## Facts

- Marina Milicevic bought a new Mercedes S-500 from Fletcher Jones Imports, Ltd. for $98,722.25.
- During the first seven months, the vehicle had recurring cosmetic and mechanical defects, including warped brake rotors, remote entry failure, window motor failure, mirror defects, and repeated unsuccessful rear window seal/molding repairs.
- Repairs were performed under Mercedes’ written limited warranty.
- The vehicle was out of service for repairs for a cumulative 55 days within the first seven months.
- Milicevic demanded that the manufacturer replace the vehicle or repurchase it; Mercedes continued repair efforts but did not replace or refund.
- Milicevic sued alleging breach of express and implied warranties, violation of Nevada’s lemon law, and violation of the Magnuson–Moss Warranty Act.
- After a bench trial, the district court found for Milicevic on warranty, lemon-law, and Magnuson–Moss theories; it awarded lemon-law damages and attorneys’ fees under Magnuson–Moss.
- Mercedes appealed the merits and fee entitlement; Milicevic cross-appealed the fee amount and argued the appeal was moot due to Mercedes’ payment of the judgment.

## Issues

1. Whether Mercedes’ payment of the judgment mooted the appeal for lack of a continuing case or controversy.
2. Whether the evidence supported liability under Nevada’s lemon law, including the statutory presumption of a reasonable number of repair attempts and substantial impairment of use and value.
3. Whether the Magnuson–Moss Warranty Act was properly applied based on the established state-law warranty and lemon-law violations.
4. Whether attorneys’ fees were available under Magnuson–Moss and whether the district court abused its discretion in setting the fee amount.

## Decision

- The appeal was not moot; a live dispute remained, including over liability and attorneys’ fees, and payment did not constitute full satisfaction of all claims.
- The court affirmed the finding that Mercedes violated Nevada’s lemon law, including that the vehicle’s defects substantially impaired use and value and that the statutory presumption of reasonable repair attempts was satisfied by the extended out-of-service time.
- The court affirmed Magnuson–Moss liability as a federal enforcement mechanism for the proven state-law warranty and lemon-law violations.
- The court affirmed the award of attorneys’ fees under Magnuson–Moss and affirmed the amount, rejecting both Mercedes’ challenge and Milicevic’s request for an increased fee award.

## Legal Principles

- Voluntary payment of a judgment does not automatically moot an appeal where the paying party continues to challenge liability or related components of the judgment, such as attorneys’ fees, and there is no clear accord and satisfaction of all claims.
- Under Nevada’s lemon law, a presumption that a reasonable number of repair attempts has occurred arises when, during the warranty period, the vehicle is out of service for repair for 30 or more cumulative days or the same nonconformity has been subject to multiple repair attempts; if nonconformities substantially impair use and value and are not corrected, the manufacturer must replace the vehicle or refund the purchase price (subject to statutory offsets).
- The Magnuson–Moss Warranty Act supplies a federal cause of action and remedies for failure to comply with obligations under a written (or implied) warranty as defined by applicable state law; it does not create independent substantive warranty duties beyond state law.
- Under 15 U.S.C. § 2310(d)(2), a prevailing consumer may recover reasonably incurred costs and expenses, including attorneys’ fees based on actual time expended; the fee amount is reviewed for abuse of discretion.

## Conclusion

The Ninth Circuit affirmed judgment and fee relief for a consumer whose new vehicle experienced persistent defects and extensive repair downtime, holding that Nevada’s lemon-law requirements were met, Magnuson–Moss properly provided federal enforcement and fee shifting, and payment of the judgment did not moot the appeal.


Milicevic v. Fletcher Jones Imports, Ltd., 402 F.3d 912 (9th Cir. 2005)