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Minnesota Lemon Law
Minnesota
Statutes Annotated, 325 F.665
325F.665
New
motor vehicle warranties; manufacturer's duty
to repair, refund, or replace.
Subdivision
1
Definitions.
For
the purposes of this section, the following
terms have the meanings given them:
(a)
"consumer" means the purchaser or
lessee, other than for purposes of resale or
sublease, of a new motor vehicle used for
personal, family, or household purposes at
least 40 percent of the time, a person to
whom the new motor vehicle is transferred for
the same purposes during the duration of an
express warranty applicable to the motor
vehicle;
(b)
"manufacturer" means a person
engaged in the business of manufacturing,
assembling or distributing motor vehicles,
who will, under normal business conditions
during the year, manufacture, assemble or
distribute to dealers at least ten new motor
vehicles;
(c)
"manufacturer's express warranty"
and "warranty" mean the written
warranty of the manufacturer of a new motor
vehicle of its condition and fitness for use,
including any terms or conditions precedent
to the enforcement of obligations under that
warranty;
(d)
"lease" means a contract in the
form of a lease or bailment for the use of
personal property by a natural person for a
period of time exceeding four months, used
for personal, family, or household purposes
at least 40 percent of the time, whether or
not the lessee has the option to purchase or
otherwise become the owner of the property at
the expiration of the lease;
(e)
"motor vehicle" means
(1)
a passenger automobile as defined in section
168.011, subdivision 7, including pickup
trucks and vans, and
(2)
the self-propelled motor vehicle chassis or
van portion of recreational equipment as
defined in section 168.011, subdivision 25,
which is sold or leased to a consumer in this
state;
(f)
"informal dispute settlement
mechanism" means an arbitration process
or procedure by which the manufacturer
attempts to resolve disputes with consumers
regarding motor vehicle nonconformities and
repairs that arise during the vehicle's
warranty period;
(g)
"motor vehicle lessor" means a
person who holds title to a motor vehicle
leased to a lessee under a written lease
agreement or who holds the lessor's rights
under such agreement; and
(h)
"early termination costs" means
expenses and obligations incurred by a motor
vehicle lessor as a result of an early
termination of a written lease agreement and
surrender of a motor vehicle to a
manufacturer under subdivision 4, including
penalties for prepayment of finance
arrangements.
Subdivision
2
Manufacturer's
duty to repair.
If
a new motor vehicle does not conform to all
applicable express warranties, and the
consumer reports the nonconformity to the
manufacturer, its agent, or its authorized
dealer during the term of the applicable
express warranties or during the period of
two years following the date of original
delivery of the new motor vehicle to a
consumer, whichever is the earlier date, the
manufacturer, its agent, or its authorized
dealer shall make the repairs necessary to
conform the vehicle to the applicable express
warranties, notwithstanding the fact that the
repairs are made after the expiration of the
warranty term or the two-year period.
Subdivision
3
Manufacturer's
duty to refund or replace.
(a)
If the manufacturer, its agents, or its
authorized dealers are unable to conform the
new motor vehicle to any applicable express
warranty by repairing or correcting any
defect or condition which substantially
impairs the use or market value of the motor
vehicle to the consumer after a reasonable
number of attempts, the manufacturer shall
either replace the new motor vehicle with a
comparable motor vehicle or accept return of
the vehicle from the consumer and refund to
the consumer the full purchase price,
including the cost of any options or other
modifications arranged, installed, or made by
the manufacturer, its agent, or its
authorized dealer within 30 days after the
date of original delivery, and all other
charges including, but not limited to, sales
or excise tax, license fees and registration
fees, reimbursement for towing and rental
vehicle expenses incurred by the consumer as
a result of the vehicle being out of service
for warranty repair, less a reasonable
allowance for the consumer's use of the
vehicle not exceeding ten cents per mile
driven or ten percent of the purchase price,
whichever is less. If the manufacturer offers
a replacement vehicle under this section, the
consumer has the option of rejecting the
replacement vehicle and requiring the
manufacturer to provide a refund. Refunds
must be made to the consumer, and lien
holder, if any, as their interests appear on
the records of the registrar of motor
vehicles. Refunds shall include the amount
stated by the dealer as the trade-in value of
a consumer's used motor vehicle, plus any
additional amount paid by the consumer for
the new motor vehicle. A manufacturer must
give to the consumer an itemized statement
listing each of the amounts refunded under
this section. If the amount of sales or
excise tax refunded is not separately stated,
or if the manufacturer does not apply for a
refund of the tax within one year of the
return of the motor vehicle, the department
of public safety may refund the tax, as
determined under paragraph (h), directly to
the consumer and lien holder, if any, as
their interests appear on the records of the
registrar of motor vehicles. A reasonable
allowance for use is that amount directly
attributable to use by the consumer and any
previous consumer during any period in which
the use and market value of the motor vehicle
are not substantially impaired. It is an
affirmative defense to any claim under this
section
(1)
that an alleged nonconformity does not
substantially impair the use or market value,
or
(2)
that a nonconformity is the result of abuse,
neglect, or unauthorized modifications or
alterations of a motor vehicle by anyone
other than the manufacturer, its agent or its
authorized dealer.
