The Toyota Report

February 8, 2011

The review of the Toyota unintended acceleration cases by NHTSA and NASA officials has been released. Watch carefully how different news sources report the same story.

Reuters claims that no defects were found, calling it a “victory” for Toyota.

Bloomberg at least mentions that the report indicates there were mechanical flaws with the vehicles, just not electronic ones.

ABCNews offered a reasonably balanced report, reminding readers of the massive recall and problems with sticking accelerator pedals, gas pedals that became trapped in floor mats, and other safety issues.

CNN notes that Toyota now includes “brake override” 0n all its new vehicles – not just good public relations, but a safety system that would have automatically prevented unwanted acceleration if it had been a standard feature earlier.

The NHTSA and NASA websites have not been updated with the full report.

Ultimately, this is good news for drivers, because many cars, not just those on Toyota vehicles, use electronic throttles – and there is lots of potential electromagnetic interference.

But while the report may be admissible in a court of law, it only rules out, essentially, one potential cause of unintended acceleration; the report does not disprove that there was unintended acceleration in some vehicles caused by other problems. It is not necessarily a consumer’s burden to provide a detailed mechanical explanation of the defect – only that a nonconformity (such as unintended acceleration) existed that was not repaired, or not repaired within a reasonable amount of time.

Law Office of Bryan Brody is on Facebook

February 7, 2011

The number of recalls is increasing – Ford is recalling the 2011 Ford Explorer and 281,000 F-150 trucks, Suzuki’s Grand Vitara may have defective engines,  Lexus had a recent recall, and the list continues to grow. Articles should discuss interesting issues, which are often raised by recalls, rather than simply posting every new recall.

Therefore, to better keep track of new vehicle and legal developments, Law Office of Bryan Brody has created a Facebook page!

Please visit at http://www.facebook.com/pages/Law-Office-of-Bryan-Brody-LLC/165234186858367

Tractor Trailer lemon laws

January 9, 2011

The Missouri lemon law specifically excludes “commercial motor vehicles,” and most tractor trailers are used for a commercial purpose.

Similarly, the federal lemon law only applies to products “normally used for personal, family, or household purposes,” though that phrase does leave some wiggle room.

Only in Wisconsin does the state lemon laws apply to tractor trailers, where there have been other big verdicts in the past.

The idea seemed to be that individuals need the attorney fee-shifting found in the lemon laws, while commercial ventures do not need the same economic lift. Unfortunately, that is rarely true, as many private lessees and owner-operators of tractor trailers do not have their own attorney or cannot afford an attorney’s hourly rate. Losing even a few days because of repair attempts can be the difference between profitability and disaster.

In Missouri, we rely on the Uniform Commercial Code to provide at least some legal protection. The Uniform Commercial Code provides for “implied warranties” as well as a more traditional breach of contract. If the tractor trailer was repaired under a warranty, but was not fully and finally fixed, then the warrantor has not lived up to its obligation. The warranty may not guarantee a perfect vehicle, but if it promises a fix a defect, that means the vehicle should not have similar or additional problems after a repair attempt.

The damages for these cases is still the difference between what you actually paid for your vehicle, and what you would have paid, back at the time of purchase, if you had known then what you know now about your vehicle.

An attorney, like Law Office of Bryan Brody, can still handle the case on a contingent basis, but the fees would have to be subtracted from what the consumer would otherwise be owed, because there is no provision for making the manufacturer or warrantor pay your attorney’s fees. The good news is that if the facts of the case are good enough and the price of the tractor trailer is high enough, then it should make it worthwhile it to pursue a case.

Toyota recall followup

August 12, 2010

Headlines are suggesting that the recall of millions of vehicles for unintended acceleration by Toyota may have been the result of “user error.” Yet, these articles actually explain that problems were found. Preliminary results did show pedals getting stuck behind floor mats and pedals getting stuck. While no widespeard electronic problem was found, that does not absolve Toyota of responsibility. Sticky pedals pose a serious safety risk, one which Toyota engineers knew of long ago. It is also reasonable for a consumer to expect that the pedals of a car would not get stuck because of floor mats, especially when Toyota designs and markets them to consumers. Some reported problems may have been caused by “driver error,” but it also appears that many incidents would not have happened but for Toyota’s inability to create a safe product. Investigation is still ongoing.

