Small Business Reaps Big Benefits Under New California Lemon Law

SMALL BUSINESS OWNER BENEFITS FROM CHANGE IN CALIFORNIA LEMON LAW
Late in 2004, a Riverside jury delivered the biggest single verdict ever rendered under California’s “lemon law,”also known as the Song-Beverly Consumer Warranty Act, against Ford Motor Company. The jury, by a vote of 12-0, determined that Ford Motor Co. had willfully violated the “lemon law” and was responsible for all damages against Ferraro Limousine Service, a Park City small business owner. Due to the grievous nature of Ford’s actions, the jury also assessed a civil penalty, which tripled the damages. The plaintiff’s total verdict was over $477,0, and the court added attorney’s fees of over $200,000.00 to this, making this verdict the largest in California history under the “lemon law” statute.
California lemon law and consumer protection specialist attorney Robert F. Brennan, a partner in Brennan and Weiner, tried the case for the plaintiff. Asked about why this case was significant, Mr. Brennan responded, “This case shows that Song-Beverly protects not only individual consumers but also small businesses.
“Park City was a small limousine service owned and operated by husband and wife Tim and Teresa Ferraro. They owned up to three limousines and due to the nature of its business, all of the limousines had to be operational for the company to even meet its basic operating costs.”
During the trial Mr. Brennan proved that one of the limos, a Ford Lincoln Towncar conversion, was defective. “The car consistently overheated. The air conditioning did not work. The suspension continually malfunctioned, causing a bumpy ride for passengers and damage to the vehicle’s undercarriage and there were persistent electrical problems,” stated Brennan in a recent interview. On one occasion, the car overheated and caught fire just after a young man had proposed to his girlfriend while sitting in the limo. The Ferraros brought the car in for service to Ford’s dealerships numerous times, but the vehicle was never properly fixed.
“Ford tried to wash its hands of the problem because this was a small business, not an individual consumer. Ford miscalculated and thought that the Ferraro’s could not obtain relief under California’s lemon law.” California’s Song-Beverly Act, also known as the California “lemon law,” was amended in 1999 to protect small business owners with less than five vehicles, as well as individual consumers.
For other California small business owners who may have a defective business vehicle, Brennan recommends:
1. Maintain a detailed record of when the vehicle breaks down, how long it is out of commission and what actions you took to resolve the problem. It will be easier to prove damage to your business if you have specific days, times, and recurring issues documented.
2. Keep every repair record. Dealership repair records are often the only proof you have in lemon law cases.
3. Seek an attorneys help after the dealership has been unable or unwilling to fix a recurring problem with your vehicle. It’s important to know your rights as a small business owner and dealerships are not under any legal obligation to tell you about them.
“It’s about time Ford and other manufacturers realize the importance of quality vehicles for small businesses. You hear all the time about how small businesses are the engine that drives this economy, but large auto manufacturers need to demonstrate that they are trustworthy partners to the small businesses that rely upon their products,” states Brennan. Ford has appealed the verdict.
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