Lemon Law in Florida

One interesting area of the lemon law involves the argument that a vehicle used primarily in business is ineligible for lemon law. Section 681.102(4) or the Florida Statutes defines consumer as:

The purchaser, other than for purposes of resale, or the lessee of a motor vehicle primarily used for personal, family or household purposes; any person to whom such motor vehicle is transferred for the same purposes during the duration of the Lemon Law rights period; and any other person entitled by the terms of the warranty to enforce the obligations of the warranty.

It is that last clause or "catchall" provision upon which the Attorney General's office has relied in arguing that even commercial vehicles, i.e. those vehicles used for business and not primarily for personal use, are eligible for relief under the Lemon Law. Only one appellate decision exists on this issue, Results Real Estate v. Lazy Days R.V. Center, 505 So. 2d 587 (Fla. 2d DCA 1987).

In Lazy Days, the Court of Appeals for the second district reversed a trial court's ruling that a corporation could not be a consumer since the protections afforded by the Act applied solely to purchasers who are natural persons and not corporations. This narrow ruling, however, has been broadly construed by Lemon Law arbitration boards to support the notion that any corporation may be a consumer regardless of the use to which a vehicle is put. However, this interpretation of the Results Real Estate case is not consistent with the decision itself.

A sophisticated reading of the Results case reveals that it is the use to which a vehicle is put which is the determining factor as to whether the owner of the vehicle can be a "consumer" as defined by the Statute. Significantly, the court stated

In our study of the three clauses set apart by semicolons in the definition section of the Statute, we discern no legislative intent which would completely foreclose application of the Act to purchasers who take title to the vehicle in a corporation name. Id. at 589. (emphasis added).

The Court's focus on who was the owner of the vehicle was necessary, given the issue at hand, i.e. whether a corporation can be a consumer. The Court was obviously struggling mightily with the issue of whether or not a corporation could conceivably qualify as a consumer under any of the three clauses set forth in the definition. The Court went on to state:

As we construe this third clause, even small, solely owned corporations who purchase a new motor vehicle will be able to take advantage of this remedial legislation, regardless of the fact that it may be sole or majority shareholder of that corporation who has the vehicle for primarily personal use. Id. (emphasis added)

This language is most significant, for it puts the emphasis on the use to which the vehicle is put. It is interesting to note that the vehicle which was the subject of the litigation was a recreational vehicle, which obviously was used for personal rather than commercial purposes.

More importantly, putting the emphasis on the use insures that the third clause "catchall" does not swallow up the definition. That is, if the third clause is to be interpreted as broadly as the Attorney General's office asserts, then there is no meaning to the first two clauses of the definition which require primarily personal use. However, as the Results decision notes, the third clause must also be given meaning. The Results decision gives the third clause meaning by establishing that a corporate owner can be a consumer since it would be entitled to enforce the terms of the warranty. That would be true even in situations where the corporation itself did not use the vehicle for any purpose.