## Facts

- Jessica Mayberry bought a new 2001 Volkswagen Jetta from a Wisconsin dealer under a two-year/24,000-mile written warranty.
- Soon after delivery, the vehicle allegedly exhibited multiple defects, including repeated check-engine light illumination, excessive oil leakage/usage, and a broken armrest.
- The vehicle was repeatedly repaired under the warranty at no cost, but Mayberry alleged the problems persisted and attempted to revoke acceptance; Volkswagen refused.
- Mayberry sued Volkswagen under the Magnuson-Moss Warranty Act, asserting breach of written warranty, breach of implied warranty of merchantability, and revocation of acceptance.
- While the suit was pending, Mayberry traded in the Jetta (about 32,737 miles) and received $15,100, an amount exceeding the vehicle’s asserted fair market value at the time (about $14,200).
- The circuit court granted Volkswagen summary judgment on the theory that the favorable trade-in showed Mayberry had no compensable damages.
- The court of appeals reversed, concluding the circuit court applied an incorrect damages standard and that factual disputes remained.

## Issues

1. Under Wis. Stat. § 402.714(2), does a consumer’s later resale/trade-in for more than fair market value constitute “special circumstances” requiring damages to be measured by the difference between resale price and fair market value, thereby eliminating recoverable damages?
2. Does a favorable post-sale trade-in bar breach-of-warranty and revocation-of-acceptance claims as a matter of law at summary judgment?

## Decision

- The Wisconsin Supreme Court affirmed the court of appeals and remanded for further proceedings.
- The court held that Wis. Stat. § 402.714(2)’s “special circumstances” clause did not bar Mayberry’s warranty claims merely because she later traded in the vehicle for more than its fair market value.
- The court held the default measure of direct damages for breach of warranty is the difference, at the time and place of acceptance, between the value as warranted and the value as accepted, absent proof of appropriate special circumstances justifying a different measure.
- The court held the trade-in evidence could be relevant to damages but did not conclusively establish an absence of damages or justify summary judgment.

## Legal Principles

- For breach of warranty under Wis. Stat. § 402.714(2), direct damages are generally measured at the time and place of acceptance by the difference between the value as warranted and the value of the goods accepted.
- The “special circumstances” clause is a limited exception permitting an alternative measure when necessary to approximate proximate damages; it is not a mechanism to extinguish direct damages based solely on a later favorable resale transaction.
- Subsequent events such as repairs, use, mitigation, offsets, or resale may affect the ultimate damages calculation, but they do not retroactively eliminate the value-based injury at acceptance.
- Magnuson-Moss warranty claims generally track state-law warranty remedies; viability of damages under state U.C.C. principles supports the federal warranty claims.

## Conclusion

A consumer’s later advantageous trade-in does not, by itself, defeat warranty or revocation claims or establish zero damages as a matter of law; direct breach-of-warranty damages remain tied to the difference in value at the time and place of acceptance unless legally sufficient special circumstances warrant a different measure.


Mayberry v. Volkswagen of Am., Inc., 692 N.W.2d 226 (Wis. 2005)