(b)
It is presumed that a reasonable number of
attempts have been undertaken to conform a
new motor vehicle to the applicable express
warranties, if
(1)
the same nonconformity has been subject to
repair four or more times by the
manufacturer, its agents, or its authorized
dealers within the applicable express
warranty term or during the period of two
years following the date of original delivery
of the new motor vehicle to a consumer,
whichever is the earlier date, but the
nonconformity continues to exist, or
(2)
the vehicle is out of service by reason of
repair for a cumulative total of 30 or more
business days during the term or during the
period, whichever is the earlier date.
(c)
If the nonconformity results in a complete
failure of the braking or steering system of
the new motor vehicle and is likely to cause
death or serious bodily injury if the vehicle
is driven, it is presumed that a reasonable
number of attempts have been undertaken to
conform the vehicle to the applicable express
warranties if the nonconformity has been
subject to repair at least once by the
manufacturer, its agents, or its authorized
dealers within the applicable express
warranty term or during the period of two
years following the date of original delivery
of the new motor vehicle to a consumer,
whichever is the earlier date, and the
nonconformity continues to exist.
(d)
The term of an applicable express warranty,
the two-year period and the 30-day period
shall be extended by any period of time
during which repair services are not
available to the consumer because of a war,
invasion, strike, or fire, flood, or other
natural disaster.
(e)
The presumption contained in paragraph (b)
applies against a manufacturer only if the
manufacturer, its agent, or its authorized
dealer has received prior written
notification from or on behalf of the
consumer at least once and an opportunity to
cure the defect alleged. If the notification
is received by the manufacturer's agent or
authorized dealer, the agent or dealer must
forward it to the manufacturer by certified
mail, return receipt requested.
(f)
The expiration of the time periods set forth
in paragraph (b) does not bar a consumer from
receiving a refund or replacement vehicle
under paragraph (a) if the reasonable number
of attempts to correct the nonconformity
causing the substantial impairment occur
within three years following the date of
original delivery of the new motor vehicle to
a consumer, provided the consumer first
reported the nonconformity to the
manufacturer, its agent, or its authorized
dealer during the term of the applicable
express warranty.
(g)
At the time of purchase or lease, the
manufacturer must provide directly to the
consumer a written statement on a separate
piece of paper, in 10-point all capital type,
in substantially the following form:
"IMPORTANT:
IF THIS VEHICLE IS DEFECTIVE, YOU MAY BE
ENTITLED UNDER THE STATE'S LEMON LAW TO
REPLACEMENT OF IT OR A REFUND OF ITS PURCHASE
PRICE OR YOUR LEASE PAYMENTS. HOWEVER, TO BE
ENTITLED TO REFUND OR REPLACEMENT, YOU MUST
FIRST NOTIFY THE MANUFACTURER, ITS AGENT, OR
ITS AUTHORIZED DEALER OF THE PROBLEM IN
WRITING AND GIVE THEM AN OPPORTUNITY TO
REPAIR THE VEHICLE. YOU ALSO HAVE A RIGHT TO
SUBMIT YOUR CASE TO THE CONSUMER ARBITRATION
PROGRAM WHICH THE MANUFACTURER MUST OFFER IN
MINNESOTA."
(h)
The amount of the sales or excise tax to be
paid by the manufacturer to the consumer
under paragraph (a) shall be the tax paid by
the consumer when the vehicle was purchased
less an amount equal to the tax paid
multiplied by a fraction, the denominator of
which is the purchase price of the vehicle
and the numerator of which is the allowance
deducted from the refund for the consumer's
use of the vehicle.
Subdivision
4
Manufacturer's
duty to consumers with leased vehicles.
