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Consumer Warranty Law: 14.4.4 UDAP and Tort Claims

An unfair and deceptive acts and practices (UDAP) claim may be available not only for car defects, but also for a manufacturer’s noncompliance with its lemon law obligations and the dealer’s inadequate repair attempts.769 Most UDAP statutes provide for attorney fees and multiple, statutory, or punitive damages.770 UDAP claims also are available for oral and advertising misrepresentations.

Consumer Warranty Law: 14.4.5 Claims Under Special State Motor Vehicle Statutes

Several states have special motor vehicle laws that give consumers additional remedies when a dealer or manufacturer fails to perform its warranty obligations. The statute may be part of a motor vehicle franchise law or a dealer licensing law. These statutes vary greatly from state to state but may offer stronger remedies, fewer restrictions, or longer statutes of limitations than warranty or lemon law claims.

Consumer Warranty Law: 14.5.1 Introduction

The typical state lemon law applies to defects discovered in the first year or two after a new car’s purchase. New car warranties usually exceed the lemon law period, but nonetheless expire after a period of years. This section summarizes consumer remedies when a defect is not discovered until after these periods expire.

Consumer Warranty Law: 14.5.2 Service Contract Coverage

A significant number of new car sales are accompanied by the sale of a service contract, an extended warranty, or mechanical breakdown insurance. For an additional charge, the consumer obtains coverage for defects in addition to or beyond the term of the written warranty.

Consumer Warranty Law: 14.5.3 Secret Warranties

A secret warranty is a manufacturer strategy of paying for repairs after the automobile’s written warranty expires, but only to those consumers who are sufficiently aggressive about complaining. The secret warranty covers certain component or system malfunctions or defects which the manufacturer has found occurring in a widespread pattern. Because these policies are communicated only to the company’s regional offices and sometimes to the dealers, but never to buyers, they are called “secret warranties” or warranty adjustment policies.

Consumer Warranty Law: 14.5.6 Strict Liability and Negligence

Claims based on the manufacturer’s strict liability or negligence are examined in Chapter 12, supra. The claim is in tort and not based on a warranty, so expiration of the warranty is irrelevant. Nor is privity of contract an issue. Tort limitations periods typically begin running from when the consumer should have discovered the tort.

Consumer Warranty Law: 14.9.4 Trial

A mechanic is a good first witness. A mechanic can set up the basic framework for the technical aspects that the jury needs to understand, particularly the impairment to use or safety. This witness can also testify about what advice a mechanic would offer a consumer concerning keeping a vehicle with the described defect.

Consumer Warranty Law: 14.9.5 Evidence and Proof Issues

The manufacturer’s technical service bulletins (TSBs) can demonstrate the existence of a defect. TSBs should be requested through discovery, but also obtain them through the Center for Auto Safety952 or from the National Highway Traffic Safety Administration (NHTSA) website,953 as a means of checking whether the defendant is producing all of them.

Consumer Warranty Law: 14.9.6 Collecting the Judgment

If a manufacturer fails to pay a judgment, a judgment attachment can be issued against the equipment in any of the manufacturer’s plants in the state. Another approach is to garnish a local dealership, which will probably owe the manufacturer for vehicles and parts, or garnish the entities that finance the vehicles that the dealer sells. Those entities may owe the dealer money for vehicle sales they are financing. In addition, the dealer’s floor plan financer, or the auction where the dealer buys vehicles, may be holding money of the dealer’s in reserve accounts.

Consumer Warranty Law: 14.7 Warranty Issues in Gray Market Vehicle Sales

The term “gray market” “refers to a fact pattern in which someone other than the designated exclusive United States importer buys genuine trademarked goods outside the U.S. and imports them for sale in the U.S. in competition with the exclusive U.S. importer.”850 Sometimes manufacturers or their distributors, responding to local market conditions, set lower prices when they sell cars to dealers in other countries, creating an incentive for U.S.

Consumer Warranty Law: 14.8.2.1 Lemon Law Coverage

Many motor home manufacturers give written warranties only on certain parts of the vehicle. They pass along the written warranties issued by the manufacturers of other parts. There may be no single entity willing to take responsibility for fixing the vehicle.

Consumer Warranty Law: 14.8.2.2 Application of UCC, Other Laws

Many courts hold that the implied warranty of merchantability arises not just against the immediate seller but also against the remote manufacturer.886 The implied warranty of merchantability should cover the vehicle as a whole, as that is the product that the final manufacturer sold to the consumer through the dealer.887 Motor homes are no different from other products, that a final manufacturer assembles from components manufactured by many other companies.

Consumer Warranty Law: 14.8.2.3 Litigation Issues

Ask early in discovery whether the entity named in the complaint as the final manufacturer actually meets that description. Many motor home manufacturers are subsidiaries of other companies. The parent company may be liable as the manufacturer’s alter ego, but if there is any doubt that the right corporation has been sued, find this fact out early and add the subsidiary to the suit.

Consumer Warranty Law: 14.8.5 Trial Issues

When trying a motor home case, prepare the jury for any terms used in the motor home industry that are not common knowledge. Prepare evidence that shows that the impairment is substantial. Many owners experience some problems with their motor homes. A jury that has some familiarity with motor home problems will want to know why the problems with the plaintiff’s home were so substantial as to justify the relief sought.

Consumer Warranty Law: 14.9.1.1 NHTSA Data

The federal National Highway Traffic Safety Administration (NHTSA) receives, investigates, and researches consumer complaints about motor vehicle defects, and can order manufacturer recalls.924 It is required by statute925 to make technical service bulletins (TSBs) available to the public in searchable form on its website.926 The same website allows sea

Consumer Warranty Law: 9.1 Introduction

Sellers may disclaim warranties pursuant to Uniform Commercial Code (UCC) section 2-316 or limit the buyer’s remedies for breach of warranty pursuant to section 2-719(1)(a).