Key: (1) language to be deleted (2) new language
Laws of Minnesota 1986
CHAPTER 422-S.F.No. 2179
An act relating to commerce; consumer protection;
requiring the repair, refund, or replacement of new
motor vehicles and new farm tractors under certain
circumstances; prescribing certain settlement
procedures; amending Minnesota Statutes 1984, section
325F.665, as amended; proposing coding for new law in
Minnesota Statutes, chapter 325F.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Article 1
Section 1. Minnesota Statutes 1984, section 325F.665, as
amended by Laws 1985, chapter 284, section 1, is amended to read:
325F.665 [NEW MOTOR VEHICLE WARRANTIES; MANUFACTURER'S DUTY
TO REPAIR, REFUND, OR REPLACE.]
Subdivision 1. [DEFINITIONS.] For the purposes of this
section, the following terms have the meanings given them:
(a) "consumer" means the purchaser or lessee, other than
for purposes of resale or sub-lease, of a new motor vehicle used
for personal, family, or household purposes at least 40 percent
of the time, a person to whom the new motor vehicle is
transferred for the same purposes during the duration of an
express warranty applicable to the motor vehicle, and any other
person entitled by the terms of the warranty to enforce the
obligations of the warranty;
(b) "manufacturer" means a person engaged in the business
of manufacturing, assembling or distributing motor vehicles, who
will, under normal business conditions during the year,
manufacture, assemble or distribute to dealers at least ten new
motor vehicles;
(c) "manufacturer's express warranty" and "warranty" mean
the written warranty of the manufacturer of a new motor vehicle
of its condition and fitness for use, including any terms or
conditions precedent to the enforcement of obligations under
that warranty; and
(d) "lease" means a contract in the form of a lease or
bailment for the use of personal property by a natural person
for a period of time exceeding four months, used for personal,
family, or household purposes at least 40 percent of the time,
whether or not the lessee has the option to purchase or
otherwise become the owner of the property at the expiration of
the lease;
(e) "motor vehicle" means (1) a passenger automobile as
defined in section 168.011, subdivision 7, including pickup
trucks and vans, and (2) the self-propelled motor vehicle
chassis or van portion of recreational equipment as defined in
section 168.011, subdivision 25, which is sold or leased to a
consumer in this state;
(f) "informal dispute settlement procedure or mechanism"
means an arbitration process or procedure by which the
manufacturer attempts to resolve disputes with consumers
regarding motor vehicle nonconformities and repairs that arise
during the vehicle's warranty period;
(g) "motor vehicle lessor" means a person who holds title
to a motor vehicle leased to a lessee under a written lease
agreement or who holds the lessor's rights under such agreement;
(h) "early termination costs" means expenses and
obligations incurred by a motor vehicle lessor as a result of an
early termination of a written lease agreement and surrender of
a motor vehicle to a manufacturer under subdivision 4, including
penalties for prepayment of finance arrangements and investment
tax credits not allowed for the year in which such termination
occurs and for prior years; and
(i) "early termination savings" means expenses and
obligations avoided by a motor vehicle lessor as a result of an
early termination of a written lease agreement and surrender of
a motor vehicle to a manufacturer under subdivision 4, including
the interest charges the motor vehicle lessor would have
otherwise paid to finance the motor vehicle.
Subd. 2. [MANUFACTURER'S DUTY TO REPAIR.] If a new motor
vehicle does not conform to all applicable express warranties,
and the consumer reports the nonconformity to the manufacturer,
its agent, or its authorized dealer during the term of the
express warranties or during the period of one year following
the date of original delivery of the new motor vehicle to a
consumer, whichever is the earlier date, the manufacturer, its
agent, or its authorized dealer shall make the repairs necessary
to conform the vehicle to the express warranties,
notwithstanding the fact that the repairs are made after the
expiration of the warranty term or the one-year period.
