Chapter 123

2005 -- S 0483 SUBSTITUTE A

Enacted 07/01/05

A N A C T

RELATING TO MOTOR AND OTHER VEHICLES -- CONSUMER ENFORCEMENT OF MOTOR VEHICLE WARRANTIES

Introduced By: Senators Felag, Walaska, F Caprio, Goodwin, and Connors

Date Introduced: February 10, 2005

It is enacted by the General Assembly as follows:

SECTION 1. Sections 31-5.2-1 and 31-5.2-7.1 of the General Laws in Chapter 31-5.2

entitled "Consumer Enforcement of Motor Vehicle Warranties" are hereby amended to read as

follows:

31-5.2-1. Definitions. -- The following words and phrases, for the purposes of this

chapter, have the following meanings:

(1) "Consumer" means a buyer, other than for purposes of resale, of a motor vehicle, any

person to whom that motor vehicle is transferred for the same purposes during the duration of any

express or implied warranty applicable to that motor vehicle, and any other person entitled by the

terms of that warranty to enforce its obligations.

(2) "Dealer" means any person engaged in the business of selling, offering to sell,

soliciting, or advertising the sale of new motor vehicles.

(3) "Lease price" means the aggregate of:

(i) Lessor's actual purchase costs.

(ii) Collateral charges, if applicable.

(iii) Any fee paid to another to obtain the lease.

(iv) Any insurance or other costs expended by the lessor for the benefit of the lessee.

(v) An amount equal to state and local sales taxes not otherwise included as collateral

charges, paid by the lessor when the vehicle was initially purchased.

(vi) An amount equal to five percent (5%) of the lessor's actual purchase costs.

(4) "Lessee" means any consumer who leases a motor vehicle for one year or more

pursuant to a written lease agreement which provides that the lessee is responsible for repairs to

such motor vehicle or any consumer who leases a motor vehicle pursuant to a lease-purchase

agreement.

(5) "Lessee cost" means the aggregate deposit and rental payments previously paid to the

lessor for the leased vehicle.

(6) "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.

(7) "Manufacturer" means any person, partnership, firm, association, corporation, or

trust, resident or nonresident, which is engaged in the business of manufacturing or assembling

new motor vehicles, or which is engaged in the business of importing new motor vehicles which

are manufactured or assembled outside of the United States.

(8) "Motor vehicle" or "vehicle" means an automobile, truck, motorcycle, or van having

a registered gross vehicle weight of less than ten thousand pounds (10,000 lbs.), sold, leased, or

replaced by a dealer or manufacturer, except that it shall not include a motorized camper as

defined in section 31-1-3~~(m)~~.

(9) "Nonconformity" means any specific or generic defect or malfunction, or any

concurrent combination of such defects or malfunctions, that substantially impairs the use, market

value, or safety of a motor vehicle.

(10) "Term of protection" means one year or fifteen thousand (15,000) miles of use from

the date of original delivery of a new motor vehicle to the consumer, whichever comes first; or, in

the case of a replacement vehicle provided by a manufacturer to a consumer under this chapter,

one year or fifteen thousand (15,000) miles from the date of delivery to the consumer of that

replacement vehicle, whichever comes first.

(11) "Motor vehicle arbitration board" means the board to be established by the

department of attorney general as set forth in section 31-5.2-7.1, which board shall replace the

consumers' council automobile dispute settlement panel.

31-5.2-7.1. Procedure. -- (a) In addition to any settlement procedure provided for in

section 31-5.2-7, the ~~consumers' council~~ department of the attorney general shall provide an

independent arbitration procedure for the settlement of disputes between consumers or lessees

and manufacturers concerning motor vehicles which do not conform to all applicable express or

implied warranties. ~~The director of the consumers' council shall establish one or more automobile~~

~~dispute settlement panels~~ There shall be established the motor vehicle arbitrator board which shall

consist of ~~three (3)~~ five (5) members. ~~appointed by the director,~~ The board shall consist of the

attorney general or his or her designee, who shall serve as director, a member of the general

public appointed by the attorney general, the director of the department of administration or his or

her designee, the president of the Rhode Island Automobile Dealers' Association or his or her

designee, and the administrator of the division of motor vehicles or his or her

designee, only one of whom shall be directly involved in the manufacture, distribution, sale,

lease, or service of any automobile product. Members shall be persons interested in consumer

disputes, and shall serve without compensation ~~at the discretion of the director~~.

(b) An owner or lessee of any motor vehicle purchased or leased which fails to conform

to the applicable express or implied warranties may either initiate a request with the department

of attorney general for arbitration by the ~~consumers' council~~ motor vehicle arbitration board or

take part in the settlement procedure set forth in section 31-5.2-7 if in existence. The consumer or

lessee shall set forth, on a complaint form prescribed by the ~~director~~ department of attorney

general, any information he or she deems relevant to the resolution of the dispute and shall file

the complaint with a nonrefundable filing fee of twenty dollars ($20.00). The ~~director~~ attorney

general shall decide if the complaint is eligible under chapter 5.2 of this title. Upon acceptance of

the complaint, the ~~director~~ attorney general shall notify the manufacturer of the filing of a request

for arbitration and shall obtain from the manufacturer, in writing on a form prescribed by the

~~director~~ attorney general, any information the manufacturer deems relevant to the resolution of

the dispute. The manufacturer shall return the form, along with a non-refundable fifty dollar

($50.00) filing fee, within twenty (20) days of receipt. The ~~director~~ department of attorney

general shall then refer the matter to ~~a panel~~ the motor vehicle arbitration board created pursuant

to subsection (a) of this section.

information necessary for a fair and timely decision in each dispute. The ~~director~~ board may issue

subpoenas ~~on behalf of any arbitration panel~~ to compel the attendance of witnesses and the

production of documents, papers, and records relevant to the dispute.

