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In Part 1 of this series, we compared the “reasonable allowance for use” provisions of Indiana’s Motor Vehicle Protection Act (Indiana’s “lemon law”) against Indiana’s neighboring states’ lemon laws and found that Indiana’s lemon law was the least favorable for consumers. In Part 2 of this series, I’d like to compare these lemon laws based on the kinds of vehicles to which they apply.

Indiana law reads:

Indiana Code 24-5-13-5 Sec. 1 5. As used in this chapter, “motor vehicle” or “vehicle” means any self-propelled vehicle that:

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Here’s another way to avoid buying a lemon vehicle. Don’t buy a car. Heck, don’t even own a car.

On a recent flight back to Indiana, I picked up one of those in-flight magazines. In it was an article about Zipcar.com. Zipcar is a car sharing company. What is car sharing? It involves the online reservation of a vehicle, located in an urban neighborhood, anywhere from minutes to months prior to needing the vehicle. Then you just show up, punch in a code, and drive away. The rates range from 8 to 11 dollars an hour.

It doesn’t sound like you get a whole lot of car for that rate, either. The article mentions Mini Coopers, Toyota Priuses, Scion xBs and Honda Elements as some of the primary rental vehicles.

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Indiana Attorney General Steve Carter has issued a press release applauding the passage by the Indiana House and Senate of a measure that would make the Homeowner Protection Unit a permanent part of the Attorney General’s Office. The Homeowner Protection Unit was created as an experimental unit two years ago. It’s primary target: mortgage fraud. Homes are being appraised for thousands more than their actual worth, and the homeowner typcially doesn’t realize they owe way more than the home’s worth until they go to refinance or sell the home.

Apparently it’s not just a few bad apples in Indiana, either. In less than two years, the Unit has filed disciplinary actions against 211 real estate appraisers and 76 real estate agents. And the Unit is investigating another 750 complaints. In addition to these disciplinary actions, the Unit has also filed a civil lawsuit against a credit repair organization that “purported to provide ‘foreclosure consultant’ services.”

The Attorney General said:

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DATELINE: Billings, Montana, Wednesday, March 14, 2007

County Attorney Dennis Paxinos apologizes to the court, the public and to local DUI defendant Phillip Holliday. Why was he making this public apology? The day before, a deputy prosecutor employed by Mr. Paxinos’ office told a local judge an eyebrow-raising story: When officers arrived at the scene where Mr. Holliday had crashed his truck into a light pole, Mr. Holliday told the officers that a unicorn was driving. Yep, a UNICORN was driving.

Well, it turns out that Mr. Holliday never actually claimed a unicorn was driving. The apparently somewhat green deputy prosecutor misinterpreted an e-mail from a colleague that indicated Holliday was pursuing a “unicorn defense” – which is prosecutor-speak for when a defendant blames the offense on some unnamed, unidentified (mythical) other person. In fact, Holliday had told officers at the scene than an unnamed woman was driving at the time of the accident.

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In Part 1a, we looked at how Indiana law handles the “reasonable allowance for use” calculation and how it encourages manufacturers to delay the resolution of claims. Let’s take a look at how some of our neighbor states handle reasonable allowance for use:

Illinois

The Illinois statutory provision reads: “A reasonable allowance for consumer use of a vehicle is that amount directly attributable to the wear and tear incurred by the new vehicle as a result of its having been used prior to the first report of a nonconformity to the seller, and during any subsequent period in which it is not out of service by reason of repair.” Surprisingly, it does not appear that this provision has ever been interpreted, at least in a published opinion, by an Illinois appellate court. Since I don’t practice in Illinois, I can’t say how they put this provision into practice, but I believe I’ve heard that they often use the IRS mileage reimbursement figure.

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I recently read an article about the Tennessee Division of Consumer Affairs’ lemon law website. Apparently that website had incorrect information about Tennessee’s lemon law up for about four years! Tennessee’s lemon law was amended in 2003 to require three instead of four repair attempts and 15 instead of 30 days out-of-service, but the information on the website was never changed. Duuoohhhh!

Anyway, this got me thinking about how Indiana’s lemon law compares to other states’ lemon laws. Rather than comparing the entire statutes in broad terms, let’s get down to the nitty gritty and compare specific provisions. This is Part 1, of what will hopefully be a series, comparing certain provisions of Indiana’s lemon law to the corresponding provisions in other states’ lemon laws. My general, relatively uneducated impression is that Indiana’s lemon law is among the least consumer friendly in the nation, but I guess we’ll see.

