156 A.D.2d 40 | N.Y. App. Div. | 1990
Lead Opinion
OPINION OF THE COURT
In May 1985, respondent purchased a 1985 Volvo 745 GLE station wagon. After experiencing various problems with his car which were not resolved to his satisfaction, respondent, pursuant to subdivision (k) of General Business Law § 198-a, the "new car lemon law” (lemon law), requested arbitration, to which the manufacturer must submit. After conducting an oral hearing, the arbitrator found that respondent was entitled to relief and, in accordance with respondent’s election, awarded him, as a "comparable vehicle”, a 1987 Volvo 745 GLE. Respondent’s 1985 Volvo had, by this time, been driven more than 47,000 miles. The IAS court upheld the arbitrator’s determination, finding it neither irrational nor arbitrary. While we agree that respondent was entitled to relief under the lemon law, we are persuaded that the arbitrator exceeded his power in awarding him a brand new 1987 Volvo. (See, CPLR 7511 [b] [1] [in].)
Under General Business Law § 198-a (c) (1), where an automobile manufacturer is unable, after a reasonable number of attempts, to correct a defect or condition which "substantially impairs the value of the motor vehicle to the consumer”, the consumer may opt for the replacement of the vehicle with a "comparable motor vehicle” or a refund of the full purchase price, with certain adjustments. If the consumer pursues the arbitration mechanism afforded by the statute and prevails, "the arbitrator is limited to awarding one of [these] two remedies.” (Motor Vehicle Mfrs. Assn, v State of New York, 75 NY2d 175 [Jan. 18,1990].)
Even without reference to these external sources, the plain language of the statute supports the conclusion that a comparable vehicle does not necessarily mean a new one. Since the refund option includes a deduction for mileage in excess of 12,000 miles pursuant to a specified formula and provides an allowance for damage beyond normal wear as well as for improvements, it follows, by parity of reasoning, that these factors will be taken into consideration in determining what constitutes a "comparable” vehicle. There was no need to include an express provision in the statute to this effect since the term "comparable motor vehicle” contemplates all of these considerations. Thus, the statute provides for alternative remedies that are of equivalent value. To uphold the award in this case would frustrate the statutory scheme and allow the consumer to choose between remedies that are grossly disproportionate in value. When an arbitrator "fails to follow the statutory standards, the award should be vacated for exceeding the legislative grant of authority”. (Motor Vehicle Mfrs. Assn, v State of New York, supra, 75 NY2d, at 186.)
There are two answers to respondent’s argument that it is not "fair * * * to replace [his] new lemon car with a used
Respondent states in his opposition papers that at the hearing the arbitrator advised both him and petitioner that a replacement vehicle meant a new 1987 Volvo.
Accordingly, the judgment of the Supreme Court, New York County (Bruce McM. Wright, J.), entered October 13, 1988, which, inter alia, denied the petition to vacate the arbitration award, should be modified, on the law, to the extent of vacating the award of a 1987 Volvo GLE automobile and remanding the matter to the arbitrator to render an award not inconsistent herewith and, except as thus modified, af
In his request for arbitration, respondent elected a full refund as his preferred remedy. He apparently amended the request for arbitration form at the hearing to change his choice of remedy. While Volvo argued before the IAS court that respondent failed to comply with the regulation requiring the consumer to "advise the Administrator [the American Arbitration Association] in writing of [such] a change,” prior to the rendition of the arbitrator’s decision (13 NYCRR 300.5 [c]), respondent’s amendment of the request for arbitration form before the arbitrator can be deemed the requisite notice to the Administrator.
Dissenting Opinion
In upholding the New Car Lemon Law (General Business Law § 198-a) against a challenge to the arbitration provision, the Court of Appeals, per Simons, J., stated that the arbitrators "are required to follow a specific procedure outlined in the statute and regulations to resolve fact-specific disputes and grant one of only two types of specific relief. Inasmuch as compulsory arbitration is involved, judicial review under CPLR article 75 is broad, requiring that the award be in accord with due process and supported by adequate evidence in the record”. (Motor Vehicle Mfrs. Assn, v State of New York, 75 NY2d 175,186.)
The two remedies are "acceptance of a replacement vehicle of comparable quality or a refund of the full purchase price, plus certain fees and charges.” (Motor Vehicle Mfrs. Assn, v State of New York, supra, at 186.)
To emphasize that the purchaser of a "lemon” should be made whole, the Court of Appeals, per Bellacosa, J., determined that a deductible imposed against the cost of covered warranty repairs was illegal under the lemon law. (Matter of State of New York [Abrams] v Ford Motor Co., 74 NY2d 495; see, discussion in Court of Appeals Roundup, NYU, Dec. 29, 1989, at 7, col 1.)
An arbitrator, within the realm of the submission, " 'may fashion the law to fit the facts’ ”. (Lentine v Fundaro, 29 NY2d 382, 386.)
Here, the respondent purchased a new automobile in 1985. It needs no delineation to realize the pain and suffering that one experiences with a car that is a lemon. The fact that when relief was finally obtained the car had over 40,000 miles on it, does not mean that the arbitrator was limited in the result to be imposed. Respondent could very well be entitled to a new car currently, rather than retroactively. There is no strong public policy to the contrary, and the arbitrator’s determination should be sustained. (See, Hunter v Glenwood Mgt., 156 AD2d 310.)
Carro and Rosenberger, JJ., concur with Sullivan, J.; Murphy, P. J., and Kupferman, J., dissent in an opinion by Kupferman, J.
Judgment, Supreme Court, New York County, entered on