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Consumer Warranty Law: 14.2.8.7.1 Components of the refund

Lemon law refund provisions should be construed to make the consumer whole.383 Many lemon laws require the manufacturer to refund the “purchase price” or “full purchase price.” A number of lemon laws define these terms to include not only the cash payments and trade-in allowance, but also optional purchases,384 sales tax,385 and registration fees.386 A lessee may not be entit

Consumer Warranty Law: 14.2.8.7.3 Incidental and consequential damages

Some lemon laws require that the manufacturer reimburse the consumer for incidental or consequential damages, and a few even specify which incidental or consequential damages are reimbursable.411 Even when such damages are not recoverable, the consumer may be able to bring an action to recover such damages under the UCC or some other theory. The consumer need not elect one remedy over another unless the lemon law so requires.412

Consumer Warranty Law: 14.2.8.8 Deduction from Refund for Reasonable Use Allowance

Almost all lemon laws provide that any purchase price returned to the consumer can be offset by a “reasonable allowance for use,” thereby reducing the consumer’s refund to the extent that the consumer has used and benefited from the car.419 These provisions recognize that the buyer may continue to use the car while pursuing lemon law remedies without the risks present under UCC § 2-606 that use after revocation will be found to bar cancellation.420

Consumer Warranty Law: 14.3.1 General

State lemon laws provide a refund or replace remedy closely akin to the UCC revocation of acceptance, with certain advantages over the UCC remedy.654 There are situations in which the consumer is better served by seeking UCC revocation of acceptance instead of lemon law remedies.

Consumer Warranty Law: 14.3.3.1 Major Defects

To revoke acceptance under the UCC, the defect must substantially impair the vehicle. General standards for substantial impairment are set out in § 8.3.2, supra. This section examines case law determining whether new car defects are substantial impairments.

In applying the substantial impairment test to vehicles, courts have held that the following sorts of vehicles had substantially impaired value:

Consumer Warranty Law: 14.3.3.2 Cumulative Effect of Minor Defects

The cumulative effect of minor defects, none of which alone would substantially impair value, can be sufficient to justify revocation if in violation of a warranty. In Rester v. Morrow,732 the car had a gasoline fume odor, a malfunctioning air conditioner, a broken oil indicator gauge, missing chrome, soiled carpets, and other less significant problems, and the battery required repeated replacement.

Consumer Warranty Law: 14.3.3.3 Amount of Time Car Unusable

Courts cite the amount of time a vehicle is out of the owner’s possession for repairs as a factor in determining whether defects substantially impair value. Substantial impairment was found when a car was at the dealer’s repair shop four of the owner’s first six months of ownership.743 Seventeen repair visits in twenty-one months was held to indicate the vehicle was not fit for its intended use.744

Consumer Warranty Law: 14.4.1 Introduction

There are a number of situations in which a consumer may want to bring a damage claim concerning new car warranty issues. The consumer may want to keep the car, or the defect may not meet the requirements for UCC revocation of acceptance or a lemon law refund or replacement. A refund or replacement remedy may not make the consumer whole without an award of damages.

Consumer Warranty Law: 14.4.2 Lemon Law Does Not Preempt Other Damage Claims

Nearly all lemon law statutes specify that they do not limit the consumer’s other rights or remedies.754 In the absence of explicit statutory language, seeking relief under a lemon law does not limit the rights and remedies which are otherwise available to a consumer under any other law.755 That UCC rights and remedies remain available is particularly clear in light of UCC § 1-104, which provides that no part of the UCC shall be deemed to be impliedly repealed by subsequent legislation if such c

Consumer Warranty Law: 14.4.3 Magnuson-Moss and UCC Damage Claims

A Magnuson-Moss Warranty Act claim can be brought whenever the manufacturer or dealer breaches written or implied warranties.762 The opportunity to cure that is required in most circumstances will certainly have been met by the various repair attempts. The Magnuson-Moss claim provides for recovery of the consumer’s attorney fees and avoids most privity issues as to claims against a manufacturer.

Consumer Warranty Law: 14.9.1.2 The Center for Auto Safety

The Center for Automobile Safety is a resource for investigating defects.929 It collects all kinds of insider documents and technical service bulletins on certain particularly suspect car models and maintains a searchable database of complaints about vehicles. For a fee, it will obtain NHTSA documents on a particular model and perform other related research.

Consumer Warranty Law: 14.9.2 Pleadings

Unless a different claim serves as the basis for the court’s jurisdiction, the first count (or counterclaim or defense) should be either the one exhibiting the most outrageous conduct or the most complete factual statement. This lays out for the judge exactly what happened in a complete fashion and it allows re-allegation of subsequent claims in an orderly fashion. Whenever possible and practical, make a jury demand.

Consumer Warranty Law: 14.9.3.2.1 Selection of deponents

In the case of a defective vehicle, a key deponent is the manufacturer’s employee with authority to refund or replace the vehicle. Sometimes one employee has authority to offer a replacement and another has authority to offer a refund. Use interrogatories to identify them.

Depose the service manager at the dealership which undertook repairs to the vehicle. The consumer probably can identify this individual, at least by job title if not by name.

Consumer Warranty Law: 14.9.3.2.2 Deposing the manufacturer’s representative

The manufacturer’s district representative may be the most appropriate deponent in an automobile lemon case. Obtain the basic documents through a request for production of documents before this deposition. The notice of deposition should ask for the same documents, plus the deponent’s own file on the car. Even if copies of the relevant documents have already been produced, review the originals, as there is often helpful material on the reverse sides.

Consumer Warranty Law: 14.9.3.2.3 Deposing the dealer’s service manager

The dealer’s service manager may be willing to discuss the matter informally if the dealer is not a party to the suit. Off-the-record remarks have a way of evaporating at the time of trial, so make a record with an affidavit or a deposition. Alternatively, the service manager’s handwritten note listing important points or opinions may be helpful.

Consumer Warranty Law: 14.9.3.2.4 Deposing the service technicians

Repair technicians who worked on the car at the dealership are often useful witnesses. They are likely to believe that the reason the car could not be repaired, despite all their efforts, is that the car has a manufacturing defect. Establish with a repair technician that:

Consumer Warranty Law: 14.9.3.2.5 Deposing the defense expert

There are multiple goals in deposing the defense expert(s). There may be a Daubert challenge to the expert’s testimony;949 if sustained, the expert’s testimony is excluded from trial. Find out what things the defense expert will say that will hurt the consumer’s case, in order to prepare for cross-examination and rebuttal testimony.950 Some parts of the defense expert’s testimony may help the consumer’s case.