The Lemon Law Applies to Businesses That Own Own Five or Fewer Vehicles

California small businesses often register vehicles in their company names, and sometimes want to know if the California lemon law (which is typically thought of as a “consumer” protection statute) applies to business vehicles if they turn out to be lemons.

California Civil Code Section 1793.22 defines how the California lemon law applies to business vehicles.  First, Civil Code Section 1793.22 states that the lemon law applies only to vehicles “bought or used primarily for personal, family, or household purposes.”  See Civil Code Section 1793.22(e)(2).  While this rule might appear to exclude business vehicles from lemon law coverage, the California legislature in Sacramento expressly considered the importance of vehicle warranties to small business owners, and included an exception in the California lemon law.  Specifically, under the exceptions listed in California Civil Code Section 1793.22(e)(2), California’s lemon law also covers business vehicles so long as: (1) the business that owns the lemon car or truck has no more than five vehicles registered in its name; and (2) the vehicle’s “gross vehicle weight” is less than 10,000 pounds.

The 10,000 pound lemon-law weight limit is high enough to cover all cars (including full-size luxury sedans), SUVs, and even many trucks intended primarily for small business use (e.g., citrus-fruit growers, agricultural;contractors, etc.).    Thus, if you are a small business owner, there is no reason to be sour on the California lemon law.

The California Lemon Law’s Weight Limit is Based on a Vehicle’s Weight – Not its Weight Rating

Vehicle owner’s manuals often specify both a vehicle’s gross vehicle weight (often referred to as the “GVW”) and the vehicle’s “gross vehicle weight rating (called the “GVWR”).  Although these terms sound similar, for California lemon law purposes, it is important to understand the difference.  In a nutshell, the GVW refers to actual weight of the vehicle, while the GVWR specifies the fully-loaded (with passengers and cargo) weight capacity that the vehicle is designed to handle.  Thus, the GVWR is substantially greater than the GVW.

In the case of Joyce v. Ford Motor Co. (Docket No. C064453, 3^rd Dist. Court of Appeal, Sept. 6, 2011), Ford Motor Co. argued that its refusal to repurchase a “lemon” business truck was justified by the fact that the truck (a Ford F-250) had a GVWR of over 10,000 pounds, and thus exceeded the California lemon law’s weight limit.   However, the Court of Appeal rejected Ford’s argument, and ruled that the California lemon law’s weight limit in Civil Code Section 1793.22 refers to the vehicle’s GVW.  Accordingly, there is now binding precedent specifying that the California lemon law applies to business vehicles with a GVW of up to 10,000 pounds.

If a Manufacturer Told You That Your Business Vehicle Was Not Covered by the California Lemon Law, Then You May be Entitled to a Civil Penalty

If you called a manufacturer’s customer service telephone number to request a buyback under the California lemon law, and were told that the lemon law does not apply to your vehicle because (1) it’s registered in a business name, or (2) its GVWR is greater than 10,000 pounds, then this might actually increase your potential monetary in a California lemon law lawsuit.

In addition to requiring that manufacturers repurchase lemon vehicles, the California lemon law permits consumers to recover a “civil penalty” of up to two times the car owner’s monetary damages if the manufacturer willfully violated the lemon law statute’s rules.  Telling small business owners that their lemon vehicles are not covered under the California lemon law, when they are, amounts to intentionally failing to obey the lemon law, and this may entitle the lemon owner to a civil penalty.   See this Web site’s section on How Much Money You Can Recover in a California Lemon Law Lawsuit for a further discussion of civil penalties.

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