                                                            FIRST DIVISION
                                                            05/21/07



No. 1-05-2368

BERNARD VILLANUEVA and LISA VILLANUEVA,                      )   Appeal from
                                                             )   the Circuit Court
       Plaintiffs-Appellants,                                )   of Cook County
                                                             )
               v.                                            )   No. 05 M1 100349
                                                             )
TOYOTA MOTOR SALES, U.S.A., INC., and                        )
GROSSINGER CITY AUTOCORP, INC., d/b/a                        )
Grossinger City Toyota,                                      )   Honorable
                                                             )   Moira S. Johnson,
       Defendants-Appellees.                                 )   Judge Presiding.


       JUSTICE CAHILL delivered the opinion of the court:

       Bernard and Lisa Villanueva, plaintiffs, appeal from the dismissal under section 2-619 of

the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2004)) of their claim that

Grossinger City Toyota (Grossinger), defendant, breached its implied warranty of

merchantability by failing to honor the extended service agreement they bought when they

purchased their 2004 Toyota Sienna van. We reverse and remand.

       Plaintiffs purchased the used Sienna from Grossinger on July 6, 2004. They signed a

form printed on Grossinger stationery with this disclaimer: “The below named purchaser is

agreeing to purchase a vehicle from seller completely AS IS, NO WARRANTIES

WHATSOEVER[,] [e]xpress or implied, including the IMPLIED WARRANTY OF

MERCHANTABILITY, or the implied warranty of fitness for a particular purchase.”

       At the same time, plaintiffs purchased a “Toyota Extra Care" extended service agreement.

Grossinger was listed as the issuing dealer on the extended service application form and as the
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selling dealer on the agreement. The agreement provided: "This agreement is between the

Agreement Holder *** and Toyota Motor Insurance Services, Inc. ('TMIS'). It provides for the

repair of mechanical components specified in this Agreement. TMIS has the sole and exclusive

administrative responsibility for the Agreement." The agreement directed the holder to contact

"[y]our selling dealer for all repair work" or, if that was not possible, to contact the plan

administrator before proceeding with repairs. The agreement also directed the holder to present

the service agreement to "[y]our dealer" when requesting repairs.

       Plaintiffs soon experienced several mechanical problems with the Sienna that Grossinger

failed to repair. Plaintiffs filed a four-count complaint. Counts I and II alleged breach of written

warranty and breach of implied warranty of merchantability under the federal Magnuson-Moss

Warranty–Federal Trade Commission Improvement Act (Warranty Act) (15 U.S.C. §2308(a)

(2000)) against Toyota Motor Sales, U.S.A. Counts III and IV made the same allegations against

Grossinger. Grossinger moved to dismiss counts III and IV under section 2-619 of the Code (735

ILCS 5/2-619 (West 2005)), claiming it was not a party to the service agreement and could not be

sued for breaching its provisions. Grossinger maintained that it merely sold the extended service

on behalf of a third party, TMIS. The trial court dismissed counts III and IV with prejudice. The

order of dismissal was made final and appealable under Supreme Court Rule 304(a) (155 Ill. 2d

R. 304(a)).

       Plaintiffs appeal only from the dismissal of count IV. We note in passing that plaintiffs

raised several new arguments in their reply brief that were not raised before the trial court,

mentioned in their opening brief or presented in defendants' appellee brief. We will not consider

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these new issues. See 188 Ill. 2d R. 341(g) (the reply brief "shall be confined strictly to replying

to arguments presented in the brief of the appellee"). See also Tivoli Enterprises, Inc. v.

Brunswick Bowling & Billiards Corp., 269 Ill. App. 3d 638, 642, 646 N.E.2d 943 (1995) ("issues

raised for the first time in the reply brief do not merit consideration on appeal").

        Plaintiffs argue on appeal that the Warranty Act prevents Grossinger from disclaiming

the implied warranty of merchantability because Grossinger extended the Extra Care contract on

the Sienna. Plaintiffs allege the following facts to show that Grossinger entered into the Extra

Care contract: (1) Grossinger identified itself as the issuing dealer on the application and as the

selling dealer on the agreement; (2) Grossinger endorsed the contract; (3) the contract required

plaintiffs to bring the Sienna to Grossinger for all repair work; and (4) Grossinger agreed to

provide services under the contract for 6 years or 100,000 miles.

