Loyola Consumer Law Review

Volume 2 | Issue 4 Article 2

1990

California's Lemon Law - Developments under theSong-Beverly Consumer Warranty ActNancy BarronPrinciple member, Kemnitzer, Dickinson, Anderson & Barron

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Recommended CitationNancy Barron California's Lemon Law - Developments under the Song-Beverly Consumer Warranty Act, 2 Loy. Consumer L. Rev. 96(1990).Available at: http://lawecommons.luc.edu/lclr/vol2/iss4/2

Loyola Consumer Law Reporter

CALIFORNIA'S LEMON LAW - DEVELOPMENTS UNDERTHE SONG-BEVERLY CONSUMER WARRANTY ACT

by Nancy Barron*

I. INTRODUCTION

Over thirty-three percent of newcars require an extensive repairwithin one year of purchase andmore than fourteen percent experi-ence multiple problems.' In 1987,manufacturers recalled more thaneight million cars and light trucksfor safety-related defects alone 2

Far too often, however, manufac-turers and dealers either ignoreconsumer complaints or fail toremedy the substantial automobiledefects.

State lemon laws provide theprimary protection for purchasersof new3 motor vehicles. Currently,forty-six states have lemon laws. 4

In addition, purchasers of newautomobiles are protected by theMagnuson-Moss Warranty - Fed-eral Trade Commission Improve-ment Act ("Magnuson-MossAct") 5 and the Uniform Commer-cial Code ("U.C.C."). 6 California'slemon law, the Song-Beverly Con-sumer Warranty Act ("Song-Bev-erly Act" or "the Act"),7 is similarto lemon laws in many states.8 TheAct gives purchasers rights theydid not have at common law. Inessence, the Act mandates that anautomobile manufacturer repairsubstantial defects that cause avehicle not to conform to the man-ufacturer's express warranties. Ifafter a reasonable number of at-tempts the manufacturer is unableto repair the vehicle, the consumeris entitled to a replacement or arefund. If the manufacturer fails toreplace or refund, the manufactur-er may be liable to the consumerfar beyond the value of a replace-ment vehicle or a refund of thepurchase price. Damages availableunder the Act include out-of-pocket costs, incidental and conse-quential damages, litigation costs,attorneys fees and a civil penalty,in addition to a refund or replace-ment of the vehicle.9

This Article examines Califor-nia's Song-Beverly Act, recentamendments to the Act, and case

law that has developed under theAct. This Article is intended toeducate consumers and consumerlaw practitioners by discussing keyissues that frequently arise in pre-paring a lemon law case. Althoughthe focus is on the California Song-Beverly Act, the issues discussedherein are equally applicable in thecontext of similar lemon laws inother states. This Article also high-lights the contrasting aspects of theSong-Beverly Act, the U.C.C., andthe Magnuson-Moss Act. Thisanalysis should assist practitionersto determine whether in a givensituation claims should be broughtunder more than one of the stat-utes. 0

"State lemon laws provide theprimary protection for

purchasers of new motorvehicles."

Section 1I of this article address-es the elements of a lemon lawclaim: what constitutes a "consum-er good," what is a "nonconformi-ty," when has a manufacturer hada reasonable opportunity to repair,and what is the effect of the con-sumer's continued use of the defec-tive vehicle. Next, section III de-scribes the potential recovery forconsumers, including attorneysfees and a civil penalty for a manu-facturer's willful failure to complywith the Act.

II. ELEMENTS OF LIABILITYUNDER THE SONG-BEVERLYCONSUMER WARRANTY ACT

A. What are consumer goods?

The Song-Beverly Act, theU.C.C., and the federal Magnuson-Moss Act require the plaintiff toestablish that the vehicle is a "con-sumer good." The tests differ sig-nificantly, however, under thethree statutes. The Song-BeverlyAct and the U.C.C. define a con-

sumer good as "any new product orpart thereof that is used, bought, orleased for use primarily for person-al, family, or household purpos-es."'' This is a subjective test thatfocuses on how the consumer actu-ally used the product, rather thanthe product's common use. In con-trast, the Magnuson-Moss Act de-fines a consumer product as "anytangible personal property which isdistributed in commerce andwhich is normally used for person-al, family, or household purpos-es."" This is an objective test thatfocuses on the common use of theproduct.13

Because the two tests differ, aconsumer may be protected by onestatute but not the other. For ex-ample, in Crume v. Ford MotorCompany, 14 the buyers of a flatbedtruck brought a Magnuson-MossAct claim. The court, applying theobjective "normal use" test, heldthat evidence of how the buyeractually used the truck was irrele-vant to whether a vehicle qualifiesas a "consumer product" for pur-poses of the Magnuson-Moss Act.Because the plaintiff failed to pre-sent evidence of how flatbed truckscommonly are used, the court di-rected a verdict for Ford MotorCompany. This case might havebeen decided differently under theSong-Beverly Act if the evidencepresented established that the buy-er used the flatbed truck primarilyfor household purposes.

Consumers typically will havelittle difficulty establishing thatthey actually used the vehicle pri-marily for personal or householdpurposes. If the vehicle is usedprimarily or exclusively for busi-ness purposes, however, it may notbe protected by the Song-BeverlyAct or the U.C.C., but may be

* Principal member, Kemnitzer, Dickinson,Anderson & Barron; J.D., University ofCalifornia Hastings College of Law; Ful-bright Scholar (Ludwig-Maximillians Univ-ersitaet, Munich); B.A., with honors,Stanford University.

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protected under the Magnuson-Moss Act if the vehicle commonlyis used for personal or householdpurposes.' 5 Automobiles are con-sidered "consumer products" un-der the Magnuson-Moss Act,' 6 butthe same is not true for all motorvehicles."

