Recent developments provide greater recovery for Louisiana consumers.
by Fred A. Pharis, J. D.
Recent developments in the law in Louisiana have added to the "value" of a claim made under Louisiana redhibition laws (see explanation of Louisiana's superior law, "lemon law" versus "redhibition").
Recently, the Third Circuit Court of Appeal, in a case entitled "Miller v. Ford Motor Company" provided that all of the consumer's insurance costs could be reimbursed when a rescission (undoing) of the sale was awarded. Previously, there had been a debate about the reimbursement of only a part of the insurance premiums, that part that protected the car, rather than the liability portion that protected the consumer from personal liability in a wreck. The principle was whether or not expenses for "preservation" of the vehicle should be awarded to the consumer because it is an expense that is incurred to keep the vehicle in good shape until given back to the seller or manufacturer. The Third Circuit made it clear that, typically, all insurance costs will be reimbursed. It has been my experience that this adds between $1,500.00 to $3,500.00 to the "value" of a "lemon law" claim. This is significant in settlement negotiations or in a court award.
Legal interest has also been decreed to be in effect from the date of the sale of the defective item, and not just from the date of filing suit. Legal interest is interest charged on the eventual judgment amount usually relating back to the time that a suit was filed. However, in the sale of a defective product, legal interest on the purchase price, that the manufacturer and seller has had the use of pending the ownership by the consumer, is awarded from the date of the sale. For example, if you purchase a $25,000.00 automobile and three years later the court awarded your money back, approximately 21 percent of the purchase price would be added to the award. That means an extra $5,250.00 to the judgment value, a significant amount. In a case entitled Nasif v. Sunshine Homes, the Court of Appeal clearly enunciated this new development.
Fred A. Pharis*Pharis Law Offices*831 DeSoto St.*Alexandria, LA 71301*(318) 445-8266