hawaii lemon car laws 2011

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Hawaii Lemon Car LawHawaii Lemon Car Law

www.AlohaLemonLaw.comwww.AlohaLemonLaw.com

Hello Lemon Law, Goodbye LemonHello Lemon Law, Goodbye Lemon


4 Lemon Car Laws

1. HRS 481I-1, Lemon Law

- HAR 16-181-1, Lemon Law Rules

2. 15 USC 2301, Magnuson Moss Act

3. HRS 490:2-101, Commercial Code

4. HRS 480-2, -13, Unfair & Deceptive Acts

Statutory Grounds


The Good

1. It’s there

2. Black letter presumptions of a “lemon”

3. Covers most cars, light trucks, motorcycles

Hawaii’s Lemon Vehicle Law


The Bad

1. Presumptions are rebuttable

2. No right to court action

3. Not easy to understand

4. Debatable defenses available to Manufacturer



And The Ugly

1. Replacement vehicle? Not free, Not new

2. Consumer needs an attorney

3. No mandatory attorney fee recovery

4. Consumer can settle and still not get check



3 Part Definition

1. Public Road Vehicles

2. Consumer Vehicles

3. 10,000 pounds GVW max

Vehicles Covered


Typical Vehicles

• Cars, Trucks, Vans

• Motorcycles, 5 hp +

• Motor Homes, under 10k GVW

• Demonstrators

Vehicles Covered


Not Typical Vehicles

• Business vehicles covered, if

• individually registered and

• used in both business & consumer use

Vehicles Covered


Not Typical Vehicles

• Business owned vehicle covered, if

• business purchases one per year, and

• used in both business & consumer use

Vehicles Covered


Date of Sale Notice, 481I-3(g)

Plain language rights notice

1. Existence of SCAP arbitration program

2. Consumer rights

3. Requirement of advance written notice

4. Name and address for notice mailing

Notice of Lemon Law Rights


Lemon Law Rights Period, 481I-2

• 24 months after original consumer delivery,

or

• 24,000 miles of operation

Definitions


“Nonconformity,” 481I-2

• Any defect or condition

• That substantially impairs the use, market value, or safety

• Not “to the consumer” (is an objective test)

Definitions


Substantial Impairment, 481I-2

• For normal use:

• Unfit

• Unreliable

• Unsafe

• Significantly diminishes value

Definitions


Different Sections = Different Rights

• HRS 481I-3(a)

• Repair Obligation Only

• Refusal = Waiver of presumptions ?

• HRS 481I-3(b)

• Buyback or Replace Obligation Only

Repair, Buyback, or Replace


Applicable Period: 24 Mo. or 24,000 Miles

(1) same defect = 3 strikes and you’re out• “documented” attempts• Dlr notice to Mfg: 2nd repair & 20 days

(2) Deadly Defect = 1 chance

(3) 30 business days out of service max• For all defects

HRS 481I-3(d) - Presumptions


Defense: “Defects not within two years - 24k miles”

Plaintiff:

• Only applies to 481I-3(a)

• 481I-3(b): “Reasonable” Number of Attempts

• Question of Fact

• Nothing in (b) says “during the term of the LL rights period”

24 Months or 24,000 Miles


Defense: “If the engine runs, it’s usable”

Plaintiff:

• Consumer Had No Real Choice

• Miles Driven after “lemon”, Not Relevant

Substantial Impairment of Use


Defense: “What do you think it’s worth?”

Plaintiff:

• “significantly diminish the value”

• Measure of Damages: Difference in Value• HRS 490:2-714

• Expert vs Owner Opinion

Substantial Impairment of Market Value


Defense: “You never had an accident, did you?”

Plaintiff:

• “Expert Opinion says its dangerous”

• “But I nearly did”

• “But I could have”

• “I adapted my driving to avoid accidents”

Substantial Impairment of Safety


The “No Problem Found” Problem

1. “N P F” = It’s No Excuse

2. “N P F” Counts Toward Presumptions

3. Existence of Defect = Question of Fact

4. Symptom + Expert Opinion = Defect

Interpretations


Court Cases -

What court cases ?

Court Cases


HRS 481I-3(c)

“Nonconformity” exclusions:

• Abuse

• Neglect

• Unauthorized Modification

• Alteration

Defenses


HRS 481I-3(f) – TSB’s

• Upon request, or• After consumer reports to Manufacturer

• Then,•manufacturer must provide “notice”

• “it exists”• “you can ask us for a copy”

Secret Warranty Notice Mandated


Replacement Vehicle, 481I-3(b)

• “identical or reasonably equivalent”

• Offsets

• Mileage up to presumption point• 1% of purchase price per 1,000 miles

• Excess damage

Remedies


Buyback =

Total Cost – Offsets & Deductions

Remedies


Arbitration, 481I-4

• At option of consumer• Then, is mandatory on manufacturer

• Attorney Fees• Prevailing party “may” recover fees

• Mfg’s Inspection Report• Copy to consumer

Other Remedies: Arbitration


Arbitration, 481I-4

• Binding vs non-binding arbitration

• later Court rights w/ non-binding arb only

• - 25% improvement, loser pays fees +

• Mfg fails to comply w/arb decision?

•Prima facie unfair act, HRS 480

Other Remedies: Arbitration


Lemon Resale Requirements, 481I-3(k)

• Notice signed by buyer• conspicuous• was repurchased due to defects• list of defects

• Defects fixed

• Warranty: 12 mo – 12,000 mile

Lemon Laundering


481I-3(j)

• 1 Year after Lemon Law Rights period expires

• Length of Mfg Warranty

• 2 years from first retail sale

• 24,000 miles of operation

Limitations Period


Back to The Ugly

1. Consumer needs an attorney

2. No mandatory attorney fee recovery

3. Consumer can settle and still not get paid



Fundamentals, 15 USC 2301

1. Federal claim for UCC breach of warranty

2. Covers virtually all consumer products

3. Consumer’s attorney fees paid by losing merchant

4. Privity not necessary element of a claim

Magnuson Moss Act


Elements

1. A consumer product, and

2. A warrantor’s failure to comply with MM, or

3. Breach of Written Warranty or Service Contract

Magnuson Moss Act


Cumulative Remedies

1. Damages, and

2. Equitable relief, and

3. Attorney Fees

Arbitration ?

Magnuson Moss Act


Fundamentals, HRS 480-2, -13

1. Unfair or deceptive acts prohibited

2. Covers consumers

3. Cumulative Remedies:1. $1,000 or 3x damages (Elder, $5,000)2. Attorney fees3. Injunction, Rescission

Unfair or Deceptive Act


Jeff CrabtreeJeff CrabtreeEmail:Email:

[email protected]

web sites:web sites:

www.ConsumerLaw.com

Ronald L. BurdgeRonald L. BurdgeEmail:Email:

[email protected]

web sites:web sites:

www.TheLawCoach.com

www.AlohaLemonLaw.comHello Lemon Law, Goodbye Lemon

Hawaii Lemon Car LawsHawaii Lemon Car Laws


Hawaii Lemon Car LawHawaii Lemon Car Law

www.AlohaLemonLaw.comwww.AlohaLemonLaw.com

Hello Lemon Law, Goodbye LemonHello Lemon Law, Goodbye Lemon

hawaii lemon car laws 2011

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