California Legislature—2015–16 Regular Session

Assembly Bill No. 2526

Introduced by Assembly Member Achadjian

February 19, 2016

An act to amend Section 1793.22 of the Civil Code, relating to consumer protection.

LEGISLATIVE COUNSEL’S DIGEST

AB 2526, as introduced, Achadjian. Consumer protection.

Existing law, the Tanner Consumer Protection Act, establishes a presumption that a reasonable number of attempts have been made to conform a new motor vehicle to the applicable express warranties if, within 18 months from delivery or 18,000 miles on the odometer, whichever occurs first, one or more conditions occur.

This bill would make nonsubstantive changes to these provisions.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1793.22 of the Civil Code is amended
to read:

1793.22.  

(a) This section shall be begin delete known end delete begin insert known, end insert and may be
cited begin delete as end delete begin insert as, end insert the Tanner Consumer Protection Act.

(b) It shall be presumed that a reasonable number of attempts
have been made to conform a new motor vehicle to the applicable
express warranties if, within 18 months from delivery to the buyer
or 18,000 miles on the odometer of the vehicle, whichever occurs
first, one or more of the following begin delete occurs: end delete begin insert conditions occur: end insert

(1) The same nonconformity results in a condition that is likely
to cause death or serious bodily injury if the vehicle is driven and
the nonconformity has been subject to repair two or more times
by the manufacturer or its agents, and the buyer or lessee has at
least once directly notified the manufacturer of the need for the
repair of the nonconformity.

(2) The same nonconformity has been subject to repair four or
more times by the manufacturer or its agents and the buyer has at
least once directly notified the manufacturer of the need for the
repair of the nonconformity.

(3) The vehicle is out of service by reason of repair of
nonconformities by the manufacturer or its agents for a cumulative
total of more than 30 calendar days since delivery of the vehicle
to the buyer. The 30-day limit shall be extended only if repairs
cannot be performed due to conditions beyond the control of the
manufacturer or its agents. The buyer shall be required to directly
notify the manufacturer pursuant to paragraphs (1) and (2) only if
the manufacturer has clearly and conspicuously disclosed to the
buyer, with the warranty or the owner’s manual, the provisions of
this section and that of subdivision (d) of Section 1793.2, including
the requirement that the buyer must notify the manufacturer directly
pursuant to paragraphs (1) and (2). The notification, if required,
shall be sent to the address, if any, specified clearly and
conspicuously by the manufacturer in the warranty or owner’s
manual. This presumption shall be a rebuttable presumption
affecting the burden of proof, and it may be asserted by the buyer
in any civil action, including an action in small claims court, or
other formal or informal proceeding.

(c) If a qualified third-party dispute resolution process exists,
and the buyer receives timely notification in writing of the
availability of that qualified third-party dispute resolution process
with a description of its operation and effect, the presumption in
subdivision (b) may not be asserted by the buyer until after the
buyer has initially resorted to the qualified third-party dispute
resolution process as required in subdivision (d). Notification of
the availability of the qualified third-party dispute resolution
process is not timely if the buyer suffers any prejudice resulting
from any delay in giving the notification. If a qualified third-party
dispute resolution process does not exist, or if the buyer is
dissatisfied with that third-party decision, or if the manufacturer
or its agent neglects to promptly fulfill the terms of the qualified
third-party dispute resolution process decision after the decision
is accepted by the buyer, the buyer may assert the presumption
provided in subdivision (b) in an action to enforce the buyer’s
rights under subdivision (d) of Section 1793.2. The findings and
decision of a qualified third-party dispute resolution process shall
be admissible in evidence in the action without further foundation.
Any period of limitation of actions under any federal or California
laws with respect to any person shall be extended for a period
equal to the number of days between the date a complaint is filed
with a third-party dispute resolution process and the date of its
decision or the date before which the manufacturer or its agent is
required by the decision to fulfill its terms if the decision is
accepted by the buyer, whichever occurs later.

(d) A qualified third-party dispute resolution process shall be
one that does all of the following:

(1) Complies with the minimum requirements of the Federal
Trade Commission for informal dispute settlement procedures as
set forth in Part 703 of Title 16 of the Code of Federal Regulations,
as those regulations read on January 1, 1987.

(2) Renders decisions which are binding on the manufacturer
if the buyer elects to accept the decision.

(3) Prescribes a reasonable time, not to exceed 30 days after the
decision is accepted by the buyer, within which the manufacturer
or its agent must fulfill the terms of its decisions.

