Posted On: August 23, 2007

Lemon Car: Toyota Prius may be a defective car by design

Consider the danger of driving a vehicle and having it suddenly surge or lunge forward uncontrollably. This is what happened to several Toyota Prius owners recently who described their experience as an "uncontrollable acceleration." One Prius owner stated that his lemon car "took off like a rocket."

According to two articles, published by ConsumerAffairs.com, despite repeated complaints and requests for repair by these owners, Toyota service centers minimized the concern and insisted that this was nothing more than "a carpet jamming the accelerator pedal or driver error."

If this has happened only once before, then this rationale may be a plausible reason for the abnormal defect. However, if there has been numerous complaints of similar problems by different Prius owners, then either Toyota or its technicians are careless in its diagnostics, or it seems, to me, that there may be intentional misrepresentations here. This is a products liability issue.

If you happen to be in a similar situation with your lemon vehicle, it is important to do the following to preserve your rights as a consumer:

First, get everything in writing. For example, if the service manager indicates to you that this is merely driver error, then ask him to write that on the repair invoice. Thereafter, remove the carpet from your vehicle and see if the same problem reoccurs. If it does, then it would be difficult for the same service manager to negate his or her diagnostic error when you bring the vehicle in again for the same problem.

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Posted On: August 21, 2007

Better Business Bureau’s (BBB) lemon law arbitration program, an overview

Aside from the Texas lemon law, consumers of defective cars may file a claim against a car manufacturer through the Better Business Bureau’s (BBB) Lemon Law Arbitration Program. Usually, the BBB arbitration program is binding to the manufacturer and non-binding to the consumer.

This article will not discuss the benefits or disadvantages of participating in this program, as each case is different and it is best that you contact a lemon law attorney to determine which options may be best for you.

The first step in opening a claim with the BBB program is to determine if your car manufacturer participates in the arbitration program in your state. The second step is to file a claim with the BBB either by telephone or online at the BBB website.

After you have submitted your basic information, the BBB mails you a “Customer Claim Form.” You will need to complete the form and mail it back to the BBB within a certain amount of time. Thereafter, the BBB will use the information that you have provided to determine whether your vehicle is eligible to participate in the program or not – this is normally based on the current mileage on your vehicle and how long it has been since the time that you purchased the alleged lemon car.

The next step involves the BBB case handler contacting you and the manufacturer to informally resolve the “lemon dispute” on your car. Typically, the manufacturer will take on the position of denying your claim and possibly offering you an extended warranty. If you do not accept the extended warranty offer, then you may request or move to have your claim proceed to arbitration.

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Posted On: August 20, 2007

Defective lemon homes

We are going to take a break from discussing lemon cars and turn our attention to houses that are lemons. Much like in the case of vehicles, the construction and materials used in a new house can also be defective. However, unlike the case of vehicles, where there is a strong established history of state and federal law (e.g. Magnuson Moss Warranty Act), home buyers are treading in much less chartered waters.

New cars are simpler and more straightforward ‘devices’ than new homes are. Cars are massed produced and the specification for a particular make and model should be the same for each vehicle. A vehicle goes through extensive testing and validation during the design phase and the resulting vehicle is well defined. This information is used by the manufacture in marketing the vehicle and is available to the consumer in the form of specification sheets, technical service bulletins, and user’s manuals.

More and more, houses are also being mass-produced, either entirely – as in mobile homes or pre-fabricated homes, or in parts – as in the case of prefabricated trusses and sections. A new house has the potential for much more customization and variability than a new car does. While you have options as far as color and added features, many new homes are close to unique. An additional variable when considering a new home is the environment, including the land the house is built on, the amount of annual rain the area receives, the temperature range to which the house will be subjected to, and etc.

I do not want to give the impression that the materials and mechanics of house construction are not well understood. Humans have been building structures far longer than they have been building cars and there is a vast area of civil and mechanical engineering and material science dealing with the construction of structures.

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Posted On: August 15, 2007

Porsche and the lemon law

The owner of a Porsche with a defective spoiler deployment system was awarded $226,160 – plus he gets to keep the car. (Notice: I did not handle this case. Please read further).

This case involves Bruce Tammi’s 2003 Porsche 911 Turbo coupe. Mr Tammi originally leased his Porsche. During the first year of the lease, Tammi brought the vehicle in for repairs six times for a spoiler which would not properly deploy and retract. After making $57,458 in lease payments (and having experienced this problem) he opted to buy the car for $75,622.

