How many repairs are unreasonable in Missouri?

March 15, 2010

Both the Missouri lemon law and the Magnuson-Moss Warranty Act (federal lemon law) require a manufacturer to repair a problem within a reasonable number of attempts or within a reasonable amount of time.

The Missouri lemon law requires a car manufacturer to “conform the new motor vehicle to any applicable express warranty…after a reasonable number of attempts.”

How many repairs are unreasonable? The Missouri lemon law states that it shall be “presumed” that 4 or more repair attempts are evidence that the manufacturer has failed to fix the vehicle within a reasonable number of attempts.

A presumption is a legal rule about the burden of proof, which requires a fact-finder, such as a judge or jury, to find that the evidence favors a particular party.  For example, the expression “innocent until proven guilty” is just a restatement of the presumption of innocent.  A judge or jury must conclude that the accused is not guilty, absent proper evidence to the contrary.

In a civil trial, the consumer presents evidence first, then the Defendant gets a chance to offer its counter-evidence. Without a presumption, a consumer could present evidence, the manufacturer could offer none, and a consumer could still lose. A judge or jury may simply not be persuaded by the consumer’s evidence.

But in a Missouri lemon law case, if a consumer puts on evidence of 4 or more repair attempts (or 30 or more days out of service), and the manufacturer offers nothing, the consumer wins. A judge or jury would be required to find that the vehicle was a lemon. The number of repair attempts is automatically persuasive evidence.

A presumption can be “rebutted.” In a criminal case, for example, the prosecutor will offer evidence trying to prove guilt.  In a lemon law case, a manufacturer might try to prove that the consumer abused, neglected, or modified or altered the vehicle.  Many manufacturers try to defend Missouri lemon law cases by focusing on whether the problems “substantially impair the use, value or safety” of the consumer’s vehicle. Such evidence would then be weighed by the judge or jury before determining whether the number of repair attempts were unreasonable.

However, a consumer might want to show there have been 3 identical repair attempts, or perhaps there have been 4 repair attempts but not all of them were within the first 12 months of purchase. In that situation, the consumer will not get the benefit of the “presumption,” but should be allowed to put on evidence to try to convince a judge or jury that fewer repair attempts were nevertheless unreasonable. Even if the manufacturer offers little or no evidence, the consumer might still lose the trial, because a judge or jury will not be bound to find in the consumer’s favor.

Many vehicles do not qualify for the Missouri lemon law presumption, but the Magnuson-Moss Warranty Act (federal lemon law) offers a possible alternative argument.

Mercedes-Benz $482,000 lemon law case

March 11, 2010

Mercedes-Benz has been ordered to pay a total of about $482,000.00 in a lemon law case out of Wisconsin.

In 2005, a consumer bought a Mercedes-Benz E320 for about $56,000.00.  The vehicle required repeat repair attempts because it would not start. The dealership was never able to correct the problem. The consumer hired an attorney, who was able to get Mercedes-Benz to agree to repurchase the vehicle. But  Mercedes took more than the 30 days Wisconsin law allows a manufacturer to provide a refund of the purchase price.

Two years later, in 2007, the consumer won a summary judgment  motion against Mercedes-Benz. This is a process by which a Judge decides if, based on the facts in evidence, whether a decision can be reached without the need for a jury. It is not clear what prevented settlement during that time, but it appears Mercedes-Benz claimed the consumer caused some of the delay by not providing information fast enough. The consumer, though, was entitled under Wisconsin law to double damages once Mercedes-Benz missed the 30-day deadline.

After losing summary judgement, Mercedes-Benz appealed. In 2008, the Wisconsim Court of Appeals ordered a trial. While acknowledging that a manufacturer cannot ignore or extend the 30-day deadline for any reason, the Court of Appeals agreed that a trial was necessary to determine if the consumer had purposefully caused Mercedes-Benz to miss the deadline.

In 2009, a Wisconsin jury awarded the consumer nothing. But the trial judge overturned the jury’s verdict, saying it was not supported by the evidence. While not common, a Judgment Notwithstanding the Verdict (JNOV) is an appropriate legal decision in some circumstances.

