B-166453, APR. 2, 1969

B-166453: Apr 2, 1969

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GENERAL MOTORS CONTENDS THAT THESE REPAIRS WERE NOT COVERED BY WARRANTY. THE VEHICLES WERE MANUFACTURED FOR THE UNITED STATES UNDER CONTRACTS NOS. WE HAVE BEEN INFORMALLY ADVISED THAT THEY WERE PURCHASED BY THE USA TANK- AUTOMOTIVE COMMAND AT WARREN. THE VEHICLES WERE DELIVERED TO AND THE REPAIR WORK PERFORMED AT FT. EACH OF THESE VEHICLES WAS COVERED UNDER A NEW VEHICLE WARRANTY WHICH APPEARS TO BE THE STANDARD MANUFACTURER'S WARRANTY. OR WHICH SHALL HAVE BEEN REPAIRED OR ALTERED OUTSIDE OF AN AUTHORIZED GMC TRUCK DEALERSHIP IN ANY WAY SO AS. GENERAL MOTORS TAKES THE POSITION THAT THE REPAIRS IN QUESTION WERE NOT COVERED BY THE WARRANTY AS EXAMINATION AND ANALYSIS INDICATE THAT THE VEHICLES WERE ABUSED.

B-166453, APR. 2, 1969

TO MR. SECRETARY:

BY LETTER DATED SEPTEMBER 3, 1968, REFERENCE FINCY-T, MAJOR W. R. BERNHARDT OF THE ARMY FINANCE CENTER SUBMITTED TO OUR OFFICE AS DOUBTFUL THE CLAIM OF THE GMC TRUCK AND COACH DIVISION, GENERAL MOTOR CORPORATION, IN THE AMOUNT OF $10,677.98, WHICH COVERS REPAIRS ON 44 VEHICLES. GENERAL MOTORS CONTENDS THAT THESE REPAIRS WERE NOT COVERED BY WARRANTY.

THE VEHICLES WERE MANUFACTURED FOR THE UNITED STATES UNDER CONTRACTS NOS. DA-20-113-AMC-02869, DA-20-113-AMC-05128 AND DA-20-113-AMC 08686. WE HAVE BEEN INFORMALLY ADVISED THAT THEY WERE PURCHASED BY THE USA TANK- AUTOMOTIVE COMMAND AT WARREN, MICHIGAN. THE VEHICLES WERE DELIVERED TO AND THE REPAIR WORK PERFORMED AT FT. LEWIS, WASHINGTON.

EACH OF THESE VEHICLES WAS COVERED UNDER A NEW VEHICLE WARRANTY WHICH APPEARS TO BE THE STANDARD MANUFACTURER'S WARRANTY. THIS WARRANTY DISCLAIMS ALL OTHER WARRANTIES EXPRESSED OR IMPLIED AND, IN PERTINENT PART, READS AS FOLLOWS: "THE PROVISIONS OF THIS WARRANTY SHALL NOT APPLY TO ANY GMC TRUCK MOTOR VEHICLE OR CHASSIS WHICH HAS BEEN SUBJECT TO MISUSE, NEGLIGENCE OR ACCIDENT, OR WHICH SHALL HAVE BEEN REPAIRED OR ALTERED OUTSIDE OF AN AUTHORIZED GMC TRUCK DEALERSHIP IN ANY WAY SO AS, IN THE JUDGMENT OF MANUFACTURER, TO AFFECT ADVERSELY ITS PERFORMANCE AND RELIABILITY * * *.'

GENERAL MOTORS TAKES THE POSITION THAT THE REPAIRS IN QUESTION WERE NOT COVERED BY THE WARRANTY AS EXAMINATION AND ANALYSIS INDICATE THAT THE VEHICLES WERE ABUSED, MISUSED, NEGLIGENTLY OPERATED OR GIVEN IMPROPER MAINTENANCE. FT. LEWIS OFFICIALS TAKE THE POSITION THAT THE REPAIRS SHOULD BE COVERED BY THE WARRANTY AND, WITH REGARD TO CERTAIN TRANSMISSION REPAIRS, GMC WAS ARBITRARY IN CLASSIFYING THE MAJOR OF THESE AS NONWARRANTY IN VIEW OF THE HIGH FREQUENCY OF TRANSMISSION FAILURES PRIOR TO MODIFICATION OF THE TRANSMISSION UNIT. WHEN REQUESTED HOWEVER BY THE TANK-AUTOMOTIVE COMMAND TO SUBMIT SPECIFIC EVIDENCE AS TO WHAT CAUSED EACH FAILURE -- PARTICULARLY EVIDENCE WHICH WOULD OVERCOME GMC'S ALLEGATION THAT THE FAILURES WERE ATTRIBUTABLE TO DRIVER ABUSE OR IMPROPER MAINTENANCE -- FT. LEWIS WAS UNABLE TO COMPLY.

