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Lemon Lawsuits Squeeze State Courts

Jersey judiciary steers parties into mediation to handle surging caseload

Monday, July 31, 2006
By Kate Coscarelli, Star-Ledger Staff

It started with an Eagle Premiere that had a wacky cooling system that spewed gunk all over the car.

Two young lawyers, just starting out, took the case, brought their client a nice resolution and claimed $30,000 in fees.

That was 15 years ago.

Today, Robert Silverman and Craig Thor Kimmel are at the center of a small but growing part of the legal world. They specialize in Lemon Lawsuits, with seven offices in six states, including one in Cherry Hill, a staff of 22 lawyers and several mechanics.

“We’re certainly kept plenty busy,” Kimmel said. “Now there are other firms that have taken on this work. People are more concerned with making sure they get their money’s worth.”

It has been nearly 25 years since states started adopting Lemon Laws to protect people who buy faulty vehicles, and for a long time those laws produced only modest settlements and attorney’s fees. But recently, after years of consumer education and rising automobile prices, Lemon Lawsuits have caught the attention of New Jersey’s legal community – so much so that the state judiciary has started a program to take care of the growing caseload.

Lemon Lawsuits “have increased a great deal over the past three or four years,” said James DeRose, a Westfield lawyer who represents auto companies, including BMW and Bentley. “The courts are more sensitive (to Lemon Laws) and they see a lot more cases than they used to. People have become more attentive to this stuff.”

The central office for Kimmel & Silverman is in Ambler, Pa., housed in a stately old bank building with soaring ceilings and glossy marble floors. An inflatable lemon bobs from the flagpole over the entrance. The firm has a fleet of yellow cars advertising its services. More than 30 phone lines keep a small army of receptionists busy, and some people still have a hard time getting through. Stacks of case files spill across desks in the main office and an annex out back.

“We feel we’re doing something really important,” Silverman said. “All these cases are helping a lot of people.”

A Growing Caseload

There are no records on how many Lemon Law cases are filed around the country, but the Center for Auto Safety, a nonprofit group in Washington, D.C., offers a conservative estimate that vehicle manufacturers buy back 100,000 lemons a year.

In New Jersey, the courts saw a 10 percent increase in Lemon Law cases – to about 1,600 filings – in 2005. In the first five months of this year, 650 cases were filed, court statistics show.

Many cases settle out of court, but others are more thorny.

Dennis Stabile’s case was one of those. A Miami cop, Stabile was vacationing in New Jersey in 2003 when his truck broke down. He stopped at a Millville dealership and bought a new Dodge. Almost as soon as he drove away, he noticed it pulled to the right. Over the next year or so, the truck was in the repair shop for a total of almost three months, he said.

Stabile filed suit. The company said everything possible had been done to fix the problem and the case went to trial in Cumberland County, featuring experts and testimony about the warranty. In March, a jury decided in Stabile’s favor. Now, that verdict is being appealed, attorneys said.

“I’m stuck with this truck,” Stabile said. “I can’t do anything. It’s unbelievable.”

The New Jersey courts recently started a pilot program to help people like Stabile avoid trials. The idea is to get vehicle manufacturers and drivers to discuss their differences early and reach a settlement that saves both sides time and money.

Clarence Ditlow, executive director of the Center for Auto Safety, said he knows of no other state that has launched targeted programs to settle Lemon Lawsuits.

“One of the things about automobiles is it’s what the family gets around in,” he said. “If you only have one and it’s a lemon, then justice delayed is justice denied.”

Under the program – which applies to all Lemon Law cases – the courts ask attorneys to pick one of three types of dispute resolution shortly after the first round of paperwork is filed.

Officials said they do not know exactly how many cases are in the pilot program. A review will help officials decide if they want to make the program permanent.

On a recent morning, Douglas Widman, an Oakhurst lawyer acting as an arbitrator, convened an informal session for the parties in a case at state Superior Court in Freehold.

“What we try to do in this short period of time we have is review the facts… and come up with a decision as to what might happen in court,” he said by way of introduction. “It’s less expensive to do it in a small room like this. It also gives you an opportunity to understand firsthand both sides of the case.”

Each attorney got to ask questions, the owner had a say and, in about an hour-and-a-half, Widman announced his decision: The owner deserved some money. The parties were then given several weeks to decide how to proceed.

“It’s always better to resolve it,” Widman said at the close.

The program is tailor-made for people like Laurie and Ronald White. The family leased a Toyota Sienna minivan in 2003, but for the past 18 months the minivan has mostly sat in front of their Manalapan home. Laurie White said the wheel and tires started randomly locking, though diagnostic checks indicated nothing was wrong.

“The whole car would be jerking and then pulling you to the left. It scared me that this was such a serious thing and nothing had come up,” she said.

Unable to get out of the lease, the Whites sued. Toyota officials said company policy is not to comment about ongoing litigation.

An arbitrator suggested the Whites should get about $8,000 toward the lease payments they made while the car has been out of regular use. But that decision was appealed and the case is now headed to trial, lawyers in the case said.

As for the Lemon Law specialists, Kimmel & Silverman, they are fans of the pilot program. While techniques like arbitration don’t always immediately lead to a settlement, it allows everyone to get a solid idea of the stakes and issues, they said.

Even before they came to be specialists in the world of cars, motorcycles and everything else on four wheels, the men each had a fascination with vehicles. Growing up, Silverman used to sit on the sidewalk of a busy street and try to guess the make and model of each car that came into sight. And Kimmel worked as a mechanic to help pay for law school.

Today, the lawyers seem to delight in telling stories about cases they’ve seen. They’ve had cases against nearly every manufacturer, from Kia to Ferrari. Some are routine, like slapping pistons and bad rotors. And some are more disturbing, like the car with a mold problem so bad that every screw hole turned black and grass near the driveway died.

“Every month, I’ll get a different one that is so wacky,” Silverman said.

And that has led Silverman to develop a simple but sure philosophy about the world of Lemon Laws.

“As long as they make cars,” he said, “there’s going to be some bad ones.”

Go back to the Lemon Law News Room.