It's well known that if
you’ve purchased a defective vehicle, you might be able to receive a
replacement or a refund under state or federal "lemon laws." As has been
shown recently in Wisconsin, however, some extreme cases can even bring
about larger reward payments, although they require patience on the
part of the consumer.
Just ask Marco Marquez. He bought a new Mercedes-Benz E320 sedan in 2005 but experienced major issues with the vehicle. His dealer was unable to repair
the car even after numerous service calls. Launching his lemon law
claim didn't initially bear fruit, but recently a judge ordered
Mercedes-Benz to pay $482,000 in damages and legal fees -- an amount
roughly 10 times the price of the vehicle when new.
Despite its attention-grabbing award, Marquez's case might not be the
ideal lemon law precedent. After initially reporting problems with his
vehicle, two years passed before a judge ruled in Marquez’s favor, but
the carmaker appealed, winning a judgment that saw his initial award
overturned.
It wasn't until earlier this year, some five years later, that a
different court overturned the decision, agreeing with Vince Megna,
Marquez’s attorney, that the jury verdict was not backed up by the
evidence. Had Mercedes-Benz paid Marquez after the first verdict, the
company would only be out $200,000 and change. Only $168,000 of the
current award actually represented the vehicle's price (doubled, in
keeping with Wisconsin's stringent lemon laws), with the rest going
towards legal fees.
What to doIf you get
stuck with a lemon, here are some recommended steps for filing a claim.
Keep in mind that while a federal law covers you, lemon laws change
from state to state. Use this as a basic guide and follow up with your
own state's attorney general for further guidance:
1. Make sure you have your
paperwork in order. This should include all correspondence with the
dealer and manufacturer, plus sales and service records. On that note,
make sure you have followed the
warranty requirements and
have proof of doing so. If you’ve reached the point where you’re
thinking about filing a lemon law claim, communication should be done in
writing, sent via certified mail with return receipt. Save copies of
everything for your records.
| Start your research with a CARFAX report |
2. Find an experienced lemon
law lawyer. Face facts, you’re not going to be able to do this yourself.
Don’t hire a lawyer who asks for a retainer or fee, or one who operates
on a “contingency” basis. Bob Silverman notes that any good lemon law
firm works on the “fee-shifting” basis, that is, if you win your case
the court typically orders the defendant (the carmaker) to pay your
legal fees. And if you lose, you shouldn’t have to pay the lawyer
anything.
??3. Lemon laws require that
you notify the company that you intend to file a lemon law case against.
Your state’s lemon law will spell out how and when you need to make
this notification, but typically you need to send the manufacturer a
letter explaining the problem, and what you want it to do about it. It
is generally recommended that you request that it
buy the car back from you or replace it.
“A Victory For Consumers”
Clarence Ditlow, executive director of the Center for Auto Safety,
stressed that “lemon laws are important, because cars are the
second-largest purchase a consumer makes (after a house). Our objective
is to make it as easy to return a lemon car as a lemon coaster. Cars are
also the primary means of transportation in this country, so consumers
can and do lose their jobs if they have a lemon and can’t get to work.”
Lemon laws differ from state to state, and Wisconsin’s is one of the
strongest. The state's law allows lemon buyers to demand a replacement
or refund, with carmakers given only 30 days to respond. The automaker
can face the cost of the repairs or, in some cases, will have to pay up
to twice or triple (what's known as a treble damage) the amount of the
purchase price as well as paying the car owner’s legal fees if the
carmaker is found guilty.
Bob Silverman, a partner at the Ambler, PA, law firm of Kimmel &
Silverman and a leading lemon law attorney, said that the Wisconsin
award was one of the biggest he has seen. But more importantly than the
amount of the award, said Silverman, the Wisconsin judgment was a
victory for consumers, and “sent a signal” to carmakers who sell a
customer a defective car and then don’t make good on their
responsibility to repair it, replace it, or promptly give the customer a
refund.
“When car companies act with impunity and don’t pay, it not only
angers the customers, it angers the judges,” noted Silverman. “The
judges want to prevent this from happening again, and one way to keep
manufacturers from disregarding lemon laws is to hit them with damages
like this. So the carmakers will think twice about not complying with
lemon laws in the future.”
Ditlow agreed that the award was “appropriate, because, in most
states auto companies benefit by delaying, because consumers will give
up out of frustration.” Strong laws like the one in Wisconsin “change
the calculus of delay by putting the economic burden of delay on the
manufacturer,” he said.
Mercedes-Benz, on the other hand, does not consider the issue a closed case.
“We pride ourselves on resolving most issues to the satisfaction of our customers,” said Donna Borand, a
Mercedes
spokesperson. “However, every once and a while, no matter how long or
hard we try, it's just not possible. This was one such case. We do not
agree with the court’s decision to vacate the jury’s verdict -- which
was in favor of [Mercedes-Benz] -- and instead impose a verdict in favor
of plaintiff. So we are appealing on the grounds that the trial court
abused its discretion by substituting its opinion for that of the jury.”
As for the amount of the award, “keep in mind that it's largely a
function of Wisconsin law and the interpretations therein, which, along
with other factors, contributes to it not being your typical lemon law
case,” said Borand.?
How much satisfaction (and monetary reward) consumers get
depend on where they live. Besides Wisconsin, California and Ohio have
some of the stronger lemon laws, according to Silverman. “The judges in
those states are aggressive when it comes to hitting violators with
judgments that act as a disincentive for other carmakers to violate the
laws,” he said.
New Jersey and Pennsylvania also have strong
laws, but the courts in these states don’t usually award double or
treble-damage damages, said Silverman. “It’s those treble-damage awards
that really send the strongest signal to the carmakers not to violate
the state’s lemon law.”
Some of the weakest lemon laws in the U.S. are in Maryland, New York
and Delaware, according to Silverman. Ditlow added that Arizona,
Colorado and Illinois also have weak lemon laws.
