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Texas Lemon Law
Texas
Revised Civil Statutes, Art. 4413(36) §§
3.08(i), 6.07, 7.01
Texas
Administrative Code, Title 16 §§
107.1-107.12
3.08(i)
General Warranty Complaints.
The
owner of a motor vehicle or the owner's
designated agent may make a complaint
concerning defects in a motor vehicle which
are covered by a manufacturer's, converter's,
or distributor's warranty agreement
applicable to the vehicle. Any such complaint
must be made in writing to the applicable
dealer, manufacturer, converter, or
distributor and must specify the defects in
the vehicle which are covered by the
warranty. The owner may also invoke the
Commission's jurisdiction by sending the
Commission a copy of the complaint. A hearing
may be scheduled on all complaints arising
under this subsection which are not privately
resolved between the owner and the dealer,
manufacturer, converter, or distributor.
6.07
Warranty Performance Obligations.
(a)
In addition to the other powers and duties
provided for in this Act, the Commission
shall cause manufacturers, converters, and
distributors to perform the obligations
imposed by this section. For purposes of this
section, the term "owner" means a
retail purchaser, lessor, lessee other than a
sub lessee, or the person so designated on
the certificate of title to a motor vehicle
issued by the State Department of Highways
and Public Transportation, or an equivalent
document issued by the duly authorized agency
of any other state, or any person to whom
such motor vehicle is legally transferred
during the duration of a manufacturer's or
distributor's express warranty applicable to
such motor vehicle, and any other person
entitled by the terms of the manufacturer's,
converter's, or distributor's express
warranty to enforce the obligations thereof.
(b)
If a new motor vehicle does not conform to
all applicable manufacturer's, converter's,
or distributor's express warranties, the
manufacturer, converter, or distributor shall
make the repairs necessary to conform the
vehicle to the applicable express warranties,
notwithstanding that the repairs are made
after the expiration of the warranties, if:
(1)
the owner or the owner's designated agent
reported the nonconformity to the
manufacturer, converter, or distributor, its
agent, or its franchised dealer during the
term of such express warranties; or
(2)
a reputable presumption relating to the
vehicle was created under Subsection (d) of
this section. This section does not in any
way limit the remedies available to an owner
under a new motor vehicle warranty that
extends beyond the provisions of this
section.
(c)
If the manufacturer, converter, or
distributor is unable to conform the motor
vehicle to an applicable express warranty by
repairing or correcting any defect or
condition which creates a serious safety
hazard or substantially impairs the use or
market value of the motor vehicle after a
reasonable number of attempts, the
manufacturer, converter, or distributor shall
(1)
replace the motor vehicle with a comparable
motor vehicle; or
(2)
accept return of the vehicle from the owner
and refund to the owner the full purchase
price less a reasonable allowance for the
owner's use of the vehicle and any other
allowances or refunds payable to the owner.
In this section, "impairment of market
value" means a substantial loss in
market value caused by a defect specific to
the vehicle. In addition to replacing the
vehicle or refunding the purchase price, the
manufacturer, converter, or distributor shall
reimburse the owner for reasonable incidental
costs resulting from loss of use of the motor
vehicle because of the nonconformity or
defect. As necessary to promote the public
interest, the Commission by rule shall define
the incidental costs that are eligible for
reimbursement, shall specify other
requirements necessary to determine an
eligible cost, and may set a maximum amount
that is eligible for reimbursement, either by
type of eligible cost or a total for all
costs. Refunds shall be made to the owner and
lien holder, if any, as their interests may
appear. A reasonable allowance for use shall
be that amount directly attributable to use
of the motor vehicle when the vehicle is not
out of service for repair. An order to refund
or to replace may not be issued by the
Executive Director against a manufacturer,
converter, or distributor unless the
manufacturer, converter, or distributor has
been mailed prior written notification of the
alleged nonconformity or defect from or on
behalf of the owner and has been given an
opportunity to cure the alleged defect or
nonconformity. In any hearing before the
Executive Director under this section, a
manufacturer, converter, or distributor may
plead and prove as an affirmative defense to
the remedies provided hereunder that
(1)
the nonconformity is the result of abuse,
neglect, or unauthorized modifications or
alterations of the motor vehicle; or
(2)
the nonconformity does not substantially
impair the use or market value of the motor
vehicle. In this section, "serious
safety hazard" means a life-threatening
malfunction or nonconformity that
substantially impedes a person's ability to
control or operate a motor vehicle for
ordinary use or intended purposes or that
creates a substantial risk of fire or
explosion.