B. What is a nonconformity?

The Song-Beverly Act requiresthat the manufacturer or its dealers"conform the vehicle to the expresswarranties."' 8 The Act's protec-tions apply only if the alleged"nonconformity" both breachesthe express warranties and sub-stantially impairs the vehicle's use,value, or safety.' 9

1. Express Warranties

The Song-Beverly Act defines"express warranty" 20 as:

(1) A written statement...pursuant to which the manu-facturer, distributor, or retail-er undertakes to preserve ormaintain the utility or perfor-mance of the consumer goodor provide compensation ifthere is a failure in utility orperformance; or(2) In the event of any

sample or model, that thewhole of the goods conformsto such sample or model.2

Unlike under the U.C.C.,22 theplaintiff need not prove that thewritten statement was a factor inthe purchase decision.2 3 However,unlike "express warranties" as de-fined under the U.C.C.,24 the Song-Beverly Act does not apply to oralwarranties.25

2. Substantial Impairment

Not all defects that violate ex-press warranties trigger Song-Bev-erly Act protections. The noncon-formity also must "substantiallyimpair the use, value or safety ofthe new motor vehicle to the buy-er."' 26 A substantial impairment ofany one of the statutory trio offactors - use, value, or safety -technically is sufficient to supporta Song-Beverly Act claim.

In order to promote the Act'sremedial purpose, 27 state and fed-eral courts should broadly inter-

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pret "nonconformity" and "sub-stantial impairment." A narrowinterpretation would make illusorymanufacturers' express writtenwarranties by allowing manufac-turers to dismiss the bulk of cus-tomer complaints as "insubstan-tial" or "insignificant." In Chmillv. Friendly Ford-Mercury,28 theWisconsin Court of Appeals broad-ly interpreted the term "substan-tial impairment" and held that abuyer does not have to show thatthe vehicle was inoperable or val-ueless. In Chmill, the buyers of aFord Tempo brought a Wisconsinlemon law claim against the manu-facturer and dealer for a noncon-formity described as a discernible"pull" to the left. As of the finalday of trial, the plaintiffs had driv-en the car 78,000 miles despite thepulling problem. Citing cases de-cided under the U.C.C., Ford ar-gued that a car driven for 78,000

"[The Song-Beverly] Actmandates that an automobile

manufacturer repairsubstantial defects that causea vehicle not to conform to the

manufacturer's expresswarranties."

miles, as a matter of law, could notbe substantially impaired. In re-jecting Ford's argument, the courtnoted that the U.C.C. focused sole-ly on whether there was a sub-stantial impairment of value, 2 9

whereas the Wisconsin lemon lawlooked to whether there was asubstantial impairment of use, val-ue, or safety.3 0 The court conclud-ed that a vehicle does not satisfythe use, value, or safety standardmerely by "serv[ing] its primarypurpose of providing 'simple trans-portation.' "3' Although a defectthat substantially impairs a vehi-cle's use or safety in most cases alsowould substantially impair its val-ue, this is not necessarily the case.Because "nonconformity" is de-fined more broadly under theSong-Beverly Act than under thecommercial code, the consumeralways should plead his claim un-der both the Act and the U.C.C.

The Act applies a subjective testin looking to whether the vehiclewas substantially impaired "to thebuyer."32 In each case, the plaintiffshould produce clear evidence ofthe personal effect of the car'sproblems. For example, the pur-chaser's use of the vehicle may behindered by unreliability. Perhapsthe defect is merely a leakinghatch-back, but this may preventthe purchaser from carrying gro-ceries, laundry, etc., because itfrequently rains where the consum-er lives. Usually, a long repairhistory itself can impair the valueof the car because it is more diffi-cult to obtain a competitive saleprice for a car that has been thesubject of extensive repairs. 33

Finally, if a safety problem isalleged, plaintiffs should empha-size their justifiable fears for theirwell-being. Safety problems such asstalling, hesitation on acceleration,and loss of power on the freewayare common problems in today'selectronically controlled cars. Inthe case of Ibrahim v. Ford MotorCompany, the appellate court not-ed:

After a harrowing experiencewhen the Cougar died whilepassing over railroad tracks,plaintiff decided she had hadenough .... Because she waspregnant and convinced thatthe Cougar was unsafe todrive, plaintiff in July usedall of her savings to buy an-other vehicle. 34

In California, where use of vid-eotapes in the courtroom is com-mon, plaintiffs' counsel have hadconsiderable success in personaliz-ing their cases through videotapedepisodes featuring the defectivevehicles.

Many different problems in newmotor vehicles have been found tobe "nonconformities" under lem-on laws similar to the Song-BeverlyAct. These range from such obvi-ous safety defects as faulty steeringto intangible problems like an an-noying "shimmy" 35 and even adefective paint job. 36 The consum-er should consider introducing ex-pert testimony as to the cause ofthe alleged nonconformity and thelong-term effect of that defect onthe safety, use, and value of the

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Lemon Law(continued from page 97)

vehicle. For example, a commoncomplaint is abnormal enginenoise. The repair dealership mayclaim its technician could not iden-tify the source of the problem, andso no repair was done. Further, thedealership may claim the noise is anormal condition of the particularmake and model and therefore nota "nonconformity." In fact, enginenoise may well be a symptom of anengine problem and may foreshad-ow premature engine failure afterexpiration of the warranty. Simi-larly, a "pulling" condition orseemingly minor alignment prob-lem in fact may be evidence of abent frame or other transit damageto the vehicle before it was sold asnew. An expert often is essential toprove that these conditions aresubstantial nonconformities.

C. What is a reasonable opportunityto repair?

The Song-Beverly Act providesthat if the vehicle does not con-form to the express warranties, themanufacturer must begin repairs"within a reasonable time" 37 andrepair the vehicle "so as to con-form to the applicable warran-ties." 38 If the manufacturer cannotrepair the vehicle

to conform to the applicableexpress warranties after a rea-sonable number of attempts,the manufacturer shall eitherpromptly replace the newmotor vehicle ... or promptlymake restitution to the buy-er.

39

The buyer has the option of choos-ing either a replacement or a re-fund.

40

Before the Act defined "reason-able number of attempts," manu-facturers were able to deny con-sumers relief indefinitely. Buyerswere forced to take their cars inrepeatedly for repairs, even asmany as thirty times.41 Effective1983, however, the Act wasamended to define "reasonablenumber of attempts." 42 The manu-facturer is presumed to have had a"reasonable number of attempts"to conform the vehicle to the ex-press warranties if, within one yearfrom delivery to the buyer or

12,000 miles of use, whicheveroccurs first, either (1) the samenonconformity has been subject torepairfour or more times, or (2) thevehicle is out of service for acumulative total of more than 30calendar days.43

The buyer must notify the man-ufacturer of the nonconformingdefects by returning the vehicle forrepair or by providing written no-tice if returning the vehicle is im-possible.44 However, the buyer on-ly must provide such notice if themanufacturer clearly and conspic-uously disclosed the buyer's rightsand responsibilities under the Act,including the buyer's responsibilityof providing notice of the noncon-formities.

