Johnson v. Earnhardt's Gilbert Dodge, Inc.

132 P.3d 825 (2006)

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Nature of the Case

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Facts

P purchased a used 1997 Kia Sportage 'AS IS' from D. The sales agreement expressly limited the implied warranty of merchantability to fifteen days or five hundred miles, whichever occurred first. P, through D, applied to purchase a DaimlerChrysler service contract. Both D's Finance Manager and P signed the application. P paid an amount in addition to the purchase price of the vehicle for the service contract. The service contract was subsequently issued to P by DaimlerChrysler. There were mechanical problems in June 2000, April 2001, and May 2001. These problems were not resolved to P's satisfaction and she attempted to revoke acceptance of the vehicle nearly a year after she had purchased it. D refused to accept the return of the vehicle. P sued alleging an implied warranty of merchantability and revocation of acceptance under the Warranty Act. D's motion for summary judgment was granted because P had not entered into a service contract with D. The court of appeals reversed holding that D had entered into a service contract with P and that D had also 'made a warranty in connection with the sale.' Thus, D was not permitted to limit the implied warranty of merchantability. D appealed.