Monday, October 30, 2006
Appeals Court Limits ‘Lemon Law’ Relief in Lease Case
By a MetNews Staff Writer
A Texas business that had no motor vehicles registered in California was not entitled to “lemon law” relief for a defective car it leased out of California primarily for business use, the Fourth District Court of Appeal held yesterday.
Div. Three reversed an order by Riverside Superior Court Judge Dallas Holmes, who denied Ford Motor Company, Inc.’s post-trial motion for a judgment notwithstanding the verdict in a suit brought under the Song-Beverly Consumer Warranty Act.
The jury had awarded Ferraro Limousine Services $489,380.13 in damages resulting from defects in a “stretch” limousine that the Dallas-based business leased from California in 1997. A Lincoln Town Car, modified with Ford’s authorization by Tiffany Coachworks in Corona, the vehicle came with a limited three-year/100,000-mile warranty from Ford.
Ford appealed the judgment, contending that Song-Beverly relief did not extend to Ferraro because the company never registered or serviced the car in California.
In the published portion of its opinion, the court agreed.
The 1970 act was originally intended to protect individual consumers, and although it was later extended to new motor vehicles used for business purposes, its history indicates it was intended to protect small businesses in California, they concluded.
Writing for the court, Justice Betty Ann Richli explained:
“[A]s a mechanism for identifying these businesses, they were required to have at least one, but not more than five, motor vehicles registered in California. If we were to adopt Ferraro’s contrary interpretation, then the Song-Beverly Act would protect any non-small, non-California businesses —even a business with thousands of vehicles — just as long as all of its vehicles were registered in other states. This would be completely contrary to the legislative intent.”
The justice noted:
“We recognize that our interpretation does not rule out protection for some non-small, non-California businesses, provided they have just one to five vehicles registered in California. Still, such a business is a small business in California, no matter how many other vehicles it may have or how much business it may do in other states.”
According to Ferraro, the limousine required repairs at least 25 times during the warranty period, causing it to lose jobs it could otherwise have performed. Alleged defects, all repaired by the same authorized Ford dealership in Dallas, included engine overheating, broken air conditioning and rear suspension problems.
The limousine continued needing frequent after the warranty expired in January 2001, Ferraro claimed, which it was forced to pay for itself. Among the alleged incidents was an occasion on which the car’s hood caught on fire while a newly engaged couple were hugging inside the champagne-and-rose decorated passenger compartment.
“The limousine in this case, while perhaps not up to the standards of Stephen King’s Christine, certainly did seem to be possessed,” Richli remarked.
Justices Thomas E. Hollenhorst and Art W. McKinster concurred in the opinion.
The case is Park City Services, Inc. v. Ford Motor Company, Inc., 06 S.O.S. 5673.
Copyright 2006, Metropolitan News Company