45

Once the consumer proves thatthe vehicle was subject to fourrepair attempts or was out of ser-vice for a total of thirty days, theburden then shifts to the defendantto prove that it was not allowed a

"The Song-Beverly Act

requires that themanufacturer or its dealers

'conform the vehicle to the

express warranties.'"

reasonable number of attempts torepair the automobile. 46 Becausethe definition of a "reasonablenumber of attempts" is only apresumption, this leaves open thepossibility that the plaintiff mayprove that less than four repairattempts or thirty days out of ser-vice constitutes a reasonable num-ber of attempts. 47

The thirty-day limit 4 may beextended if the failure to repair thenonconformity results from condi-tions beyond the manufacturer'scontrol. 49 Although the Act doesnot define "conditions beyond thecontrol of the manufacturer," oth-er state lemon laws and courts havelimited the conditions to naturaldisasters.50 The defendant's inabil-ity to identify or repair the noncon-formity does not qualify as a cir-cumstance beyond the control ofthe manufacturer. 51 For example,in Chmill, the court rejected suchan argument, reasoning that "[i]f

an acknowledged defect cannot bediagnosed... no matter how manytimes the consumer presents thevehicle for repair, the consumer iswithout recourse. '52 In fact, theChmill court held that merely pre-senting the car to the dealer consti-tutes a "repair attempt," even ifthe dealer cannot identify the de-fect and therefore does not actuallyattempt to repair the car.53 In soholding, the Chmill court recog-nized that dealers might try tothwart the statutory requirementsby claiming that they could notidentify or repair the defect.

Moreover, the plaintiff probablydoes not have to identify thesource of the problem. Under theMagnuson-Moss Act, "[i]t is suffi-cient if . . . the evidence shows,either directly or by permissibleinference, that the goods were de-fective in their performance orfunction or that they otherwisefailed to conform to the warran-ty. ' 5 4 The consumer need only"offer credible evidence that thedefect is materials or workmanshiprelated."55 The California courtshave not determined the specifici-ty with which the plaintiff mustidentify the defect, although a bur-den of proof similar to that re-quired under the Magnuson-MossAct should apply to Song-BeverlyAct suits. Clearly, consumers areless able than manufacturers toidentify the source of a defect.Moreover, manufacturers may, in-tentionally or unintentionally,tamper with the evidence whileattempting to repair the vehicle orafter the consumer has returnedthe vehicle.

D. Continued use and set-off

1. Continued Use Does Not De-feat "Lemon Law" Rights

Prior to the enactment of theSong-Beverly Act, the issue of con-tinued use of a consumer productwas governed by the law of waiv-er.56 According to this commonlaw doctrine, the right to rescindacceptance of a consumer productmay be waived if the consumer,having full knowledge of the cir-cumstances warranting rescission,nonetheless accepted and retainedthe benefits of the contract. 57 TheU.C.C., as interpreted by most

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courts, to some extent modifiedthe doctrine of waiver by providingthat reasonable continued use of anautomobile does not, as a matter oflaw, prevent the buyer from re-scinding acceptance of the prod-uct.5 Similarly, under the Song-Beverly Act continued use doesnot, as a matter of law, bar rescis-sion.5 9

By allowing the consumer tocontinue using the vehicle withoutlosing her right to revoke accep-tance of the vehicle, courts andlegislatures recognize the unequalbargaining power between the con-sumer and the manufacturer. Fre-quently, the consumer is depen-dent upon having a car andfinancially unable to secure alter-native means of transportation. 60

A contrary rule would enable man-ufacturers to benefit from theirwrongdoing: manufacturers wouldhave an incentive to ignore con-sumer claims, forcing consumersto drive defective cars at a risk tothe general safety. Then, if theconsumer brought a lemon lawsuit, the manufacturer might beable to assert the consumer's con-tinued use as a defense to theotherwise valid claim. 61 Moreover,continued use should not precluderevocation of acceptance becausethe consumer's continued use maynot indicate that the consumer has"accepted" the vehicle. This isparticularly true when the noncon-formity affects only value and thusthe consumer is not preventedfrom continued use by a safetythreat or an effectively unusablevehicle.

2. Set-Off for Use of the Vehicle

The Act provides that if themanufacturer fails to repair theproduct to conform to the expresswarranties, the manufacturer must"either replace the goods or reim-burse the buyer in an amount equalto the purchase price paid by thebuyer, less that amount directlyattributable to use by the buyerprior to discovery of the noncon-formity." 62 Notably, the Act pro-vides no set-off for the consumer'suse of the vehicle after the noncon-formity is discovered. This reflectsthe diminished value to the con-sumer of a defective vehicle.

The Act establishes the follow-

ing formula for calculating the set-off for use prior to the first repairattempt:

63

vehicle price x pre-repair miles120,000

For example, suppose the buyerpaid $23,652, before financing,and the vehicle had been driven1,559 miles when the consumerfirst brought the vehicle in forrepairs. The set-off would be:

23,652 x 1,559 = $307.28120,000

The consumer's reimbursementis reduced by the amount of theset-off or, in the case of a replace-ment, the consumer must pay theamount of the set-off to the manu-facturer.64 Allowing a set-off incases of replacement may causeproblems when the consumer can-not afford to pay the amount of theset-off to the manufacturer. There-fore, unlike California, manystates' lemon laws do not providefor a set-off in cases of replace-ment.

65

"The nonconformity.., must'substantiallyimpair[ ] theuse, value or safetyof thenew motor vehicle to the

buyer."

