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Car Renters Win Rights, Legal Fees

From the New Jersey Lawyer

March 6th, 2006

By Robert G. Seidenstein

Call 1-800 Lemon Law or visit www.lemonlaw.com, which features a drawing of a lemon on wheels and the message isn't exactly subtle.

Pennsylvania-based law firm Kimmel & Silverman, which handles New Jersey cases from its Cherry Hill office, wants to represent someone whose car is a lemon.

And last week, the New Jersey Supreme Court gave that firm and other lawyers who work on cases for unhappy motorists the right to make more, if you will, lemonade.

In one of Kimmel & Silverman's cases, Ryan v. American Honda Motor Co., the justices ruled 6-1 that the federal Magnuson-Moss Warranty Federal Trade Commission Improvement Act protects drivers whose vehicles are leased.

That statute permits a successful plaintiff to collect attorney fees.

In dissent, Justice Roberto A. Rivera-Soto noted New Jerseyans have other legal remedies when stuck with a clunker.

"We therefore now expand the reach of the Magnuson-Moss Warranty Act not because there is a gap in remedies to the consumer, but to allow for attorney fee-shifting that is generally disfavored in our law," he said.

The chance to get attorney fees generally encourages lawyers to take cases they might not otherwise accept.

Now, carmakers not only face more cases, they also might pay more if they're found to have violated a consumer's rights. So, too, would boat manufacturers and others that make their products available through lease.

Robert M. Silverman of Kimmel & Silverman said most trial judges have been ruling for lessees. Ryan, however, went against the lessee at the lower court and the Appellate Division reversed.

The case centered on whether a lessee falls within one of the statute's defini-tions of a consumer.

In a per curiam opinion, the Supreme Court majority said a lessee qualifies under the statutory language of "any person who is entitled by the terms of the warranty or under applicable state law to enforce the warranty."

The majority noted the dealer had assigned to the lessee its warranty from the manufacturer. The plaintiff, "as the assignee of the dealer's warranty, is en-titled to force the warranty under New Jersey law," the majority said.

The majority based its decision on a 2003 ruling by the 7th U.S. Circuit Court of Appeals, Voelker v. Porsche Cars N. Am., Inc.

Rivera-Soto, though, cited the 2002 New York Court of Appeals ruling, DiCintio v. DaimlerChrysler Corp.

He said, "The Magnuson-Moss Warranty Act, by its own explicit terms, requires that there be a 'sale of the consumer product' to a 'consumer' before its remedial measures can be reached. Plaintiff here did not purchase a car; he leased it from his car dealer."

Carl D. Poplar of Cherry Hill argued for the plaintiff. David M. Gossett, a member of the Illinois and District of Columbia bars, argued on behalf of Honda.

Anne S. Burris of Lindabury, McCormick & Estabrook in Westfield submitted a letter brief on behalf of the amicus International Automobile Manufacturers. Polly N. Phillippi of Kantrowitz & Phillippi in Ewing submitted a brief for the amicus Alliance of Automobile Manufacturers.

Comments about this story may be sent to robert.seidenstein@njlnews.com.

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