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Litigation or Arbitration of Lemon Law Claims

In New York State, there are various ways to enforce or settle a consumer’s claim for relief against a manufacturer of a new vehicle or dealer of a used vehicle (car, truck, SUV, hybrid, motorcycle, motor home, etc.). The process may be as simple as dealing directly with the manufacturer or dealer or as complex as prosecuting a civil lawsuit.

It should first be noted that a consumer is best advised to consult with an attorney experienced in prosecuting lemon law, fraud and consumer claims before attempting to prosecute those claims without counsel or pro se. There is an old adage in the law that “he who represents himself, has a fool for a client”. Meaning that even an attorney should be represented by someone else in prosecuting his or her claim and I would like to add in saying “how much more true is that adage when the claimant is not an attorney or has no experience in the matter”. Consumers should know that like in all types of claims or litigation, the adverse party or insurance carrier is very quick to size up the adversary and his or her knowledge and experience in the matter. Often times, the legal fees are either off set by a greater recovery than the consumer would have received without counsel or the manufacturer or dealer agrees to pay those fees. The reader is referred to a list of actual cases in my website for examples of such recoveries, however, I am compelled to say that prior results do not guarantee future outcomes.

The lemon law, deceptive trade practices, implied warranties, procedural and other statutes and case law are by no means simple and require a thorough understanding to best enforce or settle consumers’ various claims. Furthermore, a great deal of experience in dealing with manufacturers, dealers, automotive experts and the various mechanisms for prosecuting and settling such claims requires years of experience to advocate the claimant’s rights and the dealer’s or manufacturer’s obligations under the law. Of course, these matters are way too complex and comprehensive to even begin outlining same in this Blog, and the reader is welcome to call my office to address his or her particular concerns.

Keeping in mind that the average vehicle costs about thirty thousand ($30,000.00) dollars and if the consumer looses his or her claim and gives up by trading in the vehicle for perhaps one half or less than its cost rather than recovering full value in a successful consumer or lemon law claim, the average legal fees of a few thousand dollars is nominal and it is most cost efficient to retain counsel before advocating for oneself.

There are different courts and forums available to a consumer in prosecuting a lemon law, breach of warranty, breach of contract, deceptive practices, fraud or other type of claim (whether lemon law, fraudulent misrepresentations, odometer rollbacks, failure to disclose substantial damages or salvage, title, etc.) that may either be arbitrated in New York under the Attorney Generals Program, Better Business Bureau Program, The Manufacturer’s Own Arbitration Program or in various Civil Courts (District Court, Supreme Court, Federal Court and others), depending on the amount in controversy. The choice of forum (specific court) and venue (County or District) depends upon a number of considerations. Some of my colleagues seem to prefer to litigate these matters in Supreme Court, which can take years to resolve and run up tens of thousands of dollars in legal fees and disbursements, leaving the consumer with the lemon vehicle or having to acquire alternate transportation during such protracted period of time. Certainly in certain cases that is appropriate or necessary. However, in my many years of practice, I have found that the consumer is best served by a prompt resolution of the claim within a few short months by negotiating a settlement or prosecuting the claim by Arbitration as mentioned above. There are three (3) for choices for Arbitration, being the Attorney General’s Program, Better Business Bureau or the Manufacturer’s Own Arbitration Program. I always prefer to proceed with the Attorney General’s Program for a variety of reasons. First, any program established and governed by the manufacturer has inherent bias against the consumer. The Better Business Bureau Program, while not binding upon either party, also allows the Arbitrator to order further repairs instead of a refund or replacement of the vehicle, and I have found that the manufacturers have too much input in the decision-making process, thus also making it an unfavorable forum for the consumer. I also advise my clients to always request a full refund rather than replacement of the vehicle in any of these Arbitration forums since then the successful consumer is free to purchase or lease another vehicle from any manufacturer or dealer of his or her choice rather than being compelled to accept another vehicle from the same manufacturer, which also often leads to ongoing disputes of long duration when trying to select an acceptable replacement vehicle.

There are so many other details involved in this process, such as the selection and engagement of expert mechanics or witnesses, testing and inspections of the subject vehicle, data recording from the computer system or equivalent of a “black-box”, questions of fact and law as to what constitutes a “dangerous or defective condition” or that which “substantially impairs the value of the vehicle” and whether or not same is attributed to a manufacturing design or defect or something caused by the consumer or perhaps after-market equipment (such as remote starters, alarm systems, modified exhaust systems, etc.). All too often I have seen consumers loose cases unnecessarily and then consult with me for a potential Appeal by reasoning of mishandling of their claim or the Trial or Arbitration of the matter. In one such case, well educated consumers had prosecuted their own Arbitration of the vehicle but were unaware of the requirement of “personal use” and the limitation of “business use” of the vehicle, and that by reason of their deductions for tax purposes on their personal income tax returns and the improper calculations of same in excess of fifty (50%) percent of the vehicle for business use, which was a mere depreciation function, they lost the underlying Arbitration. However, I was successful on Appeal by showing the mathematical errors and that in fact, the vehicle was always used for personal rather than business use.

Please refer to my other Blogs for more information regarding the Lemon Law or feel free to call my office with any specific concerns or questions.

Ligitation & General Practice

Anthony T. Ballato, Esq. on Auto Fraud and NY Lemon Law Part 1 and 2

Consumer Tips & Advice