III. DAMAGES AVAILABLE UNDER

THE SONG-BEVERLY ACT

A. Actual damages

The Song-Beverly Act incorpo-rates portions of the CaliforniaCommercial Code in its remediessection. 66 The Act seeks to fullycompensate the aggrieved consum-er by providing, when applicable,out-of-pocket, incidental, and con-sequential damages, as well as civilpenalties, litigation expenses, andattorney's fees. 67

1. Out-of-Pocket Loss

The Song-Beverly Act entitlesplaintiffs to recover actual dam-ages. 68 Thus, a plaintiff may re-cover all losses resulting in theordinary course of events, as deter-mined in any manner that is rea-sonable. 69 A plaintiff's most directloss due to a defective vehicle liesin the purchase-related expenses.

Purchase-related expenses includethe purchase price, license anddocumentary fees, sales tax, andfinance charges.70

2. Incidental and ConsequentialDamages

In addition to actual damages,the Song-Beverly Act provides thatconsumers may recover reasonableincidental and consequential dam-ages.7 Typically, incidental dam-ages include any reasonable ex-penses incident to the failure toprovide a product free from de-fects. 72 Under the Act, the buyerhas the right to compensation formoney and time spent in effort tomake the vehicle conform to thewarranties, such as repair costs,towing charges, rental car expens-es, and some insurance. 73 The buy-er also is entitled to loss of usedamages, which may be measuredby the number of days the vehicleis in for repairs multiplied by thereasonable rental value of the vehi-cle.

7 4

Consequential damages includeany loss suffered by plaintiffs re-sulting from their special needs ofwhich the seller had reason toknow. 75 This may include damagesfor inconvenience, aggravation,mental distress, discomfort, anxi-ety, depression, and pain and suf-fering resulting from seller'sbreach.7 6 In Jacobs v. RosemountWinnebago South, the MinnesotaSupreme Court soundly reasonedthat buyers need to have confi-dence that the vehicles they rely onfor transportation are safe anddependable.77 When the plaintiff'svehicle failed to satisfy this basicneed, the plaintiff was able torecover not only actual and inci-dental damages, but also conse-quential damages for the loss ofenjoyment.

78

Alternatively, an aggrieved con-sumer may seek redress for emo-tional distress under a tort theory.Violating a statutory duty oftenconstitutes the tort of negligence atcommon law.7 9 In California, aplaintiff may recover if the negli-gence causes emotional distressthat is severe and satisfies certainguarantees of genuineness, 0 al-though the emotional distress neednot be physically manifested.8 ' The

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Lemon Law(continued from page 99)

plaintiff, however, must plead andprove every element of both thetort theory and the Song-BeverlyAct claim.

B. The Civil Penalty

1. The "Willfulness" Require-ment

In 1982, the Song-Beverly Actwas amended to include a civilpenalty provision in addition toactual, incidental, and consequen-tial damages. Section 1794(a) ofthe Act provides that if "the failureto comply was willful, the judg-ment may include . . . a civilpenalty which shall not exceed twotimes the amount of actual dam-ages."8 2

In Ibrahim v. Ford Motor Com-pany, the California Court of Ap-peals clarified the meaning of"willfulness:" 8 3

The statutory concept of will-fulness does not include themoral component ... associat-ed with the oppression, fraud,or malice required ... for therecovery of punitive dam-ages.... It amounts to nothingmore than this: That the per-son knows what he is doing[and] intends to do what he isdoing.8 4

The Ibrahim court noted thatthe consumer need not prove thatthe manufacturer intended to in-jure or take advantage of the con-sumer, or violate the law. 5 In-stead, the consumer need onlyshow that the manufacturer in-tended the acts or omissions.

2. Effect of a Qualified Manufac-turer's Arbitration Program

The 1987 amendments to theSong-Beverly Act encourage manu-facturers to offer to consumersindependent third-party arbitra-tion programs. 86 Although foryears most manufacturers have of-fered some form of industry-spon-sored arbitration program, theseprograms were far from "indepen-dent" and caused widespread con-sumer dissatisfaction. The 1987amendments were designed to in-crease the accountability and inde-pendence of manufacturers' arbi-

tration programs. Among otherrequirements, a manufacturer's ar-bitration program must meet Fed-eral Trade Commission require-ments8" and be certified by theCalifornia State Department ofConsumer Affairs in order to qual-ify under the Act.88 Only a handfulof arbitration programs have quali-fied for certification. 89

If a manufacturer has a qualifiedarbitration program and notifiesthe consumer of the program andhow to use it, a consumer who hasnot resorted to the program cannotinvoke the "reasonable number ofattempts to repair" presumption incourt.90 If the consumer does par-ticipate in the arbitration program,the findings of the arbitrator areadmissible in any subsequent suit 9'and the consumer only may obtaina civil penalty in a subsequentlawsuit by showing that the manu-facturer's violation of the Act waswillful.92 If the manufacturer's ar-bitration program is not qualified

"The Act seeks to fully

compensate the aggrievedconsumer by providing, when

applicable, out-of-pocket,incidental, and consequential

damages, as well as civil

penalties, litigation expenses,

and attorney's fees."

under the Act, or if the manufac-turer failed to properly notify theconsumer of the arbitration pro-gram, the consumer is not obligat-ed to participate in the arbitrationprogram and does not have toprove willfulness to recover a civilpenalty in a lawsuit.93

3. Election Between the Civil

Penalty and Punitive Damages

When an automobile defect re-sults in personal injury, the injuredparty may have concurrent causesof action under a tort theory andthe Song-Beverly Act. 94 The torttheory supports an award of puni-tive damages if the defendant'sactions were made knowingly andwere reprehensible. 95 The Act pro-vides that a consumer may recovera civil penalty for the manufactur-

er's violation. Theoretically, theconsumer should be able to recoverboth the civil penalty and punitivedamages.

