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308 (1995) for the proposition that Plaintiff must
establish a pattern of a deceptive practice aimed at the public at large. The New York University case states that a
plaintiff must demonstrate a pattern of misconduct in order to demonstrate a claim for punitive damages arising out
of a breach of contract. Id. at 316. On the contrary, WWC’s cited case recognizes that conduct that gives rise to a
GBL § 349 violation “need not be repetitive or recurring but defendant’s acts or practices must have a broad impact
on consumers at large.” Id. at 320. BMW Bank relies upon the Second Circuit’s earlier decision in this case, which
found that WWC’s alleged conduct is “more akin to ‘an isolated transaction incident to an otherwise legitimate
business’ than ‘a gross and wanton fraud upon the public.’” Pyskaty v. Wide World of Cars, LLC, 856 F.3d 216, 226
(2d Cir. 2017) (citing Psykaty v. Wide World of Cars, LLC, 15 Civ. 1600 (JCM), 2016 WL 828135, at *7 (S.D.N.Y.
Feb. 26, 2016)). The Second Circuit’s decision was inapposite to the issue presented here as it was in reference to
whether Plaintiff’s claim for punitive damages was warranted, and not whether WWC’s conduct was “consumer-

30

“Courts have traditionally applied General Business Law § 349 in the context of
consumer sales transactions.” Teller v. Bill Hayes, Ltd., 630 N.Y.S.2d 769, 773 (2d Dep’t 1995).
“The typical violation contemplated by the statute involves an individual consumer who falls
victim to misrepresentations made by a seller of consumer goods usually by way of false and
misleading advertising.” Id. (citation and internal quotation marks omitted). In Oswego, the New
York Court of Appeals found that a defendant bank engaged in consumer-oriented conduct
because the bank treated the plaintiffs “as any customer entering the bank to open a savings
account, furnishing the[m] with standard documents presented to customers upon the opening of
accounts.” Oswego, 85 N.Y.2d at 26. The account openings at the center of the dispute were not
“unique” to the parties, “private in nature,” or a “single shot transaction.” Id. In contrast, in New
York University v. Continental Ins. Co., 87 N.Y.2d 308 (1995), the Court of Appeals
distinguished Oswego on its facts. There, the Court found that an insurance provider was not
liable under GBL § 349 based on its denial of commercial liability coverage to New York
University because the disputed insurance policy “was not a standard policy” and the “‘private’
contract dispute over policy coverage and the processing of a claim” was unique to the individual
parties. Id. at 321.
In this case, Plaintiff has sufficiently demonstrated that WWC’s actions were consumeroriented. The CPO Program and the dealers who participate in it do so in an effort to capitalize
upon consumer demand for pre-owned luxury vehicles and Plaintiff came to WWC in response
to an advertisement extolling the benefits of CPO vehicles. WWC’s representations concerning

oriented” within the meaning of New York’s GBL statute. The standard for punitive damages and the standard for
“consumer-oriented” conduct are not equivalent, and the Court will not graft the stringent requirements for punitive
damages onto the broad protections afforded by New York’s consumer protection statute.

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the CPO eligibility of its vehicles and its conduct in implementing the CPO Program have the
potential to affect other buyers who seek CPO vehicles from WWC.
Triable issues of fact exist as to whether WWC abided by the appropriate procedures
during the certification process before marketing the Vehicle as CPO, barring summary
judgment on the GBL claims. For example, in Plaintiff’s case, WWC did not account for a
disqualifying CARFAX Report that, per the terms of the CPO Program Manual, should have
rendered the Vehicle ineligible for a CPO designation. Plaintiff has also adduced evidence that
the Vehicle Inspection Checklist, which is a prerequisite to certification, contained inaccurate
information. (Compare Docket No. 93-22 (Vehicle Inspection Checklist) with Docket No. 79-10
(10/31/2013 CARFAX Report)). Moreover, WWC did not provide Plaintiff with the CPO
materials at the time of purchase, including the Statement of Certification, the Vehicle Inspection
Checklist, or damage disclosure notices. (Docket No. 94 ¶¶ 21-23). With respect to the
certification process generally, Plaintiff has presented evidence that WWC used an untrained
individual to complete the Vehicle Inspection Checklist as a “Service Advisor.” (Jackson Dep.10
at 46-51, 55, 57-58) These facts, among others, allow the GBL § 349 and § 350 claims to survive
summary judgment.
IV. PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
Plaintiff moves for summary judgment on the following claims: breach of implied
warranty under the MMWA and New York law, breach of express warranty under New York
law, and violations of sections 349 and 350 of the New York General Business Law. Plaintiff
seeks to revoke her acceptance of the Vehicle and rescission.

10

Refers to excerpts from the deposition transcript of Michael Jackson, dated April 12, 2018. (Docket No. 93-7).

