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Minnesota Statutes
Annotated, 325 F.665
325F.665
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 ccept 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.
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