Car buyers or lessees may recover vehicle registration renewal and nonoperational fees as incidental damages under California’s “lemon law” if they can prove that the damages were caused by the manufacturer’s breach of its duty to provide a prompt remedy, the California Supreme Court held yesterday.
“We hold that such fees are not recoverable as collateral charges because they are not auxiliary to and do not supplement the price paid for the vehicle,” Justice Joshua P. Groban said in an opinion for a unanimous court, “but they are recoverable as incidental damages if they were incurred as a result of the manufacturer’s breach of its duty to promptly provide a replacement vehicle or restitution under the Act.”
Under the Song-Beverly Consumer Warranty Act, appearing Civil Code §1790 et seq.—commonly referred to as California’s “lemon law”—car buyers or lessees may demand either a replacement vehicle or restitution “in an amount equal to the actual price paid or payable by the buyer” for a defective car under a manufacturer’s warranty. The manufacturer must also pay for any “collateral charges” and “incidental damages” incurred by the buyer.
In this case, the Mercedes owner claimed that Mercedes was unable to repair the car and numerous attempts. Six months after the lawsuit was filed, Mercedes agreed to either replacement, or restitution, and specifying that the amount of restitution and incidental damages would “be determined by court motion if the parties cannot agree.”