Subd. 3. [MANUFACTURER'S DUTY TO REFUND OR REPLACE.] (a)
If the manufacturer, its agents, or its authorized dealers are
unable to conform the new motor vehicle to any applicable
express warranty by repairing or correcting any defect or
condition which substantially impairs the use or market value of
the motor vehicle to the consumer after a reasonable number of
attempts, the manufacturer shall, at the consumer's option,
either replace the new motor vehicle with a comparable motor
vehicle or accept return of the vehicle from the consumer and
refund to the consumer the full purchase price, or the total
amount actually paid by the consumer under any vehicle lease,
including the cost of any options or other modifications
arranged, installed, or made by the manufacturer, its agent, or
its authorized dealer within 30 days after the date of original
delivery, and all other charges including, but not limited to,
sales tax, license fees and registration fees, reimbursement for
towing and rental vehicle expenses incurred by the consumer as a
result of the vehicle being out of service for warranty repair,
less a reasonable allowance for the consumer's use of the
vehicle not exceeding ten cents per mile driven or ten percent
of the purchase price or full lease cost of the vehicle,
whichever is less. Refunds must be made to the consumer, and
lienholder, if any, as their interests appear on the records of
the registrar of motor vehicles. Refunds shall include the
amount stated by the dealer as the trade-in value of a
consumer's used motor vehicle, plus any additional amount paid
by the consumer for the new motor vehicle. For a lease vehicle,
refunds shall include the total amount actually paid by the
consumer under any vehicle lease, less any finance charges paid
by the consumer. A reasonable allowance for use is that amount
directly attributable to use by the consumer and any previous
consumer prior to his or her first report of the nonconformity
to the manufacturer, agent, or dealer and during any subsequent
period when the vehicle is not out of service by reason of
repair. It is an affirmative defense to any claim under this
section (1) that an alleged nonconformity does not substantially
impair the use or market value, or (2) that a nonconformity is
the result of abuse, neglect, or unauthorized modifications or
alterations of a motor vehicle by anyone other than the
manufacturer, its agent or its authorized dealer.
(b) It is presumed that a reasonable number of attempts
have been undertaken to conform a new motor vehicle to the
applicable express warranties, if (1) the same nonconformity has
been subject to repair four or more times by the manufacturer,
its agents, or its authorized dealers within the express
warranty term or during the period of one year following the
date of original delivery of the motor vehicle to a consumer,
whichever is the earlier date, but the nonconformity continues
to exist, or (2) the vehicle is out of service by reason of
repair for a cumulative total of 30 or more business days during
the term or during the period, whichever is the earlier date.
(c) If the nonconformity results in a complete failure of
the braking or steering system of the new motor vehicle and is
likely to cause death or serious bodily injury if the vehicle is
driven, it is presumed that a reasonable number of attempts have
been undertaken to conform the vehicle to the applicable express
warranties if the conformity nonconformity has been subject to
repair at least once by the manufacturer, its agents, or its
authorized dealers within the express warranty term or during
the period of one year following the date of original delivery
of the motor vehicle to a consumer, whichever is the earlier
date, and the nonconformity continues to exist.
(d) The term of an express warranty, the one-year period
and the 30-day period shall be extended by any period of time
during which repair services are not available to the consumer
because of a war, invasion, strike, or fire, flood, or other
natural disaster.
(e) The presumption contained in paragraph (b) applies
against a manufacturer only if the manufacturer, its agent, or
its authorized dealer has received prior written notification
from or on behalf of the consumer at least once and an
opportunity to cure the defect alleged. If the notification is
received by the manufacturer's agent or authorized dealer, the
agent or dealer must forward it to the manufacturer by certified
mail, return receipt requested.
(f) A consumer is eligible to receive a refund or
replacement vehicle under this section if the nonconformity is
reported to the manufacturer, its authorized agent or dealer, at
any time during the motor vehicle's express warranty period,
even if the motor vehicle's express warranty expires before the
requirements of paragraphs (a), (b), and (c) have been met.
(g) At the time of purchase the manufacturer must provide
directly to the consumer a written statement on a separate piece
of paper, in 10-point all capital type, in substantially the
following form: "IMPORTANT: IF THIS VEHICLE IS DEFECTIVE, YOU
MAY BE ENTITLED UNDER STATE LAW TO REPLACEMENT OF IT OR A REFUND
OF ITS PURCHASE PRICE. HOWEVER, TO BE ENTITLED TO REFUND OR
REPLACEMENT, YOU MUST FIRST NOTIFY THE MANUFACTURER, ITS AGENT,
OR ITS AUTHORIZED DEALER OF THE PROBLEM IN WRITING AND GIVE THEM
AN OPPORTUNITY TO REPAIR THE VEHICLE."
