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Corporate Lemon Law

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Lemon Laws Made Easy

Consumer Alert

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Consumer Alert
Lemon Laws Can Be Confusing. Read Our 101 To Get A Solid Understanding Of The Lemon Law.

State and federal statutes offer a wide array of relief for businesses saddled with a bad car or truck. At the same time, these statutes provide for recovery of costs and attorney fees – a strong incentive for attorneys who would like to take up the cause on behalf of unhappy lemon owners. This article will provide a brief overview of the many statutes that can be used to assist these potential clients, along with practice tips and case law.

Michigan Lemon Law 101

Michigan Lemon Law - MCLA 257.1401, et seq.

Michigan’s lemon law applies to new passenger cars and trucks purchased after June 25, 1986. Relief may be had only against the manufacturer or distributor of the vehicle, as opposed to the new vehicle dealer. MCLA 257-1401(b).

A “prima facie” lemon is a vehicle that continues to have a defect or condition that “substantially impairs the value of the vehicle” despite having been subjected to a “reasonable number of repair attempts.” It is presumed that a reasonable number of attempts have occurred if either of the following criteria have been met:

(a) The vehicle has been out of service for repairs for at least 30 days (or parts of days) during the first year of ownership for the same or different problems; or

(b) The vehicle has been subjected to four or more repair attempts for the same problem, provided that the first repair attempt occurred within the first year of ownership. MCLA 257.1403(a)-(b).

Once the vehicle has been out of service for 25 days or subject to repair for the same problem on three occasions, the buyer is required to notify the manufacturer, by certified mail, return receipt requested, of the need for repair. MCLA 257.1403(3). The manufacturer must then notify the buyer “as soon as reasonably possible” of a “reasonably accessible repair facility.” MCLA 257.1401(3)(a), (b). The manufacturer has five business days after delivery of the vehicle to the repair facility to complete the repairs. If repairs are not completed within the five days, the buyer is entitled to a refund or replacement vehicle “acceptable to the consumer.” MCLA 257.1403(1). See also Ayer v Ford Motor Company, 200 Mich. App 337 (1993) (summary disposition in favor of buyer affirmed, where the manufacturer failed to complete repairs in 5 business days, despite manufacturer’s argument that delay was due to unavailability of parts).

The refund or replacement must take place within 30 days after the final repair attempt. A refund is to include the purchase price, sales taxes, transfer fees, interest on any finance contract, and dealer-installed options or accessories, less a statutory offset for use. MCLA 257.1403(1). The offset for use is calculated based on a statutory formula:

  • Step 1. Determine the miles “attributable to the consumer” by taking the mileage at the time of the first repair and subtracting: (a) the miles on the vehicle at delivery, (b) miles back and forth to the shop, (c) miles put on by the repair facility. CM = consumer mileage.
  • Step 2. Determine the “purchase price” of the vehicle. This is the price of the vehicle before taxes, title, and registration fees, etc. PP = purchase price.
  • Step 3. Calculate offset: CM/100,000 x PP = Offset

If the manufacturer has an “alternative dispute resolution mechanism” (ADR) that meets Federal Magnuson-Moss guidelines (see discussion, infra), the buyer must first resort to that mechanism before filing suit in order to protect his or her right to recover costs and attorney fees. MCLA 257.1405. The result of the ADR is binding only on the manufacturer and not on the consumer. Thus, if the ADR does not result in appropriate relief (which it rarely does), the consumer is free to pursue his or her claim in court. It should be noted that the Lemon law does not supersede other remedies afforded under state or federal law. MCLA 257.1404.

Practice tip: It is often productive to file a motion for summary disposition pursuant to Ayer v Ford, supra, shortly after filing suit. Even if the motion is lost, this will force the defendant to put its best evidence forward at an early stage. You can then focus your discovery on dissipating the defendant’s line of defense.

Uniform Commercial Code
Magnuson-Moss Warranty Act
Other Statutes

Motorcycle Lemon Law 101

The frustration of owning or leasing a defective motorcycle is all too familiar to many consumers. State and federal consumer statutes provide important remedies to these consumers, ranging from monetary damages to buy-backs of defective motorcycles. These often overlooked statutes also provide for the recovery of costs and attorney fees to the successful plaintiff’s attorney. Thus, the attorney who tackles these cases usually reaps a twofold benefit — the professional reward of having served a client well and the financial reward of obtaining a fee well earned.

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Even if your vehicle doesn’t qualify for Lemon Law protection, we understand that a serious defect can significantly impact your car’s use, value, and safety. If you’re facing this situation, know that you’re not alone. There may be other legal avenues available to help you resolve the issue. Let’s discuss your specific circumstances to explore potential solutions.
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