Pet Lemon Law

May 18, 2010

A recent news article asked if your pet is a lemon. A Minnesota resident purchased a puppy that unfortunately needed almost $3,000.00 of medical treatment. The pet owner discovered that Minnesota had a special lemon law just for pets.

Missouri does not have a pet lemon law. However, Missouri courts have decided that, despite their special place in our hearts, pets are considered to be property.

Because a pet is considered property, if the pet was purchased for more than $25.00, the federal lemon law might apply. As well, depending on the pet’s condition, there could a violation of an implied warranty.

No one hopes for a pet to be sick, but a breeder or dealer might be responsible in Missouri if the pet’s ailments are discovered soon after purchase.

Deceptive Extended Warranties

April 20, 2010

The Magnuson-Moss Warranty Act covers “service contracts,” frequently referred to as extended warranties. But the extended warranty most consumer receive is not an extension of the factory warranty, but a new contract from  company that may not have a consumer’s best interests in mind.

Missouri’s Attorney General recently sued 6 local extended warranty companies. The six warranty companies are:

  • National Dealers Warranty, Inc., a.k.a. StopRepairBills.com
  • Warranty Activation Headquarters, Inc., a.k.a. Nationwide Automotive Protection
  • Extended Warranty Corporation, Inc., a.k.a. Key Protection Group
  • Dealers Warranty, LLC, a.k.a. MOGI
  • U.S. Auto Warranty
  • Dealer Warranty Services

Unfortunately, many consumers will not benefit from a lawsuit filed by the government. The Attorney General has asked for “full restitution” for victims, but is unlikely, or unable, to speak to each of those victims individually.

Nor is the deception limited to those companies. Missouri’s Attorney General has also announced “a task force to look at sales practice guidelines designed to stop auto service contract fraud.” A primary concern is a new service contract, billed as an extended warranty, with coverage much worse than what a consumer had through the manufacturer.

One proposed solution is through regulation. In general, it appears most manufacturers and extended warranty companies tend to the bare minimum required by law. If no law exists, there is little financial incentive to try to satisfy consumers.

Another option is for individual consumers can hire their own attorneys to sue the extended warranty companies.

Finally, if a problem was first reported during the original factory warranty, the manufacturer may still retain responsibility for repairing the defect. The manufacturer’s warranty requires the issue to be corrected, regardless of whether the attempts take longer than the length of the warranty.

Extended Warranty Lemon Law

April 19, 2010

The federal lemon law, the Magnuson-Moss Warranty Act, clearly states that a consumer can sue a “a supplier, warrantor or service contractor” to comply with ” any obligation…under a written warranty, implied warranty, or service contract.” 15 U.S.C. § 2310(d)(1). Based on this language, several courts have upheld the right of a consumer to file a lawsuit based on an unreasonable number of repair attempts paid for by an extended warranty.

Even though a consumer can sue, there are still several questions to answer. First, how long does a consumer have to file the lawsuit? Like for other federal lemon law cases, a consumer should have at least 4 years from the date of purchase of the extended warranty, though that date might be extended. How many repairs are unreasonable? Like the Missouri lemon law, four or more repairs is unreasonable, though fewer may also qualify as unreasonable.

The most interesting question is how much a consumer can recover. Many manufacturers and extended warranty companies try to claim that a consumer is limited to the purchase price of the extended wararnty. But that does not seem to be what the legislature intended, nor would it be fair to a consumer. Consider if a nonconformity with a vehicle resulted in the complete l0ss of use of the vehicle. Because the nonconformity would impair the use, value, or safety of the vehicle, not the extended warranty, a consumer should be able to recover the diminution of the value of vehicle itself.

Be sure to investigate the extended warranty company before paying money for their product.

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.

About Our Firm

Law Office of Bryan Brody LLC was founded to focus on consumer protection law. My goal is to distinguish the attorney-client relationship from the frustrating consumer experience. I will always strive to make sure my clients have the benefit of my knowledge and experience. Continue reading »

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