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NC Lemon Law Lawyer | Raleigh, NC Consumer Law Firm http://www.lemonlawnc.com A North Carolina Lemon Law and Consumer Protection Law Firm Mon, 21 Apr 2014 13:22:36 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 General Mills Arbitration – Can Buying a Product Force You to Give Up Your Legal Rights? http://www.lemonlawnc.com/blog/uncategorized/general-mills-arbitration-can-buying-product-can-force-give-legal-rights/ http://www.lemonlawnc.com/blog/uncategorized/general-mills-arbitration-can-buying-product-can-force-give-legal-rights/#respond Fri, 18 Apr 2014 17:54:02 +0000 http://www.lemonlawnc.com/?p=345 So now General Mills is forcing you to arbitrate disputes simply by engaging with them in an online forum, or even using a coupon to purchase one of its products!  Could you imagine that using a coupon for .25c off a box of cereal meant that you give up your legal rights relating to the […]

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So now General Mills is forcing you to arbitrate disputes simply by engaging with them in an online forum, or even using a coupon to purchase one of its products!  Could you imagine that using a coupon for .25c off a box of cereal meant that you give up your legal rights relating to the seller?  That’s what General Mills is now contending by updating its legal terms on its company website.

While the legal enforceability of the General Mills policy has yet to be tested, the social media backlash against General Mills has been swift.    Already, General Mills has responded trying to calm the storm.  In a follow up post on its company blog (careful, does simply clicking on the website subject you to arbitration?) General Mills attempts to explain itself and limit the fallout.  General Mills states “[n]o one is precluded from suing us merely by purchasing our products at the store or liking one of our brand Facebook pages.”  It does, however, state that “should an individual agree to the terms, they would then apply.”  Taking a look at the actual terms of the legal policy shows that it is not as clear cut as General Mills’ interpretation:

“PLEASE NOTE THAT SECTION 3 BELOW CONTAINS A BINDING ARBITRATION CLAUSE AND CLASS ACTION WAIVER.  IT AFFECTS THE RIGHTS YOU HAVE IN ANY DISPUTE WITH GENERAL MILLS (INCLUDING ITS AFFILIATED COMPANIES AND BRANDS), INCLUDING DISPUTES ARISING OUT OF YOUR PURCHASE OR USE OF ANY GENERAL MILLS PRODUCT OR SERVICE FOR PERSONAL OR HOUSEHOLD USE, INCLUDING GENERAL MILLS PRODUCTS PURCHASED AT ONLINE OR PHYSICAL STORES.”

1.  Your agreement to these legal terms

 These terms are a binding legal agreement (“Agreement”) between you and General Mills.  In exchange for the benefits, discounts, content, features, services, or other offerings that you receive or have access to by using our websites, joining our sites as a member, joining our online community, subscribing to our email newsletters, downloading or printing a digital coupon, entering a sweepstakes or contest, redeeming a promotional offer, or otherwise participating in any other General Mills offering, you are agreeing to these terms. 

Of course, your decision to do any of these things (i.e., to use or join our site or online community, to subscribe to our emails, to download or print a digital coupon, to enter a sweepstakes or contest, to take advantage of a promotional offer, or otherwise participate in any other General Mills offering) is entirely voluntary.  But if you choose to do any of these things, then you agree to be bound by this Agreement.”

Note how broad this provision is.  The scope of the covered events that trigger your supposed “agreement” to arbitrate could be interpreted to mean anything.  What is a “benefit” that is received from “using our websites”?  If you click on their website to download a recipe, is that a “benefit”?  How about “benefiting” by simply reading their blog post?  They can certainly track your IP address to confirm that you have visited the site.  It would be a simple matter to check their logs against your home computer to confirm that you have, in the past, visited their site, and so, arguably, have agreed to arbitration.

How about “otherwise participating in any other General Mills offering….”?  This conceivably could mean that simply by clipping a coupon in the Sunday paper,  you are agreeing to arbitration.  An interesting question is how they would ever find out you have done something like this, or the extent to which they could go to do so.     Does this broad, sweeping, arbitration policy make your general browsing history and internet habits fair game in the discovery process?  How would you like them requesting to analyze your hard drive?  Or how long does this supposed agreement last?  If you use a coupon today, but buy another General Mills product next week, does your coupon use today subject you to arbitration for all time, or until you opt out?

In sum, this is an incredibly overbroad arbitration “agreement”.  In light of the recent Supreme Court decisions enforcing arbitration clauses, you can bet that companies such as General Mills will be chomping at the bit to have a clause such as this upheld at the Supreme Court level.  The scary part is, they just might succeed.  This is another reason, among many, that we need to get the Arbitration Fairness Act passed through Congress.  Senator Franken has been instrumental in keeping this bill alive.  Hopefully, its time has come.  I would encourage you to contact your local Senator and express your views on this new front that has opened up in the war against forced arbitration.  Urge them to pass the Arbitration Fairness Act today.

