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Vermont Lemon Law
Vermont
Statutes Annotated, Title 9 §§ 4170-4181
4170
Legislative Intent
The
legislature finds and declares that
manufacturers, distributors and importers of
new motor vehicles should be obligated to
provide speedy and less costly resolution of
automobile warranty problems. Manufacturers
should be required to provide in as
expeditious a manner as possible a refund of
the consumer's purchase price or payments to
a lessor and lessee or a replacement vehicle
that is acceptable to the consumer whenever
the manufacturer is unable to make the
vehicle conform with its applicable warranty.
New motor vehicle dealers and used motor
vehicle dealers cannot be sued under this
chapter.
4171
Definitions.
As
used in this chapter:
(1)
"Board" means, unless otherwise
indicated, the Vermont motor vehicle
arbitration board.
(2)
"Consumer" means the purchaser,
other than for purposes of resale of a new
motor vehicle or lessee of a new motor
vehicle, other than for the purposes of
sub-lease, which has not been previously
leased by another person, any person to whom
such motor vehicle is transferred during the
duration of an express warranty applicable to
the motor vehicle, and any other person
entitled by the terms of the warranty to
enforce the obligations of the warranty, but
"consumer" shall not include any
governmental entity or any business or
commercial enterprise which registers or
leases three or more motor vehicles.
(3)
"Early termination costs" mean
expenses and obligations incurred by a motor
vehicle lessee as a result of an early
termination of a written lease agreement and
surrender of a motor vehicle to a
manufacturer under the provisions of 9 V.S.A.
4172(e), including penalties for prepayment
of finance arrangements.
(4)
"Lease or leased" means a written
agreement with a lessee as defined in
subdivision (5) of this section, which shall
be for the use of a motor vehicle for
consideration for a term of two or more
years.
(5)
"Lessee" means any consumer who
leases a motor vehicle pursuant to a written
lease agreement for a term of two or more
years.
(6)
"Motor vehicle" means a motor
vehicle which is purchased or leased, or
registered in the state of Vermont and is
registered in Vermont within 15 days of the
date of purchase or lease and shall not
include tractors, motorized highway building
equipment, road-making appliances,
snowmobiles, motorcycles, mopeds, or the
living portion of recreation vehicles, or
trucks with a gross vehicle weight over
10,000 pounds.
(7)
"Manufacturer" means any person,
resident or nonresident, who manufactures or
assembles new motor vehicles or imports for
distribution through distributors of motor
vehicles or any partnership, firm,
association, joint venture, corporation or
trust, resident or nonresident, which is
controlled by a manufacturer. Additionally,
the term "manufacturer" shall
include:
(A)
"distributor," meaning any person,
resident or nonresident, who in whole or in
part offers for sale , sells, or distributes
any new motor vehicle to new motor vehicle
dealers or new motor vehicle lessor's or
maintains factory representatives or who
controls any person, firm, association,
corporation, or trust, resident or
nonresident, who in whole or in part offers
for sale, sells or distributes any new motor
vehicle to new motor vehicle dealers or new
motor vehicle lessor's; and
(B)
"factory branch" meaning any branch
office maintained by a manufacturer for the
purpose of selling, leasing, offering for
sale or lease, vehicles to a distributor or
new motor vehicle dealer or for directing or
supervising, in whole or in part, factory
distributor representatives.
(8)
"Motor vehicle lessor" means a
person who holds title to a motor vehicle
leased to a lessee under a written lease
agreement for a term of two or more years, or
who holds the lessor's rights under such an
agreement.
(9)
A "new motor vehicle" means a
passenger motor vehicle which has been sold
to a new motor vehicle dealer or motor
vehicle lessor by a manufacturer and which
has not been used for other than
demonstration purposes and on which the
original title has not been issued from the
new motor vehicle dealer other than to a
motor vehicle lessor.
(10)
Warranty shall be defined as including the
following:
"Express
warranty" means express warranties as
defined in the Uniform Commercial Code2-313,
plus any written warranty of the
manufacturer.
4172
Enforcement Of Warranties.
(a)
Every new motor vehicle as defined in section
4171 of this title sold in this state must
conform to all applicable warranties.
(b)
It shall be the manufacturer's obligation
under this chapter to insure that all new
motor vehicles sold or leased in this state
conform with manufacturer's express
warranties. The manufacturer may delegate
responsibility to its agents or authorized
dealers provided, however, in the event the
manufacturer delegates its responsibility
under this chapter to its agents or
authorized dealers, it shall compensate the
dealer for all work performed by the dealer
in satisfaction of the manufacturer's
responsibility under this chapter in the
manner set forth in chapter 108 of this title
known as the "Motor Vehicle
Manufacturers, Distributors and Dealers'
Franchising Practices Act" as that act
may be from time to time amended.
