Lemon Law Arbitration Board Exceeds Powers in Awarding Purchase Agreement Price
In DaimlerChrysler Corp. v. Victoria, No. 2005-357, 2006 WL 1626989 (N.H., June 14, 2006), the Supreme Court of New Hampshire held that a lemon law arbitration board exceeded its powers in determining a value to be awarded to a consumer, based on a defective automobile.
A DaimlerChrysler dealership inflated both the trade-in value of Victoria’s previous auto and the vehicle price on the retail installment contract to conceal the negative equity on the trade-in vehicle so that Victoria could obtain a new loan. However, when a recurring defect plagued Victoria’s new vehicle, the New Hampshire New Motor Vehicle Arbitration Board (“the Board”) ordered that the consumer’s money be refunded in the amount of the inflated purchase price, which the dealer had set at just over $19,000.
DaimlerChrysler asserted that the Board exceeded its power when it awarded the purchase price as the value stated in the retail installment contract and refused to consider evidence as to the actual purchase price of the vehicle. New Hampshire’s Lemon Law requires the manufacturer to refund the full purchase price as indicated in the purchase contract. N.H. Rev. Stat. Ann. §357-D:3.
Nonetheless, other provisions of New Hampshire law indicated that purpose of the lemon laws was to “make the consumer whole,” not to place them in a better position than they were initially. Thus, the Court ruled that the Board exceeded its powers by adopting an inflated vehicle price as the amount awarded through arbitration. The case was remanded to the Board to determine a “full purchase price” in a matter consistent with the Court’s opinion.