The court in Troensgaard v. Sil-vercrest Industries96 viewed the is-sue as one of double recovery. Theconsumer complained to the man-ufacturer about a problem with hermobilehome. After the manufac-turer inspected the mobilehome, itconcealed the nature of the defectand refused to fix the problem. Theconsumer then brought a strictliability claim based on the manu-facturer's concealment of the de-fect and a Song-Beverly Act claimbased on the manufacturer's fail-ure to remedy a defect. The juryawarded her $90,000 in compensa-tory damages, $55,000 in punitivedamages, and $90,000 as a statuto-ry civil penalty. In modifying theaward, the court held that theconsumer could not recover boththe civil penalty and punitive dam-ages. The court reasoned that thepunitive damages and the civilpenalty arose out of the same set ofoperative facts and the manufac-turer should not be punished twicefor "substantially the same con-duct." 97 Thus, "by seeking a 'civilpenalty'... [the consumer] had ineffect elected to waive punitivedamages." 9

The same result is not necessari-ly true in all cases when the plain-tiff pursues both a tort claim and aSong-Beverly Act claim. For exam-ple, a plaintiff might assert boththat the manufacturer committedfraud in connection with the saleby representing as "new" a pre-owned or previously damaged ve-hicle and that the manufacturerfailed to repair the vehicle to com-ply with the express warranties.The facts supporting the fraudclaim (that the vehicle was pre-owned or previously damaged)would not be "substantially thesame conduct" as the facts sup-porting the Song-Beverly Act claim(the manufacturer's subsequent re-fusal to honor the express warran-ties).

C. Attorneys' fees are mandatory toa prevailing plaintiff

The Song-Beverly Act mandatesan award of costs and attorneys

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fees to the prevailing plaintiff.99 Ifthe plaintiff prevails in the lemonlaw claim, the plaintiff "shall beallowed by the court to recover aspart of the judgment a sum equal tothe aggregate amount of costs andexpenses, including attorney's fees... ,,100 The fees must be "reason-ably incurred" and based uponactual time expended.' 0 ' However,the judge has broad discretion todetermine the extent that the feeswere "reasonably" incurred. 02

In consumer litigation, there isalways the likelihood that attor-neys' fees based on actual timeattorneys fees expended will ex-ceed the damages award. After all,the consumer generally will be su-ing a large manufacturer for arelatively small amount of money,unless the consumer sues to recov-er for personal injuries or the suit isbrought as a class action. 0 3 Corpo-rate defendants are well aware ofways to increase legal fees by dis-covery battles and other means. ACalifornia Main County SuperiorCourt Judge recently commentedwryly in open court that FordMotor Company has a papermillgoing, with "automatons" runningit. 0 4 A rule that limited theamount of recoverable attorneysfees to the amount of actual dam-ages would result in stonewallingby manufacturers. 05

In enacting a similar attorneysfees provision in the Magnuson-Moss Act, Congress anticipatedcorporate defense tactics that forceconsumer counsel to expend con-siderable time and money on war-ranty cases, resulting in attorneysfees in excess of damages awarded.As Senator Magnuson noted,

an attorney's fee . . . basedupon actual time expendedrather than being tied to anypercentage of the recovery...make[s] the pursuit of con-sumer rights involving inex-pensive consumer productseconomically feasible. 0 6

Therefore, plaintiffs can recover"reasonable" attorneys fees evenin excess of the amount of direct,incidental, and consequentialdamages recovered.

IV. CONCLUSION

California's Song-Beverly Act,

like most states' lemon laws, pro-vides to new car buyers protectionfar beyond warranty remedies atcommon law. In order to availthemselves of these protections,consumers must be familiar withtheir rights and the procedures forobtaining relief. If consumers areprepared to assert their statutoryrights and prove their cases, lemonlaws can go a long way towardgiving full relief to aggrieved con-sumers and pressuring the manu-facturers to honor their warranties.

The Song-Beverly Act protectsmost consumers who purchase newcars that are defective. To triggerthe Act's protections, the defectmust be substantial and must vio-late the manufacturer's expresswritten warranties. If the defectviolates an oral warranty, the con-sumer may have to join a U.C.C. orMagnuson-Moss Act claim in or-der to obtain relief.

If a consumer complains of asubstantial defect that violates the

"By knowing the law andpreparing to enforce their

rights, consumers can ensurethey get the vehicle the

manufacturer promised andnot a 'lemon.' "

manufacturer's express warranties,the manufacturer is allowed a "rea-sonable number of attempts" to fixthe defect. Under recent case law,California courts will presume themanufacturer had a reasonablenumber of attempts if the defect isnot fixed in four attempts or if thevehicle is out of service for acumulative total of thirty or moredays. As the Wisconsin courts haveinterpreted their lemon law, pre-senting the vehicle for repair con-stitutes a repair attempt, whetheror not the manufacturer attemptsto fix the defect or can even identi-fy the problem. This rule properlyputs the onus on the manufacturerto discover and remedy the defect,rather than sticking the consumerwith an irremediable "lemon." Inorder to prove that the manufac-turer had a reasonable number ofattempts, the consumer should

thoroughly document the vehicle'srepair history.

The manufacturer is entitled toa set-off for the consumer's use ofthe vehicle before the first repairattempt. However, the manufac-turer is not entitled to a set-off forthe consumer's use of the vehiclebetween repair attempts, nor doesthat use necessarily defeat the lem-on law claim. This provision in thelemon law recognizes that consum-ers may have no alternative than todrive a defective vehicle, and that adefect may be substantial althoughnot totally debilitative.

Lemon laws seek to fully com-pensate aggrieved consumers, andmake valid lemon law claims via-ble, by providing for actual, inci-dental, and consequential dam-ages, as well as mandatoryattorneys fees for the prevailingconsumer. Moreover, the Califor-nia lemon law provides a civilpenalty to encourage manufactur-ers to promptly address consum-ers' complaints. If a manufacturerhas an arbitration program thatqualifies under the Act, the con-sumer must prove that the manu-facturer's failure to comply withthe Act was willful in order torecover a civil penalty. In addition,if the manufacturer's arbitrationprogram qualifies under the Act,the consumer must resort to theprogram before taking advantageof the "reasonable number of at-tempts" presumption in court. If amanufacturer's arbitration pro-gram does not qualify under theAct, the consumer need not provethat the violation was willful.

The California lemon law andrecent decisions interpreting thelemon law have given new carpurchasers significant rights. Byknowing the law and preparing toenforce their rights, consumers canensure they get the vehicle themanufacturer promised and not a"lemon."

ENDNOTES1. Lawrence A. Towers, Lemon Law

Litigation: Screening and PreparingPlaintiff's Case, TRIAL (Dec. 1987)(citing FED. TRADE COMMISSION,WARRANTIES, RULES, CONSUMERFOLLOW -UP: EVALUATION 63 (July1984)).

