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THE GOODS : A Lack of Disclosure Can Leave a Sour Taste

October 06, 1995|RALPH VARTABEDIAN | TIMES STAFF WRITER

When Roger Sanford griped that his shoes were melting, it was something more than the typical complaint people have about lousy footwear.

As it turned out, Sanford's brand-new Maserati TC, which he purchased from a San Jose Chrysler dealer, was leaking brake fluid onto the interior carpeting and causing his shoes to disintegrate.

After repeated attempts by the dealer to get the car's brakes working properly, including the installation of three hydraulic units, Sanford, chief executive of a Los Gatos advertising firm, filed for arbitration and Chrysler agreed to buy back the car.

But the story doesn't end there. Merrilee Reid purchased the same Maserati, having been told that the first owner was going to have a baby and needed a bigger car, she said. In short time, Reid began having the very same problems with the brakes.

The story of the Maserati is contained in legal papers filed by the California Department of Motor Vehicles in its lawsuit charging that Chrysler resold 119 lemons to unsuspecting customers without following state law that requires the titles be branded as lemons.

Chrysler officials say they are close to a negotiated settlement in the case, but the documents quietly filed in the suit over the past year tell an extraordinary tale. The case vividly demonstrates how differently auto manufacturers and consumer advocates look at the issue of automobile quality.

"Lemon laws are anachronistic," said Lew Goldfarb, assistant general counsel at Chrysler. "Manufacturers are self motivated to fix vehicles."

Goldfarb rejected the entire concept that any Chrysler vehicles qualify as lemons--cars cursed with so many defects as to be virtually unfixable. The problem, he said, is with California lawyers who "drag us into court . . . trying to make it an issue 10 times greater than it really is."

The DMV is seeking to bar Chrysler from doing business in the state for 10 days. It charges that Chrysler sold cars that had been repurchased because of a history of defects and committed serious violations of state law by failing to ensure that disclosure statements were made to purchasers or the titles branded as lemons.

The case tells of consumers who were stuck with bad transmissions, bad engines and bad brakes. Then there was the case of Susan Dewitt of Livermore whose 1991 Dodge Shadow convertible leaked, according to a trial brief.

"This was a bad leak, this wasn't just a little drip. This was water in my lap . . . just kind of a stream," she contended in the brief.

As it turns out, the Shadow convertible was adapted from the Shadow hardtop, but the convertible fabric tops were "cut too short," according to internal Chrysler documents cited by the DMV.

Margaret Weeks' problem wasn't so funny. The Roseville real estate broker complained that her Chrysler New Yorker had repeated brake failures, including one instance in which she flew through four lanes of traffic, bounded over a curb and slammed into some bushes. The accident occurred while she was carrying a family that was house shopping. After Chrysler bought back and resold Weeks' car, the new owner documented to the DMV a long list of similar problems.

Goldfarb said all the problems cited by the DMV were fixed by Chrysler before the cars were resold. According to Chrysler's trial brief, Dewitt exaggerated the leaks in her Shadow. In Weeks' case, Chrysler said she kept the car for more than two years and only demanded a refund shortly before the warranty expired. As for the Maserati, Chrysler argued that Reid never saw the title, so it didn't matter that it wasn't branded.

Goldfarb said that in general the cars were not branded as lemons because they were perfectly good cars that were repurchased as a matter of goodwill to keep customers happy. "What we consider customer satisfaction, they consider lemon law buy backs," he said.

Moreover, if there was a failure to provide disclosure forms or brand the titles, it was usually the fault of dealerships and auction houses, not Chrysler, Goldfarb added.

But Bernard Lu, senior staff counsel at the DMV, noted that in the Maserati case, Chrysler spent $14,000 performing warranty repairs before it bought back the car. "That's a lot of repairs if it wasn't a lemon," he said.

Lu agreed that dealerships and auction houses often played a role in failing to brand titles and providing consumers with disclosure statements, but he said Chrysler has a legal duty to see that the job gets done properly.

Rosemary Shahan, head of the Motor Voters consumer group that has been backing the DMV, dismissed Goldfarb's assertions. She noted that Chrysler President Robert Lutz was quoted in the company's in-house magazine last July as saying that just 10% of Chrysler vehicles are up to Toyota standards, another 80% are merely OK and that 10% "cause repeated problems for our customers."

* Vartabedian cannot answer mail personally but will attempt to respond in this column to automotive questions of general interest. Do not telephone. Write to Your Wheels, 1875 I St. N.W. #1100, Washington, D.C. 20006.

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