Marco A. Marquez,
APR 13, 2011
A. John Voelker
Acting Clerk of Supreme Court
Before Brown, C.J., Neubauer, P.J., and Curley, P.J.
Pursuant to Wis. Stat. Rule 809.61 (2009-10) this court certifies the appeal in this case to the Wisconsin Supreme Court for its review and determination.
What is the proper burden of proof to be applied to an allegation of intentional bad faith on the part of a consumer in a lemon law action under Wis. Stat. § 218.0171, an ordinary burden of proof or a middle burden of proof?
Marco Marquez filed a lemon law action under Wis. Stat.
§ 218.0171 against
In Marquez, we concluded that a
consumer has an obligation to act in good faith in the context of a lemon law
claim and that “a consumer fails to act in good faith when he or she
intentionally prevents the manufacturer from complying with the statute.”
Prior to the jury trial on remand, the parties disputed the appropriate burden of proof to be applied to the allegation that Marquez intentionally failed to act in good faith in dealing with Mercedes-Benz. The trial court applied an ordinary burden; Marquez requested a middle burden. The jury found that Marquez acted in bad faith; however, the trial court subsequently granted Marquez’s postverdict motion to change the jury’s answer.
determination of the appropriate burden of proof to be applied to this lemon
law claim is a question of statutory interpretation, the principal objective of
which is to ascertain and give effect to the intent of the legislature. See Carlson & Erickson Builders, Inc., v.
Lampert Yards, Inc., 190
Mercedes-Benz cites to Benkoski v. Flood, 2001
WI App 84, ¶18, 242 Wis. 2d 652, 626 N.W.2d 851, and Carlson, 190 Wis. 2d at
655-56, as examples of courts rejecting the application of a middle burden of
proof when statutory double or treble damage awards are at issue. In Carlson, the supreme court held that
an ordinary civil burden of proof applies to a private, civil antitrust
claim. Carlson, 190
Here, as with the antitrust law, the lemon law was enacted
to encourage private enforcement.
However, while the statute advances enforcement by providing financial incentives to private consumers, Mercedes-Benz argues that entirely different public policy considerations are at play when addressing alleged bad faith by the consumer. As we noted in Marquez:
The statutory penalties of the Lemon Law provide an incentive for manufacturers to promptly comply with the refund and exchange rules by making it costly to delay. This purpose is not served if the consumer may, in essence, inflict the penalties on the manufacturer even if the manufacturer is attempting to comply with the law within the proper time limit.
While the good
faith requirements in the lemon law do not stem from common law but from the lemon
law itself, see Kiss v. General Motors Corp.,
2001 WI App 122, ¶30, 246 Wis. 2d 364, 630 N.W.2d 742, both parties look to
common law for guidance as to legislative intent. Both parties cite to case law applying either
the ordinary or middle burden of proof in cases that they analogize to this lemon
law case. Marquez first contends that
Mercedes-Benz’s allegation of bad faith should be treated in the same manner as
a bad faith insurance tort claim. Citing
v. Monarch Life Ins. Co., 200
contends that the allegation involves wrongful conduct. He points to cases requiring a middle burden
of proof which include fraud, undue influence, and prosecutions of civil
ordinance violations which are also crimes under state law.
Marquez cites to numerous civil cases in which a middle burden of proof was applied. However, consistent with the court’s observation in Walberg, many of these cases involved conduct that could also be crimes under state law. See Layton, 82 Wis. 2d at 336, 342, 362-63 (defendant accused of unfair labor practices, based partially on a finding of perjury, was not entitled to criminal burden of proof when the proceeding is not criminal and legislature expressly requires a middle burden of proof); Ziegler v. Hustisford Farmers Mut. Ins. Co., 238 Wis. 238, 298 N.W. 610 (1941) (middle burden applies when an insurer denying coverage on grounds of arson; need not prove beyond a reasonable doubt); Macherey v. Home Ins. Co., 184 Wis. 2d 1, 16-17, 516 N.W.2d 434 (Ct. App. 1994) (insured entitled to middle burden of proof when insurer denied coverage based on allegation of intentional bodily injury, noting that insured could be “subjected to the stigma attached to a person who intentionally runs over an individual with an automobile”); State v. Fonk’s Mobile Home Park and Sales, Inc., 133 Wis. 2d 287, 301, 395 N.W.2d 786 (Ct. App. 1986) (alleged administrative code violations subjected the defendant to criminal penalties).