2. H. Greenberg, The Indiana MotorVehicle Protection Act of 1988: the

(continued on page 102)

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Lemon Law(continued from page 101)

Real Thing for Sweetening the Lemonor Merely a Weak ArtificialSweetener?, 22 IND. L. REV. 57, 58 n.4(1989) (citing NATIONAL HIGHWAYTRAFFIC SAFETY ADMINISTRATION, U.S.

DEPT. OF TRANSPORTATION, SAFETYRELATED RECALL CAMPAIGNS FORMOTOR VEHICLES AND MOTOR VEHICLE

EQUIPMENT, INCLUDING TIRES, DOT HS807-235 (1987)).

3. The Song-Beverly Act, like mostlemon laws, applies only to newvehicles. See, e.g., CAL. CIV. CODE§1 793.2(e)(4)(B) (West 1990); but seeVA. CODE §59.1-207.11 (1990). Seegenerally Y. ROSMARIN AND J.SHELDON, SALES OF GOODS ANDSERVICES, 521-522 (NationalConsumer Law Center, ConsumerCredit and Legal Practice Series 2dEd. 1989) (listing and analyzing statelemon laws covering used cars)(hereinafter "SALES OF GOODS AND

SERVICES").4. See, e.g., ALASKA STAT.,

§§45.45.300-.360 (1990); ARIZ. REV.STAT. ANN. §§44-1261 to 1265 (1989);CONN. GEN. STAT. ANN. §§42-179 to186 (West Supp. 1990); ILL. REV.STAT. ch. 121 1/2, paras. 1201-1208(Smith-Hurd 1990); MINN. STAT. ANN.§325F.665 (1989). See generallySALES OF GOODS AND SERVICES, supranote 3, Appendix I, at 727-740.

5. 15 U.S.C. §§2301-2312 (1988)(originallyenacted as Act of Jan. 4, 1975, Pub.L. No. 93-637, 88 Stat. 2183). TheMagnuson-Moss Warranty Act looksto applicable state law for remedies.Therefore, this discussion does notfocus on its separate provisionsexcept for important distinctions suchas the definition of "consumergoods." See, infra notes 11 to 17 andaccompanying text.

6. See, e.g., CAL. COM. CODE§§2100-2800 (West 1964 & Supp.1990). See generally, Braucher, AnInformal Resolution Model ofConsumer Product Warranty Law,1985 WIS. L. REV. 1405,1411 (1985).Louisiana is the only state that hasnot adopted the U.C.C.

7. CAL. CIV. CODE §§1790-1797.5.8. For an excellent comparative

analysis of the state lemon lawstatutes, state commercial codes andthe federal Magnuson-Moss Act, seeVogel, Squeezing Consumers:Lemon Laws, Consumer Warranties,and a Proposal for Reform, 1985ARIZ. ST. L.J. 589 (1985).

9. CAL. CIV. CODE §1794 (incorporatingCAL. COM. CODE §§2711-2715).

10. As under most lemon laws, theSong-Beverly Act provides protectionin addition to the U.C.C. and theMagnuson-Moss Act, and consumerscan sue under any one or all of thestatutes. See, e.g., CAL. ClV. CODE§1790.4; but see ILL. REV. Stat. ch.121, para. 1205(5).

11. CAL. CIv. CODE §1791(a) (emphasis

added); U.C.C. §9-109 (1990)("consumer good" is a product "usedor bought for use primarily forpersonal, family or householdpurposes"). See generally,Annotation, Secured Transactions:What Constitutes "ConsumerGoods" Under U.C.C. §9-109(1), 77A.L.R. 3d 1225 (1977 & Supp. 1989).

12. 15 U.S.C. §2301(1)(emphasisadded).

13. Id.;16C.F.R.§700.1(a)(1990)("Aproduct is a consumer product if theuse of that type is not uncommon.The percentage of sales or the use towhich a product is put by anyindividual buyer is notdeterminative.... Where it is unclearwhether a particular product iscovered under the definition ofconsumer product, any ambiguity willbe resolved in favor of coverage.").

14. Crume v. Ford Motor Co., 60 Or. App.224,653 P.2d 564 (1982).

15. See Najran Co. for Gen. Contractingand Trading v. Fleetwood Enter., Inc.,659 F. Supp. 1081 (S.D. Ga. 1986);Business Modeling Techniques v.Gen. Motors Corp., 474 N.Y.S. 2d258,123 Misc. 2d 605 (Sup. Ct. 1984).

16. 16 C.F.R. §700.1(a). See BusinessModeling Techniques, 474 N .Y.S.2dat 261.

17. See Walsh v. Ford Motor Credit Co.,449 N.Y.S.2d 556,113 Misc. 2d 546(Sup. Ct. 1982) (tractor-trailer notcovered).

18. CAL. CIv. CODE §1 793.2(d)(1).19. See CAL. CIV. CODE §§1 793.2(d)(1)

and (4)(A). Compare IND. CODE§24-5-13-6 (1990) (Defect must"substantially impair[] the.., motorvehicle, orrender[] the motor vehiclenonconforming to the terms of aapplicable manufacturer'swarranty")(emphasis added).

20. A manufacturer's express warrantytypically uses language similar to this:

This warranty covers repairs tocorrect any defect in material orworkmanship of the vehicleoccurring during the warrantyperiod.This language is taken from the 1990General Motors Corporation New CarLimited Warranty, which appears infull in R. NADER & C. DITLOW, THELEMON BOOK (1980).

21. CAL. CIV. CODE §1791.2(a).22. CAL. COM. CODE §2313. See Keith v.

Buchanan, 173 Cal. App. 3d 13,220Cal. Rptr. 392,397-98 (1985).

23. Ibrahim v. Ford Motor Co., 214 Cal.App. 3d 878,263 Cal. Rptr. 64,71(1989).

24. U.C.C. §2-313(1 )(a); see generally,Annotation, What Constitutes"Affirmation of Fact" Giving Rise toExpress Warranty under U. C. C.§2-313(1)(a), 94 A.L.R. 3d 729 (1979 &Supp. 1990); Annotation, Affirmationsor Representations Made After theSale is Closed as Basis of Warrantyunder U.C.C. §2-313(1)(a), 47 A.L.R.4th 200 (1986 & Supp. 1989).

