IN THE VIRGINIA SUPREME COURT:

SUBARU OF AMERICA, INC.

V. Record No. 971821

DEBORA C. PETERS

FROM THE CIRCUIT COURT OF THE CITY OF LYNCHBURG

(Honorable Mosby G. Perrow, III, Trial Judge)

STEPHEN L. SWANN, Arlington, VA

CARY MOSELEY, Lynchburg, VA

under the Virginia Motor Vehicle Warranty Enforcement Act (the

Act), Code Sect. 59.1-207.9 through -207.16:1, since its 1984

adoption. Acts 1984, ch. 773.

The Act, Virginia's so-called "Lemon Law," generally

provides that if a consumer has purchased a motor vehicle for

nonbusiness purposes and reports, within a specified period of

time, a defect or nonconformity covered by the motor vehicle

manufacturer's express warranty, the manufacturer or its agent

must perform the repairs necessary to correct the problem. If

the vehicle cannot be conformed to the warranty after a

reasonable number of attempts, the consumer is entitled to

replacement of the vehicle or refund of the purchase price.

The first state lemon law was enacted by the Connecticut

legislature in 1982. Since that time, a majority of states has

enacted similar legislation, although no two lemon laws are

identical. Noralyn 0. Harlow, Annotation, Validity,

Construction, and Effect of State Motor Vehicle Warranty

Legislation (Lemon Laws), 51 A.L.R.4th 872, 877 (1987). The

General Assembly patterned Virginia's Act after Connecticut's.

Carol S. Nance, Note, Virginia's Lemon Law: The Best Treatment

For Car Owner's Canker?, 19 U. Rich. L. Rev. 405, 425 (1985).

A consumer suffering a loss by reason of a violation of any

provision of the Act may bring a civil action to enforce such

provision. Code Sect. 59.1-207.14. The Act does not impair or

limit a consumer's rights under any other law. Code Sect. 59.1-

207.10 and -207.13(F).

In 1996, appellee Debora C. Peters filed this action

against appellant Subaru of America, Inc., arising from the

plaintiff's purchase of a used motor vehicle manufactured by

defendant. Even though plaintiff, in an amended motion for

judgment, sought recovery against defendant on several theories,

the case evolved into an action based solely on the Act and its

remedies.

The defendant denied plaintiff is entitled to the relief

sought. Additionally, it filed a pre-trial motion for summary

judgment asserting "the Act applies only to the purchase by a

consumer of a new motor vehicle." The trial court denied the

motion.

During a jury trial, the court denied defendant's motions

to strike plaintiff's evidence both at the conclusion of the

plaintiff's case-in-chief and at the conclusion of all the

evidence. The jury found in favor of the plaintiff and, after

assessing attorney's fees against defendant, the trial court

entered judgment for the plaintiff in the amount of $23,987.35.

We awarded defendant this appeal from the May 1997 judgment

order.

The facts are virtually undisputed. The subject of this

controversy is a 1994 Subaru Legacy four-door station wagon.

The first sale of the vehicle occurred on April 7, 1994

when defendant sold it to Hertz Corporation, Greensboro, North

Carolina, for use as a rental car. The second sale took place

in November 1994 when defendant purchased the vehicle from Hertz

and consigned it to the Greensboro Auto Auction for sale. The

third sale occurred in December 1994 when Star Imports, Inc.,

purchased the vehicle at auction for resale at the Star Imports

dealership in Lynchburg, Virginia.

The fourth sale was to the plaintiff, a resident of

Appomattox County. On March 20, 1995, she purchased the vehicle

from Star Imports for her "personal use." The odometer

registered 18,919 miles.

At the time of purchase, the plaintiff was entitled to the

benefits of the balance of the defendant's vehicle warranty.

The warranty's "basic coverage" lasted for three years or 36,000

miles, "whichever comes first." Warranty coverage began on

April 7, 1994, the date the car was "delivered to the first

retail purchaser," according to the warranty.

On appeal, defendant assigns error to the trial court's

denial of the summary judgment motion and denial of its "motion

to strike at the close of the plaintiff's evidence." These

assignments of error present three questions.

The first question is whether the Act applies only to the

purchase of new as opposed to "used" vehicles. We hold that it

applies to both, as will be demonstrated by analysis of

pertinent provisions of the Act.

We look first to the Act's title, "Virginia Motor Vehicle

Warranty Enforcement Act." Unlike some other state lemon laws,

the General Assembly made no distinction in the title between

"new" or "used" vehicles. See Connecticut's lemon law entitled

"New Automobile Warranties." Conn. Gen. Stat. Ann., Title 42,

Sect. 179 et seq. (West 1992).

