BILL NUMBER: AB 2526 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 17, 2016
INTRODUCED BY Assembly Member Achadjian
FEBRUARY 19, 2016
An act to amend Section 1793.22 1793.2
of the Civil Code, relating to consumer protection.
LEGISLATIVE COUNSEL'S DIGEST
AB 2526, as amended, Achadjian. Consumer protection.
goods: warranties: motor vehicle replacement.
Existing law requires a manufacturer of consumer goods sold in
this state for which the manufacturer has made an express warranty to
maintain sufficient service and repair facilities reasonably close
where its goods are sold to carry out the terms of those warranties
or to designate and authorize independent repair or service
facilities to fulfill this purpose. Existing law requires a
manufacturer that is unable to service or repair a new motor vehicle
to conform to the express warranties after a reasonable number of
attempts to replace the vehicle or promptly make restitution.
Existing law requires a manufacturer, in the case of a replacement,
to also pay other specified costs, including reasonable repair,
towing, and rental car costs actually incurred by the buyer.
This bill, in the case of a new motor vehicle replacement as
described above, would require the manufacturer to pay the lesser of
reasonable repair, towing, and rental car costs and those costs
actually incurred by the buyer.
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 1793.2 of the Civil
Code is amended to read:
1793.2. (a) Every manufacturer of consumer goods sold in this
state and for which the manufacturer has made an express warranty
shall:
(1) (A) Maintain in this state sufficient service and repair
facilities reasonably close to all areas where its consumer goods are
sold to carry out the terms of those warranties or designate and
authorize in this state as service and repair facilities independent
repair or service facilities reasonably close to all areas where its
consumer goods are sold to carry out the terms of the warranties.
(B) As a means of complying with this paragraph, a manufacturer
may enter into warranty service contracts with independent service
and repair facilities. The warranty service contracts may provide for
a fixed schedule of rates to be charged for warranty service or
warranty repair work. However, the rates fixed by those contracts
shall be in conformity with the requirements of subdivision (c) of
Section 1793.3. The rates established pursuant to subdivision (c) of
Section 1793.3, between the manufacturer and the independent service
and repair facility, do not preclude a good faith discount that is
reasonably related to reduced credit and general overhead cost
factors arising from the manufacturer's payment of warranty charges
direct to the independent service and repair facility. The warranty
service contracts authorized by this paragraph may not be executed to
cover a period of time in excess of one year, and may be renewed
only by a separate, new contract or letter of agreement between the
manufacturer and the independent service and repair facility.
(2) In the event of a failure to comply with paragraph (1) of this
subdivision, be subject to Section 1793.5.
(3) Make available to authorized service and repair facilities
sufficient service literature and replacement parts to effect repairs
during the express warranty period.
(b) Where those service and repair facilities are maintained in
this state and service or repair of the goods is necessary because
they do not conform with the applicable express warranties, service
and repair shall be commenced within a reasonable time by the
manufacturer or its representative in this state. Unless the buyer
agrees in writing to the contrary, the goods shall be serviced or
repaired so as to conform to the applicable warranties within 30
days. Delay caused by conditions beyond the control of the
manufacturer or its representatives shall serve to extend this 30-day
requirement. Where delay arises, conforming goods shall be tendered
as soon as possible following termination of the condition giving
rise to the delay.
(c) The buyer shall deliver nonconforming goods to the
manufacturer's service and repair facility within this state, unless,
due to reasons of size and weight, or method of attachment, or
method of installation, or nature of the nonconformity, delivery
cannot reasonably be accomplished. If the buyer cannot return the
nonconforming goods for any of these reasons, he or she shall notify
the manufacturer or its nearest service and repair facility within
the state. Written notice of nonconformity to the manufacturer or its
service and repair facility shall constitute return of the goods for
purposes of this section. Upon receipt of that notice of
nonconformity, the manufacturer shall, at its option, service or
repair the goods at the buyer's residence, or pick up the goods for
service and repair, or arrange for transporting the goods to its
service and repair facility. All reasonable costs of transporting the
goods when a buyer cannot return them for any of the above reasons
shall be at the manufacturer's expense. The reasonable costs of
transporting nonconforming goods after delivery to the service and
repair facility until return of the goods to the buyer shall be at
the manufacturer's expense.
