Wisconsin Supreme Court consider what constitutes “special circumstances” under 2-714

In Mayberry v. Volkswagen of America, Inc. 692 NW2d 226 (2005), (find the opinoin here) the Supreme Court of Wisconsin considered a question of first impression for the court: what to do if a buyer (here of a Volkswagen Jetta) receives defective merchandise but later sells the goods for more than their then fair market value.  Volkswagen attempted to invoke UCC section 2-714, suggesting “special circumstances show proximate damages of a different amount” than the usual measure of damages for breach of warranty.  The court disagreed, holding that Mayberry should receive the usual measure, the difference in value between the car as warranted (probably the purchase price) and the car as accepted, unpersuaded by the contrary holding in Valenti v. Mitsubishi Motor Sales of America, Inc., 773 NE2d 1199 (Ill. App. 2002).  As the court acknowledged, however, the fact that Mayberry drove the car for two years and then received $15,100 ($900 over the car’s book value) should be taken into account when determining the value of the car as accepted, undercutting Mayberry’s testimony that when she accepted it the car was worth only $12,526.  It’s a rare vehicle that appreciates over two years of driving! 

Another way to look at the damages, suggested by the concurring opinion (written by the same judge who wrote the majority opinion):  even if the car as accepted was worth $12,526, subsequent warranty repairs by the dealer might have caused the car to increase in value, and that would constitute “special circumstances” changing the damage amount under 2-714.