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SUBARU OF AMERICA, INC. v. DEBORA C. PETERS


SUBARU OF AMERICA, INC.
v. DEBORA C. PETERS


June 5, 1998

Record No. 971821

SUBARU OF AMERICA, INC.

v.

DEBORA C. PETERS

OPINION BY JUSTICE A. CHRISTIAN COMPTON

FROM THE CIRCUIT COURT OF THE CITY OF LYNCHBURG

Mosby G. Perrow, III, Judge

Present: All the Justices


This is the first case we have decided by written opinion
under the Virginia Motor Vehicle Warranty Enforcement Act (the
Act), Code Sec.59.1-207.9 through –207.16:1, since its
1984 adoption. Acts 1984, ch. 773.

The Act, Virginia’s so-called "Lemon Law,"
generally provides that if a consumer has purchased a motor
vehicle for nonbusiness purposes and reports, within a specified
period of time, a defect or nonconformity covered by the motor
vehicle manufacturer’s express warranty, the manufacturer or
its agent must perform the repairs necessary to correct the
problem. If the vehicle cannot be conformed to the warranty after
a reasonable number of attempts, the consumer is entitled to
replacement of the vehicle or refund of the purchase price.

The first state lemon law was enacted by the Connecticut
legislature in 1982. Since that time, a majority of states has
enacted similar legislation, although no two lemon laws are
identical. Noralyn O. Harlow, Annotation, Validity,
Construction, and Effect of State Motor Vehicle Warranty
Legislation (Lemon Laws)
, 51 A.L.R.4th 872, 877 (1987). The
General Assembly patterned Virginia’s Act after
Connecticut’s. Carol S. Nance, Note, Virginia’s
Lemon Law: The Best Treatment For Car Owner’s Canker?
,
19 U. Rich. L. Rev. 405, 425 (1985).

A consumer suffering a loss by reason of a violation of any
provision of the Act may bring a civil action to enforce such
provision. Code Sec.59.1-207.14. The Act does not impair or
limit a consumer’s rights under any other law. Code
Sec.59.1-207.10 and -207.13(F).

In 1996, appellee Debora C. Peters filed this action against
appellant Subaru of America, Inc., arising from the
plaintiff’s purchase of a used motor vehicle manufactured by
defendant. Even though plaintiff, in an amended motion for
judgment, sought recovery against defendant on several theories,
the case evolved into an action based solely on the Act and its
remedies.

The defendant denied plaintiff is entitled to the relief
sought. Additionally, it filed a pre-trial motion for summary
judgment asserting "the Act applies only to the purchase by
a consumer of a new motor vehicle." The trial court denied
the motion.

During a jury trial, the court denied defendant’s motions
to strike plaintiff’s evidence both at the conclusion of the
plaintiff’s case-in-chief and at the conclusion of all the
evidence. The jury found in favor of the plaintiff and, after
assessing attorney’s fees against defendant, the trial court
entered judgment for the plaintiff in the amount of $23,987.35.
We awarded defendant this appeal from the May 1997 judgment
order.

The facts are virtually undisputed. The subject of this
controversy is a 1994 Subaru Legacy four-door station wagon.

The first sale of the vehicle occurred on April 7, 1994 when
defendant sold it to Hertz Corporation, Greensboro, North
Carolina, for use as a rental car. The second sale took place in
November 1994 when defendant purchased the vehicle from Hertz and
consigned it to the Greensboro Auto Auction for sale. The third
sale occurred in December 1994 when Star Imports, Inc., purchased
the vehicle at auction for resale at the Star Imports dealership
in Lynchburg, Virginia.

The fourth sale was to the plaintiff, a resident of Appomattox
County. On March 20, 1995, she purchased the vehicle from Star
Imports for her "personal use." The odometer registered
18,919 miles.

At the time of purchase, the plaintiff was entitled to the
benefits of the balance of the defendant’s vehicle warranty.
The warranty’s "basic coverage" lasted for three
years or 36,000 miles, "whichever comes first."
Warranty coverage began on April 7, 1994, the date the car was
"delivered to the first retail purchaser," according to
the warranty.

On appeal, defendant assigns error to the trial court’s
denial of the summary judgment motion and denial of its
"motion to strike at the close of the plaintiff’s
evidence." These assignments of error present three
questions.

The first question is whether the Act applies only to the
purchase of new as opposed to "used" vehicles. We hold
that it applies to both, as will be demonstrated by analysis of
pertinent provisions of the Act.

We look first to the Act’s title, "Virginia Motor
Vehicle Warranty Enforcement Act." Unlike some other state
lemon laws, the General Assembly made no distinction in the title
between "new" or "used" vehicles. See
Connecticut’s lemon law entitled "New Automobile
Warranties." Conn. Gen. Stat. Ann., Title 42, Sec.179 et
seq. (West 1992).

