Milicevic v. Fletcher Jones

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

MARINA MILICEVIC, 
Plaintiff-Appellee-
Nos. 03-15954
Cross-Appellant,
03-15957
v.
 D.C. No.
FLETCHER JONES IMPORTS, LTD.; CV-02-00471-RLH
MERCEDES-BENZ USA,
OPINION
Defendants-Appellants-
Cross-Appellees.

Appeal from the United States District Court
for the District of Nevada
Roger L. Hunt, District Judge, Presiding

Submitted October 7, 2004
San Francisco, California*

Filed March 28, 2005

Before: Pamela Ann Rymer, Richard C. Tallman, and
Carlos T. Bea, Circuit Judges.

Opinion by Judge Bea

*This panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).

3701
3704 MILICEVIC v. FLETCHER JONES IMPORTS

COUNSEL

Robert A. Nersesian and Thea Marie Sankiewicz, Nersesian
& Sankiewicz, Las Vegas, Nevada, for defendants-appellants
Fletcher Jones Imports, Ltd. and Mercedes-Benz USA.
 MILICEVIC v. FLETCHER JONES IMPORTS 3705
Christopher G. Gellner, Christopher G. Gellner, PC, Las
Vegas, Nevada, for plaintiff-appellee Marina Milicevic.

OPINION

BEA, Circuit Judge:

Defendants-Appellants Fletcher Jones Imports and
Mercedes-Benz USA (collectively “Mercedes”) appeal from
the district court’s judgment in favor of Plaintiff-Appellee
Marina Milicevic following a bench trial. Milicevic sued for
damages due to defects in the Mercedes S-500 automobile she
purchased from Fletcher Jones Imports. Her Nevada state
court complaint alleged breach of express warranty, breach of
the implied warranties of merchantability and fitness, viola-
tion of Nevada Revised Statute §§ 597.600-597.680 (2000)
(Nevada’s “lemon law”), and violation of the federal
Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-2312
(1998). Mercedes removed the case to federal court based on
federal question jurisdiction.

The district court found that Mercedes breached its written
warranty and violated both the Nevada lemon law and the
Magnuson-Moss Warranty Act. The district court awarded
Milicevic damages under the Nevada lemon law and attor-
neys’ fees under the Magnuson-Moss Warranty Act.

Mercedes contends the district court incorrectly found a
violation of the Nevada lemon law. Mercedes also contends
that the district court incorrectly applied the Magnuson-Moss
Warranty Act and that its award of attorneys’ fees under the
act was improper. Milicevic cross-appeals the amount of
attorneys’ fees awarded as insufficient. She also claims Mer-
cedes’ appeal is moot because Mercedes paid the judgment
and, therefore, there is no longer a “case or controversy”
between the parties. We have jurisdiction and affirm.
3706 MILICEVIC v. FLETCHER JONES IMPORTS
BACKGROUND

Milicevic purchased a new Mercedes S-500 from Fletcher
Jones Imports on May 11, 2001, for $98,722.25. From day
one, the car exhibited a number of aesthetic and mechanical
problems. Within the first seven months, the following repairs
were made: all four brake rotors were warped and required
replacement at 6,000 miles; after locking Milicevic out of the
car, the remote entry system was replaced; the motor for the
passenger side window was replaced; the passenger side mir-
ror was replaced due to a thumb print in the paint; and the rear
window seal and molding were unsuccessfully repaired three
times. All repairs were made under Mercedes’ limited written
warranty. By the end of seven months, the car had spent 55
days at Fletcher Jones’ repair shop.

At that point, Milicevic wanted Mercedes to replace the car
or to reimburse her for the purchase price and take the car
back. Her attorney and then-fiancé,1 Christopher Gellner,
wrote a letter to Mercedes-Benz to that effect, explaining the
series of problems and repairs. Aside from a cursory letter
notifying Gellner that he would be contacted by a local repre-
sentative of Mercedes-Benz in the near future, Mercedes-
Benz did not respond to Gellner’s letter, even though he made
a series of unreturned phone calls. Milicevic sued Mercedes-
Benz and Fletcher Jones Imports.