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A. Breach of Implied Warranty under the MMWA and New York Law
As discussed above in Section III.D.3, genuine issues of material fact preclude summary
judgment on Plaintiff’s claim for breach of implied warranty under the MMWA and New York
law. There is a factual dispute over the nature and extent of the Vehicle’s problems and whether
those problems amounted to a breach of the implied warranty of merchantability. Plaintiff
maintains that the Vehicle possessed mechanical defects that rendered it unsafe to drive and
adduced evidence to that effect through expert testimony and her own personal knowledge. On
the other hand, WWC’s expert observed during a road test that the Vehicle ran smoothly once it
was fitted with proper tires, and Defendants maintain that the Vehicle performed as warranted.
Thus, whether the Vehicle was fit for its ordinary purpose is an issue for the jury and the Court
denies Plaintiff’s motion for summary judgment on the breach of implied warranty claims.
B. Breach of Express Warranty Under New York Law
Plaintiff moves for summary judgment on her breach of express warranty claim under
New York law. (Docket No. 92 at 14-16). Plaintiff maintains that there is no factual dispute
concerning the Vehicle’s condition, its CPO qualifications, or Plaintiff’s reasonable reliance on
WWC’s representation that the Vehicle was CPO. (Id. at 15). Defendants contest both the
existence of an express warranty and a breach of said warranty. (Docket No. 98 at 11-16; Docket
No. 100 at 21-22).
In order for an express warranty to exist, “there must be an affirmation of fact or promise
by the seller, the natural tendency of which is to induce the buyer to purchase.” Daley v. McNeil
Consumer Prods. Co., 164 F. Supp. 2d 367, 376 (S.D.N.Y. 2001). “Generalized statements by
the defendant, however, do not support an express warranty claim if they are ‘such that a
reasonable consumer would not interpret the statement as a factual claim upon which he or she
could rely.’” Ault v. J.M. Smucker Co., No. 13 Civ. 3409 (PAC), 2014 WL 1998235, at *6
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(S.D.N.Y. May 15, 2014) (citation omitted). The parties disagree over what a “CPO”
designation means and conveys to consumers. According to Plaintiff, a CPO designation
amounts to an affirmative claim about a vehicle’s qualities and represents that it has undergone a
prescribed certification process. In contrast, Defendants argue that a “CPO” designation merely
means that the Vehicle comes with a CPO warranty issued by BMW NA. Defendants maintain
that because Plaintiff received the CPO warranty from BMW NA, there can be no argument that
Plaintiff did not receive the benefit of the bargain.
As the Court found earlier, WWC’s representation to Plaintiff that the Vehicle she
purchased was CPO creates an actionable warranty claim sufficient to survive summary
judgment against WWC, and by virtue of its assignee status, against BMW Bank. See Section
III.B, supra. Nonetheless, at trial Defendants are free to challenge Plaintiff’s interpretation of
“CPO.” See Ault, 2014 WL 1998235, at *6 (a reasonable consumer’s interpretation of a warranty
is generally a “matter of fact”). Additionally, Defendants remain free to challenge Plaintiff’s
reasonable reliance on the Vehicle’s CPO designation, a factual finding not amenable to
summary judgment, and Plaintiff’s position that the CPO designation was improper. These
factual disputes make summary judgment in either parties’ favor unwarranted. Accordingly, the
Court denies Plaintiff’s motion for summary judgment on the breach of express warranty claim.11
C. Violations of GBL § 349 and § 350
Finally, Plaintiff moves for summary judgment on her claims for violations of GBL § 349
and § 350. (Docket No. 92 at 17-22). Defendants argue that triable issues of fact preclude
summary judgment. (Docket No. 98 at 19-22; Docket No. 100 at 24-27).

11

Revocation is a remedy for Plaintiff’s breach of warranty claims. See Diaz, 424 F. Supp. 2d at 541 (“Under New
York law, a purchaser may revoke his acceptance of goods ‘whose non-conformity substantially impairs value to
him’”) (citation omitted). Because factual issues preclude summary judgment on these claims, summary judgment
on the issue of revocation is similarly unwarranted.

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To recover under GBL § 349 and § 350, a plaintiff must demonstrate “that a defendant
has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3)
plaintiff suffered injury as a result of the allegedly deceptive act or practice.” Koch v. Acker,
Merrall & Condit Co., 944 N.Y.S.2d 452, 452 (2012). Contrary to WWC’s argument that
Plaintiff has not proven reliance, (Docket No. 98 at 20), “[j]ustifiable reliance by the plaintiff is
not an element of the statutory claim.” Id. at 453 (citing Small v. Lorillard Tobacco Co., 698
N.Y.S.2d 615 (1999)).
As evidence in support of her GBL claims, Plaintiff points to: (1) WWC’s history of
selling CPO vehicles to individual consumers; (2) WWC’s advertisement of the CPO program;
(3) evidence that WWC used an unqualified individual to complete the Vehicle Inspection
Checklist forms; (4) WWC’s failure to provide Plaintiff with damage disclosure forms; and (5) a
CARFAX report showing that the Vehicle Plaintiff purchased was not eligible for the CPO
program. (Docket No. 92 at 19-20). The Court agrees with Defendants that Plaintiff’s proffered
evidence does not entitle Plaintiff to summary judgment. Defendants have raised evidence
rebutting Plaintiff’s claim that WWC engaged in deceptive and misleading practices, including
evidence that the individual retained to complete the Vehicle Inspection Checklist was properly
trained and evidence that WWC complied with the CPO program’s mandates during the
certification process. Thus, Plaintiff’s motion is denied.
V. CONCLUSION
For the foregoing reasons (1) WWC’s motion to preclude Mr. Grismer’s testimony is
denied in part and granted in part; (2) WWC’s motion for summary judgment is denied; (3)
BMW Bank’s motion for summary judgment in denied in part and granted in part; and (4)
Plaintiff’s motion for summary judgment is denied. The Clerk is respectfully requested to

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terminate the pending motions. (Docket Nos. 77, 81, 85, 90). The Court schedules a Status
Conference for March 20, 2019 at 10:30 a.m.
Dated:

February 25, 2019
White Plains, New York
SO ORDERED:

_________________________
__
_______________________________
DITH C
JUDITH C. McCARTHY
United States Magistrate Judge

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