Moreover, in Code Sec.59.1-207.10, a preamble setting
forth the intent of the Act, the General Assembly referred
throughout to "a" motor vehicle and not to a
"new" motor vehicle. This is a plain indication that
the Act is meant to apply to the vehicles, new and used, that
qualify for coverage under the Act. For example, the
statute’s first sentence provides: "The General
Assembly recognizes that a motor vehicle is a major consumer
purchase, and there is no doubt that a defective motor vehicle
creates a hardship for the consumer." Likewise, the
statute’s third sentence provides: "It is further the
intent of the General Assembly to provide the statutory
procedures whereby a consumer may receive a replacement motor
vehicle, or a full refund, for a motor vehicle which cannot be
brought into conformity with the express warranty issued by the
manufacturer." In both the Act’s title and preamble,
the focus is upon the warranty, and not upon the vehicle’s
status as new or used.

The defendant’s reliance on references in the Act to a
"new" motor vehicle, to support its contention that the
Act applies only to new vehicles, is misplaced. The term
"new" is employed five times in the Act. The word is
found at four places in Code Sec.59.1-207.11, where the terms
"lemon law rights period," "manufacturer’s
express warranty," "serious safety defect," and
"significant impairment" are defined; it is found in
Code Sec.59.1-207.12, dealing with warranty conformity.

However, the word "new" is employed each time in the
context of warranties issued when the vehicle is indeed
"new." Instead of limiting the Act’s applicability
to a "new vehicle," the Act focuses upon the new
vehicle warranty. In other words, the Act concentrates on the
manufacturer’s written factory warranty for the particular
vehicle, and whether that vehicle can be brought into conformity
with the warranty’s terms.

The second question is whether this plaintiff qualifies as a
"consumer," as defined in the Act, so that she is
entitled to claim the benefits of the Act.

According to Code Sec.59.1-207.11, the term
"consumer" means "the purchaser, other than for
purposes of resale, of a motor vehicle used in substantial part
for personal, family, or household purposes, and any person to
whom such motor vehicle is transferred for the same purposes
during the duration of any warranty applicable to such motor
vehicle, and any other person entitled by the terms of such
warranty to enforce the obligations of the warranty."

The defendant contends the plaintiff is not a
"consumer." It says, "The purpose of this
provision is to preclude the application of the Act to business
vehicles or vehicles used for business purposes." Defendant
continues: "Hertz Corp., the original owner, was not a
consumer. When Hertz purchased the automobile and placed it into
service as a rental car, the Act no longer applied to the
automobile because it was being used substantially for business
purposes. Accordingly, subsequent purchasers, including Peters,
do not meet the definition of a consumer because no one after
Hertz purchased from a consumer." In other words, according
to defendant, "Those who purchased ‘downstream’
from Hertz cannot bring a claim under the Act because they do not
qualify as consumers. Peters’ rights under the Act can rise
no higher than the rights of her predecessors in title." We
do not agree with defendant.

We will assume this vehicle had been employed substantially
for business purposes by Hertz, a fact not shown by the record.
Nonetheless, the vehicle’s subsequent sale to a nonbusiness
transferee caused it to be included within the Act’s
"consumer" definition. The record shows the plaintiff
devoted the vehicle to her personal use for approximately 66% of
the total odometer mileage at the time of trial. This clearly
shows the vehicle was "used in substantial part for personal
. . . purposes," according to the first clause of the
definition. Also, she was "any person to whom such motor
vehicle [was] transferred" for those purposes "during
the duration of [the] warranty applicable to such motor
vehicle," according to the second clause of the definition.

Contrary to defendant’s argument, the definition of
"consumer" nowhere denies benefits to a subsequent
transferee who is "downstream" from a business buyer.
Thus, a buyer, such as this plaintiff, experiencing a
"significant impairment," as defined in the Act, during
the balance of the express factory warranty qualifies as a
"consumer," whether or not a prior owner had employed
the vehicle for business purposes.

The third question is whether the plaintiff established a
claim for benefits under the Act. Several portions of the Act are
relevant to this issue.

Code Sec.59.1-207.12 requires conformity to all
warranties. It provides: "If a new motor vehicle does not
conform to all warranties, and the consumer reports the
nonconformity to the manufacturer, its agents, or its authorized
dealer during the manufacturer’s warranty period, the
manufacturer, its agent or its authorized dealer shall make such
repairs as are necessary to conform the vehicle to such
warranties, notwithstanding the fact that such repairs are made
after the expiration of such manufacturer’s warranty
period."

Code Sec.59.1-207.13(A) provides that "[i]f the
manufacturer, its agents or authorized dealers do not conform the
motor vehicle to any applicable warranty by repairing or
correcting any defect or condition, including those that do not
affect the driveability of the vehicle, which significantly
impairs the use, market value, or safety of the motor vehicle to
the consumer[,] after a reasonable number of attempts during the
lemon law rights period," the manufacturer shall either
replace the motor vehicle, or accept return of the vehicle and
refund to the consumer the full purchase price.