Before trial, Mercedes served a trial witness subpoena upon
Gellner calling for him to testify at trial; Gellner then associ-
ated attorney Dale Haley for the case. At the outset of trial,
Mercedes made a motion to exclude Gellner as counsel and
to exclude him from the courtroom while other witnesses
were testifying. The district court denied the motion, allowing
Gellner to proceed as counsel so long as Haley “cross-
examined”2 Gellner and Haley conducted opening and closing
arguments.
1
By the time of trial, Milicevic and Gellner had married.
2
We put “cross-examined” in quotes because given Gellner’s evident
interest and bias, he could be examined by Milicevic only as if on redirect.
Fed. R. Evid. 611(c).
 MILICEVIC v. FLETCHER JONES IMPORTS 3707
The contested issues addressed at trial were whether: (1)
the brakes on Milicevic’s car were “defective”; (2) it was nec-
essary for Milicevic to leave the car at Fletcher Jones for an
extended period while parts were on order for the rear win-
dow repair; and (3) the unsuccessful repair of the rear window
was “significant.” Ultimately, Milicevic testified at trial that
she found the car’s use and value impaired: “I feel like I am
stranded. I cannot feel comfortable to take the car on a trip.
I do not feel comfortable to drive because I don’t know what
next will come. . . . [E]very day is a new problem.”

As noted above, the district court found the facts before the
court amounted to a breach of the written warranty between
the parties and a violation of both the Nevada lemon law and
the Magnuson-Moss Warranty Act. Milicevic was awarded
$93,423.51 — the purchase price of the car, including taxes
and fees, less an amount which represented her reasonable use
of the vehicle. On Milicevic’s motion, the district court also
awarded Milicevic attorneys’ fees, but reduced the hourly rate
Milicevic requested for her attorneys from $250 per hour to
$150 per hour. The district court also reduced the number of
hours her attorneys billed, concluding that some of the hours
billed were unnecessary and duplicative.

STANDARDS OF REVIEW

We review for abuse of discretion a district court’s decision
regarding whether a witness should be excluded from the
courtroom. Breneman v. Kennecott Corp., 799 F.2d 470, 473
(9th Cir. 1986). Following a bench trial, we review the district
court’s findings of fact for clear error, and its conclusions of
law de novo. Fed. R. Civ. P. 52(a); Arnold v. Arrow Transpor-
tation Co., 926 F.2d 782, 785 (9th Cir. 1991). We review a
district court’s award of attorneys’ fees for abuse of discre-
tion. Parks v. Watson, 716 F.2d 646, 664 (9th Cir. 1983).

I. Mootness

[1] The first issue is whether Mercedes’ appeal is moot for
lack of a “case or controversy” between the parties because
3708 MILICEVIC v. FLETCHER JONES IMPORTS
Mercedes paid the judgment as ordered by the district court.
It is not so made moot.

The usual rule in the federal courts is that payment
of a judgment does not foreclose an appeal. Unless
there is some contemporaneous agreement not to
appeal, implicit in a compromise of the claim after
judgment, and so long as, upon reversal, restitution
can be enforced, payment of the judgment does not
make the controversy moot.

Woodson v. Chamberlain, 317 F.2d 245, 246 (4th Cir. 1963);
accord United States ex rel. Morgan & Son Earth Moving,
Inc. v. Timberland Paving & Construction Co., 745 F.2d 595,
598 (9th Cir. 1984) (citing Woodson).

