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Chapter 115, Sections 4170 - 4181

Thursday, September 29, 2016

§ 4170. LEGISLATIVE INTENT

The legislature finds and declares that manufacturers, distributors and importers of new motor vehicles should be obligated to provide speedy and less costly resolution of automobile warranty problems. Manufacturers should be required to provide in as expeditious a manner as possible a refund of the consumer's purchase price or payments to a lessor and lessee or a replacement vehicle that is acceptable to the consumer whenever the manufacturer is unable to make the vehicle conform with its applicable warranty. New motor vehicle dealers and used motor vehicle dealers cannot be sued under this chapter.

Added 1983, No. 211 (Adj. Sess.), 1; amended 1987, No. 242 (Adj. Sess.), 1

§ 4171. DEFINITIONS

As used in this chapter:

(1) "Board" means, unless otherwise indicated, the Vermont motor vehicle arbitration board.

(2) "Consumer" means the purchaser, other than for purposes of resale of a new motor vehicle or lessee of a new motor vehicle, other than for the purposes of sub-lease, which has not been previously leased by another person, any person to whom such motor vehicle is transferred during the duration of an express warranty applicable to the motor vehicle, and any other person entitled by the terms of the warranty to enforce the obligations of the warranty, but "consumer" shall not include any governmental entity or any business or commercial enterprise which registers or leases three or more motor vehicles.

(3) "Early termination costs" mean expenses and obligations incurred by a motor vehicle lessee as a result of an early termination of a written lease agreement and surrender of a motor vehicle to a manufacturer under the provisions of 9 V.S.A. § 4172(e), including penalties for prepayment of finance arrangements.

(4) "Lease or leased" means a written agreement with a lessee as defined in subdivision (5) of this section, which shall be for the use of a motor vehicle for consideration for a term of two or more years.

(5) "Lessee" means any consumer who leases a motor vehicle pursuant to a written lease agreement for a term of two or more years.

(6) "Motor vehicle" means a motor vehicle which is purchased or leased, or registered in the state of Vermont and is registered in Vermont within 15 days of the date of purchase or lease and shall not include tractors, motorized highway building equipment, road-making appliances, snowmobiles, motorcycles, mopeds, or the living portion of recreation vehicles, or trucks with a gross vehicle weight over 12,000 pounds.

(7) "Manufacturer" means any person, resident or nonresident, who manufactures or assembles new motor vehicles or imports for distribution through distributors of motor vehicles or any partnership, firm, association, joint venture, corporation or trust, resident or nonresident, which is controlled by a manufacturer. Additionally, the term "manufacturer" shall include:

(8) "Motor vehicle lessor" means a person who holds title to a motor vehicle leased to a lessee under a written lease agreement for a term of two or more years, or who holds the lessor's rights under such an agreement.

(9) A "new motor vehicle" means a passenger motor vehicle which is still under the manufacturer's express warranty.

(10) Warranty shall be defined as including the following:

"Express warranty" means express warranties as defined in the Uniform Commercial Code§ 2-313, plus any written warranty of the manufacturer.

Added 1983, No. 211 (Adj. Sess.), 1; amended 1985, No. 260 (Adj. Sess.), 1; 1987, No. 242 (Adj. Sess.), 2; 1999, No. 18, 27, eff. May 13, 1999.

§ 4172. ENFORCEMENT OF WARRANTIES

(a) Every new motor vehicle as defined in section 4171 of this title sold in this state must conform to all applicable warranties.

(b) It shall be the manufacturer's obligation under this chapter to insure that all new motor vehicles sold, leased or registered in this state conform with manufacturer's express warranties. The manufacturer may delegate responsibility to its agents or authorized dealers provided, however, in the event the manufacturer delegates its responsibility under this chapter to its agents or authorized dealers, it shall compensate the dealer for all work performed by the dealer in satisfaction of the manufacturer's responsibility under this chapter in the manner set forth in chapter 108 of this title known as the "Motor Vehicle Manufacturers, Distributors and Dealers' Franchising Practices Act" as that act may be from time to time amended.

(c) 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 authorized dealer during the term of the warranty, the manufacturer shall cause whatever repairs are necessary to conform the vehicle to the warranties, notwithstanding the fact that the repairs are made after the expiration of a warranty term.