(c)
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 authorized dealer
during the term of the warranty, the
manufacturer shall cause whatever repairs are
necessary to conform the vehicle to the
warranties, notwithstanding the fact that the
repairs are made after the expiration of a
warranty term.
(d)
A manufacturer, its agent or authorized
dealer shall not refuse to provide a consumer
with a written repair order and shall provide
to the consumer each time the consumer's
vehicle is brought in for examination or
repair of a defect, a written summary of the
complaint and a fully itemized statement
indicating all work performed on the vehicle
including, but not limited to, examination of
the vehicle, parts and labor.
(e)
If, after a reasonable number of attempts,
the manufacturer, its agent or authorized
dealer or its delegate is unable to conform
the motor vehicle to any express warranty by
repairing or correcting any defect or
condition covered by the warranty which
substantially impairs the use, market value,
or safety of the motor vehicle to the
consumer, the manufacturer shall, at the
option of the consumer within 30 days of the
effective date of the board's order, replace
the motor vehicle with a new motor vehicle
from the same manufacturer, if available, of
comparable worth to the same make and model
with all options and accessories with
appropriate adjustments being allowed for any
model year differences or shall accept return
of the vehicle from the consumer and refund
to the consumer the full purchase price or to
the lessee in the case of leased vehicles, as
provided in subsection (i) of this section.
In those instances in which a refund is
tendered, the manufacturer shall refund to
the consumer the full purchase price as
indicated in the purchase contract and all
credits and allowances for any trade-in or
down payment, license fees, finance charges,
credit charges, registration fees and any
similar charges and incidental and
consequential damages or in the case of
leased vehicles, as provided in subsection (i)
of this section. Refunds shall be made to the
consumer and lien holder, if any, as their
interests may appear or to the motor vehicle
lessor and lessee as provided in subsection (i)
of this section. A reasonable allowance for
use shall be that amount directly
attributable to use by the consumer prior to
his or her first repair attempt and shall be
calculated by multiplying the full purchase
price of the vehicle by a fraction having as
its denominator 100,000 and having as its
numerator the number of miles that the
vehicle traveled prior to the first attempt
at repairing the vehicle. If the manufacturer
refunds the purchase price or a portion of
the price to the consumer, the purchase and
use tax shall be refunded by the state to the
consumer in the proportionate amount. To
receive a refund, the consumer must file a
claim with the commissioner of motor
vehicles.
(f)
It shall be an affirmative defense to any
claim under this chapter that an alleged
nonconformity does not substantially impair
the use, market value or safety or that the
nonconformity is the result of abuse,
neglect, or unauthorized modifications or
alterations of a motor vehicle by a consumer.
(g)
It shall be presumed that a reasonable number
of attempts have been undertaken to conform a
motor vehicle to the applicable warranties
if:
(1)
the same nonconformity as identified in any
written examination or repair order has been
subject to repair at least three times by the
manufacturer, its agent or authorized dealer
and at least the first repair attempt occurs
within the express warranty term and the same
nonconformity continues to exist, or
(2)
the vehicle is out of service by reason of
repair of one or more nonconformities,
defects or conditions for a cumulative total
of 30 or more calendar days during the term
of the express warranty. The term of any
warranty and the 30-day period shall be
extended by any period of time during which
repair services were not available to the
consumer because of war, invasion, strike,
fire, flood or other natural disaster. If an
extension of time is necessitated due to
these conditions, the manufacturer shall
cause provision for the free use of a vehicle
to the consumer whose vehicle is out of
service. A vehicle shall not be deemed out of
service if it is available to the consumer
for a major part of the day.
(h)
In order for an attempt at repair to qualify
for the presumptions of this section, the
attempt at repair must be evidenced by a
written examination or repair order issued by
the manufacturer, its agent or its authorized
dealer. The presumptions of this section
shall only apply to three attempts at repair
evidenced by written examination or repair
orders undertaken by the same agent or
authorized dealer, unless the consumer shows
good cause for taking the vehicle to a
different agent or authorized dealer.
(i)
In cases in which a refund is tendered by a
manufacturer for a leased motor vehicle under
subsection (e) of this section, the refund
and rights of the motor vehicle lessor,
lessee and manufacturer shall be in
accordance with the following:
(1)
The manufacturer shall provide to the lessee,
the aggregate deposit and rental payments
previously paid to the motor vehicle lessor
by the lessee, and incidental and
consequential damages, if applicable, minus a
reasonable allowance for use and allocated
payments for purchase and use tax. The
aggregate deposit shall include, but not be
limited to, all cash payments and trade-in
allowances tendered by the lessee to the
motor vehicle lessor under the lease
agreement. The reasonable allowance for use
shall be calculated by multiplying the
aggregate deposit and rental payments made by
the lessee on the motor vehicle by a fraction
having as its denominator 100,000 and having
as its numerator the number of miles that the
vehicle traveled prior to the first attempt
at repairing the vehicle.