II. Federal Rule of Evidence 615

This case presents a novel question under Federal Rule of
Evidence 615. At the start of trial, Mercedes informed the dis-
trict court it planned to call Gellner as a witness and, thus,
moved the district court to remove Gellner as Milicevic’s trial
counsel and exclude him from the courtroom while other wit-
nesses were testifying. The district court denied the motion.
To eliminate any possibility of Gellner using his role as trial
counsel to inject his credibility into portions of the trial other
than his testimony, however, Gellner was barred from exam-
ining witnesses on issues about which he had first-hand
knowledge; further, co-counsel Haley was ordered to conduct
Gellner’s re-direct examination and to make plaintiff’s open-
ing and closing arguments. On appeal, Mercedes contends
that the district court committed reversible error under Federal
Rule of Evidence 615 when it denied Mercedes’ motion to
exclude Gellner from the courtroom while other witnesses
were testifying, despite the fact that he was to be called by
Mercedes to testify at trial. We disagree.

[2] Federal Rule of Evidence 615 generally provides that at
the request of a party a district court shall, or on its own
 MILICEVIC v. FLETCHER JONES IMPORTS 3709
motion the district court may, order witnesses excluded from
the courtroom so that they cannot hear the testimony of other
witnesses. However, this exclusionary rule is subject to four
exceptions, the third of which excepts from exclusion “a per-
son whose presence is shown by a party to be essential to the
presentation of the party’s cause.” Fed. R. Evid. 615(3). Thus,
where a particular trial counsel is “essential to the presenta-
tion” of the client’s cause, we agree with the Eighth Circuit
that “Fed. R. Evid. 615(3) clearly would allow [trial counsel]
to remain present in the courtroom as an exception to the
exclusionary rule for witnesses.” United States v. Reeder, 614
F.2d 1179, 1186 (8th Cir. 1980).

[3] Here, Gellner had represented Milicevic from the begin-
ning of the claim process, and Milicevic had special reasons
for insisting he continue as one of her attorneys. Further,
Haley was associated as counsel for trial preparation and trial,
and Gellner’s participation at trial was limited, as set out
above. Under these circumstances, we cannot say the district
court abused its discretion when it denied Mercedes’ motion
to exclude Gellner from the courtroom.3

Finally, Gellner’s testimony was duplicative of Milicevic’s
testimony or related to issues which have not been challenged
on appeal. Thus, even if the court had erred under Federal
Rule of Evidence 615, which we do not believe it did given
Gellner’s status as essential to the presentation of the case and
3
Mercedes appeals only the district court’s refusal to exclude Gellner
under Federal Rule of Evidence 615. We express no opinion on the ethical
implications, if any, of Gellner’s continued participation in the trial as
counsel. Compare Lau Ah Yew v. Dulles, 257 F.2d 744, 746 (9th Cir.
1958) (counsel should ordinarily withdraw before testifying as a witness),
with Nev. Sup. Ct. R. 166(2) (“[A] lawyer may withdraw from represent-
ing a client if withdrawal can be accomplished without material adverse
effect on the interests of the client . . . .”), and Nev. Sup. Ct. R. 178(1)(c)
(“A lawyer shall not act as advocate at a trial in which the lawyer is likely
to be a necessary witness except where . . . [d]isqualification of the lawyer
would work substantial hardship on the client.”).
3710 MILICEVIC v. FLETCHER JONES IMPORTS
given the engagement of special co-counsel, the error was
harmless. See United States v. Ell, 718 F.2d 291, 293-294 (9th
Cir. 1983) (holding that although “prejudice is presumed”
“when a court fails to comply with Rule 615,” harmless error
analysis is nonetheless appropriate).

III. Nevada Lemon Law

[4] The district court did not commit clear error when it
found a violation of the Nevada lemon law. There was suffi-
cient evidence to support the district court’s finding that after
a reasonable number of attempts at repair had been made, a
reasonable person would have found the use and value of the
car substantially impaired, as did Milicevic.

The Nevada lemon law states that if an automobile manu-
facturer, its agent or its authorized dealer is not able to con-
form a vehicle to its warranty after a reasonable number of
attempts to repair the vehicle have been made, and the non-
conformity substantially impairs the use and value of the
vehicle to the buyer, it must replace the vehicle or give the
purchaser a refund of the purchase price, including taxes and
fees, less a deduction for the reasonable use of the vehicle.
Nev. Rev. Stat. § 597.630(1). If within the first year, or within
the time the warranty is in effect, whichever is less, the same
condition is subject to repair four or more times or the vehicle
is out of service for repair more than 30 calendar days for rea-
sons not beyond the control of the manufacturer, its agent or
its authorized dealer, it is presumed that a reasonable number
of attempts to repair the vehicle have been made. Nev. Rev.
Stat. § 597.630(2). When the vehicle is out of service more
than 30 calendar days, the nonconformity does not have to be
ongoing. See id.

