| (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 it is found 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 final order authority
shall issue a final order to the manufacturer, distributor, or converter
to:
(A) replace the motor vehicle with a comparable motor
vehicle, less a reasonable allowance for the owner's use of the 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.
(2) In any decision in favor of the complainant, the
final order authority 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 of the purchase price of a motor
vehicle 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 award 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 their ownership interest.
(2) There is a rebuttable presumption that a motor
vehicle has a useful life of 120,000 miles. Except in cases where
the preponderance of the evidence shows that 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 that amount
obtained by adding subparagraphs (A) and (B) of this paragraph.
(A) The product obtained by multiplying the 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 first report of the
defect or condition forming the basis of the repurchase order; and
(B) 50% of the product obtained by multiplying the
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. The number of miles during the
period covered in this paragraph shall be determined from the date
of 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 that the useful
life of a towable recreational vehicle is 3,650 days or 10 years.
Except in cases where a preponderance of the evidence shows that the
vehicle has a longer or shorter expected useful life than 3,650 days
or 10 years, the reasonable allowance for the owner's use of the towable
recreational vehicle shall be that amount obtained by adding subparagraphs
(A) and (B) of this paragraph.
(A) The product obtained by multiplying the purchase
price, as defined in paragraph (1) of this subsection, of the towable
recreational vehicle by a fraction having as its denominator 3,650
days or 10 years, except the denominator shall be 1,825 days or five
years, if the towable recreational vehicle is occupied on a full time
basis, 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 3,650 days
or 10 years, except the denominator shall be 1,825 days or five years,
if the towable recreational vehicle is occupied on a full time basis,
and having as its numerator the number of days of ownership after
the first report of the defect or condition forming the basis of the
repurchase order. The number of days during the period covered in
this paragraph shall be determined from 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 leased motor vehicle
relief.
(1) Except in cases involving unusual and extenuating
circumstances supported by a preponderance of the evidence, when a
refund of the purchase price of a leased motor vehicle is ordered,
the purchase price 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 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, converter, or distributor is required to pay the vehicle
lessor, as specified in subparagraph (B)(i) and (ii) of this paragraph.
(2) When the final order authority orders a manufacturer,
converter, or distributor to refund the purchase price in a leased
vehicle transaction, the motor vehicle shall be returned to the manufacturer,
converter, or distributor 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,
converter, or distributor, 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. 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 purchase
price.
(d) This subsection applies only to replacement of
motor vehicles.
(1) Upon issuance of an order from the final order
authority to a manufacturer, converter, or distributor to replace
a motor vehicle, the manufacturer, converter, or distributor 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 (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 use allowance for replacement relief shall
be calculated in accordance with subsection (b)(2) and (3) of this
section.
(2) Upon any replacement of a complainant's motor vehicle,
the complainant shall be responsible for payment or financing of the
usage allowance of the complainant's vehicle, any outstanding liens
on the complainant's vehicle, and applicable taxes and fees associated
with the new sale, excluding documentary fees.
Cont'd... |