Subd. 4. [MANUFACTURER'S DUTY TO CONSUMERS WITH LEASED
VEHICLES.] A manufacturer has the same duties under this section
to a consumer who leases a motor vehicle as to a consumer who
purchases a new motor vehicle. The lessee has the same rights
against the manufacturer under this section as does the owner of
the motor vehicle, and the consumer may enforce the rights
directly against the manufacturer. If it is determined that a
consumer who leases a motor vehicle is entitled to a refund or
replacement vehicle pursuant to this section, the consumer's
leased vehicle shall be returned to the manufacturer. The
manufacturer shall provide the owner of the leased vehicle with
either a full refund or a replacement vehicle. The owner of the
returned leased vehicle shall then provide the consumer with
either the replacement vehicle or that portion of the owner's
refund to which the consumer is entitled under this section.
Nothing contained in this section shall prohibit a motor
vehicle lessor from recovering early termination costs incurred
or early termination savings received pursuant to this section.
Subd. 5. [RESALE OR RE-LEASE OF RETURNED MOTOR VEHICLE.]
(a) If a motor vehicle has been returned under the provisions of
subdivision 3 or a similar statute of another state, whether as
the result of a legal action or as the result of an informal
dispute settlement proceeding, it may not be resold or re-leased
in this state unless:
(1) the manufacturer provides the same express warranty it
provided to the original purchaser, except that the term of the
warranty need only last for 12,000 miles or 12 months after the
date of resale, whichever is earlier; and
(2) the manufacturer provides the consumer with a written
statement on a separate piece of paper, in ten point all capital
type, in substantially the following form: "IMPORTANT: THIS
VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT
CONFORM TO THE MANUFACTURER'S EXPRESS WARRANTY AND THE
NONCONFORMITY WAS NOT CURED WITHIN A REASONABLE TIME AS PROVIDED
BY MINNESOTA LAW."
The provisions of this section apply to the resold or
re-leased motor vehicle for full term of the warranty required
under this subdivision.
(b) Notwithstanding the provisions of paragraph (a), if a
new motor vehicle has been returned under the provisions of
subdivision 3 or a similar statute of another state because of a
nonconformity resulting in a complete failure of the braking or
steering system of the motor vehicle likely to cause death or
serious bodily injury if the vehicle was driven, the motor
vehicle may not be resold in this state.
Subd. 5 6. [ALTERNATIVE DISPUTE SETTLEMENT PROCEDURE.] (a)
If a manufacturer has established, or participates in, an
informal dispute settlement procedure which substantially
complies with the provisions of the Code of Federal Regulations,
title 16, part 703 (1982), and the requirements of this section,
the provisions of subdivision 3 concerning refunds or
replacement do not apply to a consumer who has not first used
this procedure.
(b) The findings and decisions in an informal dispute
resolution proceeding settlement procedure shall address and
state in writing whether the consumer would be entitled to a
refund or replacement under the presumptions and criteria set
out in subdivision 3, and are admissible as nonbinding evidence
in any legal action and are not subject to further foundation
requirements.
(c) If, in an informal dispute settlement procedure, it is
decided that a consumer is entitled to a replacement vehicle
under subdivision 3, then the consumer has the option of
selecting and receiving either a replacement vehicle or a full
refund as authorized by subdivision 3. Any refund selected by a
consumer shall include all amounts authorized by subdivision 3.
(d) In any informal dispute settlement procedure provided
for by this section:
(1) No documents shall be received by any informal dispute
settlement mechanism unless those documents have been provided
to each of the parties in the dispute prior to the mechanism's
meeting, with an opportunity for the parties to comment on the
documents in writing, or with oral presentation at the request
of the mechanism.
(2) "Nonvoting" manufacturer or dealer representatives
shall not attend or participate in the informal dispute
settlement procedures unless the consumer is also present and
given a chance to be heard, or unless the consumer previously
consents to the manufacturer or dealer participation without the
consumer's presence and participation.
