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COA rules on first impression lemon-law issue

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The Indiana Court of Appeals tackled today an issue of first impression regarding the state's lemon law: Once a consumer has met the law's repair threshold, he can still file an action under the lemon law even if a subsequent repair fixes the problem.
 
In Metro Health Professionals, Inc. v. Chrysler, LLC, No. 06A04-0809-CV-547, Metro Health Professionals purchased a Jeep from a Chrysler dealer in October 2006. MHP took the vehicle in for service at a repair facility authorized by Chrysler to address issues with all the warning lights in the dash coming on, gauges that quit working, headlights shutting on and off spontaneously, and the transmission shifting into low gear spontaneously. Each time it was brought in, Chrysler claimed there wasn't a problem. Finally, after the fifth time MHP brought the car in for service, the repair facility replaced the front control module and the problems haven't occurred since.
 
In October 2007, MHP filed its claim under Indiana Code Sections 24-5-13-1 to -24, the Motor Vehicle Protection Act. The trial court denied MHP's motion for summary judgment. It granted Chrysler's motion for summary judgment finding the facts show the "nonconformity," or vehicle defects, hadn't occurred since the front control module was repaired and MHP was without remedy under the act.

Indiana's MVPA, or lemon law, says if after at least four attempts by the manufacture to repair the nonconformity, and the defects still exist, a consumer can bring a suit as long as the action has been brought within two years of the date the buyer first reports the defect.

At issue is whether MHP could file a claim because the nonconformity was repaired after the fifth attempt. MHP argued that because the defects weren't fixed after the fourth attempt, it could file the claim under the lemon law.

The Court of Appeals found DaimlerChrysler Corp. v. Spitzer, 860 N.E.2d 705 (N.Y. 2006), to be persuasive and applied its ruling in the instant case.

"We hold that the plain language of Ind. Code Section 24-5-13-15(a)(1) obligates a consumer to demonstrate that the vehicle was subject to repair at least four times and that the same defective condition remained unresolved after the fourth attempt," wrote Judge Elaine Brown. "Therefore, once a consumer has met the four-repair threshold and the defect remains unresolved, the requirements of Ind. Code Section 24-5-13-15(a)(1) have been met."

The designated evidence in the instant case shows MHP took the Jeep for repairs on five occasions and was returned twice to MHP without making any repairs and twice after running a scan or diagnostic test. The Court of Appeals didn't agree with Chrysler's argument the Jeep wasn't "subject to repair" four times because it didn't make repairs the first four times it was brought in for service.

"Chrysler may not avoid liability under the Lemon Law by simply doing nothing when faced with a customer's complaints," wrote the judge.

Because it couldn't fix the problems after four times, Chrysler was obligated to refund MHP's money or provide a replacement car of comparable value. The trial court erred in granting summary judgment to Chrysler.

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