Moreover, in Code Sect. 59.1-207.10, a preamble setting forth

the intent of the Act, the General Assembly referred throughout

to "a" motor vehicle and not to a "new" motor vehicle. This is

a plain indication that the Act is meant to apply to the

vehicles, new and used, that qualify for coverage under the Act.

For example, the statute's first sentence provides: "The

General Assembly recognizes that a motor vehicle is a major

consumer purchase, and there is no doubt that a defective motor

vehicle creates a hardship for the consumer." Likewise, the

statute's third sentence provides: "It is further the intent of

the General Assembly to provide the statutory procedures whereby

a consumer may receive a replacement motor vehicle, or a full

refund, for a motor vehicle which cannot be brought into

conformity with the express warranty issued by the

manufacturer." In both the Act's title and preamble, the focus

is upon the warranty, and not upon the vehicle's status as new

or used.

The defendant's reliance on references in the Act to a

"new" motor vehicle, to support its contention that the Act

applies only to new vehicles, is misplaced. The term "new" is

employed five times in the Act. The word is found at four

places in Code Sect. 59.1-207.11, where the terms "lemon law rights

period," "manufacturer's express warranty," "serious safety

defect," and "significant impairment" are defined; it is found

in Code Sect. 59.1-207.12, dealing with warranty conformity.

However, the word "new" is employed each time in the

context of warranties issued when the vehicle is indeed "new."

Instead of limiting the Act's applicability to a "new vehicle,"

the Act focuses upon the new vehicle warranty. In other words,

the Act concentrates on the manufacturer's written factory

warranty for the particular vehicle, and whether that vehicle

can be brought into conformity with the warranty's terms.

The second question is whether this plaintiff qualifies as

a "consumer," as defined in the Act, so that she is entitled to

claim the benefits of the Act.

According to Code Sect. 59.1-207.11, the term "consumer" means

"the purchaser, other than for purposes of resale, of a motor

vehicle used in substantial part for personal, family, or

household purposes, and any person to whom such motor vehicle is

transferred for the same purposes during the duration of any

warranty applicable to such motor vehicle, and any other person

entitled by the terms of such warranty to enforce the

obligations of the warranty."

The defendant contends the plaintiff is not a "consumer."

It says, "The purpose of this provision is to preclude the

application of the Act to business vehicles or vehicles used for

business purposes." Defendant continues "Hertz Corp., the

original owner, was not a consumer. When Hertz purchased the

automobile and placed it into service as a rental car, the Act

no longer applied to the automobile because it was being used

substantially for business purposes. Accordingly, subsequent

purchasers, including Peters, do not meet the definition of a

consumer because no one after Hertz purchased from a consumer."

In other words, according to defendant, "Those who purchased

'downstream' from Hertz cannot bring a claim under the Act

because they do not qualify as consumers. Peters' rights under

the Act can rise no higher than the rights of her predecessors

in title." We do not agree with defendant.

We will assume this vehicle had been employed substantially

for business purposes by Hertz, a fact not shown by the record.

Nonetheless, the vehicle's subsequent sale to a nonbusiness

transferee caused it to be included within the Act's "consumer"

definition. The record shows the plaintiff devoted the vehicle

to her personal use for approximately 66% of the total odometer

mileage at the time of trial. This clearly shows the vehicle

was "used in substantial part for personal . . purposes,"

according to the first clause of the definition. Also, she was

"any person to whom such motor vehicle [was] transferred" for

those purposes "during the duration of Ethel warranty applicable

to such motor vehicle," according to the second clause of the

definition.

Contrary to defendant's argument, the definition of

"consumer" nowhere denies benefits to a subsequent transferee

who is "downstream" from a business buyer. Thus, a buyer, such

as this plaintiff, experiencing a "significant impairment," as

defined in the Act, during the balance of the express factory

warranty qualifies as a consumer," whether or not a prior owner

had employed the vehicle for business purposes.

The third question is whether the plaintiff established a

claim for benefits under the Act. Several portions of the Act

are relevant to this issue.

Code Sect. 59.1-207.12 requires conformity to all warranties.

It provides "If a new motor vehicle does not conform to all

warranties, and the consumer reports the nonconformity to the

manufacturer, its agents, or its authorized dealer during the

manufacturer's warranty period, the manufacturer, its agent or

its authorized dealer shall make such repairs as are necessary

to conform the vehicle to such warranties, notwithstanding the

fact that such repairs are made after the expiration of such

I manufacturer's warranty period."

Code Sect. 59.1-207,13(A) provides that "[if the manufacturer,

its agents or authorized dealers do not conform the motor

vehicle to any applicable warranty by repairing or correcting

any defect or condition, including those that do not affect the

driveability of the vehicle, which significantly impairs the

use, market value, or safety of the motor vehicle to the

consumer[,] after a reasonable number of attempts during the

lemon law rights period," the manufacturer shall either replace

the motor vehicle, or accept return of the vehicle and refund to

the consumer the full purchase price.