(d) A manufacturer, its agent or authorized dealer shall not refuse to provide a consumer with a written repair order and shall provide to the consumer each time the consumer's vehicle is brought in for examination or repair of a defect, a written summary of the complaint and a fully itemized statement indicating all work performed on the vehicle including, but not limited to, examination of the vehicle, parts and labor.

(e) If, after a reasonable number of attempts, the manufacturer, its agent or authorized dealer or its delegate is unable to conform the motor vehicle to any express warranty by repairing or correcting any defect or condition covered by the warranty which substantially impairs the use, market value, or safety of the motor vehicle to the consumer, the manufacturer shall, at the option of the consumer within 30 days of the effective date of the board's order, replace the motor vehicle with a new motor vehicle from the same manufacturer, if available, of comparable worth to the same make and model with all options and accessories with appropriate adjustments being allowed for any model year differences or shall accept return of the vehicle from the consumer and refund to the consumer the full purchase price or to the lessee in the case of leased vehicles, as provided in subsection (i) of this section. In those instances in which a refund is tendered, the manufacturer shall refund to the consumer the full purchase price as indicated in the purchase contract and all credits and allowances for any trade-in or downpayment, finance charges, credit charges, registration fees and any similar charges and incidental and consequential damages or in the case of leased vehicles, as provided in subsection (i) of this section. Refunds shall be made to the consumer and lienholder, if any, as their interests may appear or to the motor vehicle lessor and lessee as provided in subsection (i) of this section. A reasonable allowance for use shall be that amount directly attributable to use by the consumer prior to his or her first repair attempt and shall be calculated by multiplying the full purchase price of the vehicle by a fraction having as its denominator 100,000 and having as its numerator the number of miles that the vehicle traveled prior to the first attempt at repairing the vehicle. If the manufacturer refunds the purchase price or a portion of the price to the consumer, any Vermont motor vehicle purchase and use tax paid shall be refunded by the state to the consumer in the proportionate amount. To receive a refund, the consumer must file a claim with the commissioner of motor vehicles within 90 days of the effective date of the order.

(f) It shall be an affirmative defense to any claim under this chapter that an alleged nonconformity does not substantially impair the use, market value or safety or that the nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of a motor vehicle by a consumer.

(g) It shall be presumed that a reasonable number of attempts have been undertaken to conform a motor vehicle to the applicable warranties if:

(h) In order for an attempt at repair to qualify for the presumptions of this section, the attempt at repair must be evidenced by a written examination or repair order issued by the manufacturer, its agent or its authorized dealer. The presumptions of this section shall only apply to three attempts at repair evidenced by written examination or repair orders undertaken by the same agent or authorized dealer, unless the consumer shows good cause for taking the vehicle to a different agent or authorized dealer.

(i) In cases in which the lessee elects a replacement vehicle, a collateral change with appropriate adjustments for any model year difference or excess mileage, or both, shall be incorporated into an amended lease agreement. In cases in which a refund is tendered by a manufacturer for a leased motor vehicle under subsection (e) of this section, the refund and rights of the motor vehicle lessor, lessee and manufacturer shall be in accordance with the following:

Added 1983, No. 211 (Adj. Sess.), 1; amended 1985, No. 260 (Adj. Sess.), 2; 1987, No. 242 (Adj. Sess.), 3, 4; 1989, No. 157 (Adj. Sess.), 1, eff. April 30, 1990; 1999, No. 18, 28, eff. May 13, 1999.

§ 4173. PROCEDURE TO OBTAIN REFUND OR REPLACEMENT

(a) After reasonable attempt at repair or correction of the nonconformity, defect or condition, or after the vehicle is out of service by reason of repair of one or more nonconformities, defects or conditions for a cumulative total of 30 or more calendar days as provided in this chapter, the consumer shall notify the manufacturer and lessor in writing, on forms to be provided by the manufacturer at the time the new motor vehicle is delivered, of the nonconformity, defect or condition and the consumer's election to proceed under this chapter. The forms shall be made available by the manufacturer to any public or nonprofit agencies that shall request them. Notice of consumer rights under this chapter shall be conspicuously displayed by all authorized dealers and agents of the manufacturer. The consumer shall in the notice, elect whether to use the dispute settlement mechanism or the arbitration provisions established by the manufacturer or to proceed under the Vermont motor vehicle arbitration board as established under this chapter. The consumer's election of whether to proceed before the board or the manufacturer's mechanism shall preclude his or her recourse to the method not selected.