(d) (1) Except as provided in paragraph (2), if the manufacturer
or its representative in this state does not service or repair the
goods to conform to the applicable express warranties after a
reasonable number of attempts, the manufacturer shall either replace
the goods or reimburse the buyer in an amount equal to the purchase
price paid by the buyer, less that amount directly attributable to
use by the buyer prior to the discovery of the nonconformity.
(2) If the manufacturer or its representative in this state is
unable to service or repair a new motor vehicle, as that term is
defined in paragraph (2) of subdivision (e) of Section 1793.22, to
conform to the applicable express warranties after a reasonable
number of attempts, the manufacturer shall either promptly replace
the new motor vehicle in accordance with subparagraph (A) or promptly
make restitution to the buyer in accordance with subparagraph (B).
However, the buyer shall be free to elect restitution in lieu of
replacement, and in no event shall the buyer be required by the
manufacturer to accept a replacement vehicle.
(A) In the case of replacement, the manufacturer shall replace the
buyer's vehicle with a new motor vehicle substantially identical to
the vehicle replaced. The replacement vehicle shall be accompanied by
all express and implied warranties that normally accompany new motor
vehicles of that specific kind. The manufacturer also shall pay for,
or to, the buyer the amount of any sales or use tax, license fees,
registration fees, and other official fees which the buyer is
obligated to pay in connection with the replacement, plus any
incidental damages to which the buyer is entitled under Section 1794,
including, but not limited to, the lesser of reasonable
repair, towing, and rental car costs and those costs
actually incurred by the buyer.
(B) In the case of restitution, the manufacturer shall make
restitution in an amount equal to the actual price paid or payable by
the buyer, including any charges for transportation and
manufacturer-installed options, but excluding nonmanufacturer items
installed by a dealer or the buyer, and including any collateral
charges such as sales or use tax, license fees, registration fees,
and other official fees, plus any incidental damages to which the
buyer is entitled under Section 1794, including, but not limited to,
reasonable repair, towing, and rental car costs actually incurred by
the buyer.
(C) When the manufacturer replaces the new motor vehicle pursuant
to subparagraph (A), the buyer shall only be liable to pay the
manufacturer an amount directly attributable to use by the buyer of
the replaced vehicle prior to the time the buyer first delivered the
vehicle to the manufacturer or distributor, or its authorized service
and repair facility for correction of the problem that gave rise to
the nonconformity. When restitution is made pursuant to subparagraph
(B), the amount to be paid by the manufacturer to the buyer may be
reduced by the manufacturer by that amount directly attributable to
use by the buyer prior to the time the buyer first delivered the
vehicle to the manufacturer or distributor, or its authorized service
and repair facility for correction of the problem that gave rise to
the nonconformity. The amount directly attributable to use by the
buyer shall be determined by multiplying the actual price of the new
motor vehicle paid or payable by the buyer, including any charges for
transportation and manufacturer-installed options, by a fraction
having as its denominator 120,000 and having as its numerator the
number of miles traveled by the new motor vehicle prior to the time
the buyer first delivered the vehicle to the manufacturer or
distributor, or its authorized service and repair facility for
correction of the problem that gave rise to the nonconformity.
Nothing in this paragraph shall in any way limit the rights or
remedies available to the buyer under any other law.
(D) Pursuant to Section 1795.4, a buyer of a new motor vehicle
shall also include a lessee of a new motor vehicle.
(e) (1) If the goods cannot practicably be serviced or repaired by
the manufacturer or its representative to conform to the applicable
express warranties because of the method of installation or because
the goods have become so affixed to real property as to become a part
thereof, the manufacturer shall either replace and install the goods
or reimburse the buyer in an amount equal to the purchase price paid
by the buyer, including installation costs, less that amount
directly attributable to use by the buyer prior to the discovery of
the nonconformity.
(2) With respect to claims arising out of deficiencies in the
construction of a new residential dwelling, paragraph (1) shall not
apply to either of the following:
(A) A product that is not a manufactured product, as defined in
subdivision (g) of Section 896.
(B) A claim against a person or entity that is not the
manufacturer that originally made the express warranty for that
manufactured product.
SECTION 1. Section 1793.22 of the Civil Code is
amended to read:
1793.22. (a) This section shall be known, and may be cited as,
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 conditions occur:
(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.