A
consumer who leases a new motor vehicle has
the same rights against the manufacturer
under this section as a consumer who
purchases a new motor vehicle, except that,
if it is determined that the manufacturer
must accept return of the consumer's leased
vehicle pursuant to subdivision 3, then the
consumer lessee is not entitled to a
replacement vehicle, but is entitled only to
a refund as provided in this subdivision. In
such a case, the consumer's leased vehicle
shall be returned to the manufacturer and the
consumer's written lease with the motor
vehicle lessor must be terminated. The
manufacturer shall then provide the consumer
with a full refund of the amount actually
paid by the consumer on the written lease,
including all additional charges set forth in
subdivision 3, if actually paid by the
consumer, less a reasonable allowance for use
by the consumer as set forth in subdivision
3. The manufacturer shall provide the motor
vehicle lessor with a full refund of the
vehicle's original purchase price plus any
early termination costs, not to exceed 15
percent of the vehicle's original purchase
price, less the amount actually paid by the
consumer on the written lease.
Subdivision
5
Resale
or re-lease of returned motor vehicle.
(a)
If a motor vehicle has been returned under
the provisions of subdivision 3 or a similar
statute of another state, whether as the
result of a legal action or as the result of
an informal dispute settlement proceeding, it
may not be resold or re-leased in this state
unless:
(1)
the manufacturer provides the same express
warranty it provided to the original
purchaser, except that the term of the
warranty need only last for 12,000 miles or
12 months after the date of resale, whichever
is earlier; and
(2)
the manufacturer provides the consumer with a
written statement on a separate piece of
paper, in 10-point all capital type, in
substantially the following form:
"IMPORTANT:
THIS VEHICLE WAS RETURNED TO THE MANUFACTURER
BECAUSE IT DID NOT CONFORM TO THE
MANUFACTURER'S EXPRESS WARRANTY AND THE
NONCONFORMITY WAS NOT CURED WITHIN A
REASONABLE TIME AS PROVIDED BY MINNESOTA
LAW."
The
provisions of this section apply to the
resold or re-leased motor vehicle for full
term of the warranty required under this
subdivision.
(b)
Notwithstanding the provisions of paragraph
(a), if a new motor vehicle has been returned
under the provisions of subdivision 3 or a
similar statute of another state because of a
nonconformity resulting in a complete failure
of the braking or steering system of the
motor vehicle likely to cause death or
serious bodily injury if the vehicle was
driven, the motor vehicle may not be resold
in this state.
Subdivision
6
Alternative
dispute settlement mechanism.
(a)
Any manufacturer doing business in this
state, entering into franchise agreements for
the sale of its motor vehicles in this state,
or offering express warranties on its motor
vehicles sold or distributed for sale in this
state shall operate, or participate in, an
informal dispute settlement mechanism located
in the state of Minnesota which complies with
the provisions of the Code of Federal
Regulations, title 16, part 703, and the
requirements of this section. The provisions
of subdivision 3 concerning refunds or
replacement do not apply to a consumer who
has not first used this mechanism before
commencing a civil action, unless the
manufacturer allows a consumer to commence an
action without first using this mechanism.
(b)
An informal dispute settlement mechanism
provided for by this section shall, at the
time a request for arbitration is made,
provide to the consumer and to each person
who will arbitrate the consumer's dispute,
information about this section as approved
and directed by the attorney general, in
consultation with interested parties. The
informal dispute settlement mechanism shall
permit the parties to present or submit any
arguments based on this section and shall not
prohibit or discourage the consideration of
any such arguments.
(c)
If, in an informal dispute settlement
mechanism, it is decided that a consumer is
entitled to a replacement vehicle or refund
under subdivision 3, then any refund or
replacement offered by the manufacturer or
selected by a consumer shall include and
itemize all amounts authorized by subdivision
3. If the amount of excise tax refunded is
not separately stated, or if the manufacturer
does not apply for a refund of the tax within
one year of the return of the motor vehicle,
the department of public safety may refund
the excise tax, as determined under
subdivision 3, paragraph (h), directly to the
consumer and lien holder, if any, as their
interests appear on the records of the
registrar of motor vehicles.
(d)
No documents shall be received by any
informal dispute settlement mechanism unless
those documents have been provided to each of
the parties in the dispute at or prior to the
mechanism's meeting, with an opportunity for
the parties to comment on the documents
either in writing or orally. If a consumer is
present during the informal dispute
settlement mechanism's meeting, the consumer
may request postponement of the mechanism's
meeting to allow sufficient time to review
any documents presented at the time of the
meeting which had not been presented to the
consumer prior to the meeting.
(e)
The informal dispute settlement mechanism
shall allow each party to appear and make an
oral presentation in the state of Minnesota
unless the consumer agrees to submit the
dispute for decision on the basis of
documents alone or by telephone, or unless
the party fails to appear for an oral
presentation after reasonable prior written
notice. If the consumer agrees to submit the
dispute for decision on the basis of
documents alone, then manufacturer or dealer
representatives may not participate in the
discussion or decision of the dispute.