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GM Ignition Recalls – Unmerchantable Vehicles? http://www.lemonlawnc.com/blog/used-cars/gm-ignition-recalls-unmerchantable-vehicles/ http://www.lemonlawnc.com/blog/used-cars/gm-ignition-recalls-unmerchantable-vehicles/#respond Fri, 11 Apr 2014 21:14:37 +0000 http://www.lemonlawnc.com/?p=341 There has been a lot of news lately about vehicle recalls, especially with the GM Ignition Recalls fiasco.  This leads to an interesting question of whether someone who has recently, but unwittingly, purchased a vehicle that falls under this recall should be allowed to return the vehicle to the dealer and get his or her […]

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GM Ignition Switch Recalls - Lemons?
There has been a lot of news lately about vehicle recalls, especially with the GM Ignition Recalls fiasco.  This leads to an interesting question of whether someone who has recently, but unwittingly, purchased a vehicle that falls under this recall should be allowed to return the vehicle to the dealer and get his or her money back.  Should you be stuck with a potentially deadly vehicle, even if the problem is fixable?  Should you be forced to do business with an entity that lied to you?

Under the Uniform Commercial Code, there is an implied warranty of merchantability in the sale of every vehicle.  (unless it is disclaimed by buying it “as-is”, but that is another discussion).  An implied warranty arises by law (and so does not have to be written down), and warrants that, at the time of sale, a vehicle is going to be “merchantable”.  This basically means, will the vehicle perform its general function (get a driver from point A to point B), or will it “pass without objection in the trade”.  So, if you buy a vehicle that has no engine, it is not merchantable because it won’t get you from A to B.  By the same token, if you go to a car lot and are shown two vehicles, one with a potentially deadly defect, and the other without, which one would you buy?  Obviously, most people would choose the one without the defect.

Certainly, a less risk-averse buyer might see the situation as an opportunity to get a vehicle for less than he would otherwise have to pay, but that is the point.  Assuming you prove a breach of warranty claim, your measure of damages is the difference in the value of the vehicle that was warranted (the one without a defect), and the value of the vehicle that you got (the one with the defect).  The amount of this difference depends on a lot of things, but suffice to say, there is certainly a difference.  How much would you pay for the privilege of riding in a vehicle that could possibly kill you?

Now, some might point out that the recall will, presumably, fix the problem, and so “no harm no foul”.  So does the existence of a vehicle problem that is fixable, but still not what you bargained for at the time of purchase, mean that you have to live with it, or should you be able to return the vehicle to get your money back?  Who bears, or should bear, the risk in purchasing such a vehicle?  The consumer, the dealer, or the manufacturer that made the vehicle (and put its customers lives at risk by refusing to come clean until years later?)  As with so many legal questions, the safest answer is probably “it depends”; it depends on when you bought the vehicle, to what extent the vehicle is actually repaired after the recall is performed, whether the dealership knew about the vehicle’s recall before selling it?  (which is a battle that is currently being fought in California), and, in this case, what the manufacturer knew and when the manufacturer knew it.

As it stands now, GM obviously did not learn anything from the lessons that were there to be learned from Ford and Firestone before them.  They are finding out the hard way that it does not pay to try to defraud and endanger the public in the interest of saving money.

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YoYo Jury Verdict Upheld By NC Court of Appeals http://www.lemonlawnc.com/blog/uncategorized/yoyo-verdict-upheld-nc-court-of-appeals/ http://www.lemonlawnc.com/blog/uncategorized/yoyo-verdict-upheld-nc-court-of-appeals/#respond Fri, 04 Apr 2014 18:44:12 +0000 http://www.lemonlawnc.com/?p=304 NC Court of Appeals Upholds Jury Verdict for Dealership in a YoYo Sales In March, the North Carolina Court of Appeals issued an opinion affirming a jury verdict on an auto fraud case involving yoyo sales.   In Patterson v. University Ford, Inc., the Plaintiff sued University Ford following her attempt to buy a 2010 Mustang.   […]

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NC Court of Appeals Upholds Jury Verdict for Dealership in a YoYo Sales

In March, the North Carolina Court of Appeals issued an opinion affirming a jury verdict on an auto fraud case involving yoyo sales.   In Patterson v. University Ford, Inc., the Plaintiff sued University Ford following her attempt to buy a 2010 Mustang.   The general manager purportedly told her that she had been “approved” for financing.  She filled out the paperwork to buy the car, including a Retail Installment Sales Contract (RISC), which stated that the defendant was the “Seller-Creditor” and that the defendant had “assigned” the RISC to C&F Finance Company.

