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Lemon Law case certified to Supreme Court

A Lemon Law case that has already been to the Wisconsin Court of Appeals once may be headed to the Wisconsin Supreme Court.

On April 13, the Court of Appeals certified the following issue to the court: What is the proper burden of proof to be applied to an allegation of intentional bad faith on the part of a consumer in a Lemon Law action under Wis. Stat. sec. 218.0171, an ordinary burden of proof or a middle burden of proof?

Also lurking in the background of this case, and perhaps of more importance to attorneys, is whether the consumer’s attorney can be called as a witness when the manufacturer asserts bad faith as a defense.

In 2005, Marco Marquez filed an action under the Lemon Law against Mercedes-Benz USA, LLC.

The law allows the purchaser of a new car that does not conform to its warranty to receive a refund or a comparable new vehicle. If the manufacturer does not comply within 30 days of a valid Lemon Law request, the purchaser can recover double damages and attorney fees.

It is not disputed in this case whether the car at issue was a “lemon” under the statute. But Mercedes-Benz claimed that Marquez intentionally thwarted its efforts to refund the purchase price.

The circuit court held this was no defense, but the Court of Appeals reversed, holding that a consumer does have a duty to act in good faith, and if he does not, he is not entitled to double damages or attorney fees. Marquez v. Mercedes-Benz USA, LLC, 2008 WI App 70, 312 Wis.2d 210, 751 N.W.2d 859.

Back in the circuit court on remand, Marquez and Mercedes-Benz disputed the appropriate burden of proof.

Mercedes-Benz contended it need only show lack of good faith by the greater weight of the credible evidence. Marquez contended it needed evidence that is clear and convincing.

The trial court agreed with Mercedes-Benz, and the jury found, by a preponderance of the evidence, that Marquez acted in bad faith. However, the trial court changed the jury’s answer on postverdict motions, and entered judgment in favor of Marquez.

Mercedes-Benz appealed the trial court’s changing the jury verdict.

But it also appealed a pretrial ruling of the trial court that barred it from calling Marquez’ attorney as a witness.

Mercedes-Benz contends that, since it dealt only with Marquez through counsel, his attorney’s testimony is required to determine whether Marquez acted in good faith.

Marquez contends the request is an attempt to circumvent the attorney-client privilege.

However, the Supreme Court might not reach this question, even if it accepts review. The only issue certified to the court is the issue stated above, regarding the proper burden of proof, which was raised by Marquez in a cross-appeal.

Nevertheless, the issue regarding attorneys testifying at trial is an interesting one that is likely to recur.

On the one hand, if the consumer is represented by counsel during the Lemon Law’s 30-day refund period, all communication between the manufacturer and consumer will probably go through the consumer’s attorney. It may not be possible to determine who did what and when, without that attorney’s testimony.

On the other hand, it would violate the purchaser’s right to counsel of choice if all that is necessary to call the purchaser’s attorney as a witness is to raise bad faith as a defense.

As a result, if the Supreme Court doesn’t address the issue, it won’t be going away.

The case is Marquez v. Mercedes-Benz USA, LLC, No. 2010AP826

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