There has been much speculation lately about what happens to Lemon Law buybacks – the cars and trucks that are so defective, no one can fix them. The lemons get resold, sometimes without future owners knowing. I know because one lemon returned to my office to let me represent it again.
I had a client who bought a car brand new from a fairly high volume dealer not far from my office in suburban Detroit. She noticed almost immediately it had a wonky transmission. Harsh shifting, slipping and so on. She brought it in for service. The technicians said they found a problem and fixed it. They gave it back to her. It was still messed up. Repeat that cycle three more times and she called me. In the four repair visits, the technicians said they witnessed the defect every time and they appeared to have tried to fix it each time. The repair orders listed all sorts of parts being replaced and so on. It's just that none of the repair attempts solved the problem. We sent a last chance letter to the manufacturer and they declined to take a last chance at repairing it.
We filed suit and the manufacturer quickly agreed to buy the car back from my client and pay the fees and costs associated with her lawsuit. I was with her the day she turned the vehicle in at the dealership and signed all of the papers necessary to rid herself of the car. That was the last she saw of the car. But it wasn't the last time for me.
The manufacturer took possession of the car shortly thereafter, did what they could to try and fix it, and sent it to an auction where it was sold to a dealer. The manufacturer sent paperwork to the auction to let the purchasing dealer know the vehicle was a lemon law buyback in the hope that they would to pass that information along to the next civilian purchaser.
A few months later I got a phone call from a woman who told me she had a used car with a bad transmission. I didn't catch it right away but it was the same year, make and model as the car in the story above. When I told her that the Michigan lemon law doesn't generally cover used cars she told me there ought to be a law covering this one.
I asked her why she thought that.
She told me that she had brought the vehicle in for warranty repairs several times and when the transmission could not be fixed, she had done a title search on the previous owner and found out that this car was the one I had gotten bought back for my client above. That client had given her my number. This was in the days before Carfax (although, Carfax might not have helped her much anyway). She had not been told of the car's history.
We filed suit against the dealer for misrepresentation – that is, failing to disclose the true history of the vehicle to my second client when she bought the car. And how did we know that this dealer definitely knew the car was a lemon law buyback? It was the same dealer both times. And when we filed suit, they did not deny it had happened this way. They just said it was an "oversight."
The vehicle got bought back again. I think the dealer picked up the brunt of the cost of this suit but I'm not privy to how defendants divide up their portions of a defense (and yes, we sued the manufacturer also because the transmission was never fixed, giving rise to a breach of warranty claim as well.) And if you are wondering about the math, this vehicle's transmission had been subjected to nine (9) repair attempts that we know of by this point. Four times for the first client, once by the manufacturer before the auction, and four more times for the second client. When she turned it in, the trans was still messed up.
I wish I still had the VIN of that car. It was early in my career and I would love to know how many more times after that it changed hands. I also admit I half expected to have it return to my office, asking me to get it repurchased by the manufacturer again.
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Steve Lehto has been practicing law for 23 years, almost exclusively in consumer protection and Michigan lemon law. He wrote The Lemon Law Bible and Chrysler's Turbine Car: The Rise and Fall of Detroit's Coolest Creation.
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