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BILL AS INTRODUCED 2007-2008

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H.393

Introduced by Representatives Manwaring of Wilmington, Devereux of Mount Holly, Edwards of Brattleboro, Evans of Essex, Fitzgerald of St. Albans City and Martin of Wolcott

Referred to Committee on

Date:

Subject:  Commerce and trade; consumer fraud; large appliances

Statement of purpose:  This bill proposes to protect consumers from purchasing large appliances that are defective products by establishing a lemon law for large appliances.

AN ACT RELATING TO A LEMON LAW FOR LARGE APPLIANCES

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  9 V.S.A. chapter 63, subchapter 1C is added to read:

Subchapter 1C.  Large Appliances

§ 2470e.  Definitions

These definitions are for use in this subchapter only:

(1)  “Collateral costs” means expenses incurred by a consumer in connection with the repair of a nonconformity, including the costs of obtaining an alternative large appliance.

(2)  “Consumer” means any of the following:

(A)  the purchaser of a large appliance, if the large appliance was purchased from a large appliance dealer or manufacturer for purposes other than resale;

(B)  a person to whom the large appliance is transferred for purposes other than resale, if the transfer occurs before the expiration of an express warranty applicable to the large appliance;

(C)  a person who may enforce the warranty; and

(D)  a person who leases a large appliance from a large appliance lessor under a written lease.

(3)  “Demonstrator” means a large appliance used primarily for the purpose of demonstration to and tryout by the public.

(4)  “Early termination cost” means any expense or obligation that a large appliance lessor incurs as a result of both the termination of a written lease before the termination date set forth in that lease and the return of a large appliance to a manufacturer pursuant to this section.  Early termination cost includes a penalty for prepayment under a finance arrangement.

(5)  “Early termination saving” means any expense or obligation that a large appliance lessor avoids as a result of both the termination of a written lease before that termination date set forth in that lease and the return of a large appliance to a manufacturer pursuant to this section. Early termination saving includes an interest charge that the large appliance lessor would have paid to finance the large appliance or, if the large appliance lessor does not finance the large appliance, the difference between the total amount for which the lease obligates the consumer during the period of the lease term remaining after the early termination and the present value of that amount at the date of the early termination.

(6)  “Large appliance” means a household appliance costing over $300.00.

(7)  “Large appliance dealer” means a person who is in the business of selling large appliances to consumers.

(8)  “Large appliance lessor” means a person who leases a large appliance to a consumer, or who holds the lessor’s rights, under a written lease.

(9)  “Loaner” means a large appliance that is lent to the user without charge while repairs are made to the user’s large appliance.

(10)  “Manufacturer” means a person who manufactures or assembles large appliances and means agents of that person, including an importer, a distributor, factory branch, distributor branch, and any warrantors of the manufacturer’s large appliance, but does not include a large appliance dealer.

(11)  “Nonconformity” means a condition or defect that substantially impairs the use, value, or safety of a large appliance, and that is covered by an express warranty applicable to the large appliance or to a component of the large appliance, but does not include a condition or defect that is the result of abuse, use which exceeds the manufacturer’s recommendations, neglect, or unauthorized modification or alteration of the large appliance by a consumer.

(12)  “Reasonable attempt to repair” means, within the terms of an express warranty applicable to a new large appliance:

(A)  any nonconformity within the warranty that is either subject to repair by the manufacturer, large appliance lessor, or any of the manufacturer’s authorized large appliance dealers, for at least three times and a nonconformity continues; or

(B)  the large appliance is out of service for an aggregate of at least 30 cumulative days because of warranty nonconformity.

§ 2470f.  Warranty

(a)  A manufacturer who sells or leases a large appliance to a consumer, either directly or through a large appliance dealer, shall furnish the consumer with an express warranty for the large appliance.  By the terms of or in the absence of an express warranty from the manufacturer, the manufacturer shall be deemed to have expressly warranted to the consumer of a large appliance that, for a period of at least one year from the date of first delivery to the consumer, the large appliance:

(1)  has no defects in parts or performance; and

(2)  is free from any condition or defect that would substantially impair the appliance’s use, value, or safety to the consumer.

(b)  The manufacturer through the large appliance lessor or large appliance dealer shall provide the consumer with a loaner if the large appliance has any condition or defect that would substantially impair the appliance’s use, value, or safety to the consumer and that cannot be remedied within one business day.

(c)  If a new large appliance does not conform to an applicable express warranty, and the consumer reports the nonconformity to the manufacturer, the large appliance lessor or any of the manufacturer’s authorized large appliance dealers and makes the large appliance available for repair before one year after return delivery of the large appliance to the consumer, the nonconformity shall be repaired at no charge to the consumer, including parts, labor, shipping, delivery, and all other costs.

