Vol. 11, No. 5, Pg. 20. South Carolina Lemon Law. Lemon or Lemonade?.

• Author: By C. Steven Moskos

South Carolina Lawyer

2000.

Vol. 11, No. 5, Pg. 20.

South Carolina Lemon Law. Lemon or Lemonade?

20South Carolina Lemon Law. Lemon or Lemonade?By C. Steven MoskosIn 1989, a law went into effect to help consumers with defective new cars. The law is formally known as the Enforcement of Express Warranties Act, commonly referred to as the Lemon Law, and is found in S.C. Code Ann. § 56-28-10 et. seq. This article discusses only the Act, not other code sections that may apply to this type of case, such as S.C. Code Ann. § 36-2-608, 711 and 714 and the Magnuson-Moss Warranty Act 15 U.S.C. § 2301 et. seq. The issues of fraud or unfair trade practices in the sale of a car are also beyond the scope of this article.

Currently, there are no cases that have interpreted this statute. Fortunately, the statute contains definitions regarding key words. As with any statute, however, some provisions will need to be interpreted. Since this is a remedial statute, it should be construed liberally in order to effectuate its purpose. Ducworth v. Neely, 319 S.C. 158, 459 S.E.2d 896 (Ct. App. 1995), South Carolina Dep`t of Mental Health v. Hanna, 270 S.C. 210, 241 S.E.2d 563 (1978).

The public policy behind the lemon law is to place on the manufacturers of motor vehicles the duty to meet their obligations and responsibilities under the terms of the express warranties extended to the consumers. Adams v. Nissan Motor Corporation in LISA, 182 W. Va. 234, 387 S.E.2d 288 (1989).

22The statute provides a broad identification of a "consumer." Unlike the Uniform Commercial Code, the Lemon Law specifically includes a lessor of an automobile in this definition, as well as an al purchaser. Dealers are excluded, as are those people who purchase a motor vehicle not normally used for personal, family or household purposes.

This does not mean that the consumer's particular use of the vehicle must be for personal, family or household purposes. The language used by the Lemon Law mirrors that of the Magnuson-Moss Act, which has been interpreted to mean that the use of the vehicle must be examined in the light of how the public ordinarily uses that type of vehicle. Business Modeling Techniques, Inc. v. General Motors Corp. (Pontiac Motor Division), 474 N.Y.S.2d 258, 123 Misc. 2d 605 (1984); See also Balser v.Cessna Aircraft Co., 512 F. Supp. 1217 (D. Ga. 1981) and Patron Aviation, Inc. v. Teledyne Industries, Inc., 267 S.E.2d 274, 154 Ga. App. 13 (1980). Purchasers and lessors are considered consumers under the statute provided the vehicle is subject to the manufacturer's express warranty.

The statute also includes as a consumer any other person who is entitled to enforce the warranty against the manufacturer. This is extremely important as the lessor of a vehicle is generally a large financial institution that does not particularly care whether the vehicle is operating properly. Many lessors assign their rights to enforce the terms of the manufacturer's warranty to the lessee. Therefore, the lessee-the person actually using the vehicle-may take steps to have the manufacturer conform the automobile to the terms of the warranty. "Manufacturer" is defined as any person, resident or nonresident who manufactures, assembles, imports or distributes new motor vehicles to be sold in the state. A dealer, even though it distributes cars, is specifically exempted by § 56-28-80, which states that this Act should not be construed to impose any liability on a dealer. The definition also contains another important limitation. As will be discussed later, the vehicle must be sold in South Carolina for it to fall under the South Carolina Lemon Law.

The "manufacturer's express warranty" or "warranty" means the written warranty of the manufacturer of a new motor vehicle, including any terms or conditions precedent to the enforcement of obligations under that warranty. Normally, the dealer provides the manufacturer's written warranty to the consumer after the sale.

A "motor vehicle" is defined in the statute as a private passenger motor vehicle as classified by § 56-3-630, which also classifies a passenger-carrying vehicle as every motor vehicle except motorcycles or a motor driven cycle, as long as it designed, used and maintained for the transportation of 10 or fewer persons. Section 56-28-10 (4) also excludes the living portion of recreational vehicles and off-road vehicles.

The definition of a "motor vehicle" also requires that the particular vehicle be sold and registered in the state of South Carolina. One issue that has already arisen pertains to leased vehicles. Where is the vehicle sold when the purchasing company, the actual lessor, is outside South Carolina? What happens if the dealership is out of state but the salesman crosses the state line and has the consumer sign the lease papers in South Carolina, but the lessor who buys the car is out of state? Is that a sale within the meaning of this definition? Does the sale occur when and where the consumer signs the paperwork, or is it when and where the foreign dealership sells the car to the out of state leasing company? Will a consumer be able to use this statute if he or she buys a car over the Internet from a dealer in another state? Changes will have to be made in the statute to accommodate the free flow of commerce that is rapidly developing.

A "new motor vehicle" is a private passenger motor vehicle that has been sold to a new motor vehicle dealer by the manufacturer, 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.

A "nonconformity" is a defect or a condition that substantially impairs the use, value or safety of a motor vehicle. A nonconformity does not include a defect or condition that results from an accident, modification or alteration of the motor vehicle by someone other than the manufacturer or its authorized service agent. The definition requires a consumer to prove a defect or condition that substantially impairs the use, value or safety of the vehicle. By using the word "condition," the definition, by implication, relieves the consumer of the burden of producing an expert who can

23 identify the exact defect in the vehicle.

The Vermont Supreme Court in Muzzy v. Chevrolet Division, General Motors Corp., 153 Vt. 179, 571 A.2d 609 (1989) held that the consumer does not have to prove an existing defect or warranty nonconformity to recover under the Act. Instead, the Act creates an obligation in the manufacturer to replace a motor vehicle if the manufacturer or dealer is unable to repair the vehicle "after a reasonable number of attempts." Plaintiff does not have to prove the nonconformity existed at the time the case is heard.

Determination of repair must be based on a subjective or "satisfaction" standard. The primary...