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Ryan v. American Honda Motor Co., Inc.

186 N.J. 431, 896 A.2d 454 (2006)

AUTOMOBILES; LEASES; WARRANTIES—Where a vehicle lease transfers all of the lessor’s rights in the vehicle’s warranties to the lessee, that lessee may proceed to enforce the vehicle manufacturer’s warranties under the Magnuson-Moss Act.

A motor vehicle lessee is a consumer and may proceed to enforce the vehicle manufacturer’s warranties under the Magnuson-Moss Act, but only if state law authorizes such person to enforce the obligations of the warranty against the warrantor. In this case, a vehicle lease specifically stated that the vehicle leasing company transferred all of its rights in the vehicle warranties to its lessee. Although the lower court ruled that the lessee was not a consumer, the Appellate Division reversed, holding that the lessee was a consumer both because it could enforce the warranty under state law and because the vehicle was transferred to the lessee during the duration of the warranties. While agreeing that the lessee was a consumer under the Magnuson-Moss Act, the New Jersey Supreme Court limited the Appellate Division’s ruling by holding only that this particular lessee qualified as a consumer because it could enforce the warranties under state law. Because the lessee was an assignee of the dealer’s warranties under the terms of the vehicle lease, the lease gave lessee the right to enforce the warranties. As such, the Court held that this lessee was a consumer under the Magnuson-Moss Act because it was a person entitled to enforce the warranties under state law.


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