(b) A consumer cannot pursue a remedy under this chapter if he or she has discontinued financing or lease payments.

(c) Arbitration of the consumer's complaint, either through the manufacturer's dispute settlement mechanism or the board, must be held within 45 days of receipt by the manufacturer or the board of the consumer's notice electing the remedy of arbitration unless the consumer or the manufacturer has good cause for an extension of time, not to exceed an additional 30-day period. If the extension of time is requested by the manufacturer, the manufacturer shall provide free use of a vehicle to the consumer if the consumer's vehicle is out of service. In the event the consumer elects to proceed in accordance with the manufacturer's dispute settlement mechanism and the arbitration of the dispute is not held within 45 days of the manufacturer's receipt of the consumer's notice and the manufacturer is not able to establish good cause for the delay, the consumer shall be entitled to receive the relief requested under this chapter.

(d) Within the 45-day period set forth in subsection (c) of this section but at least five days prior to hearing, the manufacturer shall have one final opportunity to correct and repair the defect which the consumer claims entitles him or her to a refund or replacement vehicle. Any right to a final repair attempt is waived if the manufacturer does not complete it at least five days prior to hearing. If the consumer is satisfied with the corrective work done by the manufacturer or his delegate, the arbitration proceedings shall be terminated without prejudice to the consumer's right to request arbitration be recommenced if the repair proves unsatisfactory for the duration of the express warranty.

(e) The vehicle must be presented at the hearing site for an inspection or test drive, or both, by members of the board.

(f) The manufacturer shall refund the amounts provided for in section 4172(e) or (i) of this chapter within 30 days of the facsimile transmission confirmation receipt of a decision of the board or within 15 days of final adjudication. The consumer shall receive an additional 10 percent of the total award if the manufacturer fails to complete the transaction by the effective date of the order.

Added 1983, No. 211 (Adj. Sess.), 1; amended 1985, No. 260 (Adj. Sess.), 3; 1987, No. 242 (Adj. Sess.), 5, 6; 1999, No. 18, 29, eff. May 13, 1999.

§ 4174. VERMONT MOTOR VEHICLE ARBITRATION BOARD

(a) There is created a Vermont motor vehicle arbitration board consisting of five members and three alternate members to be appointed by the governor for terms of three years. Board members may be appointed for two additional three-year terms. One member of the board and one alternate shall be new car dealers in Vermont, one member and one alternate shall be persons active as automobile technicians, and three members and one alternate shall be persons having no direct involvement in the design, manufacture, distribution, sales or service of motor vehicles or their parts. Board members shall be compensated in accordance with the provisions of 32 V.S.A. 1010. The board shall be attached to the transportation board and shall receive administrative services from the transportation board.

(b) The board shall promulgate rules under the provisions of 3 V.S.A. chapter 25 to implement the provisions of this chapter.

(c) The board may issue subpoenas to compel the attendance of witnesses to testify under oath and to produce documents.

(d) The board shall render a decision within 30 days of the conclusion of a hearing and has authority to issue any and all damages as are provided by this chapter.

Added 1983, No. 211 (Adj. Sess.), 1; amended 1985, No. 260 (Adj. Sess.), 4; 1987, No. 123 (Adj. Sess.), eff. Jan. 29, 1988; 1989, No. 157 (Adj. Sess.), 2, eff. April 30, 1990; 1999, No. 18, 30, eff. May 13, 1999.

§ 4175. FEES AND COSTS

There shall be no filing fee or costs assessed against the consumer for using the Vermont motor vehicle arbitration board or the manufacturer's dispute settlement mechanism. In the event an authorized franchise dealer or any of its employees including technicians or service personnel are called upon to testify or produce documents, repair orders or other materials in any arbitration held before the Vermont motor vehicle arbitration board or the manufacturer's dispute settlement mechanism, the person who requests the participation of the authorized franchise dealer or requests the production of documents must make arrangements in advance to reasonably compensate the dealer for the actual expense involved. Where a conflict arises as to actual expenses, the board shall make that determination. In the event the consumer prevails, these costs shall be reimbursed to the consumer by the manufacturer.