The consumer, who was still driving the vehicle, was awarded double the purchase price, plus interest. The consumer’s attorneys were awarded approximately $314,000.00 in fees and costs. That is a large amount, to be sure, but not unreasonable in light of several years of litigation.

Could this happen in Missouri? Unfortunately, there is no provision for double damages or a 30-day deadline for payment from a manufacturer. But, if a consumer is willing to continue to fight, they may be able to recover a full refund, including all collateral expenses, plus attorneys’ fees.

The Wisconsin case, though, underscores just how expensive a court case can become for a manufacturer. The $482,000 does not even include the hundreds of thousands of dollars Mercedes-Benz likely spent on their own attorney’s fees and costs, or the negative publicity the case generated. Perhaps the case will sound a note of warning to other manufacturers that satisfying the consumer early in the lemon law process is the right thing to do.

Missouri’s Reasonable Allowance for Use

March 9, 2010

All 50 states have a lemon law; 48 states allow a manufacturer to subtract some amount from what it would otherwise owe a a consumer, because of the consumer’s use of the vehicle. The idea is that a consumer is going to give the manufacturer back a vehicle with more miles on it than when it was sold.  

Ohio and Nevada law do not specifically allow for a reduction based on a consumer’s use of the vehicle, but of the other 48 states, 47 give some indication how to calculate this offset. The odd state out is Missouri.

Missouri law indicates only that a manufacturer can subract “a reasonable allowance for the consumer’s use of the vehicle.”

The Missouri legislators were aware that other state laws give more precise formulas, yet chose not to enact a statute with such guidance. The only conclusion we can draw is that Missouri wanted this offset to be negotiated on a case-by-case basis. Depending on a consumer’s use of the vehicle, different amounts of offset may be reasonable.

Unlike many other states, Missouri law emphasizes “use” instead of  mileage attributable to the consumer.  Some states look to the total miles driven until a repurchase or replacement by the manufacturer, other states use only the miles driven by the consumer until a certain number of repair visits. A few states calculate a certain amount of cents per mile driven by a consumer. A number of state laws further provide that the total offset should not exceed a certain percentage of the purchase price, regardless of the miles driven.

Eleven states, including the bordering states of Illinois, Oklahoma, and Kentucky, use almost the same language:

[The] amount directly attributable to use by the consumer prior to the first notice of the nonconformity to the manufacturer and any subsequent period when the vehicle is not out of service by reason of repair.

The first report to the manufacturer may be the first repair attempt, or it may not be until the manufacturer (not the local dealership) is directly notified about the problems with a vehicle. The statute makes clear, though, that any mileage put on by the dealership for repair attempts or test drives should not count against the consumer.

Because the Missouri lemon law is vague, a number of factors can be considered in determining a reasonable allowance for usage, including: 

  • what the offset would be using other states’ lemon laws,
  • the mileage at the time of purchase,
  • the mileage at the first repair attempt,
  • the mileage at the 4th repair attempt (when it is presumed to be a lemon under the Missouri lemon law),
  • the number of miles attributable to repair attempts, and
  • the consumer’s expected usage compared to the actual usage. 

This is not a definitive list, and the manufacturer may not agree with this analysis. But the Missouri lemon law does provide an opportunity for a consumer to argue for a lower allowance for use, thus putting more money in the consumer’s pocket.

Missouri Lemon Law Damages

March 9, 2010

When a consumer wins a Missouri lemon law claim, the statute provides that the

“manufacturer shall, at its option, either replace the new motor vehicle with a comparable new vehicle acceptable to the consumer, or take title of the vehicle from the consumer and refund to the consumer the full purchase price, including all reasonably incurred collateral charges, less a reasonable allowance for the consumer’s use of the vehicle.”

This means the manufacturer has 2 options: replace the vehicle, or repurchase the vehicle. While the statute does seem to allow the manufacturer to make the choice, no one can force a consumer to agree to a deal they don’t want to take.

If a consumer prefers a replacement, the vehicle must be “comparable.” Typically, this means a consumer must accept the same year, make, and model they currently own. If a newer model year is available, a consumer may be able to upgrade, but would also be responsible for any increase in MSRP. Under a Missouri lemon law replacement, the consumer would still be responsible for paying the manufacturer a “reasonable allowance”  for the use of the vehicle.

