Lemon Law - Minnesota
Lemon Law
Lemon Law - "Lemon
law" is that body of state law which defines an automobile
owners rights when the manufacturer is not able to repair the
automobile within the limits specified. In
such cases, the automobile is referred to as a "lemon",
and is subject to the conditions of the state lemon law.
Your Lemon Law:
Disclaimer:
These pages are created to inform and educate the public about lemon
law and under the lemon law in your state. They are not and
should not be considered legal opinions or advice as to whether you
have rights under lemon law or whether you should pursue "a
lemon law case". If after reading this information,
you believe you qualify, you should seek the advice and counsel of
an attorney specializing in lemon law in your state. Remember
that each state's lemon laws vary.
New motor vehicle warranties;
manufacturer's duty to repair, refund, or replace.
Subdivision 1
Definitions.
For the purposes of this section,
the following terms have the meanings given them:
(a) "consumer"
means the purchaser or lessee, other than for purposes of resale or
sublease, of a new motor vehicle used for personal, family, or
household purposes at least 40 percent of the time, a person to whom
the new motor vehicle is transferred for the same purposes during
the duration of an express warranty applicable to the motor vehicle;
(b) "manufacturer"
means a person engaged in the business of manufacturing, assembling
or distributing motor vehicles, who will, under normal business
conditions during the year, manufacture, assemble or distribute to
dealers at least ten new motor vehicles;
(c) "manufacturer's
express warranty" and "warranty" mean the written
warranty of the manufacturer of a new motor vehicle of its condition
and fitness for use, including any terms or conditions precedent to
the enforcement of obligations under that warranty;
(d) "lease" means
a contract in the form of a lease or bailment for the use of
personal property by a natural person for a period of time exceeding
four months, used for personal, family, or household purposes at
least 40 percent of the time, whether or not the lessee has the
option to purchase or otherwise become the owner of the property at
the expiration of the lease;
(e) "motor
vehicle" means
(1) a passenger automobile
as defined in section 168.011, subdivision 7, including pickup
trucks and vans, and
(2) the self-propelled motor
vehicle chassis or van portion of recreational equipment as defined
in section 168.011, subdivision 25, which is sold or leased to a
consumer in this state;
(f) "informal dispute
settlement mechanism" means an arbitration process or procedure
by which the manufacturer attempts to resolve disputes with
consumers regarding motor vehicle nonconformities and repairs that
arise during the vehicle's warranty period;
(g) "motor vehicle
lessor" means a person who holds title to a motor vehicle
leased to a lessee under a written lease agreement or who holds the
lessor's rights under such agreement; and
(h) "early termination
costs" means expenses and obligations incurred by a motor
vehicle lessor as a result of an early termination of a written
lease agreement and surrender of a motor vehicle to a manufacturer
under subdivision 4, including penalties for prepayment of finance
arrangements.
Subdivision 2
Manufacturer's duty to repair.
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 its
authorized dealer during the term of the applicable express
warranties or during the period of two years following the date of
original delivery of the new motor vehicle to a consumer, whichever
is the earlier date, the manufacturer, its agent, or its authorized
dealer shall make the repairs necessary to conform the vehicle to
the applicable express warranties, notwithstanding the fact that the
repairs are made after the expiration of the warranty term or the
two-year period.
Subdivision 3
Manufacturer's duty to refund or
replace.
(a) If the manufacturer, its
agents, or its authorized dealers are unable to conform the new
motor vehicle to any applicable express warranty by repairing or
correcting any defect or condition which substantially impairs the
use or market value of the motor vehicle to the consumer after a
reasonable number of attempts, the manufacturer shall either replace
the new motor vehicle with a comparable motor vehicle or accept
return of the vehicle from the consumer and refund to the consumer
the full purchase price, including the cost of any options or other
modifications arranged, installed, or made by the manufacturer, its
agent, or its authorized dealer within 30 days after the date of
original delivery, and all other charges including, but not limited
to, sales or excise tax, license fees and registration fees,
reimbursement for towing and rental vehicle expenses incurred by the
consumer as a result of the vehicle being out of service for
warranty repair, less a reasonable allowance for the consumer's use
of the vehicle not exceeding ten cents per mile driven or ten
percent of the purchase price, whichever is less. If the
manufacturer offers a replacement vehicle under this section, the
consumer has the option of rejecting the replacement vehicle and
requiring the manufacturer to provide a refund. Refunds must be made
to the consumer, and lien holder, if any, as their interests appear
on the records of the registrar of motor vehicles. Refunds shall
include the amount stated by the dealer as the trade-in value of a
consumer's used motor vehicle, plus any additional amount paid by
the consumer for the new motor vehicle. A manufacturer must give to
the consumer an itemized statement listing each of the amounts
refunded under this section. If the amount of sales or excise tax
refunded is not separately stated, or if the manufacturer does not
apply for a refund of the tax within one year of the return of the
motor vehicle, the department of public safety may refund the tax,
as determined under paragraph (h), directly to the consumer and lien
holder, if any, as their interests appear on the records of the
registrar of motor vehicles. A reasonable allowance for use is that
amount directly attributable to use by the consumer and any previous
consumer during any period in which the use and market value of the
motor vehicle are not substantially impaired. It is an affirmative
defense to any claim under this section
(1) that an alleged
nonconformity does not substantially impair the use or market value,
or
(2) that a nonconformity is
the result of abuse, neglect, or unauthorized modifications or
alterations of a motor vehicle by anyone other than the
manufacturer, its agent or its authorized dealer.