(f)
Consumers shall be given an adequate
opportunity to contest a manufacturer's
assertion that a nonconformity falls within
intended specifications for the vehicle by
having the basis of the manufacturer's claim
appraised by a technical expert selected and
paid for by the consumer prior to the
informal dispute settlement hearing.
(g)
Where there has been a recent attempt by the
manufacturer to repair a consumer's vehicle,
but no response has yet been received by the
informal dispute mechanism from the consumer
as to whether the repairs were successfully
completed, the parties must be given the
opportunity to present any additional
information regarding the manufacturer's
recent repair attempt before any final
decision is rendered by the informal dispute
settlement mechanism. This provision shall
not prejudice a consumer's rights under this
section.
(h)
If the manufacturer knows that a technical
service bulletin directly applies to the
specific mechanical problem being disputed by
the consumer, then the manufacturer shall
provide the technical service bulletin to the
consumer at reasonable cost. The mechanism
shall review any such technical service
bulletins submitted by either party.
(i)
A consumer may be charged a fee to
participate in an informal dispute settlement
mechanism required by this section, but the
fee may not exceed the conciliation court
filing fee in the county where the
arbitration is conducted.
(j)
Any party to the dispute has the right to be
represented by an attorney in an informal
dispute settlement mechanism.
(k)
The informal dispute settlement mechanism has
all the evidence-gathering powers granted an
arbitrator under section 572.14.
(l)
A decision issued in an informal dispute
settlement mechanism required by this section
may be in writing and signed.
Subdivision
7
Effect
and admissibility of decision by informal
dispute settlement mechanism.
The
decision issued in an informal dispute
settlement mechanism required by this section
is non-binding on the parties involved,
unless otherwise agreed by the parties. Any
party, upon application, may remove the
decision to district court for a trial de
novo. If the manufacturer is aggrieved by the
decision of the informal dispute settlement
mechanism, an application to remove the
decision must be filed in the district court
within 30 days after the date the decision is
received by the parties. If the application
to remove is not made within 30 days, then
the district court shall, upon application of
a party, issue an order confirming the
decision. A written decision issued by an
informal dispute settlement mechanism, and
any written findings upon which the decision
is based, are admissible as non-binding
evidence in any subsequent legal action and
are not subject to further foundation
requirements.
Subdivision
8
Treble
damages for bad faith appeal of decision.
If
the district court finds that a party has
removed a decision of an informal dispute
settlement mechanism in bad faith, by
asserting a claim or defense that is
frivolous and costly to the other party, or
by asserting an unfounded position solely to
delay recovery by the other party, then the
court shall award to the prevailing party
three times the actual damages sustained,
together with costs and disbursements,
including reasonable attorney's fees.
Subdivision
9
Civil
remedy.
Any
consumer injured by a violation of this
section may bring a civil action to enforce
this section and recover costs and
disbursements, including reasonable
attorney's fees incurred in the civil action.
In addition to the remedies provided herein,
the attorney general may bring an action
pursuant to section 8.31 against any
manufacturer for violation of this section.
Subdivision
10
Limitation
on actions.
A
civil action brought under this section must
be commenced within three years of the date
of original delivery of the new motor vehicle
to a consumer; except that, if the consumer
applies to an informal dispute settlement
mechanism within three years of the date of
original delivery of a new motor vehicle to a
consumer, and if the consumer is aggrieved by
the decision of the informal dispute
settlement mechanism, then any civil action
brought under this section must be commenced
within six months after the date of the final
decision by the mechanism.
Subdivision
11
Remedy
nonexclusive.
Nothing
in this section limits the rights or remedies
which are otherwise available to a consumer
under any other law.
Subdivision
12
Disclosure
requirement.
In
addition to any investigative powers
authorized by law, the attorney general may
inspect the records of the informal dispute
settlement mechanism upon reasonable notice,
during regular business hours, and may make
available to the public information about the
operation of the mechanism, but data on an
individual may not be disclosed without the
prior consent of the individual.
Subdivision
13
Dealer
liability.
Nothing
in this section imposes liability on a dealer
or creates an additional cause of action by a
consumer against a dealer, except for written
express warranties made by the dealer apart
from the manufacturer's warranties. The
manufacturer shall not charge back or require
reimbursement by the dealer for any costs,
including, but not limited to, any refunds or
vehicle replacements, incurred by the
manufacturer arising out of this section,
unless there is evidence that the related
repairs had not been carried out by the
dealer in a timely manner or in a manner
substantially consistent with the
manufacturer's published instructions.
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