She also signed a conditional delivery agreement (CDA) which stated, in part, that the “terms of the [RISC] are not binding until accepted by a designated lender.  This contract is cancelled if the terms are rejected by a lender.”  The defendant’s controller testified at trial that the dealership doesn’t accept deals on a “buy here pay here” basis, and that it never intended to accept payments from the plaintiff.

A critical aspect of the case was that the defendant apparently kept the car insured on its own insurance policy after the plaintiff left the lot, and never filled out any title transfer paperwork, such as a title application.  After the defendant was unable to prove a source of additional income for the plaintiff, they told her that the deal wouldn’t get done, and later repossessed the vehicle.

The jury returned a verdict for the defendant.  The plaintiff moved for a new trial, which the trial court denied, and the plaintiff appealed.

The plaintiff made a number of arguments on appeal.  One of the main arguments was that the trial court erred in giving improper jury instructions.  The trial court instructed the jury that title to, and therefore ownership of, a vehicle  passes when a certificate of title is issued. Specifically, NCGS 20-72(b) states “[i]n the context of automobile sales, new title to any motor vehicle shall pass or vest until an assignment and warranty of title is executed by the owner on the reverse certificate of title.”   The plaintiff argued on appeal that the Uniform Commercial Code should have governed when ownership of the vehicle passed to the plaintiff, specifically, that N.C.G.S. (UCC) 25-2-401(2) should have controlled the issue of ownership.  That statutes states “[t]itle, and therefore ownership, passes to the buyer at the time and place at which the seller complete his performance with reference to the physical delivery of the goods, despite any reservation of a security interest and even though a document title is to be delivered at a different time or place….”  The plaintiff’s proposed instruction though left out key initial language in this section that actually reads “[u]nless otherwise explicitly agreed….”  Thus, the Court of Appeals found that the plaintiff’s requested jury instruction was not a complete statement of the law, and therefore the trial court properly instructed the jury on the ownership rule set forth in 20-72(b).

During the trial phase, the plaintiff did not object to the jury instructions, which prevented her from getting a second bite at the apple by arguing on appeal that those instructions were erroneous.  Had she objected to the instructions at the time, and requested that the jury be given a UCC instruction, the Court of Appeals would have made a more substantive analysis.  As it now stands, the question of when, exactly, the UCC will control the issue of ownership in a motor vehicle sale, remains open.  There are some nuances in North Carolina case law on this point, such that there may be times when the UCC, and not the Motor Vehicle Act, will control.  Fortunately, the Court did not make any further analysis on this point, keeping the argument alive for another day.

Substantive Claims

At trial, the plaintiff asserted claims for breach of contract, conversion, and unfair and deceptive practices.

Breach of Contract

On the breach of contract claim, the Court ruled that the CDA and the RISC should be read together, and that the failure of the dealer to sell the RISC to C&F Finance Company meant that the a condition precedent hadn’t occurred, and the contract was therefore void.  Because the dealer was not able to sell the contract to a third party finance company, the condition did not occur, the RISC was voided, and the jury found that no breach of contract occurred.

The one positive take away from this ruling is that the Court stated that the question of whether there was “mutual assent” between the plaintiff and defendant, and whether a contract was intended between the parties, is a question of fact for a jury.

The plaintiffs also argued that the presence of a merger clause in the retail installment contract should have precluded the conditional delivery agreement from being introduced at trial.  A merger clause is a clause that combines all prior agreements between parties to a contract within the four corners of a contract document.  In this case, and in the case of almost all retail installment sales contracts, the RISC contained a merger clause that stated “this contract contains the entire agreement between you and us relating to this contract.”  The plaintiff argued that this clause should have excluded the conditional delivery agreement document, since the RISC did not state that it was conditional in any way.

The outcome here hinged on the fact that the dealership maintained insurance on the vehicle.  Under the North Carolina Conditional Delivery Act, N.C.G.S. 20-75.1, a dealer can do a conditional delivery of a vehicle, but must keep the vehicle on its own insurance policy and cannot issue 30-day tags or transfer the title of the vehicle.  The outcome may very well have been different had the plaintiff actually presented evidence that she insured the vehicle during the time that she had it.  Had the dealership made her do this before driving off with the vehicle, I think that a stronger argument could have been made that the dealership violated the Conditional Delivery Act, and therefore should not have been allowed to introduce evidence of the conditional delivery agreement at trial.  In any event, I think that under the facts of this case, the Court of Appeals reached the correct result.

Conversion

The Court of Appeals also upheld the jury’s verdict on the conversion claim.  Basically, the Court reaffirmed the principle that “ownership is the issue for the jury”.  Thus, because there was a disagreement between the parties as to when ownership of the vehicle passed to the buyer, this factual dispute was correctly decided by the jury.  Again, the positive take away from this opinion is that such an issue is one that is correctly for a jury to determine in future cases.  I am glad that the Court of Appeals did not state as a matter of law that ownership of a vehicle in a situation like this automatically stays with the dealership.