Here the presumption that a reasonable number of attempts
at repair had been made was appropriate because Milicevic’s
car was subject to repair four or more times within the first
year for the condition both of the brakes and of the rear win-
 MILICEVIC v. FLETCHER JONES IMPORTS 3711
dow, conditions which Fletcher Jones never successfully
repaired. Additionally, the district court did not clearly err in
finding that Milicevic’s car was out of service for repair a
cumulative total of 55 days during the first year.

Although Mercedes claims that the vehicle was only “out
of service” for repair 24 days, discounting 31 days Milicevic’s
car was at Fletcher Jones awaiting the arrival of parts needed
to fix the rear window seal, Fletcher Jones ordered the wrong
part for the repair. When a repair is delayed by the unavaila-
bility of a part, the time under section 597.630(2)(b) is not
tolled. Cf. Ayer v. Ford Motor Co., 503 N.W.2d 767, 770
(Mich. Ct. App. 1993) (“To allow a defendant to assert the
unavailability of parts as a reason for failing to make timely
repairs would defeat the statute’s intent to place the risk of
inconvenience and monetary loss on the manufacturer rather
than the consumer.”). Milicevic had no control over the order-
ing of the parts, nor was she in a position to know how long
the necessary parts would take to arrive. She left her car at
Fletcher Jones while the parts were on order because she was
told the repair would take only a few days. The responsibility
for the timeliness of the repair rested with Fletcher Jones.

IV. Attorneys’ Fees Under the Magnuson-Moss
Warranty Act

A. The Magnuson-Moss Warranty Act Creates a
Federal Private Cause of Action for a Warrantor’s
Failure to Comply with the Terms of a Written
Warranty

[5] Subject to certain conditions with which Milicevic com-
plied, the Magnuson-Moss Warranty Act creates a federal pri-
vate cause of action for a warrantor’s failure to comply with
the terms of a written warranty: “[A] consumer who is dam-
aged by the failure of a . . . warrantor . . . to comply with any
obligation . . . under a written warranty . . . may bring suit for
damages and other legal and equitable relief . . . in an appro-
3712 MILICEVIC v. FLETCHER JONES IMPORTS
priate district court of the United States . . . .” 15 U.S.C.
§ 2310(d)(1)(B). To the extent Mercedes argues to the con-
trary, the cases on which it relies are inapposite.

First, Mercedes cites the following language from Skelton
v. General Motors Corp., 660 F.2d 311 (7th Cir. 1981): “The
district court properly rejected plaintiffs’ argument that the
Act’s draftsmen intended in [Section 2310(d)] to create a fed-
eral private cause of action for breach of all written express
warranties.” Id. at 316 (emphasis added). The context for the
Seventh Circuit’s statement, however, is essential. The district
court had held that the written promises at issue were not
“written warrant[ies]” as defined in Section 2301(6), and the
plaintiffs did not appeal that holding. Id. at 316 n.7. Rather,
the plaintiffs argued that all written promises constituted writ-
ten warranties for the purposes of Section 2310(d)(1). The
Seventh Circuit rejected the plaintiffs’ argument, holding that
the definition of “written warranty” provided in Section
2301(6) applied wherever “written warranty” was used
throughout the Magnuson-Moss Warranty Act. Id. at 322.
Unlike General Motors’ written promises, which the Seventh
Circuit presumed not to amount to warranties under Section
2301(6), as we explain below, the express limited warranty
given by Mercedes does qualify as a written warranty.

