Sunday, December 2, 2007


MYTH NO. 1: "No Problem Found" Is Not an "Opportunity to Repair" Under the Lemon Law
Most states' lemon laws require that the manufacturer be given a reasonable opportunity to repair. Michigan's lemon law, for example, allows a manufacturer four opportunities to repair a new vehicle before it is considered a "lemon."
Typically, if the problem is intermittent or cannot be readily diagnosed, the consumer will get the vehicle back with a repair order marked as "no problem found" ("NPF"), "cannot duplicate" or "operating to specs." When it comes time to defend a lemon claim, the manufacturer will then claim that any repair visit where no work was performed will not count toward the four chances to repair.
Why is this argument wrong? The purpose of the statute is to limit the number of times a consumer must go back and forth to the shop in an effort to cure a defect or non-conformity. A consumer satisfies the opportunity to repair requirement by presenting the vehicle to an authorized dealer, regardless of whether any repairs are actually performed.
For example, in Chmill v Friendly Ford-Mercury, 144 Wisc 2d 796, 424 NW2d 747, 751 (1988), the defendants contended that, under Wisconsin's lemon law, a vehicle is not subject to repair unless the dealer had verified the consumer complaint and attempted to repair the vehicle. The Wisconsin court of appeals wisely rejected defendants' statutory construction as unreasonable, and held that "[i]If an acknowledged defect cannot be diagnosed by the service agency no matter how many times the consumer presents the vehicle for repair, the consumer is without recourse. Remedial statutes should be construed to suppress the mischief and advance the remedy which the statute intended to afford." Courts in California, Delaware and Texas have reached the same conclusion, holding that a consumer satisfies the requisite number of repair attempts under the lemon law by presenting the vehicle to an authorized dealer, regardless of whether any repairs are actually performed. Indeed, Michigan’s lemon law does not require that the dealer actually attempt a repair but, merely that the vehicle be "subject to repair." MCLA 257.1403(5)(a). Thus, where a vehicle is returned to the dealer with complaints but, the dealer is "unable to duplicate" or repair the problem, such visits nevertheless constitute being "subject to repair" for purposes of lemon law statutes.

MYTH NO. 2: The Consumer Must Be Able To Prove The Exact Cause of the Problem
When defending a "lemon" case, many dealers and manufacturers like to argue that the consumer has the burden of proving the exact cause of the defect or non-conformity. This is simply untrue. See, e.g., Garmo v General Motors Corporation, 45 Mich App 703, 207 NW2d 146 (1973); General Motors Corporation v Zirkel, 613 NE2d 30, 31 (Ind 1993); "[I]t hardly takes an expert to observe that the brakes will not adequately stop the automobile he is driving. It was not for the appellees to prove why the brakes were not working. It was sufficient for them to establish to the satisfaction of the trier of fact that they in fact did not function properly." Zirkel, supra, 613 NE2d at 31.
Once the consumer has established that the product is not performing and eliminated the consumer's fault, the burden is on the manufacturer or dealer to establish the various defenses, such as misuse or abuse of the product. Snider v Thibodeau, 42 Mich App 708, 202 NW2d 727 (1972) (once plaintiff proves product did not function properly, burden shifts to defendants to negate their responsibility for the failure.)

MYTH NO. 3: An "As Is" Sale is Always "As Is" With No Recourse
Dealers typically disclaim all warranties, even when selling a brand new vehicle. However, this does not mean that the consumer is always out of luck when it comes to suing the dealer. First, the federal Magnuson-Moss Warranty Act prohibits the dealer from disclaiming the implied warranty of merchantability where a vehicle is sold with a written warranty or service contract under which the dealer is obligated to perform repairs. 15 USC 2308(a) and (c); General Motors Acceptance Corp v Jankowitz, 523 A2d 695, 701-702, 216 NJ Super 313 (App Div 1987).
Second, the vehicle must still meet the consumer's "legitimate expectations arising from the contract." Davis v LaFontaine Motors, Inc, 271 Mich App 68, 82, 719 NW2d 890 (2006). Thus, a consumer may still be entitled to damages or a repurchase even where the dealer has attempted to disclaim the implied warranties. See, e.g., Kammeraad v Auto Sports Unlimited, 2007 WL 189344 (Mich App 2007), lv den, 478 Mich 928, 732 NW2d 900 (2007), citing Davis. For example, a purportedly new vehicle that has been damaged and repaired prior to sale would not usually meet a reasonable consumer's expectation of "new" and the consumer may be entitled to her money back. See, e.g., American Honda Motor Co v Boyd, 475 So2d 835, 41 UCC Rep Serv 410 (Ala 1985).

MYTH NO. 4: As Long as the Dealer or Manufacturer Makes Repairs At No Charge You Have No Breach of Warranty Claim
Naturally, the dealer and manufacturer would like you to believe that as long as they "keep trying" you are obligated to continue the frustration of going back and forth to the shop indefinitely. Not true. "There comes a time when enough is enough - when an automobile purchaser, after having to take his car into the shop for repairs an inordinate number of times and experiencing all of the attendant inconvenience, is entitled to say, 'That's all,' and revoke, notwithstanding the seller's repeated good faith efforts to fix the car." Rester v Morrow, 491 So2d 204, 1 UCC Rep 751, 759 (Miss 1986).
Thus, in Kelynack v Yamaha, 152 Mich App 105, 394 NW2d 17 (1986), the Court held that the buyer was entitled to revoke acceptance of his motorcycle, even though the manufacturer had replaced the engine under warranty at no charge. The Kelynack Court reasoned that the delay in completed repairs (three months) caused the "repair or replace" warranty to "fail its essential purpose," thereby stripping the warranty of its limitations and allowing the consumer to pursue all remedies permitted under the Uniform Commercial Code.

MYTH NO. 5: No Matter How Disastrous the Defect, The Manufacturer Gets A Chance to Fix It
Sometimes a defect or non-conformity which occurs shortly after delivery of a new vehicle may be serious enough to reasonably destroy the consumer’s faith in the integrity and reliability of the vehicle. This is known as the "shaken faith doctrine." "For a majority of people the purchase of a new car is a major investment, rationalized by the peace of mind that flows from its dependability and safety. Once their faith is shaken, the vehicle loses not only its real value in their eyes, but becomes an instrument whose integrity is substantially impaired and whose operation is fraught with apprehension." Zabriskie Chevrolet, Inc v Smith, 240 A2d 195, 205 (NJ Super 1968).
For example, in Pifer v DaimlerChrysler Corp, 2003 WL 22850124 (Mich App 2003, unpub), lv den, 470 Mich 885, 682 NW2d 96 (2004), the Michigan Court of Appeals held that the trial court had properly instructed the jury on the "shaken faith" doctrine where the vehicle's engine failed at only 2,013 miles after purchase. Thus, the Court affirmed a jury verdict allowing the consumers to revoke acceptance, even though the engine was replaced under warranty at no charge.