Court upholds lemon law verdict (UPDATE)

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Car manufacturers must prove consumers intentionally thwarted refund offers to escape liability under Wisconsin’s lemon law, the state Supreme Court ruled Thursday in upholding a $482,000 judgment against Mercedes-Benz USA LLC.

The court ruled 6-1 that car buyers’ honest failure to follow the steps to obtain a refund does not absolve manufacturers of their responsibilities under the law. The decision reaffirms the strength of the lemon law, regarded as one of the toughest in the country.

The ruling grew out of a case that has bounced around Wisconsin courts since 2005, when Waukesha businessman Marco Marquez purchased a defective E320 Mercedes-Benz. The car company argued it wasn’t liable because Marquez didn’t give one of its employees the information they needed to grant a refund.

Marquez’s attorney, Vince Megna, who touts himself as the “lemon law king,” said the judgment has grown to $607,000 as interest accrued during the case’s journey through the state’s appeals courts. Add additional attorney fees, he said, and the dollar figure will approach $850,000.

“They were wrong from day one,” Megna said. “It took six-and-a-half years to prove it but they were wrong. This case is going to give everybody, all the consumer lawyers, a shot in the arm. We beat a big company and let’s keep doing this.”

Mercedes-Benz’s attorney, listed in court documents as Patrick L. Wells, didn’t immediately return a message left at his office Thursday.

According to court documents, Marquez purchased a $56,000 E320 from a Milwaukee dealership in April 2005. Almost immediately, the car wouldn’t start and a number of repair attempts failed.

In October 2005, Marquez had Megna send Mercedes-Benz a lemon law notice, demanding a refund. Under the law, the company had 30 days to comply. Marquez and the company spent most of those 30 days discussing a replacement vehicle in lieu of a refund. Ultimately, Marquez said he wanted a refund five days before the compliance window closed.

On the last day, a Mercedes-Benz employee contacted Marquez to make final arrangements for the refund. The employee said he needed Marquez to call his bank so the employee would be authorized to obtain loan information. Marquez never followed through, the refund wasn’t granted and Megna filed suit the next day.

A Waukesha County judge sided with Marquez in 2007, but Mercedes-Benz appealed, arguing Marquez intentionally thwarted its attempt to give him a refund. A state appeals court kicked the case back to the circuit court level in 2008, saying it was unclear whether Marquez tried to block the refund on purpose.

In 2009, a jury found in favor of Mercedes-Benz, but another Waukesha County Circuit Judge, Michael Bohren, imposed his own verdict, saying nothing showed Marquez intentionally blocked the refund. He awarded Marquez $482,000 for damages, interest and attorney fees.

The state Supreme Court upheld Bohren’s ruling on Thursday. Chief Justice Shirley Abrahamson, writing for the majority, found the lemon law is designed to force large, well-funded auto makers to compensate customers for their losses. Expanding the manufacturers’ defenses would undermine the law’s purpose, Abrahamson wrote.

No evidence suggested Marquez intentionally tried to block the refund, Abrahamson said. She found the initial refund demand provided Mercedes-Benz authorization to contact Marquez’s bank and his loan officer, noting Marquez called the loan officer the day he reaffirmed he wanted a refund and authorized him to release the account information to the car maker. Therefore, Mercedes-Benz had all the information it needed to deliver the refund before the deadline, Abrahamson said.

In addition, the company’s employee never tried to contact the loan officer, never clearly asked Marquez to contact the bank and didn’t leave a number or express any urgency when he contacted Megna’s office later that afternoon, she found.

Justice Patience Roggensack wrote in dissent that she didn’t believe Marquez acted in good faith and the decision deprives auto manufacturers of a valid defense.

Republican Gov. Scott Walker signed a bill in December limiting attorney’s fees after Megna collected more than $150,000 in fees in a separate auto-repair dispute. The law doesn’t affect Marquez’s case because it began well before Walker even took office.