INTRODUCTION TO CALIFORNIA'S LEMON LAW

Consumer sales of motor vehicles covered by express warranties are governed by three distinct statutory schemes: the Song-Beverly Consumer Warranty Act (the "Lemon Law" - Civil Code sec. 1790 et seq.); Commercial Code sec. 2100, et seq.; and the federal Magnuson-Moss Warranty Act (15 U.S.C. sec. 2301, et seq.).

A lemon law claim is, in effect, a revocation of acceptance remedy for breach of warranty. The remedy is triggered when a new motor vehicle (which includes used vehicles with the remainder of the new vehicle warranty remaining) is not repaired after a reasonable opportunity was provided to the manufacturer's repair facilities, and the malfunction of vehicle systems and/or components rendered it unreliable, unsafe or substantially value-impaired, so that confidence was lost in the vehicle's future trouble-free performance.

The Lemon Law was intended for the protection of consumers, and it is interpreted to bring its benefits into action. A breach of warranty claim requires a written guarantee, which was the agreement by which car makers and car dealers promised to maintain the future performance of their vehicles. Liability flows from the failure to perform according to the warranty agreement.

The Lemon Law imposes mandatory obligations upon car makers and dealers to consumers, which must be complied without the consumer being compelled to file a lawsuit.

If the manufacturer or its representative in this state is unable to service or repair a new motor vehicle . . . to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle in accordance with subparagraph (A) or promptly make restitution to the buyer in accordance with subparagraph (B). However, the buyer shall be free to elect restitution in lieu of the replacement, and in no event shall the buyer be required by the manufacturer to accept a replacement vehicle.

Liability for breach of warranty occurs when the car maker or dealer repeatedly fails to correct defects as promised. A warrantor does not have an unlimited time for performance of its obligation.

The Lemon Law's mandate was to promptly repair defects in vehicles' operation. Unreasonable delays in repairing or inability to adequately repair a product where the manufacturer has promised such repairs causes a limited repair and replace warranty remedy to fail of its essential purpose.

The Lemon Law was enacted to give quick and sure relief to consumers compelled to endure unreliable and trouble-plagued vehicles, where prolonged litigation would only serve to defeat the intent of the law.

Our courts have held that the Lemon Law was aimed at eliminating consumer frustration caused by defective products and easing some of the difficulties inherent in pursuing claims arising out of product warranty disputes.

What Is A Consumer's Burden of Proof In a Lemon Law Case?

A consumer's burden of proof in a Lemon Law case is not to pinpoint the precise part that caused a vehicle's malfunction. Rather, all that a consumer need prove was that the performance of their particular vehicle was abnormal and unreliable to her/him. The car maker's authorized dealers must be provided a reasonable opportunity to repair the vehicle, without success.

The Defect(s) With A Vehicle's Operation Must Be A Substantial Nonconformity

Nonconformity means a defect substantially impairs the use, value or safety of a new motor vehicle to the buyer. Thus, the issue is whether the subjective use, value or safety of a vehicle to the consumer was substantially impaired. Examples include reducing or eliminating the use of a vehicle and using alternate transportation.

When Is A Vehicle A Presumed Lemon?

If a consumer's vehicle did not perform properly, through no fault of hers/his, and the car maker's authorized dealers were provided a reasonable opportunity to repair the vehicle's defect(s), then the consumer can be entitled to the Lemon Law's presumption that her/his car was defective. The Lemon Law presumption arises if a safety defect is repaired twice within the first 18 months'/18,000 miles' use of a vehicle, or if substantial defect(s) are repaired four times within the first 18 months'/18,000 miles' use, or if the vehicle remained in the shop for at least 30 days during the first 18 months'/18,000 miles' use.

The purpose underlying the Lemon Law's substantial impairment requirement was to preclude claims for minor problems that could be easily corrected. Courts have found vehicles defective and substantially impaired to consumers in the following instances: hard starting; stalling at startup; hesitation for 10-15 minutes after startup; delay in shifting into first gear; engine stalling; gurgling sound; windshield misting up; hard starting; engine stalling and rough idle; harsh shifting; lack of power; engine surging/dying.

Along with the express written warranty, car makers and dealers can be responsible for breaching the implied warranty of merchantability. A motor vehicle is not merchantable if it or its component systems were not fit for ordinarily-used purposes.

The Consumer's Continued Use of A Vehicle Does Not Prevent A Claim

In 1989, California joined the vast majority of state courts that were in general agreement that reasonable continued use of motorized vehicles does not, as a matter of law, prevent the buyer from asserting his/her Lemon Law claims.

One state court similarly held that a buyer did not waive his legal claims over a defective car after driving 23,000 miles. Another state's court held that Ford Motor Co. was not entitled to that state's Lemon Law's mileage offset for 78,000 miles' logged on a car because Ford was unable to repair a pulling problem after being provided a reasonable opportunity to repair the defect.

When a consumer has no practical alternative except to allow car makers and dealers to repair a defective vehicle, then continued use was justified when the consumer relied upon the limited repair-and-replace warranty remedy. Judicial recognition of continued use of defective motor vehicles acknowledged the inability of consumers to burden themselves with the debt of replacing their car when litigation was stalled by car makers.

A Breach of Warranty Entitles The Consumer To Recover Damages

The Lemon Law provides that when car makers and dealers breach their warranty obligations, then the consumer shall recover damages, attorney's fees, costs, and may recover a civil penalty. Exposure for a consumer's damages is not limited to the cost of repair or replacement of defective parts.

Incidental damages are those expenses associated with the inspection, transportation, care, and custody of the vehicle, and any other reasonable expenses related to the breach of warranty. These damages include money and time spent in efforts to make the vehicle conform to the warranties, substitute transportation, insurance while the vehicle is unused, and loss of use.

Consequential damages include any loss suffered by a consumer resulting from her general and/or particular needs of which the seller had reason to know.

A prevailing consumer under the Lemon Law is entitled to recover mandatory attorney's fees and costs of suit. The prevailing consumer need not pay for attorney's fees for them to be recoverable -- all that is necessary is that the consumer be obligated to pay for fees.

The Consumer May Recover Up to Double Her/His Damages

A feature of the Lemon Law is discretionary award of a civil penalty of up to twice a consumer's actual damages. The double damages provision is awardable two different ways: if the car makers and dealers fail to promptly repurchase or replace a vehicle once they failed to promptly repair the defects, or the car maker and dealers willfully violated their warranty obligations.

The rationale for discretionary award of double damages was to shift the risk of loss for unreliable, unsafe and value-impaired vehicles from consumers, who were least able to absorb the loss, to the car makers and dealers, which guaranteed their vehicles' future performance, were responsible for warranty obligations and chose to disregard those obligations.

Without imposition of some form of penalty for refusal to promptly honor their warranty obligations, car makers and dealers had no incentive to comply with the Lemon Law's obligations and their own guarantees of their vehicles' future performance. Our courts have construed the double damages provision as a deterrent to deliberate violations of the Lemon Law.

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