Unfair and Deceptive Practices

The plaintiff argued that the dealership committed an unfair and deceptive practices by purportedly selling the vehicle using an unconditional retail installment sales contract along with a conditional delivery agreement.  In upholding the jury verdict, the Court of Appeals simply referenced the Conditional Delivery Act, N.C.G.S.  20-75.1, which states that a dealership may sell a vehicle conditioned on the purchaser obtaining financing.  However, the dealership must keep the vehicle on its own insurance policy until “final financing is obtained.”  If it doesn’t, then the dealership violates the law.   Because, in this case, it appears that the dealer actually followed the law by maintaining insurance coverage on the vehicle, I think that an argument for an unfair or deceptive practice was weak.

Summary

Quite frankly, I think that North Carolina consumers dodged a bullet on this case. This was, unfortunately, not a good case to take up on appeal, and the Court of Appeals could have made a more detailed ruling that harmed consumers in future cases.  The fact that it did not, and limited its ruling to just those facts in this particular trial, was beneficial long term.

While the case is not a good one, the positive take away is that it appears that future cases will at least reach a jury.  For practitioners looking to accept similar cases, it is imperative before taking the case to determine the exact sequence of events in the transaction, the nature and extent of the documents that the consumer signed, and the issue of insurance coverage.

The simple fact is, dealerships in North Carolina routinely violate the Conditional Delivery Act by representing to consumers that sales are final and unconditional, only to later go back on those representations when a third party finance company does not agree to buy the contract, for whatever reason.  Dealerships go wrong by selling vehicles to consumers while having the customer insure the vehicle while the dealer is trying to sell the RISC, putting 30-day temporary tags on the vehicle, and filling out reassignment of title documentation.  Many times they make the problem worse by later refusing to return the customer’s deposit money, selling or refusing to return trade-in vehicles, etc.

They say that bad facts make bad law.  Unfortunately, I think this opinion will only embolden North Carolina dealers who will read this case too broadly as a vindication of their practices, and double down on their Yo-Yo practices.  Only time will tell.

 

 

 

 

 

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BBB: Better (for) Business Bureau? http://www.lemonlawnc.com/blog/nclemonlaw/bbb-better-for-business-bureau/ http://www.lemonlawnc.com/blog/nclemonlaw/bbb-better-for-business-bureau/#respond Tue, 21 Jan 2014 19:42:21 +0000 http://www.lemonlawnc.com/?p=296 If you bought a new car or truck in North Carolina, then it most likely came with a manufacturer warranty, which requires the manufacturer to repair a covered defect that shows up within the warranty period.  If the manufacturer is unable or unwilling to repair any covered defect, your warranty probably requires you to participate […]

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If you bought a new car or truck in North Carolina, then it most likely came with a manufacturer warranty, which requires the manufacturer to repair a covered defect that shows up within the warranty period.  If the manufacturer is unable or unwilling to repair any covered defect, your warranty probably requires you to participate in a non-binding “informal dispute settlement procedure” (arbitration) through either the BBB’s Auto Line program or another provider called the National Center for Dispute Settlement.   This arbitration is non-binding in the sense that if you don’t like the outcome, you can pursue the warranty claim in court.  If you win, however, the manufacturer has to accept and abide by the arbitrator’s decision.   Although for reasons we will discuss later, you can still reject a “favorable” award if you wish.

On the surface, this seems like a good system.  Unfortunately, it presents some pitfalls for the unwary if your warranty requires arbitration by the BBB.

In fact, if you have been awarded a repurchase or replacement from the Auto Line program from some of these manufacturers (Honda, Acura, and Ford, for example), you have most likely actually received less than the North Carolina Lemon Law (or another state’s law) allows you!  Put another way, you have been the victim of a rigged set of rules that have been agreed to by vehicle manufacturers and the BBB where, even if you win, you can only hope to recover a fraction of what you should be entitled to under the law.

This patently unfair system is illustrated by a recent Ford lemon law case I handled, which illustrates how the rules are being used to line the pockets (by minimizing the losses) of vehicle manufacturers participating in the BBB Auto Line.

Understanding how the system actually works in practice requires an understanding of the Magnuson-Moss Warranty Act (the federal law that allows these “informal dispute settlement procedures”) and the Federal Regulations that actually set up the rules of the game.  Only by understanding how the system is supposed to work can one see how this negatively impacts consumers.

The Setup

As part of the warranty dispute process, the Magnuson-Moss Warranty Act, specifically,  15 U.S.C. § 2310(a), allows manufacturers to set up “informal dispute settlement procedures” to process warranty disputes in what is supposed to be a timely and cost-effective manner (and, probably more importantly to the manufacturers, without any meddlesome lawyers getting involved).