Subsection (B) of the foregoing statute creates a

presumption that may be employed, if needed, by a consumer to

establish "a reasonable number of attempts" and significant

impairment under subsection (A) . As relevant, subsection (B)

provides: "It shall be presumed that a reasonable number of

attempts have been undertaken to conform a motor vehicle to any

warranty and that the motor vehicle is significantly impaired if

during the period of eighteen months following the date of

original delivery of the motor vehicle to the consumer either:

1. The same nonconformity has been subject to repair three or

more times by the manufacturer, its agents or its authorized

dealers and the same nonconformity continues to exist;"

or

"3. The motor vehicle is out of service due to repair for a

cumulative total of thirty calendar days. . ."

The "lemon law rights period" is defined as "the period

ending eighteen months after the date of the original delivery

to the consumer of a new motor vehicle. This shall be the

period during which the consumer can report any nonconformity to

the manufacturer and pursue any rights provided for under this

chapter." Code Sect. 59.1-207.11.

The word "nonconformity" is defined as "a failure to

conform with a warranty, a defect or a condition, including

those that do not affect the driveability of the vehicle, which

significantly impairs the use, market value, or safety of a

motor vehicle." Id.

Dwelling on the presumption set forth in Sect. 59.1-207.13(B),

and other language of the subsection, the defendant argues the

plaintiff failed to establish that the "same nonconformity" was

"subject to repair" three times during the 18-month lemon law

period. This argument is without merit.

The case was not submitted to the jury on the presumption.

Instead, the jury was instructed on the provision of subsection

(A) of the statute requiring replacement of the vehicle or

refund of the purchase price if there was a failure to conform

the vehicle to the warranty "after a reasonable number of

attempts during the lemon law rights period."

The evidence was sufficient to allow the jury to find,

without the benefit of the presumption that the defendant or

its agents were afforded a reasonable number of attempts to

conform the vehicle during the 18-month period commencing

April 7, 1994 and ending October 7, 1995. It is unnecessary to

embark upon a detailed recital of the evidence of plaintiff's

unsuccessful efforts to have defendant and its dealers conform

the vehicle to defendant's warranty. Through her testimony

supplemented by documentary evidence, the plaintiff established

she experienced "constant" problems with the operation of the

vehicle following its purchase.

She repeatedly reported defects to defendant and its

dealers. These reports commenced June 2, 1995 ("brakes were

messing up") and continued: June 19 - "motor was coughing and

then it was going into neutral"; July 20 - "motor was still

cutting off and the transmission . . was jerking and would go

in and out of neutral"; July 26 - "transmission was still

slipping and cutting off and the brakes were still the same

thing because they had never fixed them"; August 30 - brake

problems and "remanufactured transmission was put in it"; and

September 8 - "transmission was whining."

Additionally~ the plaintiff made repeated complaints beyond

the basic lemon law rights period because the warranty problems

had not been corrected by defendant or its agents. Code Sect. 59.1-

207.13(C) provides, "The lemon law rights period shall be

extended if the manufacturer has been notified but the

nonconformity has not been effectively repaired by the

manufacturer, or its agent, by the expiration of the lemon law

rights period." The plaintiff notified the defendant by letter

dated September 16, 1995 of the "constant problems with my car."

She wrote: "My car cuts off while you are driving & when you

slow down it will cut off. The transmission goes into neutral

while you are driving. The car jerks when you pull off. The

brakes grab and do not properly stop my car."

Finally, in arguing plaintiff failed to establish the

necessary elements of a claim under the Act, defendant maintains

plaintiff did not "prove a nonconformity covered by the

warranty." The warranty covers "any repairs needed to correct

defects in material or workmanship reported during the

applicable warranty period which occur under normal use."

Defendant argues plaintiff merely "testified about her

complaints, but admitted that she was not a mechanic or expert."

According to defendant, plaintiff offered no testimony

"regarding the applicability of the warranty to the alleged

nonconformity." We disagree.

Our previous summary of the facts demonstrates there was

abundant evidence presented by the plaintiff, testimonial and

documentary, to permit the jury to find that the engine,

transmission, and brake problems resulted from defects in

material or workmanship. Indeed, numerous repair orders and

invoices from Star Imports, and an Amherst Subaru dealer to

which plaintiff also took the vehicle for repair, show that, in

most instances, plaintiff was not charged for work done in

connection with her complaints. For example, plaintiff was not

charged for replacing the transmission in August 1995. The jury

was justified in concluding that, because no charges were

assessed, the dealers considered the warranty applied to the

nonconformities about which complaint was made.

Consequently, we conclude the trial court did not err, and

the judgment below will be

Affirmed.