THE SO-CALLED MANUFACTURER'S WARRANTY OF THE TYPE HERE INVOLVED IS UNDER SEVERE ATTACK IN SOME JURISDICTIONS. WITH REGARD TO THAT PORTION OF THE WARRANTY WHICH ON ITS FACE APPEARS TO LEAVE TO THE MANUFACTURERS THE SOLE DETERMINATION AS TO WHETHER OR NOT A PART IS DEFECTIVE, THE COURT IN HENNINGSEN V BLOOMFIELD MOTORS, 161 A.2D 69, 79 (1960) NOTED THAT SOME COURTS HAVE REMOVED MUCH OF THE FORCE OF THAT UNCONTROLLED DISCRETION TO DECIDE THE ISSUE OF DEFECTIVENESS BY DECLARING THAT THE PURCHASER IS NOT BOUND BY THE MANUFACTURER'S DECISION. THE COURT CITED MILLS V MAXWELL MOTOR SALES CORP., 181 NW 152 (1920) AND CANNON V PULLIAM MOTOR CO., 94 SE 2D 397 (1956). SEE ALSO HILL WEINBERG, 19 SE 2D 430, 432 (1942). COMPARE NORWAY V ROOT, 361 P.2D 162 (1961) A WASHINGTON CASE WHICH, WHILE CITING AND COMMENDING THE BLOOMFIELD CASE, RESTRICTED ITS DECISION TO THE EXPRESSED WARRANTY HOLDING THAT IT COULD NOT REWRITE THE WARRANTY RELIED UPON. IT SHOULD BE NOTED THAT EVEN UNDER THE ROOT CASE, THE PRESENT CONSIDERATION COULD BE FAVORABLY DECIDED UPON IF SUFFICIENT FACTS WERE OF RECORD TO REBUT GMC'S ALLEGATION.

AS YOU KNOW, WE HAVE CONSISTENTLY HELD THAT WHERE THERE ARE DISPUTED QUESTIONS OF FACT, THE GENERAL ACCOUNTING OFFICE WILL ACCEPT THE ADMINISTRATIVE REPORT AS ACCURATELY REFLECTING THE DISPUTED FACTS, IN THE ABSENCE OF CONVINCING CONTRARY EVIDENCE. 42 COMP. GEN. 124, 134 (1962). ALSO, IN CASES WHERE THERE IS SUBSTANTIAL DOUBT AS TO THE ACTION A COURT OF COMPETENT JURISDICTION MIGHT TAKE, IT IS REGARDED AS THE DUTY OF ACCOUNTING OFFICERS TO RESOLVE THE DOUBT IN FAVOR OF THAT INTEREPRETATION WHICH WOULD BEST SERVE THE INTEREST OF THE UNITED STATES. 18 COMP. GEN. 749; 755 (1939).

IN THE PRESENT MATTER WE ARE UNABLE TO USE TO ADVANTAGE THOSE PRECEDENTS WHICH WOULD SUPPORT A GOVERNMENT ATTACK ON WHAT WAS CHARACTERIZED AS AN ARBITRARY DETERMINATION UNDER THE WARRANTY. SIMPLE DISCLAIMER BY GENERAL STATEMENTS AS TO MATTERS WHICH SHOULD BE COVERED IN SPECIFIC DETAIL WILL NOT SUFFICE AS A BASIS TO ATTACK DETAILED FINDINGS. WE THEREFORE ARE INSTRUCTING OUR CLAIMS DIVISION TO PROCEED TO PAYMENT OF THIS CLAIM.

IT IS SUGGESTED THAT APPROPRIATE STEPS BE TAKEN SO THAT IN FUTURE DISPUTES UNDER THESE MANUFACTURER'S WARRANTIES, THE DEPARTMENT IS IN A POSITION TO REBUT MANUFACTURER'S FINDINGS ON WARRANTY COVERAGE.