25. Comment, Consumer Warranty lawin California under the CommercialCode and the Song-Beverly andMagnuson-Moss Acts, 26 UCLA L.REV. 583,628 (1978-79).

26. CAL. CIV. CODE §1 793.2(d)(4)(A)(emphasis added).

27. Remedial legislation must beconstrued liberally to promote itspurposes. See Ford Dealers Ass'n. v.Dep't of Motor Vehicles, 32 Cal. 3d347, 356, 185 Cal. Rptr. 453, 650 P.2d328 (1982) (citing Cal. StateRestaurant Ass'n. v. Whitlow, 58 Cal.App. 3d 340, 347,129 Cal. Rptr. 824(1976)).

28. Chmill v. Friendly Ford-Mercury ofJanesville, Inc., 144 Wis. 2d 796,424N.W.2d 747 (1988).

29. Id., at 750 (citing U.C.C. §2-608(1)).See generally, Annotation, WhatConstitutes "SubstantialImpairment" Entitling Buyer toRevoke his Acceptance of Goodsunder U.C.C. §2-608(1), 98 A.L.R. 3d1183 (1980 & Supp. 1989).

30. WIS. STAT. §218.-015(l)(f) (1987-88)("nonconformity" means a "conditionor defect which substantially impairsthe use, value or safety of a motorvehicle.").

31. Chmill, 424 N.W.2d at 750-51.32. CAL. CIv. CODE §1 793.2(d)(4).

Compare TEX. REV. Clv. STAT. art.4413(36), §6.07(c) (Supp. 1990).

33. The owner, as a lay witness, iscompetent to testify to the value (andloss of value) of personal propertyshe owns, and that testimony issufficient to support a judgment inthat value. Schroeder v. AutoDriveaway, 11 Cal. 3d 908,921,114Cal. Rptr. 622,630, 533 P.2d 662(1974).

34. Ibrahim V. Ford Motor Co., 214 Cal.App. 3d 878, 263 Cal. Rptr. 64, 66(1989).

35. Welch v. Fitzgerald-Hicks Dodge,Inc., 121 N.H. 358,430A.2d 144(1981).

36. Williams v. Chrysler Corp., 530 So.2d 1214 (La. Ct. App. 1988).

37. CAL. CIV. CODE §1793.2(b).38. Id.39. Id., at §1 793.2(d)(1) (emphasis

added).40. Id., at §1 793.2(d)(2). Compare COLO.

REV. STAT. §42-12-103(1) (1990)(manufacturer's choice).

41. See Tiger Motor Co. v. McMurty, 284Ala. 283,224 So. 2d 638 (1969).

42. 1982 Cal. Stat. c. 388, p. 1720, §1.43. CAL. CIV. CODE §1 793.2(e)(1); See

Ibrahim v. Ford Motor Co., 214 Cal.App. 3d 878,'263 Cal. Rptr. 64, 66-71(1989).

44. CAL. CIv. CODE §1793.2(c). Forpurposes of the notice requirement,the authorized dealer is the agent ofthe manufacturer.

45. Id., at§1793.2(c)(1).46. Ibrahim, 263 Cal. Rptr. at 71.47. Id. at 68.48. Under some lemon laws, this 30 day

limitation is measured according tothe days the vehicle is unusable,

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rather than merely the days thevehicle actually is in the repair shop.See Vutaggio v. General MotorsCorp., 145 Wis. 2d 874,429 N.W.2d93 (Ct. App. 1988).

49. CAL. CIv. CODE §1793.2(b).50. CONN. GEN. STAT. ANN. §42-179(e)

("war, invasion, strike, or fire, flood,or other natural disaster").

51. ChmiI v. Friendly Ford-Mercury ofJanesville, Inc., 144 Wisc. 2d 796,424N.W. 2d 747,751 (1988).

52. Id.53. Id.54. Universal Motors v. Waldock, 719

P.2d 254, 259 (Alaska 1986) (quotingOsburn v. Bendix Home Sys., Inc.,613 P.2d 445 (Okla. 1980)).

55. Waldock, 719 P.2d at 259.56. Ibrahim v. Ford Motor Co., 214 Cal.

App. 3d 878, 863 Cal. Rptr. 64,75(1989) (citing Neet v. Holmes, 25 Cal.2d 447, 154 P.2d 854 (1944)).

57. Neet v. Holmes, 25 Cal. 2d 447,458,154 P.2d 854.

58. See, e.g., Ozark Kenworth, Inc. v.Neirdecker, 283 Ark. 196, 672 S.W.2d899 (1984); see also Annotation, Useof Goods by Buyer as ConstitutingAcceptance Under U.C.C. §2-606(1)(c),67 A.L.R.3d 363 (1975 & Supp. 1989).

59. Ibrahim, 263 Cal. Rptr. at 76.60. Id.61. B. CLARK & C. SMITH, LAW OF PRODUCT

WARRANTIES, §7.03[3] [e] at 7-31(1984 & Supp. 1988). See U.C.C.§2-606.

62. CAL. CIV. CODE §1793.2(d) (1)(emphasis added).

63. Id., at §1793.2(d)(2)(C). No set-off isavailable under the Magnuson-MossAct. 43 Fed. Reg. 4055,4062 (1978).

64. CAL. CIV. CODE §1 793.2(d)(2)(C).65. See generally, SALES OF GOODS AND

SERVICES, supra note 3, at 517 and727-40.

66. CAL. CIV. CODE §§1 794(b)(1) and (2)(incorporating CAL. COM. CODE§§2711-2715).

67. Id.,at§1794.68. Id., at §1 794(b)(1) (incorporating CAL.

COM. CODE §2715).69. Id.70. Id., at §1793.2(d)(2)(A) and (B). The

Act does not expressly provide forthe recovery of finance charges. Butsee LEGAL SERVICES UNIT, CAL. DEP'TOF CONSUMER AFFAIRS, LEGAL GUIDE

W-5, CALIFORNIA'S NEW CARWARRANTY LAW: HOW IT HELPS

BUYERS AND LESSEES 3 (July 1990).Because financing chargesfrequently are a part of the price paidby consumers, however, the chargesshould be considered out-of-pocketexpenses. Some lemon lawsexpressly provide for recovery offinancing charges. See, e.g., CONN.GEN. STAT. §42-179(d) (1989).

