Senate Bill No. 557

(By Senators Ball and Wooton)

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[Introduced February 16, 1998; referred to the Committee on the Judiciary; and then to the Committee on Finance
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A BILL to amend article six-a, chapter forty-six-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new section, designated section eight-a, relating to creating the new motor vehicle arbitration board; membership of board; eligibility of dispute for arbitration by board; authority and duties of board; hearings before board; appeals; authority and duties of attorney general and consumer protection division; remedies and penalties; and proposal of rules.

Be it enacted by the Legislature of West Virginia:
That article six-a, chapter forty-six-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section eight-a, to read as follows:
ARTICLE 6A. CONSUMER PROTECTION--NEW MOTOR VEHICLE WARRANTIES.

§46A-6A-8a. New motor vehicle arbitration board; creation and function; dispute eligibility.
(a) There is established within the attorney general's office a new motor vehicle arbitration board, to be empowered and implemented as follows:
(1) The new motor vehicle arbitration board, hereinafter "board," shall consist of members appointed by the attorney general for an initial term of one year. Board members may be reappointed for additional terms of two years. Each board member is accountable to the attorney general for the performance of the member's duties and is exempt from civil liability for any act or omission which occurs while acting in the member's official capacity. The attorney general's office shall defend a member in any action against the member or the board which arises from any such act or omission.
(2) The board shall hear cases in various locations throughout the state so any consumer whose dispute is approved for arbitration by the consumer protection division of the attorney general's office may attend an arbitration hearing at a reasonably convenient location and present a dispute orally. Hearings shall be conducted by panels of three board members assigned by the attorney general. A majority vote of the three-member board panel shall be required to render a decision. Arbitration proceedings under this section shall be open to the public on reasonable and nondiscriminatory terms.
(3) The board shall consist of up to eight members. The members of the board shall construe and apply the provisions of this article, and rules adopted thereunder, in making their decisions. An administrator and a secretary shall be assigned to the board by the attorney general. At least one member of the board shall be a person with expertise in motor vehicle mechanics. A member may not be employed by a manufacturer or a franchised motor vehicle dealer or be a staff member of the attorney general's office. Board members shall be trained in the application of this article and any rules adopted under this article, shall be reimbursed for travel expenses, and shall be compensated at a rate or wage prescribed by the attorney general.
(4) Before filing a civil action on a matter subject to this article, the consumer shall first submit the dispute to the consumer protection division of the attorney general's office, and to the board if such dispute is deemed eligible for arbitration.
(5) Manufacturers shall submit to arbitration conducted by the board if such arbitration is requested by a consumer and the dispute is deemed eligible for arbitration by the consumer protection division pursuant to this article.
(6) The board shall hear the dispute within forty days and render a decision within sixty days after the date the request for arbitration is approved. The board may continue the hearing on its own motion or upon the request of a party for good cause shown. A request for continuance by the consumer constitutes waiver of the time periods set forth in this subsection. The consumer protection division, at the board's request, may investigate disputes, and may issue subpoenas for the attendance of witnesses and for the production of records, documents and other evidence before the board. The failure of the board to hear a dispute or render a decision within the prescribed periods does not invalidate the decision.
(7) At all arbitration proceedings, the parties may present oral and written testimony, present witnesses and evidence relevant to the dispute, cross-examine witnesses and be represented by counsel. The board may administer oaths or affirmations to witnesses and inspect the vehicle if requested by a party or if the board deems such inspection appropriate.
(8) The board shall grant relief, if a reasonable number of attempts have been undertaken to correct a nonconformity or nonconformities.
(9) The decision of the board shall be sent by registered mail to the consumer and the manufacturer, and shall contain written findings of fact and rationale for the decision. If the decision is in favor of the consumer, the manufacturer shall, within forty days after receipt of the decision, comply with the terms of the decision. Compliance occurs on the date the consumer receives delivery of an acceptable replacement motor vehicle or the refund specified in the arbitration award. In any civil action arising under this article and relating to a dispute arbitrated before the board, any decision by the board is admissible in evidence.
(10) A decision is final unless appealed by either party. A petition to the circuit court to appeal a decision shall be made within thirty days after receipt of the decision. The petition shall be filed in the county where the consumer resides, or where the motor vehicle was acquired, or where the arbitration hearing was conducted. Within seven days after the petition has been filed, the appealing party shall send a copy of the petition to the consumer protection division. If the consumer protection division does not receive notice of such petition within forty days after the manufacturer's receipt of a decision in favor of the consumer, and the manufacturer has neither complied with, nor has petitioned to appeal such decision, the consumer protection division may apply to the circuit court to seek imposition of a fine up to one thousand dollars per day against the manufacturer until the amount stands at twice the purchase price of the motor vehicle, unless the manufacturer provides clear and convincing evidence that the delay or failure was beyond its control or was acceptable to the consumer as evidenced by a written statement signed by the consumer. If the manufacturer fails to provide such evidence or fails to pay the fine, the consumer protection division shall initiate proceedings against the manufacturer for failure to pay such fine. The proceeds from the fine herein imposed shall be deposited in a fund to be created in the treasurer's office, which shall be designated the "motor vehicle warranty trust fund," and moneys from this fund shall be expended for implementation and enforcement of this article. If the manufacturer fails to comply with the provisions of this subsection, the court shall affirm the award upon application by the consumer.
