Friday, 02 August 2013 10:19

MB-USA Pays Out Another $260K in Long-Running WI Lemon Law Case as Legislature Hears Revised Law

Mercedes-Benz USA LLC has paid out another $260,000 in a long-running lemon law case. Attorney Vince Megna (known locally and self-identified as the ‘Lemon Law King’) sued the company in 2005 on behalf of a Waukesha businessman who purchased what was deemed a defective E-series sedan. The state Supreme Court last year upheld a $482,000 judgment against the company. Megna argued the company owed interest that had accrued during the case’s court journey and Mercedes-Benz paid $618,000.

A Waukesha County judge has now ordered the company to pay attorney fees and costs totaling $259,536. MB-USA cut a check dated the same day.

According to court documents, Marquez purchased a $56,000 E320 from a Milwaukee dealership in April 2005. Almost immediately, the car wouldn’t start and a number of repair attempts failed. In October 2005, Marquez had Megna send Mercedes-Benz a lemon law notice, demanding a refund. Under the law, the company had 30 days to comply. Marquez and the company spent most of those 30 days discussing a replacement vehicle in lieu of a refund. Ultimately, Marquez said he wanted a refund five days before the compliance window closed.

Wisconsin law provides that “if a new motor vehicle does not conform to an applicable express warranty,” and the nonconformity is not cured after a “reasonable attempt to repair,” then the consumer may return the vehicle and elect to receive either: 1) a new comparable vehicle, or 2) a refund.

If the auto manufacturer fails to provide a refund or replace the vehicle within 30 days, the law provides harsh penalties. The plaintiff is also entitled to pre- and post-judgment interest, which can be large in cases like this that take years to wind through the court system.

After Mercedes-Benz was alerted that the car was a lemon, it began working with the owner and his attorney to provide the owner the proper remedy. Originally Marquez sought a new vehicle, but instead of seeking a similar E-series he requested an S-series, which had not yet been released to dealers.

The car company argued it wasn’t liable because Marquez didn’t give one of its employees the information they needed to grant a refund.

The case started in Waukesha County Circuit Court, where a judge ruled in favor of the owner. The case was appealed to the court of appeals, which reversed the lower court. The court of appeals held that a consumer who intentionally thwarts a manufacturer’s efforts to provide a refund within the 30-day statutory period cannot recover the Lemon Law’s stiff remedies. The court remanded the case back to the circuit court for the jury to determine whether the owner intentionally thwarted Mercedes-Benz’s attempt to provide a statutory refund within the 30-day period by failing to provide the requisite bank information.

On remand, the jury found in favor of Mercedes-Benz. The jury determined that the owner and his attorney, Megna, acted in bad faith by failing to call the bank so that Mercedes-Benz could access the bank account information.

The circuit court judge, however, overturned the jury’s verdict by issuing a directed verdict in favor of the owner. The judge determined there was no credible evidence that the owner (or his attorney) intentionally thwarted Mercedes-Benz’s efforts to provide a refund.

The case went straight to the Supreme Court, which affirmed the judge’s directed verdict in favor of the owner.

Chief Justice Shirley Abrahamson, writing for the majority, found the lemon law is designed to force large, well-funded auto makers to compensate customers for their losses. Expanding the manufacturers’ defenses would undermine the law’s purpose, Abrahamson wrote.

No evidence suggested Marquez intentionally tried to block the refund, Abrahamson said. She found the initial refund demand provided Mercedes-Benz authorization to contact Marquez’s bank and his loan officer, noting Marquez called the loan officer the day he reaffirmed he wanted a refund and authorized him to release the account information to the car maker. Therefore, Mercedes-Benz had all the information it needed to deliver the refund before the deadline, Abrahamson said.

In addition, the company’s employee never tried to contact the loan officer, never clearly asked Marquez to contact the bank and didn’t leave a number or express any urgency when he contacted Megna’s office later that afternoon, she found.

Justice Patience Roggensack wrote in dissent that she didn’t believe Marquez acted in good faith and the decision deprives auto manufacturers of a valid defense.

Republican legislators have recently introduced a Wisconsin bill that would cap damages at actual losses.