The repurchase option requires a manufacturer to take the vehicle back and refund the full purchase price of the vehicle, including “all reasonably incurred collateral charges.” The Missouri lemon law helpfully defines “collateral charges” as including all sales tax, license fees, registration fees, title fees and motor vehicle inspections. Whether finance charges should be included will the subject of a later post.

Next, we will examine how to determine a “reasonable allowance for the consumer’s use of the vehicle.”

How long to file a lemon law claim?

March 4, 2010

A statute of limitation is the time period you have to file a lawsuit. After the statute of limitation expires, a lemon law claim can no longer be brought in court, no matter what the facts of your case.

The Missouri state lemon law statute of limitation gives consumers 18 months from the date of \purchase to file a claim. If a consumer goes through informal arbitration, such as the BBB Autoline, near the end of that 18 month period, the time period may be extended up to an additional 90 days. Otherwise, after 18 months, the Missouri lemon law statute of limitation expires, making it difficult or impossible to obtain a repurchase or replacement of your vehicle.

The federal lemon law, the Magnuson-Moss Warranty Act, does not contain its own statute of limitation. However, the Missouri Court of Appeals has determined that, like other Missouri breach of contract claims, the federal lemon law should use a 4 year statute of limitation. At a minimum, therfeore, a consumer should have 4 years from the date of purchase to bring a Magnuson-Moss Warranty Act claim.

But consumers do not know at the time of purchase that the vehicle will be a lemon. Missouri law also says that the statute of limitation should not start until the date on which a consumer knew, or perhaps should have known, about a vehicle’s defects. Unfortunately, while this rule does not apply to the Missouri lemon law, at least one Court decision approximated the start date of the statute of limitation for a federal lemon law claim as the first repair attempt.

Courts have also recently begun to consider the situation where a warranty lasts longer than 4 years. It does not seem fair that consumers with a 6, 7, or even 10 year warranty would be unable to bring a federal lemon law claim while still within their vehicle’s warranty period. Thus, a recent federal court decision suggested that a consumer should have 4 years, starting from the date the warranty expires, to bring a Magnuson-Moss Warranty Act claim.

This information does not constitute legal advice. You should confirm the statute of limitation period for your claim with an attorney as soon as possible.

GM, Chrysler, Hyundai, Nissan recalls

March 3, 2010

No car maker is immune from manufacturing defects. In the wake of the massive Toyota recall, more companies are recognizing the necessity of fixing known nonconformities.

GM has announced a recall covering Chevrolet Cobalts sold between 2005 and 2010 and 2007-2010 Pontiac G5s for problems relating to the power-steering.

Chrysler has announced a recall covering 2005-2006 Chrysler Town & Country and Dodge Grand Caravan minivans for problems relating to the airbag sensors.

Hyundai has announced a recall covering 2011 Hyundai Sonata with problems relating to the front door latches, and another recall covering the 2010 Hyundai Tucson for problems with the airbag system.

Nissan has announced a recall for 2008-2010 model year Titan pickup trucks, Quest minivans and Armada and Infiniti QX56 sport-utility vehicles for problems relating to the brake pedals.

All told, almost 2.2 million vehicles may be affected. Please contact Law Office of Bryan Brody if your vehicle has had repeat repair attempts for these nonconformities.

The term “vehicle” in the Missouri Lemon Law

March 3, 2010

The Missouri lemon law defines a motor vehicle as “those vehicles propelled by power other than muscular power.” This certainly covers almost all cars and trucks on the road, which use an engine and/or battery power. The Flintstones’ car, though, would not be covered.

The Missouri lemon law also covers the “chassis, engine, powertrain and component parts” of Recreational Vehicles (RVs).

What about an RV without an engine?  The statute does not say that a vehicle must be self-propelled. Most RVs are designed to be mobile, but cannot be moved by muscle power alone. Therefore, the “component parts” should be covered by the Missouri lemon law.

Although the Missouri lemon law excludes off-road vehicles, mopeds, and motorcycles, the Magnuson-Moss Warranty Act may still apply.

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