Warranty lawsuit heads to New York bankruptcy court after judge rules transfer is appropriate.

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Chrysler Lifetime Powertrain Warranty Class Action Lawsuit Transferred
Warranty lawsuit heads to New York bankruptcy court after judge rules transfer is appropriate.

— A Chrysler lifetime powertrain warranty class action lawsuit has been transferred from a California court to a New York courtroom after Fiat Chrysler (FCA) convinced the judge to order the move.

According to the class action, plaintiff Wendy Hightman bought a new 2007 Jeep Patriot that came with a lifetime powertrain warranty.

In March 2017, the plaintiff says she took the Jeep to a California dealer because of a whining sound coming from the transmission. A technician determined the sound came from a transmission leak in the right axle, so the Patriot was repaired and the dealership said it received a 16-point multi-inspection according to the maintenance schedule.

The plaintiff paid nothing because the repairs were covered by the lifetime warranty.

The plaintiff says she had to take the Jeep back to the dealership in July 2018 because the check engine light was illuminated. The dealer technician determined the engine gasket needed to be replaced.

Hightman believed the repairs would be covered by the lifetime powertrain warranty but the automaker denied to cover the repairs because the plaintiff failed to adhere to the maintenance inspection terms.

Chrysler says the Jeep powertrain inspection required by the terms of the lifetime warranty did not occur within 60 days of the second five year purchase anniversary. Instead, the inspection occurred seven months prior to the 10 year purchase date anniversary. Based on terms of the warranty, this caused the cancellation of the lifetime powertrain warranty.

Hightman doesn't say why she didn't read the terms of the warranty to know the conditions. But Chrysler argues it isn't at fault because the terms of the warranty inform customers of the requirements.

According to the maintenance inspection terms of the lifetime powertrain warranty, a customer must meet certain standards to retain the warranty.

Specifically, the customer must have a free powertrain inspection performed by an authorized Chrysler, Dodge or Jeep dealer once every 5 years. In addition, the inspection must be made within 60 days of each 5 year anniversary of the in-service date of the vehicle.

"You must have the inspection performed to continue this coverage." - Chrysler's lifetime powertrain warranty terms

According to Hightman, those terms are "unconscionable."

Chrysler told the judge the case is in the wrong court based on when the plaintiff purchased her Jeep, and the judge agreed by ruling the lawsuit should be transferred to the District Court for the Southern District of New York for referral to the bankruptcy court.

According to the judge, the bankruptcy court is in the best position to interpret its own order concerning Chrysler's 2009 bankruptcy.

"A court has special expertise regarding the meaning of its own order, and therefore its interpretation is entitled to deference. Moreover, it is well-established that a court has jurisdiction to enforce its own orders." - Judge Roger T. Benitez

The judge ruled he recognizes that a decision to transfer a case is not to be taken lightly, but the threshold question in this matter is one best left to the bankruptcy court that issued Chrysler's bankruptcy sale order.

The judge also found the plaintiff didn't provide a "compelling reason as to why this Court is in a better position to interpret and enforce the sale order than the bankruptcy court that issued it."

Because of this decision, FCA's motion to dismiss the warranty class action for lack of personal jurisdiction and for failure to state a claim are denied and will need to be re-filed. According to the judge, Chrysler may re-file its motion to dismiss after the New York bankruptucy court has the chance to rule on the plaintiff's case.

The Chrysler lifetime powertrain warranty class action lawsuit was filed in the U.S. District Court for the Southern District of California - Hightman, et al., v. Fiat Chrysler US LLC, et al.

The plaintiff is represented by McCune Wright Arevalo, and Douglas C Sohn.


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