(b) It is presumed that a
reasonable number of attempts have been undertaken to conform a new
motor vehicle to the applicable express warranties, if
(1) the same nonconformity
has been subject to repair four or more times by the manufacturer,
its agents, or its authorized dealers within the applicable express
warranty term or during the period of two years following the date
of original delivery of the new motor vehicle to a consumer,
whichever is the earlier date, but the nonconformity continues to
exist, or
(2) the vehicle is out of
service by reason of repair for a cumulative total of 30 or more
business days during the term or during the period, whichever is the
earlier date.
(c) If the nonconformity
results in a complete failure of the braking or steering system of
the new motor vehicle and is likely to cause death or serious bodily
injury if the vehicle is driven, it is presumed that a reasonable
number of attempts have been undertaken to conform the vehicle to
the applicable express warranties if the nonconformity has been
subject to repair at least once by the manufacturer, its agents, or
its authorized dealers within the applicable express warranty term
or during the period of two years following the date of original
delivery of the new motor vehicle to a consumer, whichever is the
earlier date, and the nonconformity continues to exist.
(d) The term of an
applicable express warranty, the two-year period and the 30-day
period shall be extended by any period of time during which repair
services are not available to the consumer because of a war,
invasion, strike, or fire, flood, or other natural disaster.
(e) The presumption
contained in paragraph (b) applies against a manufacturer only if
the manufacturer, its agent, or its authorized dealer has received
prior written notification from or on behalf of the consumer at
least once and an opportunity to cure the defect alleged. If the
notification is received by the manufacturer's agent or authorized
dealer, the agent or dealer must forward it to the manufacturer by
certified mail, return receipt requested.
(f) The expiration of the
time periods set forth in paragraph (b) does not bar a consumer from
receiving a refund or replacement vehicle under paragraph (a) if the
reasonable number of attempts to correct the nonconformity causing
the substantial impairment occur within three years following the
date of original delivery of the new motor vehicle to a consumer,
provided the consumer first reported the nonconformity to the
manufacturer, its agent, or its authorized dealer during the term of
the applicable express warranty.
(g) At the time of purchase
or lease, the manufacturer must provide directly to the consumer a
written statement on a separate piece of paper, in 10-point all
capital type, in substantially the following form:
"IMPORTANT: IF THIS VEHICLE IS
DEFECTIVE, YOU MAY BE ENTITLED UNDER THE STATE'S LEMON LAW TO
REPLACEMENT OF IT OR A REFUND OF ITS PURCHASE PRICE OR YOUR LEASE
PAYMENTS. HOWEVER, TO BE ENTITLED TO REFUND OR REPLACEMENT, YOU MUST
FIRST NOTIFY THE MANUFACTURER, ITS AGENT, OR ITS AUTHORIZED DEALER
OF THE PROBLEM IN WRITING AND GIVE THEM AN OPPORTUNITY TO REPAIR THE
VEHICLE. YOU ALSO HAVE A RIGHT TO SUBMIT YOUR CASE TO THE CONSUMER
ARBITRATION PROGRAM WHICH THE MANUFACTURER MUST OFFER IN
MINNESOTA."
(h) The amount of the sales
or excise tax to be paid by the manufacturer to the consumer under
paragraph (a) shall be the tax paid by the consumer when the vehicle
was purchased less an amount equal to the tax paid multiplied by a
fraction, the denominator of which is the purchase price of the
vehicle and the numerator of which is the allowance deducted from
the refund for the consumer's use of the vehicle.
Subdivision 4
Manufacturer's duty to consumers
with leased vehicles.
