Hyundai Owner Says Co. Shouldn't Escape Lemon Law Suit – Law360 (subscription)



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By Juan Carlos Rodriguez

Law360, New York (June 02, 2014, 4:05 PM ET) —
The lead plaintiff in a class action accusing Hyundai Motor America of illegally buying back or replacing defective vehicles without refunding consumers for certain costs on Friday urged a California federal judge to reject the company’s bid to dodge the suit, saying its arguments don’t pass muster.

The lawsuit says Hyundai has avoided paying consumers for costs associated with buybacks or replacements including service contracts, insurance and registration fees. It also says the company improperly mandates certain deductions from the vehicles’ repurchase prices, such as for “any condition beyond normal wear and tear.”

But in an April motion to dismiss, the company argued it already fulfills its legal obligations under California’s lemon law.

Hyundai said it offered the required reimbursements to plaintiff Lori Robbins, and that Robbins had no right to claim reimbursement for other costs under California or federal law.

Hyundai said the California Song-Beverly Consumer Warranty Act, which Robbins claims the car company violated, doesn’t require coverage of the insurance or service contracts as those are optional third-party services. It also said the act only requires reimbursement for initial registration fees, not for the fees every year the vehicle was registered.

In a brief in opposition to Hyundai’s motion, Robbins said the act clearly says a manufacturer must reimburse a buyer for the “actual price paid or payable.”

“At the time of purchase, plaintiff paid $2,490 for a third-party extended service contract and $750 for GAP insurance,” the brief said. “Though conceding this, HMA nevertheless assumes, without explanation or support, that these amounts ‘are not part of the actual price.’”

This contradicts controlling authority, Robbins said, which, under a California appeals court’s decision in Mitchell v. Blue Bird Body Co., holds that “actual price paid or payable” includes all amounts plaintiffs became legally obligated to pay when they agreed to buy the vehicle, including finance charges.

Hyundai has also argued that Robbins had no standing to protest Hyundai’s repurchase condition that she be responsible for any damages beyond normal wear and tear because no such damages were assessed against her vehicle.

Robbins responded that under the Song-Beverly act, manufacturers are not entitled to any reductions such as “wear and tear,” and that predelivery mileage offset is the sole permissible deduction.

“Ignoring the legislative history, case law, and the statutory mandate, HMA asserts that conditioning repurchase or replacement offers for wear-and-tear items is proper because the California Code of Regulations allows an arbitrator to offset any amount ‘for which the customer is justly responsible,’” Robbins said.

She also attacked the company’s argument that she had no right to bring claims under the Magnuson-Moss Warranty Act because she failed to first contest the reimbursement through Hyundai’s informal dispute procedure.

“Plaintiff need not do so … because HMA’s informal dispute procedure — the BBB Autoline — is not an informal dispute settlement procedure for the purposes of the MMWA,” the brief said.

The plaintiff is represented by Steve Borislav Mikhov and Mark D. O’Connor of O’Connor & Mikhov LLP and Karen E. Nakon and Payam Shahian of Strategic Legal Practices APC.

Hyundai is represented by Michael L. Mallow and Darlene M. Cho of Loeb & Loeb LLP.

The case is Lori Robbins v. Hyundai Motor America et al., case number 8:14-cv-00005 in the U.S. District Court for the Central District of California.

–Additional reporting by Kaitlyn Kiernan. Editing by Emily Kokoll.

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Hyundai Owner Says Co. Shouldn't Escape Lemon Law Suit – Law360 (subscription)

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