Oregon’s Lemon Law Clarified

Liles v. Damon Corp., --- P.3d ----, (Or. Dec 11, 2008) (NO. CA A129113, SC S054734, CC 033086)

Oregon’s Supreme Court reversed a bizarre decision by the Court of Appeal written by pro tempore judge J. Barron. The good news is the Supreme Court got it right. The bad news is the Court of Appeals again shows its deficiencies.

The case turned on whether the actions required to invoke the Lemon Law must be taken in any particular order. The general rule is that a statute is strictly construed and the court will not imply unwritten conditions. The Court of Appeals decided that there was an implied priority in the statute and therefore the manufacturer must be given written notice and then an opportunity to repair the vehicle. If the manufacturer is given opportunity to repair the vehicle before the formal written notice, plaintiff cannot bring the action.

Plaintiffs bought a new motor home that had severe leaks whenever it rained. According to the trial court's finding, plaintiffs “began contacting the factory representatives by phone in April of 2003 regarding the water leak problems they were experiencing with the unit. They contacted the factory representative about the many problems with the motor home numerous times between April 2003 and December 2003. The Plaintiffs also presented numerous times between April 2003 and December 2003. The Plaintiffs also presented numerous repair orders from the selling dealer representing many unsuccessful attempts to repair the water leaks in this unit during that same period [of] time.”

The vehicle dealer performed most of the unsuccessful attempts to repair the leaks. However, the trial court found that, on one occasion, defendant directed plaintiffs to submit the vehicle for repair at a different repair shop. That attempted repair occurred on December 9, 2003, but it, too, was unsuccessful. According to the trial court, that attempted repair “was specifically authorized by the manufacturer as their attempt to cure the defect[ ]” and “was an opportunity to correct the defect before the lawsuit was filed even though written notice wasn't given.”

On December 23, 2003, an attorney representing plaintiffs sent a letter to defendant under Oregon's Lemon Law. The letter described the water leak problems and plaintiffs' unsuccessful efforts to resolve them through multiple repair efforts and through several discussions with defendant's representatives, including its president and “the field person for Damon in charge of repairs.” The letter requested the replacement remedy under the Lemon Law, ORS 646A.404(1)(a), which we quote below.

Defendant received the letter described above on December 29, 2003. Plaintiffs filed their action the next day, December 30, 2003, because of a mistaken belief the statute of limitations was about to expire. In January 2004, plaintiffs informed defendant that it could have access to the vehicle, but defendant took no further action to assess or repair the rainwater leaks.

The Supreme Court pointed out that the Legislature knows how to use words like “prior to,” “before,” and “10 days prior notice” when it want to establish priority. The Lemon Law merely requires that the manufacturer is given a reasonable opportunity to fix the vehicle.