(d) At all arbitration proceedings before the board the parties may present oral or written

testimony, present witnesses and evidence relevant to the dispute, cross examine witnesses, and

be represented by counsel.

(e) The ~~consumers' council~~ motor vehicle arbitration board may forward a copy of all

written testimony, including all documentary evidence, to an independent technical expert, who

shall review the material and be able to advise and consult with the ~~arbitration panel~~ the board.

An expert shall sit as a non-voting member of ~~an arbitration panel~~ the board whenever oral

testimony is presented. The expert shall provide advice and counsel to the board as a part of its

deliberation process and shall aid the board in preparing its findings and facts.

(f) The ~~panel~~ motor vehicle arbitration board shall grant the relief specified in section

31-5.2-3 of this chapter and any other relief available under the applicable warranties or the

Magnuson-Moss Warranty Federal Trade Commission Improvement Act, 88 Stat. 2183 (1975),

15 U.S.C. section 2301 et seq., as in effect on October 1, 1982, to the consumer or lessee if a

reasonable number of attempts ,as provided in section 31-5.2-5(1) and (2) have been undertaken

to correct one or more nonconformities that substantially impair the motor vehicle. The ~~panel~~

motor vehicle arbitration board shall dismiss the dispute if ~~the panel~~ it finds, after considering all

the evidence presented, that the consumer or lessee is not entitled to relief under this chapter.

(g) (1) The ~~panel~~ board shall, as expeditiously as possible, but not later than ninety (90)

days from the date the director deems the dispute eligible for arbitration, render a fair decision

based on the information gathered and disclose its findings and the reasons for it to the parties

involved. The consumer or lessee shall accept or reject the decision within five (5) days of its

filing.

(2) If the decision is favorable to the consumer or lessee, the manufacturer ~~must~~ shall

within thirty (30) days after the rendering of the decision, either comply with the terms of the

decision if the consumer or lessee elects to accept the decision or appeal the finding to superior

court. No appeal by a manufacturer shall be heard unless the petition for such appeal is filed with

the clerk of the superior court within thirty (30) days of issuance of the finding of the motor

vehicle arbitration board and is accompanied by a bond in a principal sum equal to the money

award made by the state-certified arbitrator plus two thousand five-hundred dollars ($2,500) for

anticipated attorneys' fees, secured by cash or its equivalent, payable to the consumer. The

liability of the surety of any bond filed pursuant to this section shall be limited to the

indemnification of the consumer in the action. Such bond shall not limit or impair any right of

recovery otherwise available pursuant to law, nor shall the amount of the bond be relevant in

determining the amount of recovery to which the consumer shall be entitled. In the event that any

motor vehicle arbitration board decision, resulting in an award of a refund or replacement, is

upheld by the court, recovery by the consumer shall include continuing damages in the amount of

twenty-five dollars ($25.00) per day for each day, subsequent to the day the motor vehicle was

returned to the manufacturer pursuant to subdivision (3), that said vehicle was out of use as a

direct result of any nonconformity not issuing from owner negligence, accident, vandalism or any

attempt to repair or substantially modify the vehicle by a person other than the manufacturer, its

agent or authorized dealer; provided, however, that the manufacturer did not make a comparable

vehicle available to the consumer free of charge. In addition to any other recovery, any prevailing

consumer shall be awarded reasonable attorneys' fees and costs. If the court finds that the

manufacturer did not have any reasonable basis for its appeal or that the appeal was frivolous, the

court shall double the amount of the total award made to the consumer. The ~~consumers' council~~

motor vehicle arbitration board shall contact the consumer or lessee, within ten (10) working days

after the date for performance, to determine whether performance has occurred.

(h) The ~~director~~ motor vehicle arbitration board shall maintain the records of each

dispute as deemed necessary, including an index of disputes by brand name and model. The

~~director~~ motor vehicle arbitration board shall, at intervals of no more than six (6) months, compile

and maintain statistics indicating the record of manufacturer compliance with arbitration

decisions and the number of refunds or replacement awarded. The summary shall be a public

record.

(i) The ~~consumers' council~~ motor vehicle arbitration board automobile dispute settlement

procedure shall be prominently posted in the place of business of each new car dealer or lessor

licensed by the department of administration to engage in the sale or lease of that manufacturer's

new motor vehicles. The display of this public notice shall be a condition of licensure under the

general laws. The ~~director~~ board shall determine the size, type face, form and wording of the sign

required by this section, which shall include the telephone number and the address to which

requests for the ~~consumers' council's~~ motor vehicle arbitration board arbitration services may be

sent.

(j) The ~~director~~ motor vehicle arbitration board shall adopt regulations, in accordance

with the provisions of the general laws to carry out the purposes of this section. Written copies of

the regulations and appropriate arbitration hearing procedures shall be provided to any person

upon request.

SECTION 2. Chapter 31-5.2 of the General Laws entitled "Consumer Enforcement of

Motor Vehicle Warranties" is hereby amended by adding thereto the following section:

31-5.2-14. Consumers' council automobile dispute settlement panel - Motor vehicle

arbitration board. – Whenever the term "consumer's council automobile dispute settlement

panel," for the purpose of providing an independent arbitration procedure for the settlement of

disputes between consumers or lessees and manufactures concerning motor vehicles which do not

conform to all applicable express or implied warranties is used, the term shall mean the motor

vehicle arbitration board established by the department of attorney general pursuant to section 31-

5.2-7.1.

SECTION 3. This act shall take effect September 30, 2005.

=======

LC01205/SUB A

=======