The Mag-Moss Act includes a glossy, pleasant-sounding policy:

“Congress hereby declares it to be its policy to encourage warrantors to establish procedures whereby consumer disputes are fairly and expeditiously settled through informal dispute settlement mechanisms.”

Sounds great, right?  Of course, manufacturers jumped on this, and some contracted with the BBB, setting up procedures that are reflected in the BBB Auto Line program.  This pre-litigation requirement is included in most manufacturers’ warranty books.  For example, Ford Motor Company’s 2013 warranty states the following:

“You are required to submit your warranty dispute to the BBB AUTO LINE before exercising rights or seeking remedies under the Federal Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. To the extent permitted by the applicable state ‘‘Lemon Law’’, you are also required to submit your warranty dispute to the BBB AUTO LINE before exercising any rights or seeking remedies under the ‘‘Lemon Law’’. If you choose to seek remedies that are not created by the Magnuson-Moss Warranty Act or the applicable state ‘‘Lemon Law,’’ you are not required to first use BBB AUTO LINE to resolve your dispute – although the program is still available to you.” (emphasis added).

Ford requires this program to be used before you can bring a lawsuit for any claims for breach of warranty.  If you don’t follow this step, then you lose your right to bring the claim in court, and your case can be dismissed.

This arbitration requirement is fine in theory.  As discussed below, however, the BBB Auto Line rules drastically limit a consumer’s available lemon law recovery in many cases, which only benefits the manufacturer.

Comparison of NC Lemon Law and Ford Motor Company BBB Auto Line

NC Lemon Law Liability:  A defect has to show up within the first twenty-months or 24,000 miles after the purchase date.

The law presumes that the manufacturer has been given a reasonable number of attempts to fix a defect if the vehicle has been out of service for 20 business days or if the vehicle has been taken for repair four or more times for the same problem.   The defect only has to substantially impair the value of the vehicle to the consumer.

BBB Auto Line Liability (Ford Motor Company):  Under the Ford BBB Auto Line rules,

The arbitrator may award a repurchase or replacement only if the arbitrator finds that the claim meets the following conditions:

  • The defect(s) in material or workmanship covered by the Ford New Vehicle Limited Warranty was first reported to Ford or an authorized dealer within 18 months or 18,000 miles – whichever occurs first – after the vehicle’s warranty start date; and
  • Either (1) the same defect was subject to repair four or more times and continues to exist, or (2) the vehicle was out of service for 30 or more cumulative calendar days for repairs to any defect(s); and
  • The defect(s) substantially impairs the use, value, or safety of the vehicle to the reasonable consumer.

Ford’s rules make it harder to establish liability under the BBB Auto Line program because Ford vehicles have to be out of service longer (30 calendar days versus 20 business days), and the defect has to show up within 18 months or 18,000 miles from the warranty start date (as opposed to the date you purchased the vehicle).  Often, even if a vehicle is purchased new, it may have more miles on it due to test drives, use as a demonstrator vehicle or, in some instances, prior sales.  Thus, it is entirely possible for your warranty to start before you buy a vehicle.  Also, if you have a lemon vehicle that has been out of service for 21-29 business (but not calendar) days, then you do not qualify under the BBB, even though your claim would be valid under North Carolina law.

The problem also must begin and be reported to Ford or a dealer within 18 months or 18,000 miles rather than the longer 24 month/24,000 period allowed by statute.  Good luck trying to win (or even file) an arbitration against Ford if your problem started after 18 months/18,000 miles.

Not only is it more difficult to prove liability under the BBB, the BBB and Ford limit how much you can recover in the event that you do win the arbitration.

NC Lemon Law Remedy:  A consumer is entitled to recover the following:

“A replacement vehicle with a comparable new vehicle, or return of the vehicle and refund of the following:

(1) The full contract price including, but not limited to, charges for undercoating, dealer preparation and transportation, and installed options, plus the non-refundable portions of extended warranties and service contracts;

(2) All collateral charges, including but not limited to, sales tax, license and registration fees, and similar government charges;

(3) All finance charges incurred by the consumer after he first reports the nonconformity to the manufacturer, its agent, or its authorized dealer; and

(4) Any incidental damages and monetary consequential damages.

N.C.G.S. § 20-351.3(b) (emphasis added).

If your vehicle is repurchased, then the manufacturer is entitled to an offset for the mileage that you have driven.  A mileage offset is essentially a “rental” charge for the miles that you drove before the problem(s) started.

“The refund to the consumer shall be reduced by a reasonable allowance for the consumer’s use of the vehicle.  A reasonable allowance for use is calculated from the number of miles used by the consumer up to the date of the third attempt to repair the same nonconformity G.S. 20-351.3 which is the subject of the claim, or the twentieth cumulative business day when the vehicle is out of service by reason of repair of one or more nonconformities, whichever occurs first. The number of miles used by the consumer is multiplied by the purchase price of the vehicle or the lessor’s actual lease price, and divided by 120,000.”