(2)
The manufacturer shall provide to the motor
vehicle lessor the aggregate of the
following:
(A)
the lessor's actual purchase cost, less
payments made by the lessee;
(B)
the freight cost, if applicable;
(C)
the cost for dealer or manufacturer-installed
accessories, if applicable;
(D)
any fee paid to another to obtain the lease;
(E)
an amount equal to five percent of the
lessor's actual purchase cost as prescribed
in subdivision (2)(A) of this section. The
amount in this subdivision shall be instead
of any early termination costs as defined in
4171(3) of this chapter or as described in
the lease agreement.
(3)
The purchase and use tax shall be refunded by
the state to whomever paid the tax. The party
must file a claim with the commissioner of
the department of motor vehicles.
(4)
The lessee's lease agreement with the motor
vehicle lessor and all contractual
obligations shall be terminated upon a
decision of the board in favor of the lessee.
The lessee shall not be liable for any
further costs or charges to the manufacturer
or motor vehicle lessor under the lease
agreement.
(5)
The motor vehicle lessor shall release the
motor vehicle title to the manufacturer upon
payment by the manufacturer under the
provisions of this subsection.
(6)
The board shall give notice to the motor
vehicle lessor of the lessee's filing of a
request for arbitration under this chapter
and shall notify the motor vehicle lessor of
the date, time and place scheduled for a
hearing before the board. The motor vehicle
lessor shall provide testimony and evidence
necessary to the arbitration proceedings. Any
decision of the board shall be binding upon
the motor vehicle lessor.
4173
Procedure To Obtain Refund Or Replacement.
(a)
After the third attempt at repair or
correction of the nonconformity, defect or
condition, or after the vehicle is out of
service by reason of repair of one or more
nonconformities, defects or conditions for a
cumulative total of 30 or more calendar days
as provided in this chapter, the consumer
shall notify the manufacturer and lessor in
writing, on forms to be provided by the
manufacturer at the time the new motor
vehicle is delivered, of the nonconformity,
defect or condition and the consumer's
election to proceed under this chapter. The
forms shall be made available by the
manufacturer to the Vermont motor vehicle
arbitration board, and any other public or
nonprofit agencies that shall request them.
Notice of consumer rights under this chapter
shall be conspicuously displayed by all
authorized dealers and agents of the
manufacturer. The consumer shall in the
notice, elect whether to use the dispute
settlement mechanism and/or the arbitration
provisions established by the manufacturer or
to proceed under the Vermont motor vehicle
arbitration board as established under this
chapter. The consumer's election of whether
to proceed before the board or the
manufacturer's mechanism shall preclude his
or her recourse to the method not selected.
(b)
A consumer cannot pursue a remedy under this
chapter if he or she has discontinued
financing or lease payments if the payments
have been discontinued due to the
manufacturer's breach of obligation under
this chapter or of a breach of the
manufacturer's warranties.
(c)
Arbitration of the consumer's complaint,
either through the manufacturer's dispute
settlement mechanism or the board, must be
held within 45 days of receipt by the
manufacturer or the board and the
manufacturer of the consumer's notice
electing the remedy of arbitration unless the
consumer or the manufacturer has good cause
for an extension of time, not to exceed an
additional 30-day period. If the extension of
time is requested by the manufacturer, the
manufacturer shall provide free use of a
vehicle to the consumer if the consumer's
vehicle is out of service. In the event the
consumer elects to proceed in accordance with
the manufacturer's dispute settlement
mechanism and the arbitration of the dispute
is not held within 45 days of the
manufacturer's receipt of the consumer's
notice and the manufacturer is not able to
establish good cause for the delay, the
consumer shall be entitled to receive the
relief requested under this chapter.
(d)
Within the 45-day period set forth in
subsection (c) of this section, the
manufacturer shall have one final opportunity
to correct and repair the defect which the
consumer claims entitles him or her to a
refund or replacement vehicle. If the
consumer is satisfied with the corrective
work done by the manufacturer or his
delegate, the arbitration proceedings shall
be terminated without prejudice to the
consumer's right to request arbitration be
recommenced if the repair proves
unsatisfactory for the duration of the
express warranty.
(e)
The manufacturer shall refund the amounts
provided for in section 4172(e) or (i) of
this chapter within 30 days of a decision of
the board or within 15 days of final
adjudication.
4174
Vermont Motor Vehicle Arbitration Board.
