Wisconsin Supreme Court Clarifies Lemon Law, Sides
Wisconsin Supreme Court ends seven-year lemon law litigation, holding
that car dealerships must prove a consumer “intentionally”
thwarted the manufacturer’s attempt to make a timely refund by
“clear and convincing evidence” in order to escape statutory
By org jforward wisbar Joe Forward, Legal Writer,
State Bar of Wisconsin
May 24, 2012
– A car dealer that can’t prove a consumer intentionally
thwarted the dealer’s attempts to timely refund a customer’s
money can’t escape Wisconsin’s lemon law, and payment of
double damages, the Wisconsin Supreme Court has ruled.
That is, car dealers are still subject to statutory penalties if a
consumer’s negligence prevented the manufacturer or dealer from
meeting the refund deadline, according to the Wisconsin Supreme
Court’s decision in Marquez
v. Mercedes Benz USA, 2012 WI 57 (May 24, 2012).
“It is not sufficient to argue that a consumer was unreasonable
or careless in responding to a manufacturer’s requests for
additional information,” wrote Chief Justice Shirley Abrahamson in a majority opinion that garnered
full acceptance from five of the six other justices.
However, the court suggested that it may rule differently in rare cases
where “the manufacturer tried to comply with great diligence and
unlikely events outside its control or outside of the control of a
consumer made the manufacturer’s compliance impossible.”
“Our holding gives manufacturers an incentive to gather the
information needed to provide refunds within the 30-day statutory
period, but it does not unfairly place manufacturers at the mercy of
consumers,” wrote Chief Justice Abrahamson.
Middle Burden of Proof Applies
Mercedes-Benz USA failed to give Marco Marquez a refund within 30 days
after claiming the car he purchased in 2005, a Mercedes-Benz E320, was improperly manufactured, a lemon.
A timely refund is required under Wisconsin’s lemon law, Wis. Stat. section 218.0171,
which also requires a consumer to prove the car was a lemon, showing
four or more failed repairs.
Mercedes-Benz argued that Marquez’s conduct prevented it from
meeting the 30-day statutory refund deadline and therefore it
shouldn’t liable for statutory damages. Specifically,
Mercedes-Benz argued that it did not have necessary information to make
the refund, and Marquez did not respond to requests on the statutory
deadline day knowing it was the last day. A circuit court granted
summary judgment to Marquez, but an appeals court reversed.
The appeals court held that consumer's who
intentionally thwart the dealer's efforts to make
a refund are not protected by Wisconsin's lemon law. It
remanded the case for a determination of whether Marquez
intentionally thwarted Mercedes Benz's efforts to make the
On remand, a jury found that Marquez acted in bad faith. But the
circuit court judge entered a directed verdict in favor of Marquez,
concluding that there was no credible evidence to support the
The court entered judgment for Marquez, awarding him
$117,285 in statutory damages, twice the value of the car.
Marquez’s lemon law claim also allowed him to recover $5,833 in
prejudgment interest, $45,233 in statutory interest, and $12,321 for
statutory and litigation costs, and attorney’s fees totaling
Mercedes-Benz appealed, and the appeals court certified the case to the
Wisconsin Supreme Court, which affirmed the circuit court judgment in
favor of Marquez.
In addition to holding that only intentional conduct removes a
customer’s protection under the lemon law’s timely refund
provision, the court ruled that a “middle burden of proof”
applies to the car manufacturer’s affirmative defense of
intentional conduct. That is, the car manufacturer must prove the
customer’s intentional conduct by “clear and convincing
Mercedes-Benz had argued that it had a low or ordinary burden, proof by
a “preponderance of the evidence,” or by the “greater
weight of the credible evidence.” That was the burden of
proof applied by the circuit court, on Marquez's
objection. But the supreme court disagreed.
“Requiring manufacturers to prove the affirmative defense by the
middle burden of proof expresses a preference for the consumer’s
interests and acknowledges the imbalanced playing
field on which Lemon Law disputes unfold,” the Chief Justice Abrahamson wrote.
“Manufacturers might argue that our two holdings will allow savvy
consumers to use the Lemon Law as a get-rich-quick scheme. We see no
such risk,” the chief justice wrote, explaining that consumers
still must prove the car is a lemon and take other actions.
It was proper for the circuit court to grant Marquez’s motion for
directed verdict, the court ruled, because no credible evidence
supported the jury’s verdict.
“After reviewing the record in the light most favorable to
Mercedes-Benz, we conclude, that there is no credible evidence from
which reasonable inferences can be drawn to support
Mercedes-Benz’s affirmative defense,” the chief justice
The court also ruled that Mercedes-Benz was not entitled to a new trial
based on its assertion that it was wrongly denied an adjournment on the
morning of trial, and was not permitted to call Marquez’s
attorney, Vincent Megna, as a witness.
Justice Patience Roggensack wrote a
lone concurrence/dissent. She agreed that a middle burden applies in
these cases, and she agreed that the circuit court did not erroneously
exercise its discretion in denying Mercedes-Benz’s request for
adjournment on the morning of trial.
She dissented, however, concluding that there was credible evidence to
support the jury’s finding that Marquez acted in bad faith, which
was the question presented to the jury.
“[W]hile I would have sustained the jury’s
verdict had the middle burden of proof been applied, because it was not,
I would reverse the circuit court’s decision and remand the matter
for a new trial where the middle burden of proof would be
applied,” she wrote.
Vincent Megna and Susan Grzeskowiak of
Aiken & Scopture S.C., Milwaukee, represented Marco
Marquez. Patrick Wells and Thomas Armstrong of von Briesen & Roper S.C., Milwaukee,
represented Mercedes-Benz USA.