(3) Consumers shall be given an adequate opportunity to
contest a manufacturer's assertion that a nonconformity falls
within intended specifications for the vehicle by having the
basis of the manufacturer's claim appraised by a technical
expert selected and paid for by the consumer prior to the
informal dispute settlement hearing.
(4) No disputes shall be heard where there has been a
recent attempt by the manufacturer to repair a consumer's
vehicle, but no response has yet been received by the informal
dispute mechanism from the consumer as to whether the repairs
were successfully completed. This provision shall not prejudice
a consumer's rights under this section.
(5) The manufacturer shall provide and the informal dispute
settlement mechanism shall consider any relevant technical
service bulletins which may have been issued by the manufacturer
or lessor regarding the motor vehicle being disputed.
Subd. 7. [EXHAUSTION OF SETTLEMENT REMEDY.] No consumer
shall be required to first participate in an informal dispute
settlement procedure before filing an action in district court
if the informal dispute settlement procedure does not comply
with the requirements of this section, notwithstanding the
procedure's compliance with the Code of Federal Regulations,
title 16, part 703.
Subd. 6 8. [CIVIL REMEDY.] Any consumer injured by a
violation of this section may bring a civil action to enforce
this section and recover costs and disbursements, including
reasonable attorney's fees.
Subd. 7 9. [LIMITATION ON ACTIONS.] An action brought
under this section must be commenced within six months of the
expiration of the express warranty term, or within one year of
the date of original delivery of the new motor vehicle to a
consumer date the motor vehicle's express warranty term expires,
the date a consumer is eligible under this section to bring an
action in district court, or the date a consumer receives
written notice of the final decision by the informal dispute
settlement mechanism, whichever is the later date.
Subd. 8 10. [REMEDY NONEXCLUSIVE.] Nothing in this section
limits the rights or remedies which are otherwise available to a
consumer under any other law.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective August 1, 1986, and applies to all
leased vehicles which are still under an express manufacturer's
warranty and were originally delivered during the previous
one-year period.
Article 2
FARM EQUIPMENT WARRANTY COMPLIANCE
Section 1. [325F.6651] [DEFINITIONS.]
Subdivision 1. [APPLICATION.] For the purpose of sections
1 to 8, the following terms have the meanings given them.
Subd. 2. [FARM TRACTOR.] "Farm tractor" means any
self-propelled vehicle which is designed primarily for pulling
or propelling agricultural machinery and implements and is used
principally in the occupation or business of farming, including
an implement of husbandry, as defined in section 169.01,
subdivision 55, that is self-propelled.
Subd. 3. [CONSUMER.] "Consumer" means a purchaser, other
than for purposes of resale, of a new farm tractor, a person to
whom the new farm tractor is transferred for the same purposes
during the duration of an express warranty applicable to the
farm tractor and any other person entitled by the terms of the
warranty to enforce the terms of the warranty. In the case of
an agricultural vehicle within the warranty period, the sale
must be made through an authorized farm equipment dealer.
Subd. 4. [MANUFACTURER.] "Manufacturer" means a person
engaged in the business of manufacturing, assembling, or
distributing farm tractors, who under normal business conditions
during the year, manufactures, assembles, or distributes to
dealers at least ten new farm tractors.
Subd. 5. [MANUFACTURER'S EXPRESS WARRANTY; WARRANTY.]
"Manufacturer's express warranty" and "warranty" mean the
written warranty of the manufacturer of a new farm tractor of
its condition and fitness for use, including any terms or
conditions precedent to the enforcement of obligations under
that warranty.
Subd. 6. [FAIR RENTAL VALUE.] "Fair rental value" means
the rental value calculated in accordance with the "Tractor and
Farm Equipment Trade-In Guide" published by the national farm
and power equipment dealers association.
Subd. 7. [NONCONFORMITY.] "Nonconformity" means any
condition of the farm tractor that makes it impossible to use
for the purpose for which it was intended.
Subd. 8. [REASONABLE ALLOWANCE FOR PRIOR USE.] "Reasonable
allowance for prior use" shall mean no less than the fair rental
value of the farm tractor and shall be the sum of:
(1) that amount attributable to use by the consumer prior
to the consumer's first report of the nonconformity to the
manufacturer or its authorized dealers;
(2) that amount attributable to use by the consumer during
any period subsequent to such report of the reported
nonconformity; and
(3) that amount attributable to use by the consumer of the
farm tractor provided by the manufacturer or its authorized
dealers while the farm tractor is out of service by reason of
repair of the reported nonconformity.