In my opinion, one of the harshest provisions in Indiana’s lemon law is the manufacturer’s reimbursement for “a reasonable allowance for use.” The basic premise is that if the lemon purchaser wants his or her money back, the manufacturer should be entitled to deduct from that refund a reasonable allowance for the mileage the purchaser put on the vehicle. On it’s face, this seems reasonable, but there is a problem with the way this reasonable allowance is calculated under the statute that, in some situations, makes it unfair to Indiana consumers.
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CarFax is the nation’s most popular way to research the history of used cars, and not just by consumers. Whether you live in Lebanon, Indianapolis, or West Lafayette, or anywhere else for that matter, chances are your local dealership has an account. More than 29,000 car dealers in the United States have one.

But the reliability of CarFax’s reports has recently been questioned because of attention from the settlement of a nationwide class-action lawsuit. The lawsuit alleged that CarFax’s reports were not as comprehensive as CarFax claimed. The settlement will give millions who purchased a CarFax report before October 27, 2006 the opportunity to choose one free or multiple discounted reports, or a 20 percent discount on a vehicle inspection. Big whoop. My guess is that the discounted inspection is coming a little late for most of the CarFax report purchasers.

Anyway, this publicity emphasizes what should really be common sense – that there’s really no way a report like this could be 100% accurate. A vehicle history report can certainly be a tool to use in making a used car purchase, but it should never be the sole reason to make a buying decision.

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I attended the Indiana Lemon Law continuing legal education seminar last week. The seminar was put on by two attorneys of the Law Offices of Connie J. Postelli, Connie Postelli and Rebecca Letourneaux, and a mediator Ms. Postelli uses a lot named Paul Petticrew. Ms. Postelli’s firm represents General Motors all over the States of Indiana and Illinois and Ford Motor Co. in Northern Indiana.

Interestingly, the seminar was titled: “PLEASE Sue My Clients for Violation of the Indiana Lemon Laws (And get your fees paid too!).” It was very informative and all presenters did a good job of relaying the basics of lemon law in Indiana. Ms. Postelli spent a significant amount of time talking about the disservice the Internet Boys (her term for the big out-of-state Internet lemon law firm currently representing around 90% of all lemon law plaintiffs in the state) were doing to their clients, the reputation of lawyers and the practice of law in general.

Having practiced against this “law firm” in the past, I would have to wholeheartedly agree. Their practice is built on volume, and because of this, individual attention to each client is intentionally kept to a minimum. Ms. Postelli noted that this results in a multitude of problems, from clients with unrealistic expectations, to attorneys who don’t know their client’s case, to clients who are dissatisfied with their entire experience with the judicial system.

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I recently received an e-mail notice of the pending resolution of a class-action lawsuit against Experian, one of the big three credit reporting agencies. Experian had been sued “because of the way [they] advertised their credit scores and credit-monitoring products and because of certain information about credit that was contained on [their] websites.” Experian was accused of violating the Credit Repair Organizations Act.

Credit repair organizations sprang up in droves in the ’90’s, particularly with the proliferation of the Internet. They often advertised almost miracle credit cures, and charged the most vulnerable of consumers hefty fees. These companies were almost always a big rip off. The bottom line: anything that a credit repair organization can legally do for you, you can do for yourself for free! Anyway, the Credit Repair Organizations Act was designed to curb some of the most flagrant abuses of the credit repair industry.

I apparently received the Notice of Proposed Class-Action Settlement because I had purchased a credit score from the Experian website during the relevant time period. The notice gave me a website to visit to learn more. I took the time to do that, and frankly, was horrified at what I found. What I found was a gigantic waste of time and money that only accomplished one thing: making lawyers money.
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Attorneys who practice lemon law in Indiana may want to attend a seminar on the subject on February 22, 2007. The continuing legal education seminar is put on by ICLEF and will be held at ICLEF’s Conference Facility located at 230 E. Ohio St. in Indianapolis. The faculty of the half-day seminar is comprised of two defense lawyers and a mediator.

I do not recall another lemon law seminar in Indiana, so it’s interesting to see that lemon law as a practice area has developed enough to support such a seminar. Still, I can’t imagine there will be that many attorneys in attendance.

For those interested, you can contact ICLEF at 317-637-9102. The seminar cost is $185 for non Indiana State Bar Association members, or $135 for members. I’ll see you there!