Chrysler in violation of 'lemon law,' judge rules
COURTS: An Orange County case could lead to penalties for disobeying rules
on defective vehicles.
December 16, 2000
By ANNE C. MULKERN
The Orange County Register
Chrysler Corp. has repeatedly violated the state law requiring car makers to
buy back or replace troublesome vehicles, a judge ruled in an Orange County
case.
Superior Court Judge David C. Velasquez, in a ruling following a six-week
trial, said the company does not tell consumers about the "lemon law" and
instead forces them into arbitration.
Velasquez cited 15 unlawful, unfair and fraudulent business practices by the
company.
DaimlerChrysler Corp., in a written statement, said it has "extensive
policies in place to satisfy customers under the terms of California law.''
Chrysler Corp. became DaimlerChrysler in 1998, about two years after the
lawsuit was filed.
The judge, in his ruling, said Chrysler "unfairly requires owners to apply
for unnecessary arbitration when there appears to be no reason to dispute
the fact that defective conditions persist even after a reasonable number of
repair attempts by the dealer.''
Other violations include not having a procedure to allow a car owner to seek
replacement or restitution without arbitration, and not instructing dealers
that they need to tell consumers about the lemon law after a certain number
of repair attempts. The company also does not advise consumers that they
have the option of choosing a refund or a replacement car, the ruling
states.
Velasquez will issue a final judgment, with possible penalties, next month.
Consumer Advocates, the group that sued Chrysler Corp. asserting lemon-law
violations, plans to file court papers next week asking Velasquez to issue
an injunction ordering the company to cease unlawful practices. The case
includes complaints from about 30 consumers, most of them from Orange
County.
Consumer Advocates said it plans to seek provisions in which DaimlerChrysler
would be monitored to ensure it follows the law. Subsequent violations could
bring penalties, said Martin Anderson, attorney for the consumer group.
The case is not the only complaint involving Chrysler and its application of
the lemon law. The California Department of Motor Vehicles in 1996 proposed
suspending Chrysler's sales license for 45 days after the agency found the
company illegally resold cars considered lemons. That issue has been sent
back to a lower court after an appeals court agreed with DaimlerChrysler's
contention that the DMV withheld evidence.
The lemon law says car makers must buy back or replace a vehicle after a
reasonable number of repair attempts. Reasonable is not defined, though four
attempted repairs within 18 months is considered the standard.
"It basically says if they can't fix it, they have to buy it back,'' said
Rosemary Shahan of Consumers for Auto Reliability and Safety in Sacramento.
"It puts the ball in their court to promptly replace a defective product.''
DaimlerChrysler, in its statement about the Orange County case, said
Consumer Advocates "failed to produce a single instance where
DaimlerChrysler failed to repurchase or replace a vehicle which qualified
under the law.''
But Martin Anderson, attorney for the consumers who filed the suit, said the
judge's ruling clearly states otherwise.
Michelle Hutchinson, 33, of Yorba Linda testified in the case about her
experience with the company.
She said in an interview this week that she and her husband, Jim, took their
new Dodge Stratus for nine brake repairs in two years.
"How can someone look us in the face and tell us replacing brakes and rotors
on a car nine times in two years is not (a sign) something is wrong?''
Hutchinson said.
During that time, she said, no one at the Chrysler dealership where she went
for the repairs mentioned the lemon law. She later found information about
it in her owner's manual.
An arbitration board ruled the company only needed to fix the car again.
Hutchinson and her husband sold the vehicle to a used-car dealer for less
than the amount they owed on the lease. They took out a $5,000 loan to make
up the difference.
DaimlerChrysler is unlikely to be fined in the case, with the possible
exception of paying the consumer group's attorneys fees, Anderson said.
The judge said there was insufficient evidence that DaimlerChrysler had made
a profit as a result of an unlawful business practice.
Ron
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