(d)
There is a reputable presumption that a
reasonable number of attempts have been
undertaken to conform a motor vehicle to the
applicable express warranties if
(1)
the same nonconformity has been subject to
repair four or more times by the
manufacturer, converter, or distributor, its
agent, or its franchised dealer and two of
the repair attempts have been made within a
period of 12 months following the date of
original delivery to an owner, or 12,000
miles, whichever occurs first, and the other
two repair attempts occur within the 12
months or 12,000 miles immediately following
the date of the second repair attempt,
whichever occurs first, but such
nonconformity continues to exist;
(2)
the same nonconformity creates a serious
safety hazard and has caused the vehicle to
have been subject to repair two or more times
by the manufacturer, converter, or
distributor, or an authorized agent or
franchised dealer, and at least one attempt
to repair the nonconformity was made in the
period of 12 months or 12,000 miles,
whichever occurs first, and at least one
other attempt made in the period of 12 months
or 12,000 miles after the first repair
attempt, whichever occurs first, but the
nonconformity continues to exist; or
(3)
the vehicle is out of service for repair for
a cumulative total of 30 or more days in the
24 months or 24,000 miles, whichever occurs
first, and at least two repair attempts were
made in the first 12 months or 12,000 miles
immediately following the date of original
delivery to an owner and a nonconformity
still exists that substantially impairs the
vehicle's use or market value. The initial
12-month period or 12,000 mile limit, the
subsequent 12-month period or 12,000 mile
limit, and the 30-day period shall be
extended by any period of time during which
repair services are not available to the
owner because of a war, invasion, strike or
fire, flood, or other natural disaster.
During any period of time that the
manufacturer or distributor lends a
comparable motor vehicle to the owner during
the time the vehicle is being repaired by a
franchised dealer, the 30-day period provided
for in this subsection is tolled.
(e)
(1)
The Commission shall adopt rules for the
enforcement and implementation of this
section.
(2)
The Executive Director shall, in accordance
with rules adopted by the Commission, conduct
hearings and issue final orders for the
enforcement and implementation of this
section. Orders issued by the Executive
Director under this section are considered
final orders of the Commission.
(3)
Except as provided by Subdivision (6) of this
subsection, the provisions of this section
are not available to an owner in an action
seeking a refund or replacement based upon
the alleged nonconformity of a motor vehicle
to an express warranty applicable to the
motor vehicle unless the owner has first
exhausted the administrative remedies
provided herein.
(4)
The provisions of this section are not
available to a party in an action against a
seller under Chapter 2 or Chapter 17,
Business & Commerce Code, as amended.
(5)
Except as provided by Subdivision (6) of this
subsection, the provisions of this section
are available in an action against a
manufacturer, converter, or distributor
brought under Chapter 17, Business &
Commerce Code, after the owner has exhausted
the administrative remedies provided by this
section.
(6)
If, after a complaint has been filed under
this section, the Hearing Examiner has not
issued a proposal for decision and
recommended to the Executive Director a final
order before the expiration of the 150th day
after the date the complaint was filed, the
Executive Director shall, in writing sent by
certified mail, so inform the complainant and
the manufacturer, converter, or distributor
of the expiration of the 150-day period and
of the complainant's right to file a civil
action. The Commission shall extend the
150-day period if a delay is requested or is
caused by the complainant.
(7)
After receipt of the notice of the right to
file a civil action, the complainant may file
a civil action against one or more of the
persons complained of in the complaint.
(8)
A failure by the Commission to issue a notice
of the right to file a civil action does not
affect a complainant's right to bring an
action under this Act.
(9)
Any party to a proceeding under this section
before the Executive Director that is
affected by a final order of the Executive
Director is entitled to judicial review of
the order under the substantial evidence rule
in a District Court of Travis County, Texas.
The judicial review is subject to the
Administrative Procedure and Texas Register
Act (Article 6252-13a, Vernon's Texas Civil
Statutes) except to the extent that that Act
is inconsistent with this Act.
(f)
This section does not limit the rights or
remedies otherwise available to an owner
under any other law.
(g)
In a hearing under this section, the
Executive Director shall make its order with
respect to responsibility for payment of the
cost of any refund or replacement and no
manufacturer, converter, or distributor may
cause any franchised dealer to pay directly
or indirectly any sum not specifically so
ordered by the Executive Director. If the
Executive Director orders a manufacturer,
converter, or distributor to refund or
replace a motor vehicle because it meets the
criteria set forth in this section, the
Executive Director may order the franchised
dealer to reimburse the owner, lien holder,
manufacturer, converter, or distributor only
for items or options added to the vehicle by
the franchised dealer and only to the extent
that one or more of such items or options
contributed to the defect that served as the
basis for the Executive Director's order of
refund or replacement. In a case involving a
leased vehicle, the Executive Director may
terminate the lease and apportion the
allowance for use and other allowances or
refunds between the lessee and lessor of the
vehicle.