Sec. 2. [325F.6652] [NOTICE TO CONSUMER.]
At the time of purchase the manufacturer must provide
directly to the consumer a written statement on a separate piece
of paper, in 10-point all capital type, in substantially the
following form: "IMPORTANT: IF THIS VEHICLE IS DEFECTIVE, YOU
MAY BE ENTITLED UNDER STATE LAW TO REPLACEMENT OF IT OR A REFUND
OF ITS PURCHASE PRICE. HOWEVER, TO BE ENTITLED TO REFUND OR
REPLACEMENT, YOU MUST FIRST NOTIFY THE MANUFACTURER, ITS AGENT,
OR ITS AUTHORIZED DEALER OF THE PROBLEM IN WRITING AND GIVE THEM
AN OPPORTUNITY TO REPAIR THE VEHICLE."
Sec. 3. [325F.6653] [MANUFACTURER'S DUTY TO REPAIR.]
If a farm tractor does not conform to applicable express
written warranties and the consumer reports the nonconformity to
the manufacturer and its authorized dealer during the term of
the express written warranties or during the period of one year
following the date of the original delivery of the farm tractor
to the consumer, whichever is earlier, the manufacturer or its
authorized dealers shall make the repairs necessary to make the
farm tractor conform to the express written warranties,
notwithstanding that the repairs are made after the expiration
of the warranty term or the one-year period. For a
self-propelled vehicle this section is limited to warranties on
the engine and power train.
Sec. 4. [325F.6654] [MANUFACTURER'S DUTY TO REFUND OR
REPLACE.]
Subdivision 1. [DUTY.] (a) If the manufacturer or its
authorized dealers are unable to make the farm tractor conform
to any applicable express written warranty by repairing or
correcting any condition which substantially impairs the use or
market value of the farm tractor to the consumer within the time
periods and after the number of attempts specified in
subdivision 2, the manufacturer, through its authorized dealer
who sold the farm tractor, shall, at the option of the consumer,
replace the farm tractor with a comparable one, charging the
consumer only a reasonable allowance for the consumer's use of
the farm tractor, or accept the return of the farm tractor from
the consumer and refund to the consumer the cash purchase price,
including sales tax, license fees, registration fees, and any
similar governmental charges, less a reasonable allowance for
prior use. Refunds shall be made to the consumer and
lienholder, if any, as their interests may appear in the county
recorder's office. If no replacement or refund is made, the
consumer may bring a civil action to enforce the obligation. No
action may be brought unless the manufacturer has received prior
direct written notification from or on behalf of the consumer
and has been offered an opportunity to cure the condition
alleged within a reasonable time that is not to exceed 60
business days.
(b) For a self-propelled vehicle, this section is limited
to warranties on the engine and power train.
Subd. 2. [WHEN DUTY ARISES.] The replacement or refund
obligation specified in subdivision 1 shall arise if the
manufacturer or its authorized dealers are unable to make the
farm tractor conform to applicable express written warranties
within the express written warranty term or during the period of
one year following the date of the original physical delivery of
the farm tractor to the consumer, whichever is the earlier date,
and (1) the same nonconformity has been subject to repair four
or more times by the manufacturer or its authorized dealers, but
such nonconformity continues to exist; or (2) the farm tractor
is out of service by reason of repair of the same nonconformity
for a cumulative total of 60 or more business days when the
service department of the authorized dealer in possession of the
farm tractor is open for purposes of repair, provided that days
when the consumer has been provided by the manufacturer or its
authorized dealers with the use of another farm tractor which
performs the same function shall not be counted.
Sec. 5. [325F.6655] [EXTENSION OF WARRANTY.]
The terms of any express written warranty, the one-year
period, and the 60-day repair period shall be extended by any
period of time during which repair services or replacement parts
are not available to the consumer because of a war, invasion, or
strike, or fire, flood, or other natural disaster.
Sec. 6. [325F.6656] [ALTERNATIVE DISPUTE SETTLEMENT.]