A consumer who leases a new motor
vehicle has the same rights against the manufacturer under this
section as a consumer who purchases a new motor vehicle, except
that, if it is determined that the manufacturer must accept return
of the consumer's leased vehicle pursuant to subdivision 3, then the
consumer lessee is not entitled to a replacement vehicle, but is
entitled only to a refund as provided in this subdivision. In such a
case, the consumer's leased vehicle shall be returned to the
manufacturer and the consumer's written lease with the motor vehicle
lessor must be terminated. The manufacturer shall then provide the
consumer with a full refund of the amount actually paid by the
consumer on the written lease, including all additional charges set
forth in subdivision 3, if actually paid by the consumer, less a
reasonable allowance for use by the consumer as set forth in
subdivision 3. The manufacturer shall provide the motor vehicle
lessor with a full refund of the vehicle's original purchase price
plus any early termination costs, not to exceed 15 percent of the
vehicle's original purchase price, less the amount actually paid by
the consumer on the written lease.
Subdivision 5
Resale or re-lease of returned
motor vehicle.
(a) If a motor vehicle has
been returned under the provisions of subdivision 3 or a similar
statute of another state, whether as the result of a legal action or
as the result of an informal dispute settlement proceeding, it may
not be resold or re-leased in this state unless:
(1) the manufacturer
provides the same express warranty it provided to the original
purchaser, except that the term of the warranty need only last for
12,000 miles or 12 months after the date of resale, whichever is
earlier; and
(2) the manufacturer
provides the consumer with a written statement on a separate piece
of paper, in 10-point all capital type, in substantially the
following form:
"IMPORTANT: THIS VEHICLE WAS
RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT CONFORM TO THE
MANUFACTURER'S EXPRESS WARRANTY AND THE NONCONFORMITY WAS NOT CURED
WITHIN A REASONABLE TIME AS PROVIDED BY MINNESOTA LAW."
The provisions of this section
apply to the resold or re-leased motor vehicle for full term of the
warranty required under this subdivision.
(b) Notwithstanding the
provisions of paragraph (a), if a new motor vehicle has been
returned under the provisions of subdivision 3 or a similar statute
of another state because of a nonconformity resulting in a complete
failure of the braking or steering system of the motor vehicle
likely to cause death or serious bodily injury if the vehicle was
driven, the motor vehicle may not be resold in this state.
Subdivision 6
Alternative dispute settlement
mechanism.
(a) Any manufacturer doing
business in this state, entering into franchise agreements for the
sale of its motor vehicles in this state, or offering express
warranties on its motor vehicles sold or distributed for sale in
this state shall operate, or participate in, an informal dispute
settlement mechanism located in the state of Minnesota which
complies with the provisions of the Code of Federal Regulations,
title 16, part 703, and the requirements of this section. The
provisions of subdivision 3 concerning refunds or replacement do not
apply to a consumer who has not first used this mechanism before
commencing a civil action, unless the manufacturer allows a consumer
to commence an action without first using this mechanism.
(b) An informal dispute
settlement mechanism provided for by this section shall, at the time
a request for arbitration is made, provide to the consumer and to
each person who will arbitrate the consumer's dispute, information
about this section as approved and directed by the attorney general,
in consultation with interested parties. The informal dispute
settlement mechanism shall permit the parties to present or submit
any arguments based on this section and shall not prohibit or
discourage the consideration of any such arguments.
(c) If, in an informal
dispute settlement mechanism, it is decided that a consumer is
entitled to a replacement vehicle or refund under subdivision 3,
then any refund or replacement offered by the manufacturer or
selected by a consumer shall include and itemize all amounts
authorized by subdivision 3. If the amount of excise tax refunded is
not separately stated, or if the manufacturer does not apply for a
refund of the tax within one year of the return of the motor
vehicle, the department of public safety may refund the excise tax,
as determined under subdivision 3, paragraph (h), directly to the
consumer and lien holder, if any, as their interests appear on the
records of the registrar of motor vehicles.
(d) No documents shall be
received by any informal dispute settlement mechanism unless those
documents have been provided to each of the parties in the dispute
at or prior to the mechanism's meeting, with an opportunity for the
parties to comment on the documents either in writing or orally. If
a consumer is present during the informal dispute settlement
mechanism's meeting, the consumer may request postponement of the
mechanism's meeting to allow sufficient time to review any documents
presented at the time of the meeting which had not been presented to
the consumer prior to the meeting.
(e) The informal dispute
settlement mechanism shall allow each party to appear and make an
oral presentation in the state of Minnesota unless the consumer
agrees to submit the dispute for decision on the basis of documents
alone or by telephone, or unless the party fails to appear for an
oral presentation after reasonable prior written notice. If the
consumer agrees to submit the dispute for decision on the basis of
documents alone, then manufacturer or dealer representatives may not
participate in the discussion or decision of the dispute.