N.C.G.S. § 20-351.3(c) (emphasis added).

Importantly, there is no usage allowance at all if you get a replacement vehicle.

BBB Auto Line Remedy (Ford Motor Company):

“Deductions/Exclusions from a Repurchase or Replacement Award

  • If the arbitrator awards a replacement, the award will require payment for the customer’s use of the vehicle in accordance with the following formula:

                                mileage at first repair of the defect for which a replacement is awarded  x purchase price
100,000

  • If the arbitrator awards a repurchase, the award will be reduced for the customer’s use of the vehicle in accordance with the following formula:

all accrued mileage – 100 miles    x   purchase price
100,000

BBB Auto Line Program Summary – Ford Motor Company – North Carolina

So under the BBB, what you thought was a good result (you won!), actually turns out to not be so good after all.  No matter what the outcome, the consumer ends up losing out.

Let’s take an example to illustrate the point:

Customer buys a new Ford vehicle for $25,000.00.

The new car is a lemon, and the customer reads the warranty and tries the BBB Auto Line on his or her own, without contacting an attorney.

After the hearing, the BBB awards a repurchase.

At the time of the arbitration, assume that the customer has 20,000 miles on the car.  Assume that the problem started at 5,000 miles, and the third repair happened at 15,000 miles.

Under the BBB, Ford Motor Company could deduct $4,975.00 from the total repurchase amount (this hypothetical leaves out taxes, tag, and title fees, and interest charges):

20,000 – 100    x   $25,000.00 = $4,975.00
100,000

Under the North Carolina Lemon Law, however, Ford could only legally deduct $3,125.00.

15,000 (miles at 3rd Repair)     x   $25,000.00 = $3,125.00
120,000

This is a $1,850.00 benefit to Ford because it does not have to pay Customer as much for her lemon!

It gets worse if there is a replacement.  If Ford has to replace the vehicle, Ford will be able to deduct $1,250 even though the lemon law does not allow them to do this!

5,000    x    $25,000.00 = $1,250.00
100,000

If you are unfortunate enough for the defect to start after 5,000 miles, then you could be left with thousands of dollars being deducted from your total recovery.  Because Ford uses an MSRP as the litmus test for a replacement value, it is entirely possible for a Customer to buy a Ford Focus ($16,310 MSRP), and end up with a Ford Fiesta ($14,000 MSRP).

Also, it is possible (and probable) that, if the remaining balance owed is more than the repurchase amount after the BBB Auto Line offset, the customer may even have to pay money out of pocket to pay off her lienholder!  This assumes that the customer would (or could even afford to)  take such a terrible deal in the first place.

So under the BBB, you could end up having to pay to get rid of your lemon.

What You Should Do

First and foremost, if your vehicle has a mandatory arbitration procedure, you need to look very closely at the wording in the warranty book itself.  If arbitration is required, this obviously needs to be done first, no matter how stacked the rules are against you.  You also need to look at the actual remedies that you can get under the arbitration program’s rules for each manufacturer.  To see the rules available for your vehicle under the BBB, check the BBB Auto Line website.

Secondly, know your rights and the remedies to which you are entitled.   The serious problems with the BBB arbitration rules show that you should be careful going into a BBB arbitration without a lawyer.  The pressure to accept a substandard decision in your favor can be great, especially when you have to consider the prospect of extended litigation.  However, because the BBB decision can be used against the manufacturer in court, if you get a favorable decision but don’t like the remedy, you should feel confident in standing your ground and forcing the manufacturer to comply with the law.

Finally, give us a call before making the decision to arbitrate.  As always, your options are only as strong as the facts of your case, so contact us discuss your situation.  Our case review and consultation are free, so you don’t have anything to lose by calling us to review your situation.

 

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Honda Pilot Seat Belt Defect Causes Recall http://www.lemonlawnc.com/blog/nclemonlaw/honda-pilot-seat-belt-defect-causes-recall/ http://www.lemonlawnc.com/blog/nclemonlaw/honda-pilot-seat-belt-defect-causes-recall/#respond Tue, 13 Sep 2011 11:11:51 +0000 http://www.lemonlawnc.com/?p=155 Honda has recalled 310,773 of its Honda Pilot SUVs to attempt to fix a seat belt defect.  After receiving two complaints of detaching seat belts in the last 18 months, Honda issued the recall to address a problem with the stitching that may not have been properly sewn.  The defective stitching could cause the seatbelt […]

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Honda has recalled 310,773 of its Honda Pilot SUVs to attempt to fix a seat belt defect.  After receiving two complaints of detaching seat belts in the last 18 months, Honda issued the recall to address a problem with the stitching that may not have been properly sewn.  The defective stitching could cause the seatbelt to detach suddenly, with obvious danger of injury in a crash.

