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.
(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:
(A) "distributor," meaning any person, resident or
nonresident, who in whole or in part offers for sale , sells,
or distributes any new motor vehicle to new motor vehicle dealers
or new motor vehicle lessors or maintains factory representatives
or who controls any person, firm, association, corporation, or
trust, resident or nonresident, who in whole or in part offers
for sale, sells or distributes any new motor vehicle to new motor
vehicle dealers or new motor vehicle lessors; and
(B) "factory branch" meaning any branch office maintained
by a manufacturer for the purpose of selling, leasing, offering
for sale or lease, vehicles to a distributor or new motor vehicle
dealer or for directing or supervising, in whole or in part, factory
distributor representatives.
(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.
(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:
(1) the same nonconformity as identified in any written examination
or repair order has been subject to repair at least three times
by the manufacturer, its agent or authorized dealer and at least
the first repair attempt occurs within the express warranty term
and the same nonconformity continues to exist, or
(2) 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 during the term of the express
warranty. The term of any warranty and the 30-day period shall
be extended by any period of time during which repair services
were not available to the consumer because of war, invasion, strike,
fire, flood or other natural disaster. If an extension of time
is necessitated due to these conditions, the manufacturer shall
cause provision for the free use of a vehicle to the consumer
whose vehicle is out of service. A vehicle shall not be deemed
out of service if it is available to the consumer for a major
part of the day.
(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:
(1) The manufacturer shall provide to the lessee, the aggregate
deposit and rental payments previously paid to the motor vehicle
lessor by the lessee, and incidental and consequential damages,
if applicable, minus a reasonable allowance for use and allocated
payments for purchase and use tax. The aggregate deposit shall
include, but not be limited to, all cash payments and trade-in
allowances tendered by the lessee to the motor vehicle lessor
under the lease agreement. The reasonable allowance for use shall
be calculated by multiplying the aggregate deposit and rental
payments made by the lessee on the motor vehicle by a fraction
having as its denominator the number of miles allowed in the lease
contract and having as its numerator the number of miles that
the vehicle traveled prior to the first attempt at repairing the
vehicle. Any miles in excess of those allowed in the lease contract
shall be added to the mileage at the first repair attempt or first
day out of service prior to calculating the reasonable allowance
for use.
(2) The manufacturer shall provide to the motor vehicle lessor
the aggregate of the following:
(A) the lessor's actual purchase cost, less payments made
by the lessee;
(B) the freight cost, if applicable;
(C) the cost for dealer or manufacturer-installed accessories,
if applicable;
(D) any fee paid to another to obtain the lease;
(E) an amount equal to five percent of the lessor's actual
purchase cost. The amount in this subdivision shall be instead
of any early termination costs as defined in § 4171(3) of this
chapter or as described in the lease agreement.
(3) Vermont motor vehicle purchase and use tax shall be refunded
by the state to whomever paid the tax. The party must file a claim
with the commissioner of the department of motor vehicles within
90 days of the effective date of the order.
(4) The lessee's lease agreement with the motor vehicle lessor
and all contractual obligations shall be terminated upon a decision
of the board in favor of the lessee as of the effective date of
the order. The lessee shall not be liable for any further costs
or charges to the manufacturer or motor vehicle lessor under the
lease agreement.
(5) The motor vehicle lessor shall release the motor vehicle
title to the manufacturer upon payment by the manufacturer under
the provisions of this subsection.
(6) The board shall give notice to the motor vehicle lessor
of the lessee's filing of a request for arbitration under this
chapter and shall notify the motor vehicle lessor of the date,
time and place scheduled for a hearing before the board. The motor
vehicle lessor shall provide testimony and evidence necessary
to the arbitration proceedings. Any decision of the board shall
be binding upon the motor vehicle lessor.
(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.
(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.
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.
(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:
(1) the decision was procured by corruption, fraud or other
undue means;
(2) there was evident partiality by the board or corruption
or misconduct prejudicing the rights of any party by the board;
(3) the board exceeded its powers;
(4) the board refused to postpone a hearing after being shown
sufficient cause to do so or refused to hear evidence material
to the controversy or otherwise conducted the hearing contrary
to the rules promulgated by the board so as to prejudice substantially
the rights of a party.
An application to vacate or modify a decision shall be made
within 30 days after delivery of a copy of the final decision
to the applicant except that if predicated upon corruption, fraud
or other undue means, it may be made within 30 days after such
grounds are known or should have been known. In the event a decision
is confirmed, the party who prevails shall be awarded the attorney's
fees incurred in obtaining confirmation of the decision together
with all costs.
(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.
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.
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.
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.
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