CHAPTER 36

FORMERLY

SENATE BILL NO. 91

AS AMENDED BY SENATE AMENDMENT NOS. 1, 7 AND 10

AN ACT TO AMEND TITLE 6, CHAPTER 50 OF THE DELAWARE CODE RELATING TO AUTOMOBILE WARRANTIES AND DISPUTE RESOLUTION PROCEDURES FOR DEFECTIVE AUTOMOBILES.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend §5001(5), Chapter 50, Title 6 of the Delaware Code by inserting

between the words "motorcycles, which is and "registered by the following:

"leased or bought in Delaware or",

Section 3. Amend §5003, Chapter 50, Title 6 of the Delaware Code by deleting said Section in its entirety and by substituting in lieu thereof the following:

"§5003. Remedies upon Failure to Repair

(a) If the manufacturer, its agent, or its authorized dealer does not conform the automobile to any applicable express warranty by repairing or correcting any nonconformity after a reasonable number of attempts, the manufacturer shall either replace the automobile with a comparable new automobile acceptable to the consumer, or repurchase the automobile from the consumer and refund to the consumer the full purchase, including all credits and allowances for any trade—in vehicle; provided. however, that the consumer shall have the unqualified right to decline a replacement automobile and to demand instead a repurchase;

(b) In instances in which an automobile is replaced by a manufacturer under the provisions of this Section, said manufacturer shall accept return of the automobile and reimburse the consumer for any incidental costs, including dealer preparation fees, fees for transfer of registration, sales taxes, or other charges or fees incurred by the consumer as a result of such replacement. In instances in which an automobile which was financed by the manufacturer or its subsidiary, or agent is replaced under the provisions of this Section, said manufacturer, subsidiary or agent shall not require the consumer to enter into any refinancing agreement for a replacement automobile which would create any financial obligations upon such consumer beyond those created by the original financing agreement.

(c) In instances in which a refund is tendered under the provisions of this

Section, the manufacturer shall accept return of the automobile from the consumer and shall reimburse the consumer for related purchase costs, including sales taxes, registration fees, and dealer preparation fees, less:

(1) a reasonable allowance for the consumer's use of the automobile, not to exceed the full purchase price of the automobile multiplied by a fraction which consists of the number of mile driven before the consumer first reported the nonconformity to the manufacturer, its agent or dealer divided by 100,000 miles, and

(2) a reasonable allowance for damage not attributable to normal wear and tear, but not to include damage resulting from a nonconformity.

(d) Refunds shall be made to the consumer, and lien holder, if any, as their interests may appear.

(e) No authorized dealer shall be held liable by the manufacturer for any refunds or automobile replacements in the absence of evidence indicating that dealership repairs have been carried out in a manner inconsistent with the manufacturer's instructions."

Section 4. Amend §5004, Chapter 50, Title 6, Delaware Code, by inserting the word

"Substantially" at the beginning of subsection (a) (1), and by deleting the words "waiting for the dealer to begin or complete" as they appear in subsection (a) (2) thereof, and by deleting the words "business days" as they appear in subsection (a) (2) thereof and Inserting in lieu thereof the words "calendar days".

Section 5. Amend §5005, Chapter 50, Title 6 of the Delaware Code by deleting said Section in its entirety and by substituting in lieu thereof the following:

"§5005. Costs and Attorney's Fees in Breach ofJWarrantv Actions

In any court action brought under this Chapter by a consumer against the manufacturer of an automobile, or the manufacturer's agent or authorized dealer, based upon the alleged breach of an express warranty made in connection with the sale of such automobile, the court, in its discretion, may award to the plaintiff his costs and reasonable attorney's fees or, if the court determines that the action is brought in bad faith or is frivolous in nature, may award reasonable attorney's fees to the defendant."

Section 6. Amend §5007, Chapter 50, Title 6 of the Delaware Code by deleting said Section in its entirety and by substituting in lieu thereof the following:

"§5007. Informal Dispute Settlement Procedure

(a) If a manufacturer has established an informal settlement procedure that has a certificate of approval by the Division of Consumer Affairs, the remedies provided by this Chapter shall not be available to any consumer who has not first resorted to such procedure. In the event a manufacturer's informal dispute settlement procedure does not have a certificate of approval from the Division of Consumer Affairs, a consumer may immediately and directly seek the remedies provided by this Chapter.

(b) The Division of Consumer Affairs shall annually evaluate the operation of informal dispute settlement procedures established by manufacturers and shall issue an annual certificate of approval to those manufacturers whose procedures comply with the provisions of Title 16 Code of Federal Regulations, Part 703 and with the provisions of subsections (c), (d), and (e) of this Section. The Division of Consumer Affairs shall suspend the certification of, or decertify any informal dispute settlement which no longer complies with said provisions.

(c) Any manufacturer who has established an informal settlement procedure shall file with the Division of Consumer Affairs a copy of each decision of the informal dispute settlement procedure within thirty (30) days after the decision is rendered.

(d) In order to obtain the certification of the Division of Consumer Affairs, a manufacturer's informal dispute settlement procedure shall not convene any informal dispute settlement hearing or meeting outside the State of Delaware and shall refrain from any practices which:

(1) Delay a decision in any dispute beyond sixty—five (65) days after the date on which the consumer initially resorts to the informal dispute settlement procedure by written notification that a dispute exists; or

(2) delay performance of remedies awarded in a settlement beyond thirty (30) days after receipt of notice of the consumers acceptance of the decision provided, however, that such time limits shall not include periods of time when the consumer or the consumer's car is unavailable for the remedies specified in the settlement; or

(3) require the consumer to make the automobile available more than once for inspection by a manufacturer's representative or more than once for repair of the same nonconformity; or

(1) fail to consider in decisions any remedies provided by this Act, such remedies to include:

(A) repair, replacement, and refund,

(8) reimbursement for related purchase costs; or

(2) require the consumer to take any action or assume any obligation not specifically authorized under the provisions of title 16 Code of Federal Regulations, Part 703.

(e) A manufacturer desiring annual certification of an informal dispute settlement procedure shall make application to the Division of Consumer Affairs on forms developed by, and shall provide such information as required by, the Division of Consumer Affairs."

Section 7. Amend Title 6, Chapter 50 of the Delaware Code by striking the current §5009 in its entirety and substituting in lieu thereof a new §5009 to read as follows:

"§5009. EdDrcement

In addition to any remedies the consumer may have at law or in equity, a violation of this Chapter shall be an unlawful practice as defined in §2513 of this Title. The Division of Consumer Affairs shall promulgate rules and regulations in order to implement the purposes of this Chapter."

Section 9. If any provision of this Act or the application thereof to any person or circumstance is held invalid, in whole or in part, then such invalidity shall not affect other provisions or applications of this Act which can be given effect without the invalid provision or application, and to that end the provisions of this Act are'declared severable.

Approved June 4, 1987.