REGINA LITTLE, on behalf of herself and all others similarly situated, Plaintiff-Appellant/ Cross-Respondent,
KIA MOTORS AMERICA, INC., Defendant-Respondent/ Cross-Appellant.
May 16, 2018
appeal from Superior Court of New Jersey, Law Division, Union
County, Docket No. L-0800-01.
Michael D. Donovan (Donovan Axler, LLC) of the Pennsylvania
bar, admitted pro hac vice, argued the cause for
appellant/cross-respondent (Schnader Harrison Segal &
Lewis, LLP, Francis and Mailman, PC, Feldman Shepherd
Wohlgelernter Tanner Weinstock Dodig, LLP, and Michael D.
Donovan, attorneys; Michael D. Donovan, Lisa J. Rodriguez,
James A. Francis, Edward S. Goldis and Alan M. Feldman
(Feldman Shepherd Wohlgelernter Tanner Weinstock Dodig, LLP)
of the Pennsylvania bar, admitted pro hac vice, on the
Roberto A. Rivera-Soto argued the cause for
respondent/cross-appellant (Ballard Spahr, LLP, attorneys;
Roberto A. Rivera-Soto, Neal D. Walters, Michael R. Carroll
and Michele C. Ventura, on the brief).
Judges Koblitz, Manahan and Suter.
class action against defendant Kia Motors America, Inc.
(KMA), plaintiff class of 8455 Kia Sephia owners and lessees
represented by Regina Little proved at a jury trial that the
Sephia, model years 1997 through 2000, had a defective front
brake system, which caused premature brake pad and rotor
wear. Concluding that the defect amounted to a breach of
express and implied warranties, and that all owners had
suffered damage due to the defect, the jury awarded each
member of the class $750 ($6.3 million total) in repair
for the first time post-trial that repair damages could not
be awarded on a class-wide basis because they were dependent
upon individual factors, the trial court granted KMA's
motion for judgment notwithstanding the verdict (JNOV) on the
repair damages award, decertified the class for purposes of
damages, and ordered a new trial on repair damages only, to
proceed by way of claim forms. With the advantage of recent
case law unavailable to the trial judge, we now reverse,
reinstate the jury award and remand for determination of
recount only the facts and procedural history relevant to
this appeal. We begin with the procedural history. On June
26, 2001, Little filed an amended class action complaint on
behalf of herself and others similarly situated, against
defendant, a California corporation with offices in New
Jersey. The putative class alleged that the Sephia had a
defective front brake system and asserted causes of action
for: fraudulent business practices in violation of California
law and the New Jersey Consumer Fraud Act (CFA), N.J.S.A.
56:8-1 to -210; breach of an express warranty; breach of the
implied warranty of merchantability; and failure to comply
with the federal Magnuson-Moss Warranty Improvement Act
(MMWA), 15 U.S.C. §§ 2301 to 2312.
August 2003, the court granted class certification. Prior to
trial, the trial judge heard a number of pretrial motions on
the admissibility of evidence. Defendant moved unsuccessfully
to exclude as net opinions the class expert testimony of
Raymond King, on repair damages, and John Matthews, on
diminution of value damages.
month-long trial, in June 2008 the jury returned a verdict
finding that defendant had breached the express and implied
warranties as well as the MMWA, but that it had not violated
the CFA. The jury found that the class had suffered damages
and awarded each member repair damages. It awarded no damages
for diminution in value.
November 24, 2008 written decision, the trial judge granted
defendant's motion for JNOV as to repair damages only,
decertifying the class for purposes of damages only based on
the finding that individual factors predominated, and ordered
a new trial on repair damages to proceed by way of claim
January 2011 decision, another judge granted plaintiff's
motion to recertify the class, explaining that individual
damages issues did not require decertification. This judge
appointed a special master. In an August 12, 2011 order,
without having read the record and based on the special
master's recommendation, the motion judge vacated the
zero diminution in value jury award to allow the master to
consider damages for all class members on any applicable
theory of recovery.
published decision dated April 2, 2012, we reversed the
August 12, 2011 order because the motion judge had improperly
vacated the jury's finding of no diminution in value
damages without first canvassing the record to determine
whether that aspect of the verdict resulted in a manifest
denial of justice. Little v. KIA Motors Am., Inc.,
425 N.J.Super. 82, 89-91 (App. Div. 2012). Further, the
motion judge's decision was inconsistent with the law of
the case doctrine, since the trial judge's decision on
the limited new trial had controlled the proceedings for
nearly three years. Id. at 93.
remand, the motion judge appointed a new special master to
adjudicate the claims. In August 2013, she accepted the new
special master's finding that only 150 claimants had
proven their damages, and his recommendation of a total award
of $46, 197. Little was not among the members for whom he
January 2015, class counsel requested an award of $6, 055,
916 in attorney fees and $481, 850 in costs of suit, with
pre- and post-judgment interest, pursuant to the MMWA. After
reducing the class's attorney fee award based on the
paucity of damages it recovered, on May 6, 2015, a new motion
judge ordered defendant to pay: $200, 000 for the class's
attorney fees, plus $19, 113 in prejudgment interest; $481,
850 in fees and costs of suit; and $5000 to Little as an
trial, plaintiff demonstrated a defect in the Sephia's
brakes. Defendant began selling the Sephia in New Jersey in
1997. Raymond King, plaintiff's expert in mechanical
engineering and repair damages, explained that when a driver
presses the brakes, hydraulic pressure forces brake fluid
into a brake caliper, which causes the brake pads to squeeze
against the rotors and decrease the spinning of the wheel.