[2] Second, in Richardson v. Palm Harbor Homes, 254
F.3d 1321 (11th Cir. 2001), the plaintiffs filed suit for breach
of, in relevant part, an express oral warranty when their
mobile home exhibited a number of defects. Id. at 1323,
1326-27 (interpreting Count 1 of the plaintiffs’ complaint to
refer to an express oral warranty). The defendant moved to
compel arbitration based on a binding arbitration agreement
signed by the plaintiffs. Id. at 1323. In response, the plaintiffs
claimed that Section 2310(a) overrode the Federal Arbitration
Act, 9 U.S.C. § 2 et seq., and prohibited binding arbitration
agreements as to all consumer warranties — whether express
or implied, written or oral. Id. The district court denied the
motion to compel arbitration of the express oral warranty
 MILICEVIC v. FLETCHER JONES IMPORTS 3713
claim. Id. at 1323-34. The Eleventh Circuit reversed and
remanded, holding that the Magnuson-Moss Warranty Act
superceded the Federal Arbitration Act as to written warran-
ties but not as to oral express warranties. Id. at 1327. Of
course, the arbitration provision in Section 2310(a) is not here
at issue. Further, not only was there no dispute in Richardson
that the plaintiffs had a private right of action under the
Magnuson-Moss Warranty Act for claims of breach of written
warranties, the court’s language dispels whatever doubt there
might be: “The Act’s consumer-suit provision . . . supplies a
federal remedy for breach of written and implied warranties,
but not for oral express warranties, which remain the domain
of state law.” Id. at 1325. Here, the warranty Milicevic relies
upon is written, not oral.

Third, in Walsh v. Ford Motor Co., 807 F.2d 1000 (D.C.
Cir. 1986), the D.C. Circuit held: “[E]xcept in the specific
instances in which Magnuson-Moss expressly prescribes a
regulating rule, the Act calls for the application of state writ-
ten and implied warranty law, not the creation of additional
federal law.” Id. at 1012. Again, however, the context is cru-
cial. There, the plaintiffs sought certification of three classes
in an action brought under the Magnuson-Moss Warranty Act
for breach of written and implied warranties. Id. at 1002.
Despite the fact that the plaintiffs resided in several different
states and that there were variations in state laws governing
the interpretation of written and implied warranties, the dis-
trict court “apparently believed . . . that the federal Act alone,
uncomplicated by ‘any State law variations,’ covered the class
members’ ‘claims for breach of written warranty,’ ” id. at
1011, and, as for the claims for breach of implied warranty,
interpreted the Magnuson-Moss Warranty Act as mandating
a “somewhat looser application of Rule 23.” Id. at 1003-05.
The D.C. Circuit granted interlocutory appeal on the issue of
class certification, concluded the district court improperly
construed the Magnuson-Moss Warranty Act, and instructed
the district court to reexamine whether the variance in state
warranty laws prohibited the finding (required for class certi-
3714 MILICEVIC v. FLETCHER JONES IMPORTS
fication) that common questions of law predominated. Id. at
1012. However, at no point did the D.C. Circuit suggest that
there was no federal cause of action under the Magnuson-
Moss Warranty Act.

[7] Thus, it is clear from the statutory language that the
Magnuson-Moss Warranty Act creates a private cause of
action for a warrantor’s failure to comply with the terms of a
written warranty, and none of the cases cited by Mercedes
support a contrary position. Finally, in this regard, whether
the written warranty is full or limited makes no difference.
Although the Magnuson-Moss Warranty Act distinguishes
between full and limited warranties, it nonetheless refers to
each as a written warranty. 15 U.S.C. § 2303(a)(1)-(2). Like-
wise, Section 2301(6) defines a “written warranty” without
limiting it to either full or limited warranties, and Section
2310(d)(1) does not limit its application to either full or lim-
ited warranties.