(f) Consumers shall be given
an adequate opportunity to contest a manufacturer's assertion that a
nonconformity falls within intended specifications for the vehicle
by having the basis of the manufacturer's claim appraised by a
technical expert selected and paid for by the consumer prior to the
informal dispute settlement hearing.
(g) Where there has been a
recent attempt by the manufacturer to repair a consumer's vehicle,
but no response has yet been received by the informal dispute
mechanism from the consumer as to whether the repairs were
successfully completed, the parties must be given the opportunity to
present any additional information regarding the manufacturer's
recent repair attempt before any final decision is rendered by the
informal dispute settlement mechanism. This provision shall not
prejudice a consumer's rights under this section.
(h) If the manufacturer
knows that a technical service bulletin directly applies to the
specific mechanical problem being disputed by the consumer, then the
manufacturer shall provide the technical service bulletin to the
consumer at reasonable cost. The mechanism shall review any such
technical service bulletins submitted by either party.
(i) A consumer may be
charged a fee to participate in an informal dispute settlement
mechanism required by this section, but the fee may not exceed the
conciliation court filing fee in the county where the arbitration is
conducted.
(j) Any party to the dispute
has the right to be represented by an attorney in an informal
dispute settlement mechanism.
(k) The informal dispute
settlement mechanism has all the evidence-gathering powers granted
an arbitrator under section 572.14.
(l) A decision issued in an
informal dispute settlement mechanism required by this section may
be in writing and signed.
Subdivision 7
Effect and admissibility of
decision by informal dispute settlement mechanism.
The decision issued in an informal
dispute settlement mechanism required by this section is non-binding
on the parties involved, unless otherwise agreed by the parties. Any
party, upon application, may remove the decision to district court
for a trial de novo. If the manufacturer is aggrieved by the
decision of the informal dispute settlement mechanism, an
application to remove the decision must be filed in the district
court within 30 days after the date the decision is received by the
parties. If the application to remove is not made within 30 days,
then the district court shall, upon application of a party, issue an
order confirming the decision. A written decision issued by an
informal dispute settlement mechanism, and any written findings upon
which the decision is based, are admissible as non-binding evidence
in any subsequent legal action and are not subject to further
foundation requirements.
Subdivision 8
Treble damages for bad faith
appeal of decision.
If the district court finds that a
party has removed a decision of an informal dispute settlement
mechanism in bad faith, by asserting a claim or defense that is
frivolous and costly to the other party, or by asserting an
unfounded position solely to delay recovery by the other party, then
the court shall award to the prevailing party three times the actual
damages sustained, together with costs and disbursements, including
reasonable attorney's fees.
Subdivision 9
Civil remedy.
Any consumer injured by a violation
of this section may bring a civil action to enforce this section and
recover costs and disbursements, including reasonable attorney's
fees incurred in the civil action. In addition to the remedies
provided herein, the attorney general may bring an action pursuant
to section 8.31 against any manufacturer for violation of this
section.
Subdivision 10
Limitation on actions.
A civil action brought under this
section must be commenced within three years of the date of original
delivery of the new motor vehicle to a consumer; except that, if the
consumer applies to an informal dispute settlement mechanism within
three years of the date of original delivery of a new motor vehicle
to a consumer, and if the consumer is aggrieved by the decision of
the informal dispute settlement mechanism, then any civil action
brought under this section must be commenced within six months after
the date of the final decision by the mechanism.
Subdivision 11
Remedy nonexclusive.
Nothing in this section limits the
rights or remedies which are otherwise available to a consumer under
any other law.
Subdivision 12
Disclosure requirement.
In addition to any investigative
powers authorized by law, the attorney general may inspect the
records of the informal dispute settlement mechanism upon reasonable
notice, during regular business hours, and may make available to the
public information about the operation of the mechanism, but data on
an individual may not be disclosed without the prior consent of the
individual.
Subdivision 13
Dealer liability.
Nothing in this section imposes
liability on a dealer or creates an additional cause of action by a
consumer against a dealer, except for written express warranties
made by the dealer apart from the manufacturer's warranties. The
manufacturer shall not charge back or require reimbursement by the
dealer for any costs, including, but not limited to, any refunds or
vehicle replacements, incurred by the manufacturer arising out of
this section, unless there is evidence that the related repairs had
not been carried out by the dealer in a timely manner or in a manner
substantially consistent with the manufacturer's published
instructions.