While most recalls tend to fix the problem area, if it is found, some do not and the problem continues.  If your Honda is affected by this or has experienced other problems, and you want to discuss your legal rights, give us a call.

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Auto Sales Increased in 2010 http://www.lemonlawnc.com/blog/nclemonlaw/auto-sales-increased/ http://www.lemonlawnc.com/blog/nclemonlaw/auto-sales-increased/#respond Wed, 12 Jan 2011 17:50:18 +0000 http://www.lemonlawnc.com/?p=103 December auto sales increased almost across the board in 2010, with the exception being, not surprisingly, large SUVs, which fell 9.9% from 2009.  What does this mean?  Well, for one, it is good news for the auto industry.  I am sure the workers in Michigan and elsewhere are breathing a sigh of relief.  It also […]

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December auto sales increased almost across the board in 2010, with the exception being, not surprisingly, large SUVs, which fell 9.9% from 2009. 

What does this mean?  Well, for one, it is good news for the auto industry.  I am sure the workers in Michigan and elsewhere are breathing a sigh of relief.  It also means that if you are one of the purchasers of these new vehicles, the clock has started running to determine if you were one of the unlucky few who has purchased a lemon.  The complexity of today’s vehicles, and the sheer number of parts and systems within each vehicle, means that every year manufacturers will produce a certain number of lemon vehicles.  Some auto makers are better than others, and therefore produce less, or they simply don’t produce or sell as many vehicles, but the vehicles are out there.  When defects happen, and the manufacturer can’t or won’t repair the problem, give us a call.  We’ll be glad to help.

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Mean Automakers Dash Hopes for Flying Cars http://www.lemonlawnc.com/blog/miscellaneous/95/ http://www.lemonlawnc.com/blog/miscellaneous/95/#respond Thu, 16 Dec 2010 15:08:04 +0000 http://www.lemonlawnc.com/?p=95 Perhaps fortunately, we won’t have to worry about the prospect of flying lemons dropping from the sky any time soon.  If you have a real, land-based, lemon this website  is intended to provide you with the tools to make an informed decision about your vehicle under the North Carolina Lemon Law.

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Perhaps fortunately, we won’t have to worry about the prospect of flying lemons dropping from the sky any time soon.  If you have a real, land-based, lemon this website  is intended to provide you with the tools to make an informed decision about your vehicle under the North Carolina Lemon Law.

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So you think you might have a lemon? http://www.lemonlawnc.com/blog/nclemonlaw/so-think-might-have-lemon/ http://www.lemonlawnc.com/blog/nclemonlaw/so-think-might-have-lemon/#respond Tue, 16 Nov 2010 00:55:39 +0000 http://www.lemonlawnc.com/?p=63 The feeling might begin after the first trip to the dealership for repair, perhaps only identifying itself as a faint sense of unease.  After all, you just bought your car new right?  It shouldn’t need to be in the shop in the next 50,000 miles, much less the first three or ten?  So what is […]

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The feeling might begin after the first trip to the dealership for repair, perhaps only identifying itself as a faint sense of unease.  After all, you just bought your car new right?  It shouldn’t need to be in the shop in the next 50,000 miles, much less the first three or ten?  So what is going on?  The repair order may or may not identify the problem, but when the issue shows up again the next day or week or month, requiring yet another trip to the shop, the feeling of unease turns into a sinking feeling in the pit of your stomach.  The third, fourth, and even fifth trip turns unease into out and out frustration and aggravation.

If you are at this website, then you most likely know the what I am talking about, and you are most likely looking for answers.  So what can you do?  Well, the first thing to do is relax if you can.  There is hope.  The NC lemon law exists to protect consumers like yourself from just these sorts of issues.  The question you need answered now is how to protect yourself in the short term and  set yourself up for the best chance of success in a lemon claim over the long term.  The answer is simple, turn your frustration into motivation.  The critical thing to remember is that repair orders (ROs) are critical, perhaps the most important, pieces of evidence that exist in any lemon claim.  Make sure that the repair orders you get from the dealership are thorough and adequately spell out both your concerns and what the dealership did about it.  If the dealership was unable to ‘duplicate the concern’ then make sure that is the case.  Ride along with them if necessary, but make sure your issues are addressed to your satisfaction.  Make sure you keep detailed notes on not only the ‘service advisor’, who is often the only name you will see on an RO, but also on the mechanic who actually ‘turned the wrench’ on your car.  You have a right to these ROs so make sure you get them all.  If you don’t have a record of a visit, then be persistent (but polite) in your request for a copy.  Finally, it is a good idea to try to get a ‘warranty repair history’ from the dealer if they will give this to you.  This is essentially a summary of all warranty visits for your vehicle no matter where it was conducted.

