LEMON VICTORY SPOTLIGHTS GM PUBLIC RELATIONS DISASTER

A Superior Court jury rules that General Motors willfully violated Song Beverly Consumer Warranty Act - "lemon law" by denying a Buick-owner replacement or repurchase for stalling.

An Orange County Superior Court jury has awarded Richard Monti $35,103.30, including a $5,000 civil penalty, plus attorney fees and costs yet to be determined by the court.

Only last January, General Motors announced that it was recalling as many as 1.5 million 1986 and 1987 model Buicks, Oldsmobiles and Pontiacs with 3.0 and 3.8 liter engines due to defective engine control parts. The "stalling problem" is allegedly linked to 300 accidents and at least one death.

GM representatives had testified, under oath, both throughout arbitration and at trial last week, that there is no existing stalling problem - contrary to GM’s own January 1992 recall announcement. GM representatives testified that the engine stall at cold start is characteristic of that engine, so designed in order to meet emission standards and reduce the "gas guzzler" tax, yet there was no disclosure of this "design characteristic" at the time of sale or in any owner manual from Buick. These representations were contrary to the representations made at the time of sale.

The salesman assured Mr. Monti that the car was o.k. even though the engine stalled 5 times before it could be taken for a test drive. The salesman said it stalled because it had been sitting quite some time and was very low on fuel. The problem persisted from the initial purchase, so Mr. Monti returned the Buick for repair after only 402 miles due to intermittent stalling both at cold and hot operating temperatures. It was returned 5 times for the same problem during the first 3 months of ownership.

Mr. Monti wrote to the Buick district service manager on May 6, 1988, expressing concern for his safety because the stalling occurred not only upon starting, but also when the engine was at normal operating temperature. The stalling made control of the vehicle, with power steering and power brakes, difficult and dangerous.

Under the California lemon law, Mr. Monti was, at the time of his letter, entitled to a full refund or replacement vehicle. Nevertheless, his request was denied, and he was directed to enter the Better Business Bureau arbitration process.
Mr. Monti followed this recommendation and went through the arbitration process twice. This ordeal lasted over 1 year - between the summer of 1988 and the fall of 1989. At the second arbitration, GM’s district service manager promised that Buick
would replace the vehicle if the problem could be duplicated; the problem was duplicated, but Mr. Monti was still denied a replacement vehicle.

Of this victory for Mr. Monti, trial attorney Al Hodges of Glendale said, "This a typical example of GM’s corporate policy of handling warranty claims as if each one were a big class action lawsuit rather than a simple warranty claim under the lemon law".

Glendale attorney Norman Taylor of Taylor and Hodges, in an open letter to General Motors’ Board of Directors, which was published in the June 22, 1992 edition of Automotive News, the leading auto industry trade journal, "...we have now confirmed that the legal tactics and practices employed by GM are dictated and managed at a corporate level, and we believe that they spring from a corporate policy to give lip-service rather than satisfaction.

GM’s policies and practices in this arena are not only a public relations disaster, but also exaggerate litigation expenses. Lemon law cases against other manufacturers usually settle long before trial. GM cases usually ‘go to the wall,’ and GM pays substantially higher fees to us, as well as incurring large defense costs. This approach makes no sense from any perspective.

We would like to see GM back on top. It cannot happen, however, with its continued adherence to a covertly adversarial approach to customer relations. Management fails to realize that its actions and policies are alienating GM customers. Our GM clients repeatedly inform us that they will never buy another GM product." (Automotive News, June 22, 1992 at page 13.)