(d)  If, after a reasonable attempt to repair, the nonconformity is not repaired, then at the direction of a consumer described in subdivision 2470e(5)(A), (B), or (C) of this title, the manufacturer shall do one of the following:

(1)  Accept return of the large appliance and replace the large appliance with a comparable new large appliance and refund any collateral costs.

(2)  Accept return of the large appliance and refund to the consumer and to any holder of a perfected security interest in the consumer’s large appliance, as their interests may appear, the full purchase price plus any finance charge amount paid by the consumer at the point of sale and collateral costs, less a reasonable allowance for use.  A reasonable allowance for use may not exceed the amount obtained by multiplying the full purchase price of the large appliance by a fraction, the denominator of which is 1,825 and the numerator of which is the number of days that the large appliance was used before the consumer first reported the nonconformity to the large appliance dealer.

(3)  With respect to a consumer described in subdivision 2470e(5)(D) of this title, accept return of the large appliance, refund to the large appliance lessor and to any holder of a perfected security interest in the large appliance, as their interests may appear, the current value of the written lease and refund to the consumer the amount that the consumer paid under the written lease, plus any collateral costs, less a reasonable allowance for use.

(e)  The current value of the written lease equals the total amount for which that lease obligates the consumer during the period of the lease remaining after its early termination, plus the large appliance dealer’s early termination costs and the value of the large appliance at the lease expiration date if the lease sets forth that value, less the large appliance lessor’s early termination savings.

(f)  A reasonable allowance for use may not exceed the amount obtained by multiplying the total amount for which the written lease obligates the consumer by a fraction, the denominator of which is 1,825 and the numerator of which is a number of days that the consumer used the large appliance before first reporting the nonconformity to the manufacturer, large appliance lessor, or large appliance dealer.

(g)  None of the requirements of this subchapter shall be construed to diminish existing large appliance warranties.

§ 2470g.  Loaners

A loaner must:

(1)  Be in good working order;

(2)  Perform the essential functions of the large appliance that is being repaired, considering the needs of the user; and

(3)  Be provided to the consumer by the manufacturer through the large appliance dealer within two business days after notice from the consumer of the nonconformity, except in the case of a large appliance that requires an extensive custom retrofit in order to perform the essential functions.  Such a custom appliance shall be provided as soon as reasonably possible, but in no case later than ten business days after notice.

§ 2470h.  Remedies

(a)  To receive a comparable new large appliance or a refund due under subsection 2470f(d) of this title, a consumer shall offer to transfer possession of the large appliance to the manufacturer of the large appliance having the nonconformity.  No later than 30 days after that offer, the manufacturer shall provide the consumer with the comparable large appliance or refund.  When the manufacturer provides the new large appliance or refund, the consumer shall return the large appliance having the nonconformity to the manufacturer, along with any endorsements necessary to transfer real possession to the manufacturer.

(b)  To receive a refund due under subsection 2470f(d) of this title, a consumer described in subdivision 2470e(5)(D) of this title shall offer to return to its manufacturer the large appliance having the nonconformity.  No later than 30 days after that offer, the manufacturer shall provide the refund to the consumer.  When the manufacturer provides the refund, the consumer shall return to the manufacturer the large appliance having the nonconformity.

(c)  To receive a refund due under subsection 2470f(d) of this title, a large appliance lessor shall offer to transfer possession to its manufacturer of the large appliance having the nonconformity.  No later than 30 days after that offer, the manufacturer shall provide the refund to the large appliance lessor.  When the manufacturer provides the refund, the large appliance lessor shall provide to the manufacturer any endorsements necessary to transfer legal possession to the manufacturer.

(d)  If the large appliance was a covered benefit under a health insurance policy or health benefit plan, the health insurer or other entity providing the benefit shall be subrogated to the consumer’s right of recovery to the extent of the benefit provided.

(e)  No person shall enforce the lease against the consumer after the consumer offers to return the large appliance having the nonconformity pursuant to this section or returns the large appliance to the vendor pursuant to this section.

(f)  No large appliance returned by a consumer or large appliance lessor in this state, or by a consumer or large appliance lessor in another state under a similar law of that state, may be sold or leased again in this state, unless full written disclosure of the reasons for return is made to any prospective buyer or lessee.

(g)  This subchapter shall not be construed to limit rights or remedies available to a consumer under any other law.

(h)  Any waiver by a consumer of rights under this subchapter is void.

(i)  A violation of this subchapter or rules adopted under this subchapter is deemed to be an unfair or deceptive practice in commerce and a violation of section 2453 of this title.  The attorney general has the same authority to make rules, conduct civil investigations, and enter into assurances of discontinuance as provided under subchapter 1 of this chapter.

(j)  A consumer aggrieved by a violation of this subchapter or a violation of rules adopted under this subchapter may bring an action in superior court for appropriate equitable relief, the amount of the consumer’s damages, punitive damages in the case of a willful violation, the consideration or the value of the consideration given by the consumer, and reasonable costs and attorney’s fees.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us