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NJ Lemon Law Firm Wins Victory For Lessees In Appeals Court

Kimmel & Silverman defeats car manufacturer’s plan to cancel all New Jersey consumer warranties of leased vehicles.

The Cherry Hill, New Jersey Lemon Law firm of Kimmel & Silverman scored a major victory for New Jersey lessees last week when they won an appeal filed against American Honda Motor Corporation (Honda).

The suit deals with lessees’ rights to enforce their manufacturers warranty in the State of New Jersey. The firm was appealing the decision of the lower court in the case of Christopher Ryan vs. Honda. Ryan leased a 1999 Honda Passport and experienced engine problems on the vehicle starting at 22,000 miles. At first, the dealer concluded that the problem was not covered under warranty and instructed Ryan to file an insurance claim, which he did. But, after the insurance company covered the repairs, and Ryan covered the deductible, he continued to experience problems with the engine. Because the problems occurred after the first 18,000 miles of protection provided by the New Jersey Lemon Law, Ryan had to enforce his warranty rights under federal warranty law.

Ryan retained Kimmel & Silverman to file a case under the Magnuson Moss Warranty Act, a federal statute designed to protect consumers who have repetitive problems with a product still under a warranty. Like the New Jersey Lemon Law, the Magnuson Moss Warranty Act provides cost-free legal representation through a fee-shifting provision, with the manufacturer paying all attorneys fees and legal costs if the plaintiff prevails. Despite Honda’s initial attempt to fix the engine and repeated repair efforts thereafter under the warranty, Ryan’s vehicle continued to suffer engine problems and thus, the suit alleged that Ryan had the right to the difference between the actual price of the lease and diminished value as a result of the defect.

Taking the position that Ryan was not entitled to any warranty protection, Honda argued that Ryan leased the Passport, but that it was actually owned by the manufacturer, and therefore, he was not entitled to warranty protection. A Superior Court Judge in Camden County agreed, dismissed the case and ordered Ryan to cover Honda’s legal bills as well. If left undisturbed, the ruling would have prevented all New Jersey automobile lessees from enforcing their Federal warranty rights if their first problem occurred outside of the provisions set by the New Jersey Lemon Law. Kimmel & Silverman immediately appealed the decision.

In a unanimous decision issued March 30, New Jersey Appeals Court Judges Edwin H. Stern, Donald S. Coburn, and Barbara Byrd remanded Ryan’s suit back to Camden County Superior Court for reconsideration and reversed the order that Ryan had to cover Honda’s legal fees. In their decision, the judges write, “We doubt that a dealer who takes title to a new vehicle would pay for the title unless it received the manufacturer’s written warranty for the benefit of all the dealer’s customers whether buyer or lessee. The warranty is undoubtedly a condition of the transaction, that is, a basis of the bargain, and the warranty is ‘issued in connection with a sale’-the manufacturer’s original sale of the car to the lessor.”

New Jersey Lemon Law Attorney Robert M. Silverman is elated with the decision.

“With cars becoming so expensive, leasing has become a more viable option for New Jersey drivers. In many cases, it enables consumers to drive a car they normally would not be able to afford. For their part, the manufacturers are spending millions to promote special lease incentives, including automobile warranties. It seems incomprehensible to me that a manufacturer such as Honda could promote the value of their lease, including its warranty protection, and then deny a consumer his legal rights under Federal Law. This important decision cements lessees’ legal rights and guarantees that manufacturers will address their concerns regarding repetitive repair attempts in the same manner as they would a buyer.”

According to Silverman’s partner, Lemon Law Attorney and Automotive Consumer Advocate Craig Thor Kimmel, Honda’s position was “an unprecedented and legally flawed attempt to quietly cancel all warranty rights of New Jersey automobile leaseholders. If the case had not been reversed, many NJ lessees who chose a new Honda for the piece of mind afforded by its 3 year, 36,000 mile warranty, would be left without rights if their warranty proved ineffective and problems could not be fixed.”

With five full-service offices throughout New Jersey, Eastern and Western Pennsylvania, Connecticut and Delaware, Kimmel & Silverman has provided cost-free lemon law and breach of warranty help to more than 30,000 consumers since its inception in 1991. For further information regarding consumers’ rights under the New Jersey Lemon Law and the Magnuson Moss Warranty Act, consumers can visit www.lemonlaw.com.