| (a) Unless otherwise indicated, this section applies
to decisions that relate to lemon law complaints. Decisions shall
give effect to the presumptions provided in Occupations Code, §2301.605,
where applicable.
(1) If a hearings examiner finds that the manufacturer,
distributor, or converter is not able to conform the motor vehicle
to an applicable express warranty by repairing or correcting a defect
in the complainant's motor vehicle, creating a serious safety hazard
or substantially impairing the use or market value of the motor vehicle
after a reasonable number of attempts, and that the affirmative defenses
provided under Occupations Code, §2301.606 are not applicable,
the hearings examiner shall issue a final order to the manufacturer,
distributor, or converter to:
(A) replace the motor vehicle with a comparable motor
vehicle; or
(B) accept the return of the motor vehicle from the
owner and refund the full purchase price of the motor vehicle to the
owner, less a reasonable allowance for the owner's use of the motor
vehicle and any other allowances or refunds payable to the owner.
(2) In a decision in favor of the complainant, the
hearings examiner will, to the extent possible, accommodate the complainant's
request with respect to replacement or repurchase of the motor vehicle.
(b) This subsection applies only to the repurchase
of motor vehicles.
(1) When a refund is ordered, the purchase price shall
be the total purchase price of the motor vehicle, excluding the amount
of any interest, finance charge, or insurance premiums. The refund
amount to the motor vehicle owner shall include reimbursement of the
amount of the lemon law complaint filing fee paid by, or on behalf
of, the motor vehicle owner. The refund shall be made payable to the
motor vehicle owner and to any lienholder, respective to each person's
ownership interest in the motor vehicle.
(2) There is a rebuttable presumption that the expected
useful life of a motor vehicle is 120,000 miles. Except in cases where
the preponderance of the evidence shows the motor vehicle has a longer
or shorter expected useful life than 120,000 miles, the reasonable
allowance for the owner's use of the motor vehicle shall be the sums
of the amounts obtained by adding subparagraphs (A) and (B) of this
paragraph.
(A) The product obtained by multiplying the total purchase
price, as defined in paragraph (1) of this subsection, of the motor
vehicle by a fraction having as its denominator 120,000 and having
as its numerator the number of miles that the motor vehicle traveled
from the time of delivery to the owner to the date of the date of
the first report of the defect or condition forming the basis of the
repurchase order; and
(B) 50% of the product obtained by multiplying the
total purchase price by a fraction having as its denominator 120,000
and having as its numerator the number of miles that the motor vehicle
traveled after the first report of the defect or condition forming
the basis of the repurchase order through the date of the hearing.
(3) There is a rebuttable presumption the expected
useful life of a towable recreational vehicle is 5,475 days or 15
years. Except in cases where a preponderance of the evidence shows
that the vehicle has a longer or shorter expected useful life than
5,475 days or 15 years, the reasonable allowance for the owner's use
of the towable recreational vehicle shall be the sum of the amount
obtained by adding subparagraphs (A) and (B) of this paragraph.
(A) The product obtained by multiplying the total purchase
price, as defined in paragraph (1) of this subsection, of the towable
recreational vehicle by a fraction having as its denominator 5,475
days or 15 years and having as its numerator the number of days from
the time of delivery to the owner to the first report of the defect
or condition forming the basis of the repurchase order.
(B) 50% of the product obtained by multiplying the
purchase price by a fraction having as its denominator 5,475 days
or 15 years and having as its numerator the number of days of ownership
after the date of the first report of the defect or condition forming
the basis of the repurchase order through the date of the hearing.
(C) Any day or part of a day that the vehicle is out
of service for repair will be deducted from the numerator in determining
the reasonable allowance for use of a towable recreational vehicle
in this paragraph.
(c) This subsection applies only to the repurchase
of a leased motor vehicle.
(1) Except in cases involving unusual and extenuating
circumstances supported by a preponderance of the evidence, when a
refund of the total purchase price of a leased motor vehicle is ordered,
the refund shall be allocated and paid to the lessee and the vehicle
lessor, respectively, in accordance with subparagraphs (A) and (B)
of this paragraph.
(A) The lessee shall receive the total of:
(i) all lease payments previously paid by the lessee
to the vehicle lessor under the terms of the lease; and
(ii) all sums previously paid by the lessee to the
vehicle lessor in connection with entering into the lease agreement,
including, but not limited to any capitalized cost reduction, down
payment, trade-in, or similar cost, plus sales tax, license, registration
fees, and other documentary fees, if applicable.
(B) The vehicle lessor shall receive the total of:
(i) the actual price paid by the vehicle lessor for
the motor vehicle, including tax, title, license, and documentary
fees, if paid by the vehicle lessor and evidenced in a bill of sale,
bank draft demand, tax collector's receipt, or similar instrument;
and
(ii) an additional 5.0% of the purchase price plus
any amount or fee paid by the vehicle lessor to secure the lease or
interest in the lease.
(C) A credit reflecting all of the payments made by
the lessee shall be deducted from the actual purchase price that the
manufacturer, distributor, or converter is required to pay the vehicle
lessor, as specified in subparagraph (B)(i) and (ii) of this paragraph.
(2) When the hearings examiner orders a manufacturer,
distributor, or converter to refund the purchase price in a leased
vehicle transaction, the motor vehicle shall be returned to the manufacturer,
distributor, or converter with clear title upon payment of the sums
indicated in paragraph (1)(A) and (B) of this subsection. The vehicle
lessor shall transfer title of the motor vehicle to the manufacturer,
distributor, or converter, as necessary to effectuate the lessee's
rights. The lease shall be terminated without penalty to the lessee.
(3) Refunds shall be made to the lessee, vehicle lessor,
and to any lienholder, respective to their ownership interest in the
motor vehicle. The refund to the lessee under paragraph (1)(A) of
this subsection shall be reduced by a reasonable allowance for the
lessee's use of the motor vehicle. A reasonable allowance for use
shall be computed in accordance with subsection (b)(2) or (3) of this
section, using the amount in paragraph (1)(B)(i) of this subsection
as the applicable total purchase price.
(d) This subsection applies only to replacement of
motor vehicles.
(1) Upon a hearing examiner's issuance of a final order
to a manufacturer, distributor, or converter to replace a motor vehicle,
the manufacturer, distributor, or converter shall:
(A) promptly authorize the exchange of the complainant's
motor vehicle with the complainant's choice of any comparable motor
vehicle; and
(B) instruct the dealer to contract the sale of the
selected comparable motor vehicle with the complainant under the following
terms.
(i) The sales price of the comparable motor vehicle
shall be the vehicle's Manufacturer's Suggested Retail Price or Distributor's
Suggested Retail Price (MSRP/DSRP), as applicable;
(ii) The trade-in value of the complainant's motor
vehicle shall be the MSRP/DRSP, as applicable, at the time of the
original transaction, less a reasonable allowance for the complainant's
use of the complainant's motor vehicle.
(iii) The reasonable allowance for replacement relief
shall be calculated in accordance with subsection (b)(2) and (3) of
this section.
(2) Upon a replacement of a complainant's motor vehicle,
the complainant shall be responsible for payment or financing of the
reasonable allowance for use of the complainant's vehicle, any outstanding
liens on the complainant's vehicle, and applicable taxes and fees
associated with the new sale of a comparable motor vehicle, excluding
documentary fees.
(A) If the comparable motor vehicle has a higher MSRP/DSRP,
as applicable, than the complainant's vehicle, the complainant shall
be responsible at the time of sale to pay or finance the difference
in the two vehicles' MSRPs/DSRPs, as applicable, to the manufacturer,
converter or distributor.
Cont'd... |
