July 23, 2018
In Regina Little v. KIA Motors America, Inc., on June 6, 2008, a jury in Union County, New Jersey found in favor of the plaintiff class and against KIA Motors America, Inc. (“KMA”) in the amount of $750 per class member, or $6,300,000.Plaintiffs claimed that the Kia Sephia, sold in New Jersey from 1997 through 2000, had a defect in the braking system which caused premature wear of brake pads and rotors, and needed replacement at approximately 10,000 mile intervals. The defense did not deny that the Sephia had brake problems.
Because Kia’s warranty did not cover brake components, Kia owners spent money for additional brake repair expense caused by the defective braking system. The jury found that KMA had breached its express and implied warranty to purchasers of the cars; the jury also found that KMA had violated the Magnuson-Moss Warranty Act, which entitled plaintiffs to counsel fees. The jury awarded zero for diminution in value and $750 for repair costs. The trial court thereafter granted KMA’s motion to vacate the award for repair costs.
Plaintiffs appealed the trial court’s reversal of the jury award on damages, its decertification of the class on damages and its order for a new trial on repair damages only, by way of claim forms. Based on recent New Jersey law unavailable to the trial judge, the Appellate Division in Regina Little v. KIA Motors America, Inc., Docket No. A-0794-15TE, (Approved for Publication July 18, 2018) reversed the trial court, reinstated the jury award and remanded for a determination of counsel fees.
The Appellate Division noted that breach of contract damages need not be established with exact certainty:
[M]ere uncertainty as to the quantum of damages is an insufficient basis on which to deny the non-breaching party relief. Although it complicates the precise calculation of damages, our courts have long held that “[p]roof of damages need not be done with exactitude. . . . It is therefore sufficient that the plaintiff prove damages with such certainty as the nature of the case may permit, laying a foundation which will enable the trier of the facts to make a fair and reasonable estimate.” (Cite omitted)
It further noted that a small windfall to the injured party based on an inability to prove exact damages should not defeat recovery.Also, the injured party need not prove that he or she actually spent the money to repair the defect in order to recover for the breach.
Breach of contract damages are not limited to actual out of pocket expenses incurred by class members but based on any reasonable method that places the class members in the position they would have been in if KMA had provided a car free of a defective brake system. As a result, both theories of damages were proper considerations for the jury.