Added 1983, No. 211 (Adj. Sess.), 1; amended 1999, No. 18, 31, eff. May 13, 1999.

§ 4176. APPEAL FROM BOARD

(a) The decision of the board shall be final unless a motion for reconsideration is filed within 30 days of the consumer's receipt of decision accompanied by new evidence. The board shall allow the opposing party to respond and may reconvene the hearing if deemed necessary. The decision shall then be final and shall not be modified or vacated unless, on appeal to the superior court a party to the arbitration proceeding proves, by clear and convincing evidence, that:

(b) When a judgment of the superior court affirms a decision of the board, permission of the presiding judge shall be required for review. Review may be conditioned upon the appellant paying appellee's appellate attorney's fees, giving security for costs, expenses and financial loss resulting from the passage of time for review.

Added 1983, No. 211 (Adj. Sess.), 1; amended 1985, No. 260 (Adj. Sess.), 5; 1999, No. 18, 32, eff. May 13, 1999.

§ 4177. UNFAIR AND DECEPTIVE ACTS AND PRACTICES

Failure of the manufacturer, its agents, authorized dealers, or motor vehicle lessors to comply with a decision of the board shall constitute an unfair or deceptive act or practice under 9 V.S.A. chapter 63.

Added 1983, No. 211 (Adj. Sess.), 1; amended 1987, No. 242 (Adj. Sess.), 7.

§ 4178. LIMITATIONS

Nothing in this chapter shall be construed as imposing any liability on a manufacturer's authorized dealers or creating a cause of action by a manufacturer against its authorized agents or dealers. It shall be a violation of 9 V.S.A. chapter 108 for a manufacturer to engage in reprisals or threats of reprisals, directly or indirectly, against any authorized dealer arising out of the dealer's efforts to repair a motor vehicle under the provisions of this chapter.

Added 1983, No. 211 (Adj. Sess.), 1.

§ 4179. EFFECTIVE DATE; LIMITATIONS

(a) This chapter shall apply to motor vehicles beginning with the model year following July 1, 1984. Any proceedings initiated under this chapter shall be commenced within one year following the expiration of the express warranty term.

(b) Nothing in this chapter shall in any way limit the rights or remedies which are otherwise available to a consumer under any other law.

Added 1983, No. 211 (Adj. Sess.), 1; amended 1999, No. 18, 33, eff. May 13, 1999.

§ 4180. NOTIFICATION TO CONSUMERS

The manufacturer of every motor vehicle sold in this state beginning with the model year following July 1, 1984 shall provide a clear and conspicuous written notice of the consumer's rights under this chapter and at the time of the delivery of every new motor vehicle in this state beginning with the model year following July 1, 1984 shall provide the consumer with a stamped self-addressed notice in a form satisfactory to the Vermont motor vehicle arbitration board sufficient to notify the manufacturer of the consumer's election to proceed under this chapter. The manufacturer shall not delegate this responsibility to its authorized dealers. The manufacturer of every new motor vehicle sold in this state beginning with the effective date of this chapter shall also provide a clear and conspicuous notice that informs consumers of their rights under this chapter.

Added 1983, No. 211 (Adj. Sess.), 1.

§ 4181. SALE OF DEFECTIVE MOTOR VEHICLES

Any manufacturer, its agent or authorized dealer who attempts to resell a motor vehicle after final determination, adjudication or settlement, pursuant to the provisions of this chapter or after final determination, adjudication or settlement under similar laws of any other state shall apprise prospective buyers in Vermont by means of a clearly visible window sticker and such manufacturers are prohibited from reselling in Vermont any vehicle determined or adjudicated as having a serious safety defect. Notice that a vehicle has been returned pursuant to such law shall also be conspicuously printed on the motor vehicle certificate of title.

Added 1983, No. 211 (Adj. Sess.), 1