(h)
A proceeding brought under this section shall
be commenced within six months following the
earlier of (1) expiration of the express
warranty term or (2) 24 months or 24,000
miles following the date of original delivery
of the motor vehicle to an owner.
(i)
A contractual provision that excludes or
modifies the remedies provided for in this
section is prohibited and shall be deemed
null and void as against public policy unless
the exclusion or modification is done with
respect to a settlement agreement between the
owner and the manufacturer, converter, or
distributor.
(j)
(1)
A manufacturer, distributor, or converter
that has been ordered to repurchase or
replace a vehicle shall, through its
franchised dealer, issue a disclosure
statement stating that the vehicle was
repurchased or replaced by the manufacturer,
distributor, or converter under this section.
The disclosure statement must accompany the
vehicle through the first retail purchase.
The manufacturer, distributor, or converter
must restore the cause of the repurchase or
replacement to factory specifications and
issue a new 12-month, 12,000-mile warranty on
the vehicle. The disclosure statement must
include a toll-free telephone number of the
Commission that will enable a purchaser of a
repurchased or replaced vehicle to obtain
information about the condition or defect
that was the basis of the order for
repurchase or replacement. The Commission
shall adopt rules for the enforcement of this
subdivision.
(2)
The Commission shall provide a toll-free
telephone number for providing information to
persons who request information about a
condition or defect that was the basis for
repurchase or replacement by an order of the
Executive Director. The Commission shall
maintain an effective method of providing
information to persons who make the requests.
(k)
The Commission shall publish an annual report
on the motor vehicles ordered repurchased or
replaced under this section. The report must
list the number of vehicles by brand name and
model and include a brief description of the
conditions or defects that caused the
repurchase or replacement. The Commission
shall make the report available to the
public. The Commission may charge a
reasonable fee to recover the cost of the
report.
(l)
Information filed with the Board under this
section is not a public record and is not
subject to release under the open records
law, Chapter 552, Government Code, until the
complaint is finally resolved by order of the
Board.
7.01
Judicial Review; Appeal.
(a)
Any party to a proceeding before the
Commission that is affected by a final order,
rule, decision, or other final action of the
Commission is entitled to judicial review of
any such final Commission action, under the
substantial evidence rule, in a District
Court of Travis County, Texas, or in the
Court of Appeals for the Third Court of
Appeals District, and to the extent not in
consistent herewith, pursuant to the
Administrative Procedure and Texas Register
Act (Article 6252-13a, Vernon's Texas Civil
Statutes). Appeals initiated in the District
Courts of Travis County shall be removable to
the Court of Appeals upon notice of removal
to any such district court by any party at
any time prior to trial in the district
court. Appeals initiated in or removed to the
Court of Appeals shall be initiated under the
Administrative Procedure and Texas Register
Act as if initiated in a Travis County
District Court and shall, upon the filing
thereof, be thereafter governed by the Texas
Rules of Appellate Procedure.
(b)
A final action, ruling, order, or decision of
the Motor Vehicle Board of the Texas
Department of Transportation, or the Director
of the Motor Vehicle Division of the Texas
Department of Transportation, as appropriate
under the terms of this Act or other law, is
the final action with respect to a matter
arising under this Act, and is subject to
review only by judicial review as provided by
this Act. The petition for judicial review
must be filed within 30 days of the date on
which an action, ruling, order, or decision
of the Board or the director first becomes
final and appealable.
(c)
Citation must be served on the Executive
Director. Citation must also be served on all
other parties of record before the
Commission. For appeals initiated in the
Court of Appeals, the court shall cause
citation to be issued.
(d)
Appeals in which evidence outside the
Commission's record is to be taken under
Section 19(d)(3), Administrative Procedure
and Texas Register Act (Article
6252-13a,Version's Texas Civil Statutes), or
otherwise, shall be initiated in a Travis
County District Court, or having been
initiated in the Court of Appeals, shall be
subject to remand to a Travis County District
Court for proceedings in accordance with
instructions from the Court of Appeals.
(e)
Appellants shall pursue appeals with
reasonable diligence. If an appellant fails
to prosecute an appeal within six months
after the appeal is filed, the court shall
presume that the appeal has been abandoned.
The court shall dismiss any such appeal on a
motion for dismissal made by the Attorney
General or other party unless the appellant,
after receiving due notice, demonstrates good
cause for the delay.
