The Supreme Court has declined to take up the issue of whether a consumer may file a Lemon Law suit for the sole purpose of pursuing an award of attorney fees, even after obtaining a remedy through the vehicle manufacturer’s arbitration program.
In an order issued Tuesday, the court declined certification in Bowen v. Hyundai Motor America. The carmaker had petitioned the justices to overturn an Appellate Division decision holding that a consumer could reject the remedy obtained through arbitration with the manufacturer and file a Lemon Law suit.
The appeals court ruled in June that a consumer is free to reject an arbitration award with the hope of obtaining additional relief, including attorney fees. The appellate panel reversed a trial court judge who held the plaintiff was not a prevailing party in the Lemon Law case because she won the same relief there that she was awarded in the arbitration.
At the Appellate Division, a lawyer for Hyundai argued that allowing the plaintiff to “exploit a loophole” would cause informal dispute resolution mechanisms to cease to exist, to the detriment of consumers. But the appeals court judges said they saw “no evidence of that dire prediction.” The panel remanded the case for an award of fees for the Superior Court litigation.
The plaintiff, Deedra Bowen, experienced a recurring problem with her Hyundai Sonata that could not be resolved despite multiple repairs. She asked the company to repurchase the car but it initially refused. The manufacturer warranty required that a dispute be submitted to the company’s nonbinding dispute resolution program. The arbitrator rendered an award in favor of Bowen calling for the company to repurchase its vehicle. She then rejected the award and filed suit in Superior Court. There, the parties reached a stipulation of settlement calling for Hyundai to repurchase the vehicle, while reserving the question of entitlement to fees for resolution by the trial judge.
The trial judge ruled that fees were not warranted in the Lemon Law case because they were not available under the arbitration program. Since the level of success in Superior Court was the same as in the arbitration, the litigation did not achieve success on behalf of the consumer, he said.
Woodbury attorney Lewis Adler, who represented Bowen, said the Appellate Division ruling merely enforced existing law, which is that a consumer does not have to accept the outcome of nonbinding arbitration. “Non-binding arbitration doesn’t bind anybody—you’re then free to file a case with the court and proceed, if you’re successful, to get attorneys’ fees. It’s been the law forever,” he said.
Hyundai’s attorney, David Haase of White & Williams in Philadelphia, did not return a call.