(a)
There is created a Vermont motor vehicle
arbitration board consisting of five members
and two alternate members to be appointed by
the governor for terms of three years. Board
members may be appointed for two additional
three-year terms. One member of the board
shall be a new car dealer in Vermont, one
member and one alternate shall be persons
knowledgeable in automobile mechanics, and
three members and one alternate shall be
persons having no direct involvement in the
design, manufacture, distribution, sales or
service of motor vehicles or their parts.
Board members shall be compensated in
accordance with the provisions of 32 V.S.A.
1010. The board shall be attached to the
transportation board and shall receive
administrative services from the
transportation board.
(b)
The board shall promulgate rules under the
provisions of 3 V.S.A. chapter 25 to
implement the provisions of this chapter.
(c)
The board may issue subpoenas to compel the
attendance of witnesses to testify under oath
and to produce documents.
(d)
The board shall render a decision within 30
days of the conclusion of a hearing and has
authority to issue any and all damages as are
provided by this chapter.
4175
Fees And Costs.
There
shall be no filing fee or costs assessed
against the consumer for using the Vermont
motor vehicle arbitration board or the
manufacturer's dispute settlement mechanism.
In the event an authorized franchise dealer
or any of its employees including mechanics
or service personnel are called upon to
testify or produce documents, repair orders
or other materials in any arbitration held
before the Vermont motor vehicle arbitration
board or the manufacturer's dispute
settlement mechanism, the person who requests
the participation of the authorized franchise
dealer or requests the production of
documents must make arrangements in advance
to reasonably compensate the dealer for the
actual expense involved. Where a conflict
arises as to actual expenses, the board shall
make that determination. In the event the
consumer prevails, these costs shall be
reimbursed to the consumer by the
manufacturer.
4176
Appeal From Board.
(a)
The decision of the board shall be final and
shall not be modified or vacated unless, on
appeal to the superior court a party to the
arbitration proceeding proves, by clear and
convincing evidence, that:
(1)
the award was procured by corruption, fraud
or other undue means;
(2)
there was evident partiality by the board or
corruption or misconduct prejudicing the
rights of any party by the board;
(3)
the board exceeded its powers;
(4)
the board refused to postpone a hearing after
being shown sufficient cause to do so or
refused to hear evidence material to the
controversy or otherwise conducted the
hearing contrary to the rules promulgated by
the board so as to prejudice substantially
the rights of a party.
An
application to vacate or modify an award
shall be made within 30 days after delivery
of a copy of the award to the applicant
except that if predicated upon corruption,
fraud or other undue means, it may be made
within 30 days after such grounds are known
or should have been known. In the event an
award is confirmed, the party who prevails
shall be awarded the attorney's fees incurred
in obtaining confirmation of the award
together with all costs.
(b)
When a judgment of the superior court affirms
an award of the board, permission of the
presiding judge shall be required for review.
Review may be conditioned upon the appellant
paying appellee's appellate attorney's fees (sic),
giving security for costs, expenses and
financial loss resulting from the passage of
time for review.
4177
Unfair And Deceptive Acts And Practices.
Failure
of the manufacturer, its agents, authorized
dealers, or motor vehicle lessor's to comply
with a decision of the board shall constitute
an unfair or deceptive act or practice under
9 V.S.A. chapter 63.
4178
Limitations.
Nothing
in this chapter shall be construed as
imposing any liability on a manufacturer's
authorized dealers or creating a cause of
action by a manufacturer against its
authorized agents or dealers. It shall be a
violation of 9 V.S.A. chapter 108 for a
manufacturer to engage in reprisals or
threats of reprisals, directly or indirectly,
against any authorized dealer arising out of
the dealer's efforts to repair a motor
vehicle under the provisions of this chapter.
4179
Effective Date; Limitations.
(a)
This chapter shall apply to motor vehicles
beginning with the model year following July
1, 1984. Any proceedings initiated under this
chapter shall be commenced within one year
following:
(1)
the expiration of the express warranty term;
or
(2)
one year following the manufacturer's last
attempt at repair of the nonconformity which
gives rise to the consumer's request that the
vehicle be replaced or the money refunded,
whichever comes later.
(b)
Nothing in this chapter shall in any way
limit the rights or remedies which are
otherwise available to a consumer under any
other law.
4180
Notification To Consumers.
The
manufacturer of every motor vehicle sold in
this state beginning with the model year
following July 1, 1984 shall provide a clear
and conspicuous written notice of the
consumer's rights under this chapter and at
the time of the delivery of every new motor
vehicle in this state beginning with the
model year following July 1, 1984 shall
provide the consumer with a stamped
self-addressed notice in a form satisfactory
to the Vermont motor vehicle arbitration
board sufficient to notify the manufacturer
of the consumer's election to proceed under
this chapter. The manufacturer shall not
delegate this responsility.
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