## Facts

- The Levines bought a new 1978 Ford Granada from Champion Ford Sales, Inc. for $5,446.35 cash for family transportation.
- The vehicle came with Ford’s limited warranty promising the selling dealer would repair, replace, or adjust defective parts within 12 months or 12,000 miles (excluding tires).
- After six days and 109 miles, an engine valve failed and caused extensive internal engine damage.
- The defect existed at the time of sale and was not discoverable by reasonable inspection before purchase.
- Champion and Ford offered to repair the vehicle by rebuilding the damaged engine locally under the limited warranty.
- The Levines refused a locally rebuilt engine, demanded a new factory-built engine, revoked acceptance, and sued under Maryland UCC § 2-608 and the Magnuson-Moss Warranty Act.
- The trial court submitted revocation and damages to the jury, ruled Magnuson-Moss inapplicable (denying attorney’s fees), and the jury found for the Levines.
- The sellers appealed the revocation and damages; the Levines cross-appealed the Magnuson-Moss ruling.

## Issues

1. Whether the buyers justifiably revoked acceptance under Md. Com. Law § 2-608 when a new car suffered catastrophic engine failure shortly after purchase and the sellers offered only a local rebuild under warranty.
2. Whether the damages awarded following revocation were proper under the UCC.
3. Whether the Magnuson-Moss Warranty Act applied, permitting an award of attorney’s fees to a prevailing consumer.

## Decision

- The court affirmed that the Levines’ revocation of acceptance was justified under § 2-608 because the nonconformity substantially impaired the car’s value to them.
- The court modified the damages award, holding that the judgment included some improperly awarded damage elements.
- The court reversed the trial court’s ruling on Magnuson-Moss, holding the Act applied and could support an award of attorney’s fees to a prevailing consumer.

## Legal Principles

- Under UCC § 2-608, revocation is permitted when a nonconformity substantially impairs the value of the goods to the buyer, applying a buyer-focused (“to him”) assessment rather than an abstract “average person” test.
- A catastrophic defect in a newly purchased vehicle can constitute substantial impairment, particularly where the proposed cure (such as a major local rebuild) does not match reasonable expectations associated with a new, factory-equipped car.
- After justified revocation, the buyer may recover the purchase price and appropriate incidental and consequential damages, but recovery is limited to damages properly supported by the evidence and authorized by the UCC.
- The Magnuson-Moss Warranty Act applies to qualifying consumer warranty disputes and permits fee-shifting through an award of reasonable attorney’s fees to a prevailing consumer.

## Conclusion

A major engine failure in a nearly new car supported revocation because the defect substantially impaired the vehicle’s value to these buyers, and the sellers’ proposed local rebuild did not eliminate that impairment consistent with reasonable expectations; the court reduced improper damage items and held that federal warranty law applied and could allow attorney’s fees.


Champion Ford Sales, Inc. v. Levine, 49 Md. App. 547, 433 A.2d 1218 (Ct. Spec. App. 1981)