(11) An appeal of a decision by the board to the circuit court by a consumer or a manufacturer shall be by trial de novo. In a written petition to appeal a decision by the board, the appealing party shall state the action requested and the grounds relied upon for appeal. Within thirty days of final disposition of the appeal, the appealing party shall furnish the consumer protection division with notice of such disposition and, upon request, shall furnish the consumer protection division with a copy of the order or judgment of the court.
(12) If a decision of the board in favor of the consumer is upheld by the court, recovery by the consumer shall include the pecuniary value of the award, attorney's fees incurred in obtaining confirmation of the award, and all costs and continuing damages in the amount of twenty-five dollars per day for each day beyond the forty day period following the manufacturer's receipt of the board's decision. If a court determines that the manufacturer acted in bad faith in bringing the appeal or brought the appeal solely for the purpose of harassment or in complete absence of a justiciable issue of law or fact, the court shall double, and may triple, the amount of the total award.
(13) When a judgment affirms a decision by the board in favor of a consumer, appellate review may be conditioned upon payment by the manufacturer of the consumer's attorney's fees and giving security for costs and expenses resulting from the review period.
(14) The consumer protection division shall maintain records of each dispute submitted to the board, including an index of motor vehicles by year, make, and model, and shall compile aggregate annual statistics for all disputes submitted to, and decided by, the board, as well as annual statistics for each manufacturer that include, but are not limited to, the value, if applicable, and the number and percent of:
(A) Replacement motor vehicle requests;
(B) Purchase price refund requests;
(C) Replacement motor vehicles obtained in prehearing settlements;
(D) Purchase price refunds obtained in prehearing settlements;
(E) Replacement motor vehicles awarded in arbitration;
(F) Purchase price refunds awarded in arbitration;
(G) Board decisions neither complied with in forty days nor petitioned for appeal within thirty days;
(H) Board decisions appealed;
(I) Appeals affirmed by the court; and
(J) Appeals found by the court to be brought in bad faith or solely for the purpose of harassment.
The statistics compiled under this subsection are public information.
(15) When requested by the consumer protection division, a manufacturer shall verify the settlement terms for disputes that are approved for arbitration but are not decided by the board.
(b) Eligibility of a dispute for arbitration by the board shall be determined as follows:
(1) If a manufacturer has a certified procedure, a consumer claim arising under this article shall be filed with the certified procedure. If a decision is not rendered by the certified procedure within forty days of filing, the consumer may apply to the consumer protection division to have the dispute removed to the board for arbitration.
(2) When a manufacturer has a certified procedure and a consumer claim arising under this article has been filed with the certified procedure, if a consumer is not satisfied with the decision or the manufacturer's compliance therewith, the consumer may apply to the division to have the dispute submitted to the
board for arbitration. A manufacturer may not seek review of a decision made under its procedure.
(3) If a manufacturer has no certified procedure or if a certified procedure does not have jurisdiction to resolve the dispute, a consumer may apply directly to the consumer protection division to have the dispute submitted to the board for arbitration.
(4) A consumer must request arbitration before the board with respect to a claim arising under this article within one year after the expiration of the express warranty term, or within thirty days after the final action of a certified procedure, whichever date occurs later.
(5) The consumer protection division shall screen all requests for arbitration before the board to determine eligibility. The consumer protection division shall forward to the board all disputes that it determines are potentially entitled to relief under this article.
(6) The consumer protection division may reject a dispute that it determines to be fraudulent or outside the scope of the
board's authority. Any dispute deemed by the consumer protection division to be ineligible for arbitration by the board due to insufficient evidence may be reconsidered upon the submission of new information regarding the dispute. Following a second review, the consumer protection division may reject a dispute if the evidence is clearly insufficient to qualify for relief. When a dispute is rejected by the division notice shall be sent by registered mail to the consumer and the manufacturer, containing a brief explanation as to the reason for rejection.
(7) If the consumer protection division rejects a dispute, the consumer may file a lawsuit to enforce the remedies provided under this article. In any civil action arising under this article and relating to a matter considered by the consumer protection division, any determination made to reject a dispute is admissible in evidence.
(c) The attorney general shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to implement the provisions of this section.

NOTE: The purpose of this bill is to create the New Motor Vehicle Arbitration Board to resolve disputes under this State's automobile "lemon law."

This section is new; therefore, strike-throughs and underscoring have been omitted.