The pressure of the brake pads against the rotors causes
friction, which produces heat. The hotter the brake system
becomes, the faster the brake pads and rotors wear.
on the documents from defendant that King had reviewed, as
well as deposition testimony from defendant executives, King
concluded that the Sephia's front brake system had a
systemic design defect that did not allow for the proper
dissipation of heat. This defect caused a premature wear of
the brake pads, pulsating or grinding brakes, warped or
prematurely worn rotors, and shaking or vibration (also
called shudder or judder) when the driver applied the brakes.
Repairs or replacement of the brake pads and rotors failed to
correct the problem.
reach this conclusion, King reviewed a standardized industry
report; Quality Assurance Field Product Reports and District
Parts and Service Manager Reports, drafted by defendant's
mechanics and managers throughout the United States;
defendant's Technical Assistance Center Incident Reports;
Technical Service Bulletins; and defendant's warranty
brake claims data.
parties stipulated that from 1997 to 2000 a total of 8455
Sephias were sold in New Jersey. Defendant's warranty
repair data showed that the total number of warranty repairs
to front brake components on the Sephia in New Jersey was
about 8400. Defendant sold 42, 713 model year 1997 Sephias in
the United States. The warranty claim rate nationally for
that model's brakes was 92%. King testified that he had
never before seen a warranty claim rate that high. In his
view, it "screamed" that there was a problem with
the brake system. The following years the model had similarly
high claim rates.
January 2 002, Kia Motors Corporation (Kia Motors), KMA's
parent company based in South Korea, issued a technical
services bulletin introducing newly designed brake pads and
rotors, known as the "field fix." The updated pads
were not compatible with the original rotors; thus, both had
to be replaced as a set. This was an improvement, King said,
but it failed to meet the 20, 000-mile standard. At most, the
field fix brake pads lasted 14, 000 to 15, 000 miles.
addition to reviewing Kia Motors' documents, King
inspected the cars belonging to Little and Samuel-Basset (the
named plaintiff in a Pennsylvania class action against
defendant, Samuel-Bassett v. Kia Motors Am., Inc.,
34 A.3d 1 (Pa. 2011)). King found nothing remarkable about
either car in general, or the brake system in particular,
that would have caused premature brake pad and rotor wear,
and nothing to suggest that driving habits had caused the
premature brake wear.
surveying five Kia dealerships, King estimated that an owner
would spend about $250 for a brake repair. Defendant's
documents showed brake replacements when cars had as little
as 2000 miles, and others at more than 10, 000 miles. On
average, a Sephia would need a brake replacement every 10,
000 miles. In King's experience, and based on industry
data he reviewed, cars typically lasted 100, 000 miles, or
seven to eight years.
on a life of 100, 000 miles, and the need for a brake repair
every 10, 000 miles, King estimated an owner would incur ten
brake repairs over the life of the car, doubling the normal
repair expense due to the defective brake system. As a
result, the owner would incur $1250 in additional repair
expenses (five times $250) due to the defective brake system.
cross-examination, King conceded that the $1250 brake repair
costs would not apply to someone who had brake replacements
at 20, 000-mile-or-more intervals, or to someone who had each
brake replacement paid under warranty. He also admitted that
his damages model did not conform exactly to Little's
testified that in January or February 1999, she purchased a
new Sephia for $13, 288. Her constant brake problems began
within two weeks. She testified that for the three years she
owned the car, a set of brakes lasted no more than six to
read into the record a portion of the deposition testimony of
several individuals, including defendant KMA's Director
of Technical Operations, Timothy McCurdy, who testified that
defendant had been aware of the brake issue based on the rate
of repairs, and that it had taken steps to address it by
relaying the complaints to Kia Motors.
"major cause" of these problems was improper
dissipation of heat. While there was no set standard for the
life of brakes, McCurdy said that consumers typically
expected them to last 20, 000 miles. One study from Kia
Motors reported that the 1999 Sephia had a brake pad life of
16, 000 miles. Defendant notified Kia Motors that 16, 000
miles was not acceptable, since brake pads should last at
least 20, 000 miles.
did not cover the brake pads under warranty, but it did cover
defects in the brake system under the three-year or 36, 000
mile warranty. In model year 2002, Kia Motors replaced the
Sephia with the Kia Spectra. The Spectra was "the same
basic car," but with a different brake system. None of
Kia Motors' vehicles, including the Spectra, had brake
repair rates as high as the Sephia's.
Motors Deputy General Manager Young Sun Sohn's deposition
testimony revealed that when Kia Motors developed the Sephia,
the specification for the brake pads was that they achieve a
life of 20, 000 kilometers, or just under 12, 500 miles.
Sawyer, defendant's Senior Vice President of Fixed
Operations, testified at deposition that some Sephias had
brakes that wore prematurely. Typically, brake pads lasted
20, 000 to 25, 000 miles before needing replacement.
"Some of the Sephia owners were experiencing brake pad
life in the [ten] to [twelve thousand] mile range."
became aware of the Sephia brake problem within the first
year of sales based on warranty claims and brake pad orders
from the parts department. After the first year, defendant
also noticed an increase in part orders for rotors, which
usually last 50, 000 to 75, 000 miles.
defendant's policy was to exclude brakes from the
warranty, some dealers covered brake pad replacements as
warranty repairs or as goodwill repairs, both at no charge to
the owner. Dealers did this because they knew that there were
problems with the brakes.
said that McCurdy had an engineer investigate the brake issue
and send a report to Kia Motors' headquarters. At some
point, a South Korean engineer met with someone at KMA and
said the brakes had to be redesigned with better quality
Cameron, defendant's Manager for Consumer Affairs,
testified that people who answered complaints through
defendant's call center were trained to notify callers
that brakes were not covered under the warranty.
presented expert testimony from John Matthews, a professor at
the University of Wisconsin School of Business, on diminution
damages. In Matthews's opinion, Sephia owners paid about
$2000 more for their Sephia ...