Subdivision 1. [PROCEDURE.] If a manufacturer has
established, or participates in, an informal dispute settlement
procedure which substantially complies with the provisions of
the Code of Federal Regulations, title 16, part 703, as amended,
and the requirements of this section, the provisions of section
4 concerning refunds or replacement do not apply to a consumer
who has not first used this procedure.
Subd. 2. [FINDINGS AS EVIDENCE.] The findings and
decisions in an informal dispute settlement procedure shall
address and state in writing whether the consumer would be
entitled to a refund or replacement under the presumptions and
criteria set out in section 4, and are admissible as nonbinding
evidence in any legal action and are not subject to further
foundation requirements.
Subd. 3. [REPLACEMENT OR REFUND.] If, in an informal
dispute settlement procedure, it is decided that a consumer is
entitled to a replacement vehicle under section 4, then the
consumer has the option of selecting and receiving either a
replacement vehicle or a full refund as authorized by section
4. Any refund selected by a consumer shall include all amounts
authorized by section 4.
Subd. 4. [REQUIREMENTS.] (a) In any informal dispute
settlement procedure provided for by this section:
(1) no documents shall be received by any informal dispute
settlement mechanism unless those documents have been provided
to each of the parties in the dispute prior to the mechanism's
meeting, with an opportunity for the parties to comment on the
documents in writing, or with oral presentation at the request
of the mechanism;
(2) "nonvoting" manufacturer or dealer representatives
shall not attend or participate in the internal dispute
settlement procedures unless the consumer is also present and
given a chance to be heard, or unless the consumer previously
consents to the manufacturer or dealer participation without the
consumer's presence and participation;
(3) consumers shall be given an adequate opportunity to
contest a manufacturer's assertion that a nonconformity falls
within intended specifications for the vehicle by having the
basis of the manufacturer's claim appraised by a technical
expert selected and paid for by the consumer prior to the
informal dispute settlement hearing;
(4) no disputes shall be heard where there has been a
recent attempt by the manufacturer to repair a consumer's
vehicle, but no response has yet been received by the informal
dispute mechanism from the consumer as to whether the repairs
were successfully completed. This provision shall not prejudice
a consumer's rights under this section nor shall it extend the
informal dispute mechanism's 40-day time limit for deciding
disputes, as established by the Code of Federal Regulations,
title 16, part 703; and
(5) the manufacturer shall provide and the informal dispute
settlement mechanism shall consider all information relevant to
resolving the dispute, such as the prior dispute records and
information required by the Code of Federal Regulations, title
16, part 703.6, and any relevant technical service bulletins
which may have been issued by the manufacturer or lessor
regarding the motor vehicle being disputed.
(b) A settlement reached under this section is binding on
all participating parties.
Subd. 5. [EXHAUSTION OF SETTLEMENT REMEDY.] No consumer
shall be required to first participate in an informal dispute
settlement procedure before filing an action in district court
if the informal dispute settlement procedure does not comply
with the requirements of this section, notwithstanding the
procedure's compliance with the Code of Federal Regulations,
title 16, part 703.
Subd. 6. [CIVIL REMEDY.] Any consumer injured by a
violation of this section may bring a civil action to enforce
this section and recover costs and disbursements, including
reasonable attorney's fees.
Sec. 7. [325F.6657] [AFFIRMATIVE DEFENSES.]
It shall be an affirmative defense to claim under sections
1 to 8 that (1) an alleged nonconformity does not substantially
impair such use and market value, or (2) a nonconformity is the
result of abuse or neglect, or of modifications or alterations
of the farm tractor not authorized by the manufacturer.
Sec. 8. [325F.6658] [LIMITATION ON ACTIONS.]
Any action brought under sections 1 to 8 shall be commenced
within six months following (1) expiration of the express
written warranty term, or (2) one year following the date of the
original delivery of the farm tractor to the customer, whichever
is later.
Sec. 9. [325F.6659] [REMEDY NONEXCLUSIVE.]
Nothing in this section limits the rights or remedies which
are otherwise available to a consumer under any other law.
Sec. 10. [EFFECTIVE DATE.]
Sections 1 to 9 apply to farm tractors sold after the first
day of January following the effective date of sections 1 to 9.
Approved March 24, 1986
Official Publication of the State of Minnesota
Revisor of Statutes