Subsection (B) of the foregoing statute creates a presumption
that may be employed, if needed, by a consumer to establish
"a reasonable number of attempts" and significant
impairment under subsection (A). As relevant, subsection (B)
provides: "It shall be presumed that a reasonable number of
attempts have been undertaken to conform a motor vehicle to any
warranty and that the motor vehicle is significantly impaired if
during the period of eighteen months following the date of
original delivery of the motor vehicle to the consumer either: 1.
The same nonconformity has been subject to repair three or more
times by the manufacturer, its agents or its authorized dealers
and the same nonconformity continues to exist;" or "3.
The motor vehicle is out of service due to repair for a
cumulative total of thirty calendar
days. . . ."

The "lemon law rights period" is defined as
"the period ending eighteen months after the date of the
original delivery to the consumer of a new motor vehicle. This
shall be the period during which the consumer can report any
nonconformity to the manufacturer and pursue any rights provided
for under this chapter." Code Sec.59.1-207.11.

The word "nonconformity" is defined as "a
failure to conform with a warranty, a defect or a condition,
including those that do not affect the driveability of the
vehicle, which significantly impairs the use, market value, or
safety of a motor vehicle." Id.

Dwelling on the presumption set forth in
Sec.59.1-207.13(B), and other language of the subsection, the
defendant argues the plaintiff failed to establish that the
"same nonconformity" was "subject to repair"
three times during the 18-month lemon law period. This argument
is without merit.

The case was not submitted to the jury on the presumption.
Instead, the jury was instructed on the provision of subsection
(A) of the statute requiring replacement of the vehicle or refund
of the purchase price if there was a failure to conform the
vehicle to the warranty "after a reasonable number of
attempts during the lemon law rights period."

The evidence was sufficient to allow the jury to find, without
the benefit of the presumption, that the defendant or its agents
were afforded a reasonable number of attempts to conform the
vehicle during the 18-month period commencing April 7, 1994 and
ending October 7, 1995. It is unnecessary to embark upon a
detailed recital of the evidence of plaintiff’s unsuccessful
efforts to have defendant and its dealers conform the vehicle to
defendant’s warranty. Through her testimony supplemented by
documentary evidence, the plaintiff established she experienced
"constant" problems with the operation of the vehicle
following its purchase.

She repeatedly reported defects to defendant and its dealers.
These reports commenced June 2, 1995 ("brakes were messing
up") and continued: June 19 — "motor was coughing
and then it was going into neutral"; July 20 —
"motor was still cutting off and the transmission
. . . was jerking and would go in and out of
neutral"; July 26 — "transmission was still
slipping and cutting off and the brakes were still the same thing
because they had never fixed them"; August 30 — brake
problems and "remanufactured transmission was put in
it"; and September 8 — "transmission was
whining."

Additionally, the plaintiff made repeated complaints beyond
the basic lemon law rights period because the warranty problems
had not been corrected by defendant or its agents. Code
Sec.59.1-207.13(C) provides, "The lemon law rights
period shall be extended if the manufacturer has been notified
but the nonconformity has not been effectively repaired by the
manufacturer, or its agent, by the expiration of the lemon law
rights period." The plaintiff notified the defendant by
letter dated September 18, 1995 of the "constant problems
with my car." She wrote: "My car cuts off while you are
driving & when you slow down it will cut off. The
transmission goes into neutral while you are driving. The car
jerks when you pull off. The brakes grab and do not properly stop
my car."

Finally, in arguing plaintiff failed to establish the
necessary elements of a claim under the Act, defendant maintains
plaintiff did not "prove a nonconformity covered by the
warranty." The warranty covers "any repairs needed to
correct defects in material or workmanship reported during the
applicable warranty period which occur under normal use."
Defendant argues plaintiff merely "testified about her
complaints, but admitted that she was not a mechanic or
expert." According to defendant, plaintiff offered no
testimony "regarding the applicability of the warranty to
the alleged nonconformity." We disagree.

Our previous summary of the facts demonstrates there was
abundant evidence presented by the plaintiff, testimonial and
documentary, to permit the jury to find that the engine,
transmission, and brake problems resulted from defects in
material or workmanship. Indeed, numerous repair orders and
invoices from Star Imports, and an Amherst Subaru dealer to which
plaintiff also took the vehicle for repair, show that, in most
instances, plaintiff was not charged for work done in connection
with her complaints. For example, plaintiff was not charged for
replacing the transmission in August 1995. The jury was justified
in concluding that, because no charges were assessed, the dealers
considered the warranty applied to the nonconformities about
which complaint was made.

Consequently, we conclude the trial court did not err, and the
judgment below will be

Affirmed.

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