71. CAL. CIV. CODE §1 794(b)(2)(incorporating CAL. COM. CODE

§§2711, 2712 and 2715).72. See CAL. COM. CODE §2715(1).73. CAL. CIV. CODE §§1 793.2(A)-(B) &

1794(b).74. See U.C.C. §2-715(1).

75. CAL. COM. CODE §2715(2)(c).76. See Young v. Bank ofAm., 141 Cal.

App. 3d 108, 190 Cal. Rptr. 122,126(1 983)(willful violation of theSong-Beverly Credit Card Act of1971, CAL. CIv. CODE §§1747-1748.5);Lycos v. Gray Mobile Home Sales, 76Mich. App. 165,256 N.W.2d 63(1977); Jacobs v. RosemontWinnebago South, 310 N.W.2d 71(Minn. 1981).

77. Jacobs, 310 N.W.2d at 79.78. Id.79. See, e.g., Young, 141 Cal. Rptr. 122.80. Pintorv. Ong, 211 Cal. App. 3d 837,

259 Cal. Rptr. 577, 579 (1989) (citingYoung v. Bank of America, 141 Cal.App. 3d 127,190 Cal. Rptr. 122(1983)).

81. Molien v. Kaiser Foundation Hosp.,27 Cal. 3d 916,167 Cal. Rptr. 831,616 P.2d 813 (1980).

82. CAL. CIV. CODE §1 793.2(e)(1).83. Ibrahim v. Ford Motor Co., 214 Cal.

App. 3d 878,863 Cal. Rptr. 64 (1989).84. Id., at 73-74.85. Id.,at74n. 13. Thecourt'sinterpretation was consistent with a

long line of case law similarlyinterpreting "willful" in othercontexts. See, e.g., Hale v. Moran, 22Cal. 3d 388, 396, 149 Cal. Rptr. 375,584 P.2d 512 (1978).

86. CAL. CIV. CODE §§1 793.2(e)(2) and(3).

87. Id., at §1 793.2(e)(3)(A) (incorporating16 C.F.R. §703(1987)).

88. Id., at §1 793.2(e)(3)(1) (incorporatingCAL Bus. & PROF. CODE §9889.70).

89. The following arbitration programshave been certified: AmericanAutomobile Assoc. for Toyota; Ford'sConsumer Appeals Board; and theBetter Business Bureau for Ford,VW/Audi, and Maserati. Letter datedSept. 5, 1990, to Nancy Barron fromCandis Cohen, Arbitration ReviewProgram Mgr., Cal. Dept. ofConsumer Affairs (copy on file at theLoyola Consumer Law Reporteroffice).

90. CAL. CIV. CODE §1 793.2(e)(2). Withinthirty days of the arbitrator's decision,the manufacturer must comply withan award in favor of the consumer.Id., at §1 793.2(e)(3)(C). Amanufacturer's failure to comply withthe decision re-triggers theconsumer's right to assert thepresumption in a subsequent lawsuit.Id., at §1 793.2(e)(2).

91. Id.92. Id., at §1794(e)(2).93. Id., at §1 794(e)(1); see generally,

LEGAL SERVICES UNIT, CALIFORNIADEPARTMENT OF CONSUMER AFFAIRS,LEGAL GUIDE W-7, CONSUMER AFFAIRS'ARBITRATION REVIEW PROGRAMADOPTS WARRANTY ARBITRATIONCERTIFICATION REGULATIONS 2 (July1990).

94. Troensgaard v. Silvercrest Indus.,175 Cal. App. 3d 228,220 Cal. Rptr.712 (1985).

95. Grimshaw v. Ford Motor Co., 119Cal. App. 3d 757, 174, Cal. Rptr. 348

(1981).96. 175 Cal. App. 3d 228,220 Cal. Rptr.

712.97. Id., 220 Cal. Rptr. at 717.98. Id., at 718.99. CAL. CIV. CODE §1794(d). There is no

reciprocal attorneys fee award to theprevailing defendant. Id.

100. Id., at §1794(d) (emphasis added). Cf.Magnuson-Moss Act, §11 0(d)(2), 15U.S.C. §231 0(d)(2) (award ofattorneys fees is discretionary).

101. CAL. CiV. CODE §1794(d). In somecases, the fee award may be greaterthan actual attorneys fees incurred.This is intended to encourage thoseattorneys who work on a contingentfee basis to represent lemon lawplaintiffs. See Chrysler Corp. v.Weinstein, 522 So. 2d 894 (Fla. Dist.Ct. App. 1988).

102. In determining the reasonableness offees, most courts consider thefollowing factors: (1) time and laborexpended; (2) novelty and difficulty ofthe issues; (3) skill required toperform the legal services rendered;(4) customary fee for similar work; (5)whether the fee is fixed or contingent(higher awards allowed in contingentfee cases due to risk); (6) experience,reputation, and ability of theattorneys. MODEL CODE OFPROFESSIONAL RESPONSIBILITY DR201-6(B) (1981).

103. Where the litigation serves thegeneral public's interest, the plaintiffmay be entitled to recover more thanthe actual attorneys fees incurred.California courts have upheld feemultipliers in other types of publicinterest litigation. See, e.g., SanBernardino Valley Audubon Socy v.County of San Bernardino, 155 Cal.App. 3d 738,202 Cal. Rptr. 423 (1984)(a multiplier of 1.4 affirmed in anenvironmental suit). AlthoughCalifornia has not addressed theissue, other courts have upheld feemultipliers in lemon law cases. SeeChrysler v. Weinstein, 522 So. 2d 894(Fla. Dist. Ct. App. 1988).

104. Laguette v. Marin Peugeot-Subaru,Marin County (Cal.) Superior Court,Case No. 136893 (1990).

105. See Chrysler, 522 So.2d 894.106. SEN. REP. NO. 151,93rd Cong., 1 st

Sess. (1973) at 23-24. See also,Drouin v. Fleetwood Enter., 163 Cal.App. 3d 468,493, 209 Cal. Rptr. 623(1985).

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