On February 7, 1992, Santa Barbara County Superior Court Judge Patrick
McMahon upheld an October jury verdict of $182,096.11 to Mr. Pierre P.
Forest of Beverly Hills.
The jury had found that BMW of North America willfully violated California's
‘lemon law' by refusing to refund to the plaintiff his vehicle
purchase price, according to Mr. Forest's counsel, the Glendale law
firm of Taylor and Hodges.
The Superior Court Judge in his memorandum of decision denying BMW's
motion for a new trial, characterized the jury as conservative but said
"... 99,999 out of 100,000 juries hearing the same evidence would
have reached the same result."
Although BMW argued at trial that the particular electrical system defect
was "characteristic of the design", BMW's literature did
not disclose any such problem. The honorable Judge McMahon stated "in
this modern age, when a vehicle is defective, it is a rather hollow defense
to tell the customer to "get a horse."
"Whenever a manufacturer tells a consumer to accept an equally defective
replacement vehicle, the jury is likely to treat this as equivalent to
two other time-honored but immortal responses namely ‘let them eat
cake' or ‘the public be damned.' the award was an attempt
to quantify in monetary terms the immoral character of BMW's own corporate
policies...," according to Judge McMahon.
In sustaining the jury's award of a civil penalty in the amount of
$90,238.64, Judge McMahon stated: "the evidence of willfulness was
self-evident. Indeed BMW's fate was sealed when they insisted that
there was nothing wrong with the "ultimate driving machine."
BMW's posture at trial made "...the award of penal damages virtual
certainty".
Judge McMahon explained the philosophy behind the Song Beverly Consumer
Warranty Act (lemon law):
". . . The manufacturer has ultimate control over products sold to
California consumers. If the product is defective, the manufacturer can
either decide not to release the product at all or to refund the purchaser's
money..." the statute "...tends to encourage that vehicles sold
to members of the unsuspecting public will have been adequately tested
and designed. Furthermore, if the manufacturer filibusters, the statute
provides a mechanism by which a conscientious jury can impose financial
penalty as a deterrent..." to such tactics.
Other interesting items to be found in Judge McMahon's memorandum of
decision are:
Defense counsel's "...strident insistence that BMW should have
prevailed on all issues seems to be presented more for the enjoyment of
his clients rather than to address what actually happened at trial."
"The key to America's greatness never was caveat emptor."
"...if the 'characteristic of the design, etc. Is in fact defective,
then the car should never have been designed in that fashion. Stated otherwise,
if all other cars of the same make, model and year are also lemons, the
manufacturer is not entitled to immunity."
"...gauged in light of numerous cases dealing with punitive damages,
an award of a statutory penalty amounting to slightly more than the amount
of the statutory damages does not shock the conscience. Indeed it seems
to reflect the jury's decision that the corporate policy which BMW
pursued will not be countenanced as it is out of step with the Song Beverly
Consumer Warranty Act."
Mr. Forest's trial attorney, A. Clifton Hodges, said that this award,
thought to be the largest "lemon law" award in the state's
history, obviously sends a strong message to BMW. "If other manufacturers
can read the handwriting on the wall, it should also serve as a potent
message to the entire automotive industry."