        Section 2308(a) of the Warranty Act provides that "[n]o supplier may disclaim or modify

*** any implied warranty to a consumer with respect to such consumer product if *** (3) at the

time of the sale *** such supplier enters into a service contract with the consumer which applies

to such consumer product." 15 U.S.C. §2308(a) (2000).

       We apply de novo review to dismissals under section 2-619 of the Code (735 ILCS 5/2-

619 (West 2004)). Dewan v. Ford Motor Co., 363 Ill. App. 3d 365, 368, 842 N.E.2d 756 (2005).

A complaint is properly dismissed under section 2-619 when an affirmative matter defeats the

claim or avoids its legal effect. Dewan, 363 Ill. App. 3d at 368. An affirmative matter is

" 'something in the nature of a defense that negates the cause of action completely or refutes

crucial conclusions of law or conclusions of material fact contained in or inferred from the

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complaint.' " Dewan, 363 Ill. App. 3d at 368, quoting Cwikla v. Sheir, 345 Ill. App. 3d 23, 29,

801 N.E.2d 1103 (2003). The reviewing court must determine whether a genuine issue of

material fact exists and whether the defendant is entitled to a judgment as a matter of law.

Dewan, 363 Ill. App. 3d at 368. We accept all well-pled facts as true and draw all reasonable

inferences in favor of the plaintiff. Dewan, 363 Ill. App. 3d at 368.

       Here, there is a genuine issue of material fact as to whether Grossinger was a party to the

extended service agreement. Plaintiffs have alleged that Grossinger was a party to the agreement

because it identified itself as the issuing and selling dealer and the agreement required plaintiffs

to contact Grossinger for all repair work. Viewing these facts in the light most favorable to

plaintiffs, we conclude that this cause should not have been dismissed under section 2-619 of the

Code. 735 ILCS 5/2-619 (West 2004).

       Defendants rely on Mitsch v. General Motors Corp., 359 Ill. App. 3d 99, 106, 833 N.E.2d

936 (2005), which in turn relies on Priebe v. Autobarn, Ltd., 240 F.3d 584 (7th Cir. 2001). In

those cases, as here, the purchase contract for a used car included a disclaimer, stating that the car

was being sold in an "as is" condition without an express or implied warranty. Mitsch, 359 Ill.

App. 3d at 101-102; Priebe, 240 F.3d at 586. In those cases, as here, the plaintiffs purchased an

extended service plan offered by a third party but sold though the dealership. Mitsch, 359 Ill.

App. 3d at 101; Priebe, 240 F.3d at 586. In those cases, as here, the plaintiffs sued, claiming that

the dealerships that sold the extended service plans could not disclaim the implied warranty of

merchantability under the Warranty Act (15 U.S.C. §2308(a) (2000)). Mitsch, 359 Ill. App. 3d at

105-06; Priebe, 240 F.3d at 587-88. The courts in Mitsch and Priebe affirmed summary

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judgments in favor of the defendants, concluding that the plaintiffs had not articulated how the

dealerships were parties to the service contracts, beyond the fact that they had offered the plans

and accepted payments from the plaintiffs. Mitsch, 359 Ill. App. 3d at 106; Priebe at 240 F.3d at

588.

       Here, plaintiffs did articulate how Grossinger was a party to the extended service

agreement: plaintiffs were required to contact Grossinger for repairs. No such provision appears

to have been considered in Mitsch or Priebe. The effect of a requirement to obtain service from

the dealer was considered in an out-of-state case, Patton v. McHone, 822 S.W.2d 608 (Tenn.

App. 1991). There, the court found that a disclaimer of implied warranties would have been

ineffective where a dealership sold an extended service contract to the plaintiffs that required

them to obtain service from the dealership unless they obtained special permission to go

elsewhere. Patton, 822 S.W.2d at 617 n.16.

       Here, a trier of fact must determine whether Grossinger was a party to the extended

service agreement. The cause should not have been dismissed under section 2-619 of the Code.

       The judgment of the trial court is reversed and the cause remanded for further

proceedings.

       Reversed and remanded.

       McBRIDE, P.J., and GARCIA, J., concur.




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