LOS ANGELES (Legal Newsline) - A man who leased a Dodge Charger and sought restitution under California’s lemon law may be able to recover insurance premiums and registration costs after defects emerged in the car, but he can’t win the entire residual value of the vehicle, an appeals court ruled.
Brandon Crayton leased the 2016 Charger from a Chrysler dealer in a transaction financed by Ally Financial, putting down $6,750 and contracting to pay $500 a month for 47 months, after which he would be entitled to purchase the car for $24,458. About eight months later he sued Chrysler, claiming the car had numerous defects the dealer wasn’t able to repair.
He also claimed Chrysler failed to promptly replace the vehicle or pay restitution, entitling him to double damages, in a lawsuit against FCA - Chrysler's finance company.
Chrysler quickly admitted liability and agreed to pay two times actual damages, but not the residual value of the car, saying Crayton was only entitled to what he paid to use the vehicle. Chrysler also balked at paying registration renewal fees and insurance premiums, as well as a $142,000 legal bill submitted by Crayton’s lawyers. The plaintiff lawyers were only entitled to fees for work they did up until Chrysler admitted liability, the company said.
A trial judge awarded Crayton $29,000 in damages, doubled to $58,000. On attorney fees, the judge said “it would be inequitable” to award more than $100,000 in fees for arguments Crayton’s lawyers “consistently lost.” The judge instead ordered Chrysler to pay $29,000 to the two firms representing the plaintiff.
California’s Second District Court of Appeal largely upheld the judgment. In a March 30 decision, the court rejected arguments the lemon law requires courts to treat purchase and lease transactions the same.
“Awarding plaintiff the residual value of the Charger—an amount he admits he did not pay and was not obligated to pay under the terms of the lease—would leave him in a better position than he was in at the time he leased the Charger,” the appeals court ruled.
The court also rejected arguments the entire judgment was invalid because it required the plaintiff to buy the car and deliver title to Ally in order to receive restitution. The lemon law does require companies that take back a vehicle to “brand” the title with information about the defects, the court ruled, but nothing in the law suggests the lessee has to do anything to receive restitution.
In a partial win for the plaintiff that may be even sweeter for his lawyers, the court remanded the question of whether Chrysler had to cover insurance fees while the plaintiff sought to have the problems fixed. And if the lower court awards higher damages, the appeals court said, “plaintiff would be entitled to additional attorney fees.”