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Wednesday, 03 June 2009 08:40

Consumer Warranty Rights to Chrysler, Dodge and Jeep Owners

Sales Agreement Initially Created Confusion As To Whether Consumers Would Receive Protection Under Manufacturers Warranty; Now Revised to Protect All Present and Future Drivers

Attorneys Robert M. Silverman and Amy L. Bennecoff of the Northeast Lemon Law Firm of Kimmel and Silverman have been successful in revising the Master Sales Agreement between Chrysler and Fiat to specifically include a provision that all present and future warranty claims, including lemon law and breach of warranty matters, will be assumed by the New Chrysler when the sales order is scheduled to go into effect on or before Monday, June 15, 2009.

Previously, the Master Transaction Agreement (MTA) was unclear as to how consumers with unresolved warranty claims would be treated by the new organization.

Upon review of the MTA, there appeared to be two conflicting provisions
It was unclear whether the new company being formed would take on the liabilities of the previous company, including lemon law and breach of warranty remedies for consumers who suffered repetitive problems with their vehicles.
We have a number of clients who suffered significant water leaks with their Jeeps, resulting in mold issues, who were promised a refund, and were getting nothing
There was mention of refunds, but the language did not identify whether these refunds included partial refunds or cash damages
The Federal Magnuson Moss Warranty Act, for example, provides monetary damages to those who suffer either non-conformities which are not significant enough to warrant a full repurchase under the Lemon Law, or that occur once outside the Lemon Law provisions.
This is great news not just for our clients, but also for the company itself and its many dealers
With the liquidation sales and incentives being advertised, those looking to purchase one of these vehicles can do so with the satisfaction of knowing that they are fully protected if something does go wrong. I applaud Chrysler and Fiat for taking the time to work with us, and for standing behind the warranty and quality of their product.

"Upon review of the MTA, there appeared to be two conflicting provisions," said lemon law attorney Amy L. Bennecoff. "It was unclear whether the new company being formed would take on the liabilities of the previous company, including lemon law and breach of warranty remedies for consumers who suffered repetitive problems with their vehicles."

Furthermore, as reported in numerous media outlets, immediately following Chrysler's bankruptcy announcement, the company stopped payment on all checks from previously settled lemon law and breach of warranty claims, and stayed all litigation until further notice.

"We have a number of clients who suffered significant water leaks with their Jeeps, resulting in mold issues, who were promised a refund, and were getting nothing," said lemon law attorney Bob Silverman. "Another client, who is suffering from Multiple Sclerosis, is fearful to get into her Dodge conversion van because she never knows when it will stall. We filed a lemon law claim and she was to receive a full refund, and now that refund process itself is stalled. She has lost all of her freedom. In one swoop, hundreds of our clients and thousands of consumers throughout the Nation lost protection that they were clearly entitled to under State and Federal Laws. We had to take action immediately."

In response to the situation, Silverman and Bennecoff filed an objection to the 363 sale of Chrysler's assets. They also simultaneously filed a motion to form a specific unsecured creditors committee made up of lemon law and breach of warranty claimants who no longer had the right to seek remedy or recourse under State or Federal Law, despite suffering repetitive non-conformities which affect the use, value and safety of their vehicle. Both motions were filed May 19th.

To address the motions and similar issues brought to their attention by consumer attorneys from across the Nation, the proposed sale order released Tuesday, May 27 provided some clarification on consumer rights. However, it still left numerous questions unanswered.

"There was mention of refunds, but the language did not identify whether these refunds included partial refunds or cash damages," said Bennecoff. "The Federal Magnuson Moss Warranty Act, for example, provides monetary damages to those who suffer either non-conformities which are not significant enough to warrant a full repurchase under the Lemon Law, or that occur once outside the Lemon Law provisions."

In Magnuson Moss claims, consumers are entitled to maintain ownership of their vehicle, and they receive monetary compensation to reflect the diminished value of their vehicles. Also, there was no additional clarification on what would happen to the claims which were filed and/or resolved prior to the bankruptcy filing.

After several meetings between Silverman, Bennecoff, Fiat's counsel and Chrysler's counsel, it was agreed that paragraph 19 of the MTA would be revised to specifically address the attorneys' concerns and to permanently protect consumers' rights under State and Federal Law. As a result of the revision, Silverman and Bennecoff withdrew their objections to the sale.

The sale order was signed Sunday, May 31 by Judge Arthur J. Gonzalez of the United States Bankruptcy Court for the Southern District of New York, and the sale is scheduled to take place on or before Monday, June 15. Both Chrysler and Fiat's Counsel specifically attributed Bennecoff and Silverman for making the revision a reality. They were the only lemon law lawyers involved in this process.

"This is great news not just for our clients, but also for the company itself and its many dealers," said Silverman. "With the liquidation sales and incentives being advertised, those looking to purchase one of these vehicles can do so with the satisfaction of knowing that they are fully protected if something does go wrong. I applaud Chrysler and Fiat for taking the time to work with us, and for standing behind the warranty and quality of their product."

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