Defining Lemon Law
Lemon Laws, which vary from state to state, are designed to protect consumers against fraud and deception committed by automobile manufacturers. This statute mandates that vehicles must be fit for the particular uses of the owners. However, there is no statute of limitations for filing a claim; the timeframe for taking legal action comes down to when the manufacturer receives notification from the consumer that the problem exists. States provide Lemon Law Rights at the time of purchase, and it is the purchaser’s responsibility to completely read the document to understand the rights provided. If a company fails to meet the obligations in the warranty (the Lemon Law) , then the consumer has a right to reject the product and recover any costs incurred up to that point. The most basic definition of Lemon Law is a vehicle that cannot be adequately repaired within a reasonable amount of attempts and time. While there are different types, general criteria need to be met for a vehicle to be declared a ‘lemon.’ The first is that the problem must have occurred within the warranty period. Second is that the problem must be covered under warranty; repairs and routine maintenance do not fall under this rule. Next is whether the defect hinders the use, value, safety, or any other aspect of operation to the consumer. Fourth, the number of times that the car has been attempted to be repaired is important. Finally is the time frame spent trying to remedy the issue.
Lemon Law Case Studies
Bennett v. Ford Motor Co.
One of the most famous lemon law cases involved an alleged defect in the timing chain of a 2002 Ford Ranger Pickup Truck. The plaintiff filed a lawsuit against Ford alleging that a defect in the vehicle’s timing chain caused the entire engine to be replaced under warranty. The plaintiff alleged he was inconvenienced by the repairs and sought damages, attorneys’ fees and costs under the lemon law. The court awarded him damages for loss of use of the vehicle over the 65-day repair period. However, the Court found that he was not entitled to recover the cost of hiring an attorney to pursue his claims.
Lyons v. Subaru of America
This lemon law case involved a brand-new 1999 Subaru Legacy Station Wagon. Mr. Lyons alleged that the vehicle would experience loss of steering control (steering wheel lock up) and then resume steering control. Mr. Lyons’ car was brought to the Subaru dealership for repair eight (8) times that year. The Court found that the plaintiffs’ car had a serious defect and awarded damages for the loss of use of the vehicle while it could not be driven.
Ferris v. Subaru of America, Inc.
In this case, Mr. Ferris purchased a 1994 Subaru Vivio 4WD wagon that was later sold, as a used vehicle, to Mr. Lapini. Mr. Ferris alleged that the vehicle stalled while driving in the city and shut down entirely. Mr. Ferris brought his vehicle into the dealership for warranty repairs on four separate occasions. Following the fourth attempted repair of the stalling condition, the manufacturer replaced the transaxle assembly only to have the condition immediately return. Mr. Ferris ended up giving the car back to the dealership. His lemon law claim was granted and Mr. Ferris was awarded damages for the loss of use of the vehicle and $1,000 in damages for violation of the consumer fraud act.
Wolbrink v. Chrysler Credit Corp.
Mr. Wolbrink filed a suit against Chrysler Credit citing that the dealership he purchased the vehicle from allegedly sold him the car without a full inspection, where the brakes were allegedly never inspected. The braking system failed and when Mr. Wolbrink returned, the dealer allegedly assured him there was nothing wrong with concerned parts. He later had the vehicle in for service and discovered that the rotors and pads had to be replaced. One month later the front brake calipers and rotors allegedly had to be replaced. The dealership and Chrysler issues a buy-back order and asked Mr. Wolbrink to sign paperwork to return the vehicle. Mr. Wolbrink alleged that the dealership failed to make a buy-back offer and that they did not return his trade-in. The Court found that the dealership’s conduct was "definitely unconscionable and unfair." The Court awarded damages for loss of use of the vehicle, loss of value, repair charges, among other things.
Lemon Law Claim Process
Lemon Law claims are one of the more complex and challenging types of consumer protection cases both because of the technical details, as well as the fact that the manufacturer’s lawyers and claims adjusters work hard to withhold information from consumers who are entitled to a full refund or replacement vehicle as quickly as possible. While this article is not intended to provide legal advice in any particular case, it is intended to give consumers a general sense of the Graham Leigh process of pursuing the manufacturer through litigation.
- The consumer must carefully review the warranty documentation because the Lemon Law provides that a consumer can only win if he or she has complied with the manufacturer’s warranty requirements. This means that the consumer must have provided the car for repair at least four times, or two complete repair attempts and then be out of commission for 30 days, and other requirements may also apply.