B. Milicevic Had a Limited Written Warranty and the
District Court’s Findings Support the Conclusion
that Mercedes Was in Breach of that Warranty

[8] As defined in the Magnuson-Moss Warranty Act, a
written warranty is a writing made by the supplier of a prod-
uct relating to the nature of the material or workmanship of
the product, which warranty promises that the product is
defect free or will meet a certain level of performance for a
given period of time, or a writing in which the supplier agrees
to refund, repair, replace, or take other remedial action in the
event that the product fails to meet its specifications. 15
U.S.C. § 2301(6). Here, Mercedes supplied such a limited
written warranty, which by its terms “warrants to the original
and each subsequent owner of a new Mercedes-Benz passen-
ger car that any authorized Mercedes-Benz Center will make
any repairs or replacements necessary to correct defects in
material or workmanship” at no charge for parts or labor.
 MILICEVIC v. FLETCHER JONES IMPORTS 3715
[9] The district court did not clearly err in finding that two
significant nonconformities — the rear window seal and the
brakes — were not corrected. A Fletcher Jones mechanic
admitted that the rear window seal was a “factory defect,” and
Mercedes never corrected the defect. And even after the brake
pads and rotors were replaced, Milicevic testified the brakes
still did not work properly. The district court also found that
all of the defects, conditions and non-conformities com-
plained of by plaintiff, which Fletcher Jones was unable to
repair, were covered by Mercedes-Benz’s said warranty. We
are not firmly convinced this was in error. Even though the
warranty provides that “normal maintenance” of items was
the owner’s responsibility, it also states:

Our intention is to repair under warranty, without
charge to you, anything that goes wrong with your
car during the warranty period which is our fault. . . .
Please note the difference between “defects” and
“damage” as used in the warranty. Defects are cov-
ered since we, the manufacturer or distributor are
responsible.

The rear window seal and brakes were repaired under war-
ranty at no cost to Milicevic. By attempting to repair the rear
window seal and the brakes under warranty, Mercedes admit-
ted the defective nature of these conditions. Thus, when it
failed to correct the defects in the rear window seal and
brakes, Mercedes breached the terms of its limited written
warranty in violation of Section 2310(d)(1).4
4
When the district court concluded Mercedes violated the Magnuson-
Moss Warranty Act it, perhaps accidentally, cited Section 2304 instead of
Section 2310(d)(1). Section 2304 applies to full warranties, not to the lim-
ited warranty between the parties here. Nevertheless, Section 2310(d)(1)
does apply to limited written warranties and “[w]e may affirm on any
ground supported by the record even if it differs from the rationale of the
district court.” Martinez-Villareal v. Lewis, 80 F.3d 1301, 1305 (9th Cir.
1996).
3716 MILICEVIC v. FLETCHER JONES IMPORTS
C. The District Court Did Not Abuse Its Discretion in
Its Award of Attorneys’ Fees

[10] Having made out a claim for relief under the
Magnuson-Moss Warranty Act, Milicevic may be awarded
reasonable costs and attorneys’ fees. 15 U.S.C. § 2310(d)(2).
With respect to attorneys’ fees, the Magnuson-Moss Warranty
Act gives courts discretion to award “reasonabl[e]” attorneys’
fees “based on actual time expended.” Id. The district court
did not abuse its discretion when it concluded that the hourly
rate requested by Milicevic’s attorneys was not reasonable
and, thus, eliminated hours it thought were unnecessarily
duplicative. American Law Center PC v. Stanley (In re
Jastrem), 253 F.3d 438, 443 (9th Cir. 2001). The evidence in
the record supports the conclusion that it was not necessary to
have both Gellner and Haley prepare for trial in this case.
Mercedes informed Gellner of its intent to call Gellner as a
witness in advance of trial. Once Gellner knew he might be
called to testify, the district court found Gellner could have
turned over to Haley the task of trial preparation. Such a find-
ing was well within the discretion of the district court. Fur-
ther, the case was not overly complicated and did not require
any special expertise. Last, the district court was well within
its discretion in reducing the hourly rate and hours upon
which Milicevic based her attorneys’ fee request.

CONCLUSION

For the foregoing reasons, we affirm the district court’s
judgment and its award of attorneys’ fees.

AFFIRMED.