The federal lemon law, the Magnuson-Moss Warranty Act, does not contain its own statute of limitation. However, the Missouri Court of Appeals has determined that, like other Missouri breach of contract claims, the federal lemon law should use a 4 year statute of limitation. At a minimum, therefore, a consumer should have 4 years from the date of purchase to bring a Magnuson-Moss Warranty Act claim.

But consumers do not know at the time of purchase that the vehicle will be a lemon. Missouri law also says that the statute of limitation should not start until the date on which a consumer knew, or perhaps should have known, about a vehicle’s defects. Unfortunately, while this rule does not apply to the Missouri lemon law, at least one Court decision approximated the start date of the statute of limitation for a federal lemon law claim as the first repair attempt.

Courts have also recently begun to consider the situation where a warranty lasts longer than 4 years. It does not seem fair that consumers with a 6, 7, or even 10 year warranty would be unable to bring a federal lemon law claim while still within their vehicle’s warranty period. Thus, a recent federal court decision suggested that a consumer should have 4 years, starting from the date the warranty expires, to bring a Magnuson-Moss Warranty Act claim.

This information does not constitute legal advice. You should confirm the statute of limitation period for your claim with an attorney as soon as possible.

Three separate witnesses testified for the employer before our client gave his testimony.  The Gusdorf Law Firm was able to show that our client’s supervisor had not bothered to investigate the accusations. As a result, the employer could not prove that the behavior our client had been accused of had actually taken placed. The individual who made the accusations did offer testimony, but the Gusdorf Law Firm showed how her memory of the event was suspect. Our client testified credibly that, in fact, he had never committed any misconduct.

In Missouri, like many states, the employer has the burden of trying to prove misconduct by “competent and substantial evidence.” This standard means that the evidence, if believed, tends to prove the assertion, such that any reasonable judge would reach a similar conclusion. In this case, the Judge agreed with the Gusdorf Law Firm that the employer had, at most, proven only that an accusation of misconduct had been made, not that any actual misconduct had occurred. As a result, our client was awarded his unemployment benefits. Both the Gusdorf Law Firm and our client were very pleased with the result.

How many repairs are unreasonable? The Missouri lemon law states that it shall be “presumed” that 4 or more repair attempts are evidence that the manufacturer has failed to fix the vehicle within a reasonable number of attempts.

A presumption is a legal rule about the burden of proof, which requires a fact-finder, such as a judge or jury, to find that the evidence favors a particular party.  For example, the expression “innocent until proven guilty” is just a restatement of the presumption of innocent.  A judge or jury must conclude that the accused is not guilty, absent proper evidence to the contrary.

In a civil trial, the consumer presents evidence first, then the Defendant gets a chance to offer its counter-evidence. Without a presumption, a consumer could present evidence, the manufacturer could offer none, and a consumer could still lose. A judge or jury may simply not be persuaded by the consumer’s evidence.

But in a Missouri lemon law case, if a consumer puts on evidence of 4 or more repair attempts (or 30 or more days out of service), and the manufacturer offers nothing, the consumer wins. A judge or jury would be required to find that the vehicle was a lemon. The number of repair attempts is automatically persuasive evidence.

A presumption can be “rebutted.” In a criminal case, for example, the prosecutor will offer evidence trying to prove guilt.  In a lemon law case, a manufacturer might try to prove that the consumer abused, neglected, or modified or altered the vehicle.  Many manufacturers try to defend Missouri lemon law cases by focusing on whether the problems “substantially impair the use, value or safety” of the consumer’s vehicle. Such evidence would then be weighed by the judge or jury before determining whether the number of repair attempts were unreasonable.

However, a consumer might want to show there have been 3 identical repair attempts, or perhaps there have been 4 repair attempts but not all of them were within the first 12 months of purchase. In that situation, the consumer will not get the benefit of the “presumption,” but should be allowed to put on evidence to try to convince a judge or jury that fewer repair attempts were nevertheless unreasonable. Even if the manufacturer offers little or no evidence, the consumer might still lose the trial, because a judge or jury will not be bound to find in the consumer’s favor.

Many vehicles do not qualify for the Missouri lemon law presumption, but the Magnuson-Moss Warranty Act (federal lemon law) offers a possible alternative argument.

In this case, the employer had provided 2 witnesses at the hearing who had no personal knowledge about our client’s job. They each tried to testify about an investigation conducted by the employer, but neither one was actually involved in any step of that process, and neither actually saw any of our client actually doing the actions of which she was accused.  Furthermore, the record showed that the employer did not tell our client, or any other employees for that matter, that certain types of conduct could result in termination.

After briefing and oral argument, the Court agreed with the Gusdorf Law Firm that the employee was not at fault in causing her discharge. The Court therefore reversed the decision of the Georgia Department of Labor, and awarded benefits to our client. Even though the Gusdorf Law Firm had not represented her at the original hearing of her appeal, we were pleased to be able to provide such a positive result for our client.

This means the manufacturer has 2 options: replace the vehicle, or repurchase the vehicle. While the statute does seem to allow the manufacturer to make the choice, no one can force a consumer to agree to a deal they don’t want to take.

If a consumer prefers a replacement, the vehicle must be “comparable.” Typically, this means a consumer must accept the same year, make, and model they currently own. If a newer model year is available, a consumer may be able to upgrade, but would also be responsible for any increase in MSRP. Under a Missouri lemon law replacement, the consumer would still be responsible for paying the manufacturer a “reasonable allowance” for the use of the vehicle.

The repurchase option requires a manufacturer to take the vehicle back and refund the full purchase price of the vehicle, including “all reasonably incurred collateral charges.” The Missouri lemon law helpfully defines “collateral charges” as including all sales tax, license fees, registration fees, title fees and motor vehicle inspections. Whether finance charges should be included will the subject of a later post.

Like most states, North Carolina has a law that disqualifies a claimant from unemployment benefits if they quit a job without having good cause to do so. But the Gusdorf Law Firm was aware of a decision by the Supreme Court of North Carolina that explained how an employee, faced with a decision between being fired and being allowed to resign, will not be considered to have voluntarily quit if choosing to resign.

At the appeal hearing, the Gusdorf Law Firm conducted a direct examination of our client, who testified that her employer had given her too few resources and set impossible goals. Called in for a performance review, our client was told she would nevertheless be fired if she failed to meet these deadlines. The Appeals Referee found that our client’s reason for leaving work was actually attributable to the employer, reversed the earlier decision, and ruled that our client was entitled to receive her unemployment benefits. The Gusdorf Law Firm and the client appreciated the ruling, which allowed our client the dignity of resignation while preserving her qualification for benefits.

A “consumer product” is any item that “is normally used for personal, family, or household purposes.” The idea behind this language is to exclude products that are commercial, that is, normally used for business purposes.

A warranty under the Federal Lemon Law includes written promises, like a warranty booklet that comes with a vehicle, but it could also be an implied warranty or a service contract.

The Federal Lemon Law creates a cause of action for a consumer who is damaged by a failure “to comply with any obligation” found in the federal statute.  One of those obligations is that the seller must “remedy such consumer product within a reasonable time and without charge.” See 15 U.S.C. section 2304.

Thus, a warranty promises to repair an item, and the federal lemon law requires the repairs to be done in a reasonable time and without charge. When this is not done, the product might be a lemon under the federal lemon law.