- Next, the consumer needs to gather all of the documentation that he or she has received from the manufacturer, including warranties, repair records, etc. We recommend the consumer organizes the documents by date and make exact copies before sending originals to the manufacturer.
- Sometimes the attorney can simply call the manufacturer or the dealer manager and the claim can be settled even before filing a lawsuit. However, if the attorney has to file a lawsuit the customer has to pay litigation costs (filing fees, expert witness fees, etc.) and legal fees (which the Lemon Law provides the manufacturer has to pay). The upside is that if the claim is won by the attorney, the client will get a full refund and the litigation costs will be recovered by the manufacturer.
- If the attorney has to file a lawsuit, the customer will sign a document authorizing the attorney to obtain information regarding all of the consumer’s assets so that the money can be recovered and paid to the consumer as soon as possible.
Common Pitfalls of Lemon Law Claims
The road to a successful lemon law claim is fraught with potential pitfalls. For instance, manufacturers are not always willing to accept liability for problematic automobiles, and the details of warranty terms can be a source of confusion for consumers. These elements, along with many others, can delay the process and make obtaining a fair settlement more difficult.
The following are some common challenges that consumers encounter while filing a lemon law claim:
• A manufacturer may dispute a consumer’s lemon law claim by arguing that an automobile’s problems are not substantial enough to qualify for a buyback.
• Disputes between consumers and manufacturers can arise when an automobile has a significant issue for only a brief period of time but then returns to normal functionality. Referring to this as a "Class A" problem , manufacturers will claim that it does not qualify for a buyback.
• Some manufacturers might refuse to fully repair problematic automobiles.
• Manufacturers may claim that the problems with an automobile are the result of an after-market alteration or modification. Additionally, some manufacturers will argue that they were not made aware of the damage during the warranty period because an owner failed to make their vehicle available for repair.
• Car owners have difficulty obtaining a maximum settlement from a manufacturer. Since maximum settlements include parts of the purchase price of the car, attorneys representing a consumer must accurately estimate the residual value of an automobile, making the process more complex.
• One component of a settlement, incidental damages, are difficult to calculate.
Variation of Lemon Laws between the States
State variations in lemon law statutes can lead to different outcomes in similar cases. This is because lemon law statutes are passed at a state-by-state level, and the language of every statute is specific to its overriding state policy. Not only is this an interesting quirk of lemon law litigation, but it’s also important for the consumer to understand these differences in outcome, since the law in his state can directly impact the outcome of his case.
In Arkansas, dealers are not permitted to represent that "the manufacturer has manufactured a motor vehicle which has defect or condition or nonconformity which is not repairable by the use of ordinary repair facilities within the motor vehicle distribution or servicing network;" however, this limitation does not apply to a manufacturer when it is called on to arrange for repairs. In other words, the dealership can’t tell you that the car cannot be repaired, but the manufacturer may do so at a later date.
In Oregon, if an arbitration decision is appealed to the district court, the car dealer or manufacturer can still be liable for attorney’s fees incurred by the plaintiff at both the arbitration stage and through the final disposition in court. This is important because most consumers are unaware of the potential for further attorney’s fees later in the process.
Ways to Avoid a Lemon Vehicle
Consumers can take several steps to educate themselves before purchasing a new or used vehicle that may help them avoid purchasing a lemon.
One strategy is to have a pre-purchase inspection carried out by a qualified mechanic. A pre-purchase inspection can reveal potential mechanical problems as well as information about previous repairs on the vehicle. For example, a buyer may think they are purchasing a "new" car that has never been involved in an accident. However, the pre-purchase inspection may reveal that the car has not only been in an accident, but has also sustained costly water damage to its internal wiring when it was submerged in floodwaters. Additionally, a pre-purchase inspection can alert a buyer to potentially dangerous safety defects that may be the basis for a lemon law claim . Given the potential high costs of repairs, a pre-purchase inspection can save valuable dollars and help you avoid being stuck with a lemon.
Another strategy is to conduct thorough research on the vehicle’s history. For a few dollars, consumers can obtain detailed reports covering everything from title and mileage to previous accidents. These reports can help consumers find hidden issues that could ultimately lead to their vehicle being classified as a lemon.
Finally, consumers who educate themselves on their rights under their state’s lemon laws are in the best position to make informed choices. An experienced lemon law attorney can provide valuable insights into your state’s lemon laws and how to interpret specific provisions pertaining to issues such as warranty requirements.