(4) Provides arbitrators who are assigned to decide disputes
with copies of, and instruction in, the provisions of the Federal
Trade Commission’s regulations in Part 703 of Title 16 of the
Code of Federal Regulations as those regulations read on January
1, 1987, Division 2 (commencing with Section 2101) of the
Commercial Code, and this chapter.

(5) Requires the manufacturer, when the process orders, under
the terms of this chapter, either that the nonconforming motor
vehicle be replaced if the buyer consents to this remedy or that
restitution be made to the buyer, to replace the motor vehicle or
make restitution in accordance with paragraph (2) of subdivision
(d) of Section 1793.2.

(6) Provides, at the request of the arbitrator or a majority of the
arbitration panel, for an inspection and written report on the
condition of a nonconforming motor vehicle, at no cost to the
buyer, by an automobile expert who is independent of the
manufacturer.

(7) Takes into account, in rendering decisions, all legal and
equitable factors, including, but not limited to, the written warranty,
the rights and remedies conferred in regulations of the Federal
Trade Commission contained in Part 703 of Title 16 of the Code
of Federal Regulations as those regulations read on January 1,
1987, Division 2 (commencing with Section 2101) of the
Commercial Code, this chapter, and any other equitable
considerations appropriate in the circumstances. Nothing in this
chapter requires that, to be certified as a qualified third-party
dispute resolution process pursuant to this section, decisions of
the process must consider or provide remedies in the form of
awards of punitive damages or multiple damages, under subdivision
(c) of Section 1794, or of attorneys’ fees under subdivision (d) of
Section 1794, or of consequential damages other than as provided
in subdivisions (a) and (b) of Section 1794, including, but not
limited to, reasonable repair, towing, and rental car costs actually
incurred by the buyer.

(8) Requires that no arbitrator deciding a dispute may be a party
to the dispute and that no other person, including an employee,
agent, or dealer for the manufacturer, may be allowed to participate
substantively in the merits of any dispute with the arbitrator unless
the buyer is allowed to participate also. Nothing in this subdivision
prohibits any member of an arbitration board from deciding a
dispute.

(9) Obtains and maintains certification by the Department of
Consumer Affairs pursuant to Chapter 9 (commencing with Section
472) of Division 1 of the Business and Professions Code.

(e) For the purposes of subdivision (d) of Section 1793.2 and
this section, the following terms have the following meanings:

(1) “Nonconformity” means a nonconformity which substantially
impairs the use, value, or safety of the new motor vehicle to the
buyer or lessee.

(2) “New motor vehicle” means a new motor vehicle that is
bought or used primarily for personal, family, or household
purposes. “New motor vehicle” also means a new motor vehicle
with a gross vehicle weight under 10,000 pounds that is bought or
used primarily for business purposes by a person, including a
partnership, limited liability company, corporation, association,
or any other legal entity, to which not more than five motor
vehicles are registered in this state. “New motor vehicle” includes
the chassis, chassis cab, and that portion of a motor home devoted
to its propulsion, but does not include any portion designed, used,
or maintained primarily for human habitation, a dealer-owned
vehicle and a “demonstrator” or other motor vehicle sold with a
manufacturer’s new car warranty but does not include a motorcycle
or a motor vehicle which is not registered under the Vehicle Code
because it is to be operated or used exclusively off the highways.
A demonstrator is a vehicle assigned by a dealer for the purpose
of demonstrating qualities and characteristics common to vehicles
of the same or similar model and type.

(3) “Motor home” means a vehicular unit built on, or
permanently attached to, a self-propelled motor vehicle chassis,
chassis cab, or van, which becomes an integral part of the
completed vehicle, designed for human habitation for recreational
or emergency occupancy.

(f) (1) Except as provided in paragraph (2), no person shall sell,
either at wholesale or retail, lease, or transfer a motor vehicle
transferred by a buyer or lessee to a manufacturer pursuant to
paragraph (2) of subdivision (d) of Section 1793.2 or a similar
statute of any other state, unless the nature of the nonconformity
experienced by the original buyer or lessee is clearly and
conspicuously disclosed to the prospective buyer, lessee, or
transferee, the nonconformity is corrected, and the manufacturer
warrants to the new buyer, lessee, or transferee in writing for a
period of one year that the motor vehicle is free of that
nonconformity.

(2) Except for the requirement that the nature of the
nonconformity be disclosed to the transferee, paragraph (1) does
not apply to the transfer of a motor vehicle to an educational
institution if the purpose of the transfer is to make the motor vehicle
available for use in automotive repair courses.