April 15, 2010 – The Wisconsin Supreme Court may decide the proper burden of proof in lemon law actions when a car manufacturer alleges intentional bad faith on the part of a consumer.
Under Wisconsin’s lemon law, Wis. Stat. section 218.0171, a manufacturer must refund a purchaser’s money within 30 days if the car does not conform to its warranty and reasonable attempts to repair the car have failed. A manufacturer who fails to meet this deadline is subject to double damages, attorney fees, and costs.
Marco Marquez sued Mercedes-Benz USA LLC for failing to refund his money within 30 days. Mercedes-Benz argued Marquez intentionally acted in bad faith by failing to provide Mercedes-Benz with the necessary information to meet the 30-day refund deadline.
The circuit court granted summary judgment to Marquez. But in Marquez v. Mercedes-Benz USA LLC, 2008 WI App 70 (April 9, 2008), a Wisconsin appeals court held that a consumer is not entitled to statutory remedies under Wisconsin’s lemon law if the consumer intentionally thwarts the manufacturer’s attempt to make a refund. The appeals court remanded the case for trial to determine if Marquez acted in bad faith.
Burden of proof
Prior to jury trial on remand, the parties disputed the appropriate burden of proof to be applied if a consumer intentionally fails to act in good faith in dealing with a manufacturer.
Marquez argued that Mercedes-Benz was required to show Marquez acted in bad faith “by evidence that is clear, satisfactory, and convincing to a reasonable certainty,” a middle burden. Mercedes-Benz argued that a lesser burden applied, requiring Mercedes-Benz to prove bad faith “by the greater weight of the credible evidence to a reasonable certainty.”
The trial court sided with Mercedes-Benz and applied the lesser, ordinary burden of proof. Subsequently, a jury ruled in favor of Mercedes-Benz. But the trial court granted Marquez’s post-verdict motion, concluding that Marquez was entitled to a refund.
The District II Wisconsin Court of Appeals recently certified Marquez v. Mercedes-Benz USA, Cir. Ct. No. 2005CV2885 to the Wisconsin Supreme Court on the burden of proof issue only.
Assuming credible evidence supported the jury’s finding of bad faith, the certification asks the supreme court to decide “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.”
The appeals court notes that the lemon law is silent on the burden of proof and no relevant statutory history exists to determine the legislature’s intent on that issue.
Mercedes-Benz contends that Wisconsin courts reject application of the middle burden of proof when statutory double or treble damages are at issue and a higher burden would encourage consumer noncooperation.
Marquez says a lower burden of proof “would not comport with the overall statutory purpose and would provide incentive for mischief on the part of the manufacturer.”
The court noted an underlying issue in the event of reversal: “[W]hether the trial court erred in excluding the nonprivileged testimony of Marquez’s attorney,” who may have “possessed relevant information regarding what transpired on the thirtieth day of the refund period.”