Second, gather all of your paperwork from the initial sale, both dealing with your vehicle and with any trade in, third party warranties, service contracts, and anything else you can think of from the date of sale.  These will help if and when the manufacturer finally agrees to buy your vehicle back or replace it.  They also provide valuable information regarding the original sale.  While the NC Lemon Law does not require a dealership to repurchase or replace your vehicle, it does require the dealer to repair any issues that are covered by the manufacturer’s warranty.

Finally, give us a call (or call us first if you wish, and then gather all of the above information ).  We can help you review the documents to identify the claims that might be available and help you take the first step to getting rid of your lemon.

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What is a Lemon Law? http://www.lemonlawnc.com/blog/nclemonlaw/lemon-law/ http://www.lemonlawnc.com/blog/nclemonlaw/lemon-law/#respond Sat, 28 Aug 2010 23:43:19 +0000 http://www.lemonlawnc.com/?p=47 Those in other states

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A “lemon law” is  a general term for a state statute that regulates manufacturers of motor vehicles, and spells out the circumstances under which they must buyback or replace vehicles that they make and sell to the public.  Although some states have lemon laws that cover used cars, and sometimes other products entirely, most specifically deal with the sale of new vehicles.  The laws basically place a cap on the manufacturer’s chances to fix defective vehicles that they distribute into the marketplace.  The laws can be seen as both a sword and a shield for consumers.  The consumer is given a civil right of action for breach of the manufacturer’s warranty if the vehicle he or she purchased suffers from unrepairable defects, and also protects them from a manufacturer’s attempts to delay taking action to remedy the problems by providing caps on the number of repair attempts a manufacturer may make, or the number of days they may use to fix a defect.

Although each state’s lemon law might differ in certain respects, as a general matter they all impose similar requirements.  A car buyer must provide notice to the manufacturer that his or her vehicle is defective in some manner and has not been able to be repaired.  The laws give manufacturers a specified number of attempts to fix the problem or problems, or give them a specified time period within which the repairs must be made.  If it is unable to do so, the law generally requires the manufacturer to buyback or replace the customers vehicle. 

North Carolina’s lemon law provides manufacturers with four opportunities to repair a single defect with a consumer’s vehicle, or gives them 20 days within any 12-month period of the warranty to repair a single defect or a series of defects.  Therefore, if the manufacturer takes thirty days to repair thirty separate defects than the vehicle would fall under North Carolina’s lemon law; similarly, if a manufacturer tries to repair the same defect four or more times without success, the vehicle would also fall under the lemon law.  As mentioned above, consumers in North Carolina must provide manufacturers with notice of the existence of the defect after the third unsuccessful repair attempt or the twentieth (or close to it) day in the shop.  If the manufacturer refuses to repurchase or replace the consumer’s vehicle after these milestones have been met, then the consumer has the right to bring an action in court provided they give the manufacturer at least ten-days written notice of his or her intent to do so.

Moreover, lemon laws, like most consumer protection statutes, contain attorney-fee shifting provisions,which require manufacturers to pay the attorney fees of the prevailing consumer, although the circumstances under which these fees may be awarded differ considerably from state to state.

If you think you may have a lemon, be sure to contact an experienced lemon law attorney to discuss your rights.  Contact us today to find out more.

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Chrysler recalls 25,000 cars for sticky pedals http://www.lemonlawnc.com/blog/nclemonlaw/chrysler-recalls-25000-cars-for-sticky-pedals/ http://www.lemonlawnc.com/blog/nclemonlaw/chrysler-recalls-25000-cars-for-sticky-pedals/#respond Thu, 01 Jul 2010 19:09:06 +0000 http://www.lemonlawnc.com/?p=38 Chrysler recalls 25,000 cars for sticky pedals. “Chrysler Group is recalling about 25,000 model year 2007 Dodge Caliber and Jeep Compass cars in the U.S. because of a problem that causes the gas pedals to stick.” The problem is that these vehicles have been manufactured in 2007 and so, depending on the date of sale, […]

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Chrysler recalls 25,000 cars for sticky pedals.

“Chrysler Group is recalling about 25,000 model year 2007 Dodge Caliber and Jeep Compass cars in the U.S. because of a problem that causes the gas pedals to stick.”

The problem is that these vehicles have been manufactured in 2007 and so, depending on the date of sale, your lemon law rights may have expired if you purchased one of these vehicles prior to, currently, July 1, 2007.  If you have experienced or are experiencing a problem relating to sticky pedals or other defects with your Chrysler vehicle that started within the first 24 months or 24,000 miles, you may want to consider contacting an attorney to see if you have any further rights under the North Carolina Lemon Law.

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