Porsche Cars North America Inc. and a suburban New York City dealership face a trial in a lemon law and breach of warranty suit by a lessee who didn't sue until after he had returned the car at the end of the three-year lease period.
The Appellate Division of the New York Supreme Court rejected a bid by Porsche and the dealer, Classic Automobiles Inc., to have the case dismissed without trial and ruled that the lessee did not have to follow Porsche's informal dispute-resolution procedures.
According to the suit, Lem-onier Verdier experienced continuing mechanical problems, particularly with the electrical system, on a 1993 Porsche 928 he had leased from the dealership's Porsche store, then located in Eastchester.
He sued in Westchester County Supreme Court to recover the amount of his lease payments, about $54,000, plus attorney fees, said his lawyer, Thomas Bloomer of Elmsford.
The manufacturer and dealer acknowledged the car had been out of service more than the maximum time allowed by the state lemon law. But they contended that Verdier could not sue because he already had returned the car to the dealer, which, in turn, had returned it to the leasing company, which held title.
That precluded Porsche from getting the car back, which typically is the right of a manufacturer in a lemon law case, they contended.
A lower court judge refused to dismiss the case.
The Appellate Division unanimously upheld that decision, ruling that the suit was filed properly before the statute of limitations ran out and that Verdier's return of the vehicle when the lease ended did not preclude a lemon law claim.
In addition, Porsche unsuccessfully argued that Verdier's failure to follow the company's informal dispute-resolution program barred the lawsuit.
The manufacturer's program fails to comply with federal regulations, the court held, because 'the written warranty suggests that participation in Porsche's informal dispute settlement mechanism is merely optional and does not disclose that resort to the mechanism is a prerequisite to obtaining relief under the lemon law.'
The court also said a trial is necessary to determine whether Classic's disclaimer of express and implied warranties is binding. It said a jury should decide whether the disclaimer was conspicuous enough to meet Uni-form Commercial Code requirements and whether Verdier was told about the disclaimer properly.
Bloomer, Verdier's lawyer, said, 'The hurdle here that we've overcome for the time being is timing. The typical scenario isn't to wait until you return the car (at the end of the lease) and decide six months later to sue.'
Defense lawyer Phillip Tum-barello said his clients are studying the decision and that he could not discuss the case.