## Facts

- Nicolyn S. Wilbur bought a 1992 Toyota Camry from a Vermont dealer, Tri‑Nordic, for about $18,600; it had roughly 5,800 miles and had been used as a demonstrator.
- Before the sale, Tri‑Nordic disclosed a prior rear-end collision during the demonstrator period and represented that repairs were complete and there was no structural damage.
- Wilbur received Toyota’s written “New Vehicle Limited Warranty,” which stated it began on the date the vehicle was “first delivered or put into use (in‑service date).”
- Tri‑Nordic wrote May 18, 1992 (the purchase date) as the vehicle’s in‑service date in the warranty materials provided to Wilbur.
- The warranty contained an exclusion for repairs required as a result of an accident; a specialized emissions-warranty portion included language tying certain exclusions to the date the vehicle was first placed into service if used as a demonstrator.
- After purchase, Wilbur experienced significant problems, including anti‑lock brake malfunctioning, and sought repairs under the warranty.
- Toyota dealers refused warranty repairs on the ground that the earlier accident caused structural damage and placed the needed repairs outside warranty coverage.
- Wilbur sued Toyota under the Magnuson–Moss Warranty Act and asserted that the same conduct constituted a deceptive practice under the Vermont Consumer Fraud Act.

## Issues

1. Whether Toyota violated the Magnuson–Moss Warranty Act by denying warranty coverage based on accident damage that occurred before the in‑service date written in the warranty materials given to the purchaser.
2. Whether, if the warranty denial violated Magnuson–Moss, that conduct could also support liability under the Vermont Consumer Fraud Act.
3. Whether the warranty’s language about when coverage and exclusions began was sufficiently clear and conspicuous, or instead ambiguous and therefore construed against Toyota.

## Decision

- The Second Circuit reversed the district court’s grant of summary judgment for Toyota and remanded.
- The court held that, under the warranty as provided to Wilbur, accident-related damage occurring before the listed in‑service date was not excluded from coverage.
- The court concluded that, at minimum, the warranty was unclear about whether “in‑service date” referred to dealer demonstrator use or the buyer’s purchase, and that any such ambiguity had to be construed against Toyota.
- The court rejected Toyota’s reliance on limiting language found in a specialized emissions-warranty portion as inadequate to clearly inform an ordinary purchaser that pre-purchase demonstrator accident damage would be excluded despite the listed in‑service date.

## Legal Principles

- Under the Magnuson–Moss Warranty Act, a written warranty’s terms and limitations must be disclosed clearly, conspicuously, and in language that is readily understood by consumers.
- When a written warranty is ambiguous about the timing or scope of coverage or exclusions, the ambiguity is construed against the warrantor, particularly where the warrantor authorizes a dealer to complete key terms (such as the in‑service date).
- A warrantor cannot deny coverage based on an exclusion that, as presented to the consumer, does not clearly apply to the claimed loss because of conflicting or unclear commencement-date provisions.
- If a warranty denial is based on unclear or misleading warranty terms, that conduct may also provide a basis for state consumer-fraud liability, depending on proof and further proceedings.

## Conclusion

The Second Circuit held that Toyota was not entitled to summary judgment because the warranty materials, completed with an in‑service date matching the purchase date, did not clearly exclude damage from an accident that occurred earlier during dealer demonstrator use; any lack of clarity was construed against Toyota, requiring further proceedings on the federal warranty and related state consumer-fraud claims.


Wilbur v. Toyota Motor Sales, U.S.A., Inc., 86 F.3d 23 (2d Cir. 1996)