Tammi, himself a lawyer, undertook lemon law proceedings against Porsche. At trial, in Federal court, Porsche unsuccessfully argued that the malfunctioning spoiler represented only an inconvenience and did not impair the use or operation of the vehicle. Tammi prevailed at trial and a jury awarded him $26,000. Judge Charles Clevert Jr, the U.S. District Court judge who presided over the trial, determined that the jury’s award was improper under Wisconsin’s lemon law. He changed the award to $266,160. Judge Clevert arrived at this figure by taking the total amount that Tammi had paid – both in lease payments and in purchase price, and doubling that value. Clevert stated that "Tammi's receipt of double damages plus his retention of the car together do not seem unreasonably harsh in light of the purposes of the lemon law statute. If they appear too harsh for Porsche, Porsche should direct its concerns to the state legislature."

Tammi indicated that he would have settled the case for much less, had Porsche been receptive to his earlier offers. Porsche is considering their appellate options

Manufacturers and dealers are required to provide a product that performs as advertised. If they do not, they are required to repair it within the terms of the provided warranty. Under existing lemon laws, when this fails to happen, the purchaser is entitled to some compensation such as cash or a replacement vehicle. The goal is to be fair to all parties.

If you think that you have a lemon vehicle, you may want to consult with an attorney as soon as possible.

Posted On: August 4, 2007

Frank Moss, the second co-creator of a consumer law that helped shape lemon laws in the United States (Part Two)

This is the second of a two part series on the Magnuson-Moss Warranty Act – a piece of legislation that is central to many automobile lemon law claims. Last time, we looked at the life of William Grant Magnusson. This time, we will examine the other legislator whose name this legislation bears.

Frank Edward Moss (September 23, 1911 – January 29, 2003) was born in Utah – the state he would later represent in the Senate. Like William Magnusson, Moss was also a lawyer by training, graduating from the George Washington University Law School, Washington, D.C., in 1937. Following graduation, he served on the staff of the Securities and Exchange Commission. In 1937, he returned to Utah where he served as a municipal court judge and then as a county attorney. Following an unsuccessful bid for the governorship of Utah in 1956, he was elected to the US Senate in 1958.

In the Senate, Moss took a particular interest in health care, environmental, and consumer issues. In 1967, he wrote a book entitled “The Water Crisis” dealing with issues of water use and pollution, especially in the Western portion of the United States. Moss was instrumental in legislation concerning fair packaging and labeling and truth in lending. He was active in health related legislating, being one of the original sponsors of Medicare and authoring the ban on TV cigarette advertising.

In 1976, he lost his Senate seat to Orrin Hatch and returned to the practice of law. Since Moss, Utah has not sent a Democrat to the U.S. Senate.

Both Magnusson and Moss shared a deep interest in protecting the health, safety and rights of the individual; from the safety of toys, to health care, to the Product Warranty and Guarantee Act. While lemon law attorneys frequently mention and use the “Mag-Moss” Act, we should occasionally pause and reflect on the great good that these two important legislators did for many other aspects of individual rights and health.

Posted On: August 3, 2007

William Magnusson, the co-creator of a consumer law that helped shape lemon laws in the United States (Part 1)

If you spend much time reading “lemon law” sites or talking to a “lemon law” lawyer, you are bound to hear the term “Magnuson-Moss Warranty Act”. This piece of legislation (sometimes abbreviated as Mag-Moss) is an important piece of federal law dealing with consumer warranties. It was enacted in 1975 in response to deceptive practices on the part of manufacturers and distributors. This is the keystone of many lemon law suits. While the mention of the Magnuson-Moss Warranty Act is common, there is rarely any discussion about the two legislators for whom the act is named.

William Grant Magnusson (April 12, 1905 - May 20, 1989) spent 45 years of his life as representative of the people of Washington state. He was a lawyer by training and graduated from the University of Washington Law school in 1929. After graduation, he practiced law in Seattle, including a position as a special prosecuting attorney in King County in 1931. His interest in politics started early and he was a founding member of the Young Democrats of Washington. He was elected to the House of Representatives in 1936 and was reelected three times. Magnusson served with Lyndon B. Johnson on the House Naval Affairs Committee. They remained friends. When Magnusson was married in 1964, LBJ was his best man.

In 1944, Magnusson was appointed to fill a vacancy in the U.S. Senate. He continued to serve continuously in the Senate until he was defeated in 1980. During his tenure in the senate, Magnusson fought strongly for funding for the state of Washington. Vice President Walter Mondale said of him: “He is scrupulously fair with federal funds; one half for Washington state, one half for the rest of the country.”

Magnusson was key to the development of many important institutions. He sponsored legislation that lead to the creation of the National Institutes of Health, He also sponsored legislation creating the National Health Service Corps and public television. He was instrumental in the passage of consumer rights and protection legislation, including the Safe Drinking Water Act, Fair Credit Advertising Act, as well as legislation ranging from requiring warnings on cigarette packages to the protection of marine wildlife in Puget Sound.

While in the area of warranty law, William Magnusson is known for his work protecting the consumer, his legacy is far greater than that, touching almost every aspect of American life.