California Supreme Court’s Explanation of Lemon Law Claim Damages

California Supreme Court’s Explanation of Lemon Law Claim Damages

California’s lemon laws are some of the best in the nation, but that doesn’t mean they were perfect right off the bat. As with most laws, these warranty regulations eventually made their way to the state Supreme Court for clarification in the case Kirzhner v. Mercedes-Benz USA, LLC (2020) 9 Cal.5th 966.

Luckily for California residents, the Court made it clear that these laws are intended to favor consumers. In Kirzhner, it even expanded the potential damages for lemon claims to cover a wider variety of fees and costs. Here’s what you should know about this crucial lemon case and what it means for your rights after buying a defective vehicle.

Serious Ruling Clarifies Lemon Laws in California

The case Kirzhner v. Mercedes-Benz USA, LLC set standards for what types of damages a plaintiff can receive if they purchase or lease a defective vehicle. The original claim was simple. The plaintiff argued that they had leased a car from the defendant, and the carmaker failed to repair the issues within a reasonable number of attempts. 

As occurs with many lemon claims, the defendant made a settlement offer to the plaintiff several months after the case began. The plaintiff accepted and requested restitution for the cost of leasing the vehicle. However, this is when things got complicated. Kirzhner also requested reimbursement for the costs of renewing the car’s registration and the non-operation fees paid after the initial lease. 

This is why the case made it to the California Supreme Court. The manufacturer argued that it should only have to reimburse Kirzhner for charges such as the initial registration fee and the monthly cost of the lease. It used the straightforward language used in the Song-Beverly Consumer Warranty Act, which dictates what businesses need to do to honor their warranties, to support its argument. 

The Court acknowledged that the Act does not explicitly permit people to demand damages like registration renewal fees. Despite this, it chose to interpret the language of the Act more broadly than the defendant hoped. It held that registration and non-operation charges are not automatically recoverable in a standard lemon claim. It justified this because these fees may be entirely unrelated to a vehicle’s defects. 

However, it permitted Kirzhner to receive reimbursement for the designated costs. The Court stated that fees, costs, and charges that would not normally be considered for reimbursement could be eligible if they are “incurred after the manufacturer’s duty to promptly provide a replacement vehicle or restitution arises.” In other words, any fees you’re charged because you still have a defective vehicle that the manufacturer hasn’t repaired or replaced could be part of your final settlement.

Types of Damages You Can Receive in California Lemon Claims

So, what are the damages you can receive for a lemon lawsuit? The specifics vary, but according to this California Supreme Court ruling, they are officially greater than they used to be. Currently, should you choose reimbursement rather than replacement, you may be eligible for damages such as:

  • The purchase price or lease payments made for the vehicle: You’ll be reimbursed for the actual amount you paid for the car or the amount you’ve paid in lease fees and the downpayment. This includes anything you still owe on a car loan if you have one.
  • Official fees included in the purchase price or lease: The total purchase price consists of all fees included in the initial transaction, including registration, sales tax, and anything else you paid to the dealership or government agencies to begin using the vehicle.
  • Finance fees, early termination charges, prepayment penalties, and other fees directly related to the purchase or lease: Any fees associated with paying for your vehicle while you owned or leased it before it was returned and reimbursed.
  • Fees caused by the manufacturer’s delay in replacing or repairing the vehicle: Since the Kirzhner ruling, fees not normally covered by state warranty laws are now included. This includes renewal of registration fees and non-operation fees, for example. An experienced attorney can help you determine which charges qualify.
  • Legal fees related to your case: In most cases, the manufacturer will pay your legal costs for a successful claim as part of your settlement. 
  • Civil penalties for the manufacturer’s willful failure to comply: On top of all of the other potential damages, state law permits you to request civil penalties of up to twice the total damages if the manufacturer is actively avoiding complying with its duty to fulfill its warranty. 

Other potential damages you could receive include the cost of repairs you made to the vehicle, insurance premiums on a vehicle you couldn’t use, and transportation expenses you incurred because your car didn’t work. 

How to Ensure You Don’t Miss Out on Damages

Every lemon case is different, so the damages you may be eligible for vary. The best way to ensure you get the maximum amount of damages for your claim is to work with an experienced lemon law attorney. 

A skilled lawyer is key to getting the best possible settlement from your claim. They will review your situation and help you determine what fees and charges could be part of your settlement. They will also advocate on your behalf to ensure these fees are included rather than dismissed by the manufacturer’s legal team. If you have a defective car, you have little to lose. Don’t wait any longer and risk missing out on damages. The sooner you file your claim, the stronger your argument for incidental damages. Talk to the experts at Johnson & Buxton – The Lemon Law Guys, to discuss your needs and learn more about your potential damages.

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