Ford Motor Credit Co. v. Caiazzo, 387 Pa. Super. 561

Summary

The Pennsylvania Superior Court held that warranty, Lemon Law, and related damages claims generally were not cognizable as defenses or counterclaims in a replevin action. However, the buyers' alleged possessory purchase-money security interest under 13 Pa.C.S.A. § 2711(c), arising from their claimed revocation of acceptance of a defective vehicle, was properly cognizable and could not be dismissed at the preliminary-objection stage. The court affirmed in part, reversed in part, and remanded for further proceedings.

Holdings

1. A replevin action is limited to determining title and the right to immediate possession; warranty, Lemon Law, repayment, and defamation claims that do not establish a possessory right are not cognizable defenses or counterclaims in the replevin action and must be pursued independently.
2. A buyer may assert as a counterclaim in a replevin action a possessory purchase-money security interest in goods retained after a rightful rejection or justifiable revocation of acceptance under 13 Pa.C.S.A. § 2711(c).
3. An assignee of a security interest in a retail installment motor-vehicle financing contract takes subject to claims against the seller or manufacturer and is not a holder in due course who takes free from those claims.
4. The timeliness of notice of revocation, the existence of defects, and whether the defects substantially impaired the vehicle's value are factual questions generally not resolvable on preliminary objections in the nature of a demurrer.

Questions Presented

1. Whether Lemon Law, warranty, repayment, and defamation claims and defenses may be asserted in a replevin action.
2. Whether a buyer's claimed possessory purchase-money security interest arising from a justifiable revocation of acceptance under 13 Pa.C.S.A. § 2711(c) may be asserted as a counterclaim in a replevin action.
3. Whether the effectiveness and timeliness of the alleged revocation of acceptance, and whether the vehicle's defects substantially impaired its value, could be resolved on preliminary objections in the nature of a demurrer.

Disposition

reversed_and_remanded