that the alleged conduct at issue here is not criminal, Marquez nevertheless
argues that the stigma associated with the allegations against him are “harmful
to [his] character and reputation as well as that of his counsel.” He likens the bad faith allegation in this
case to one of common law fraud which requires a middle burden of proof. See Kensington
Dev. Corp. v. Israel, 142 Wis. 2d 894, 905, 419 N.W.2d 241 (1988) (“It
is well established that a common law claim sounding in fraud must be
established by the middle burden of proof.”); compare Kain v. Bluemound E. Indus.
Mercedes-Benz argues that this is an “ordinary civil action” and likens its claim to that of breach of the duty of good faith and fair dealing. Mercedes-Benz contends that neither bad faith analysis necessarily involves an element of malicious intent or improper motive. Mercedes-Benz cites to the Restatement (Second) of Contracts § 205 cmt. d (1981), “Duty of Good Faith and Fair Dealing,” which includes interference with or failure to cooperate in the other party’s performance as one type of bad faith:
Good faith performance. Subterfuges and evasions violate the obligation of good faith in performance even though the actor believes his [or her] conduct to be justified. But the obligation goes further: bad faith may be overt or may consist of inaction, and fair dealing may require more than honesty. A complete catalogue of types of bad faith is impossible, but the following types are among those which have been recognized in judicial decisions: evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of imperfect performance, abuse of a power to specify terms, and interference with or failure to cooperate in the other party’s performance. (Emphasis added.)
See also Foseid v. State Bank of Cross Plains,
The parties agree that the obligation to act in good faith arises not under common law, but under the lemon law. Thus the purpose and policies under the lemon law are paramount to the statutory interpretation in this case. As there is no law governing the burden of proof to be applied when an allegation of intentional bad faith arises, we request the guidance of the supreme court.
Here, Mercedes-Benz alleges that Marquez intentionally prevented it from complying with the lemon law statute by failing to cooperate; Marquez argues that the manufacturer failed to attempt the refund until the last possible day and then neglected to obtain the necessary payoff information from obvious sources. We concluded in Marquez that, among other things, “the differing recollections of the conversations between Marquez and the [Mercedes-Benz] representative creat[ed] an issue of fact about what was requested of, and agreed to, by Marquez.” On remand, the jury found that Marquez “fail[ed] to act in good faith in his dealings with Mercedes-Benz.” The trial court, however, disagreed. Given the disputed facts at issue, the applicable burden of proof could be dispositive. We therefore respectfully request the supreme court’s guidance as to the appropriate burden of proof given the need to balance the policies underlying the lemon law with the obligation of the consumer to act in good faith in dealing with the manufacturer.
 All references to the Wisconsin Statutes are to the 2009-10 version unless otherwise noted.
 While these facts were further developed at the subsequent trial, the facts set forth in Marquez v. Mercedes-Benz USA, LLC, 2008 WI App 70, 312 Wis. 2d 210, 751 N.W.2d 859, provide an overview of the bad faith dispute at issue.
 The burden of proof issue arises only if the trial court erred in granting Marquez’s postverdict motion to change the jury’s answer. For purposes of this certification, we assume that there was credible evidence to support the jury’s finding of bad faith and, therefore, the trial court’s finding to the contrary was erroneous. Regardless of whether Marquez is entitled to statutory double damages and attorney fees under Wis. Stat. § 218.0171, it is undisputed that he is entitled to a refund from Mercedes-Benz.
Also at issue in the event of reversal is whether the trial court erred in excluding the nonprivileged testimony of Marquez’s attorney. Mercedes-Benz contends that the attorney possessed relevant information regarding what transpired on the thirtieth day of the refund period.