(f)
Appeal shall not affect the enforcement of a
final Commission order unless its enforcement
is enjoyable under Section 65.001 et seq.,
Civil Practice and Remedies Code, and under
principles of primary jurisdiction.
107.1
Objective.
It
is the objective of these sections to
implement the intent of the legislature as
declared in the Texas Motor Vehicle
Commission Code, 3.06 and 6.07(e), by
prescribing rules to provide a simplified and
fair procedure for the enforcement and
implementation of the Texas lemon law and
consumer complaints covered by general
warranty agreements, including the processing
of complaints, the conduct of hearings, and
the disposition of complaints filed by owners
of new motor vehicles seeking relief under
these provisions of the Code.
107.2
Filing of Complaints.
(a)
Complaints for relief under the lemon law
must be in writing and filed with the
commission at its office in Austin.
Complaints may be in letter form or any other
written format or may be submitted on
complaint forms provided by the commission.
(b)
Complaints should state sufficient facts to
enable the commission and the party
complained against to know the nature of the
complaint and the specific problems or
circumstances which form the basis of the
claim for relief under the lemon law.
(c)
Complaints must provide the following
information:
(1)
name, address, and phone number of vehicle
owner;
(2)
identification of vehicle by make, model, and
year, and manufacturer's vehicle
identification number;
(3)
type of warranty coverage;
(4)
name and address of dealer, or other person,
from whom vehicle was purchased or leased,
including the name and address of the current
lessor, if applicable;
(5)
date of delivery of vehicle to original
owner; and in the case of a demonstrator, the
date the vehicle was placed into demonstrator
service;
(6)
vehicle mileage at time vehicle was purchased
or leased, mileage when problems with vehicle
were first reported, name of dealer or
manufacturer's or distributor's agent to whom
problems were first reported, and current
mileage;
(7)
identification of existing problems and brief
description of history of problems and
repairs on vehicle, including date and
mileage of each repair, with copies of repair
orders where possible;
(8)
date on which written notification of
complaint was given to the vehicle
manufacturer or distributor, and if vehicle
has been inspected by manufacturer, the date
and results of such inspection;
(9)
any other information which the complainant
believes to be pertinent to the complaint.
(d)
The commission's staff will provide
information concerning the complaint
procedure and complaint forms to any person
requesting information or assistance.
(e)
The lemon law complaint filing fee of $75
should be remitted with the complaint by
check or money order payable to the Texas
Motor Vehicle Commission. The filing fee is
nonrefundable, but a complainant who prevails
in a lemon law case is entitled to
reimbursement of the amount of the filing
fee. Failure to remit the filing fee with the
complaint will result in delaying the
commencement of the 150-day requirement
provided in 107.6(11) of this title (relating
to Hearings).
107.3
Review of Complaints.
All
complaints will be reviewed promptly by the
commission's staff to determine whether they
satisfy the requirements of the lemon law.
(1)
If it cannot be determined whether a
complaint satisfies the requirements of the
lemon law, the complainant will be contacted
for additional information.
(2)
If it is determined that the complaint does
not meet the requirements of the lemon law,
the complainant will be notified of this
fact.
(3)
If it is determined that the complaint does
meet the requirements of the lemon law, the
complaint will be processed in accordance
with the following procedures in 107.4-107.9
of this title (relating to Notification of
Manufacturer and Distributor; Mediation,
Settlement; Hearings; Hearing Officer's
Report; Decisions; and Compliance).
(4)
For purposes of 6.07(h), the commencement of
a proceeding means the filing of a complaint
with the commission, and the date of filing
is determined by the date of receipt by the
commission.
107.4
Notification to Manufacturer and Distributor.
Upon
receipt of a complaint for relief under the
lemon law, notification thereof, with a copy
of the complaint, will be given to the
appropriate manufacturer or distributor
against whom the complaint is made, and a
response to the complaint will be requested.
Notification of the complaint and a request
for a response will also be given to the
selling dealer and any other dealer that has
been involved with the complaint.
107.5
Mediation; Settlement.
If,
from a review of the complaint and the
responses received from the manufacturer,
distributor, or dealer, it appears to the
commission staff that a settlement or
resolution of the complaint may be possible
without the necessity for a hearing, the
commission staff will contact all parties and
attempt to effect a settlement or resolution
of the complaint in a manner satisfactory to
the parties.
107.6
Hearings.
Complaints
which satisfy the jurisdictional requirements
of the Texas Motor Vehicle Commission Code,
3.08(i) and 6.07, will be set for hearing and
notification of the date, time, and place the
hearing will be given to all parties by
certified mail.
(1)
Where possible, and subject to the
availability of commission personnel and
funds, hearings will be h
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