N.C. Ct. of Appeals: Harrison v. Kia Motors America, Inc.- Notice of Violation of Lemon Law and Damages

Summary:

Under North Carolina's New Motor Vehicles Warranties Act, N.C.G.S. § § 20-351, a motor vehicle manufacturer is required to either repurchase or refund the purchase price if "after a reasonable number of attempts" the vehicle cannot be repaired to conform with express warranties. N.C.G.S. § 20-351.5 creates a presumption that the manufacturer has failed if it attempts to repair the vehicle four or more times. The consumer must have notified the manufacturer in writing of the defect and allowed up to fifteen (15) days to make repairs. The manufacturer must, however, "clearly and conspicuously" notify the consumer of the obligation to send written notice.

In the present case, the owner's manual provided by Kia, did provide such notice to the consumers, directing them to notify Kia at a specified address, by certified mail, of the problem. The consumers, however, notified Kia at a different address (in the same city). As Kia had not only accepted the notice, but responded and negotiated with the consumer's attorney, the Court of Appeals held that this was sufficient.

Kia also contended that the fifteen (15) days it was allowed to make repairs commenced when it first obtained access to the defective vehicle. The Court of Appeals rejected this as interpreting

the 'cure period' as beginning when the manufacturer obtains possession of the car to inspect or repair it could lead to absurd results, i.e., the manufacturer or agent could wait weeks or even months after receiving the notice to set up an inspection or to repair the vehicle, as long as it resolves the problem within fifteen days of receipt of the car.

Accordingly, the consumers were entitled to summary judgment requiring Kia to repurchase the vehicle, as it waited more than a month after receiving written notice of the defects to inspect or repair the vehicle.

The Court of Appeals, however, did find that Kia had not "unreasonably failed or refused" to resolve the matter and therefore an award of attorneys' fees was not merited under N.C.G.S. § 25-351.8 (3). The only failure was of acting as quickly as required by statute, which, by itself, was insufficient. Further, while N.C.G.S. § 20-351.8 (2) provides for treble damages if the manufacturer "unreasonably refused" to comply with the repair requirements, here Kia had, even tardily, contacted the consumer's attorney, negotiated and ultimately arranged repairs. Such actions supported a denial of treble damages. See, however, Taylor v. Volvo N. Am. Corp., 339 N.C. 238, 256, 451 S.E.2d 618, 627 (1994) (a single failed telephone call by the manufacturer justified treble damages.)

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