By JOHNNIE BROWN, Esq. A t the writing of this article, I debate whether to wish you a Happy New Year or say that I hope you had a great holiday season. Regardless, I hope your time with your family and friends will be, or was, well spent. In this edition of Counselor’s Corner, I wish to caution everyone about a new legal theory, at least here in West Virginia, that has arisen and also discuss some legal trends my fellow lawyers and I have been seeing over the last six months. Recently, dealers have faced claims based upon the fact pattern that begins when a motor vehicle was originally manufactured for the Canadian market and then legally transferred into the United States. Most of you likely had trouble finding used motor vehicles during COVID, and dealers, including those in West Virginia, purchased Canadian vehicles through auctions in order to replenish supply. Canadian vehicles are perfectly legal to sell in the United States and West Virginia as long as the Canadian motor vehicle has passed required EPA inspections. Otherwise, Canadian motor vehicles are manufactured to meet all safety and other United States standards. It now seems that some dealers, upon trade-in, are arguing that because the trade-in vehicle is a Canadian vehicle, it is a “grey vehicle” and worth less than their United States counterpart. Please do not take my comments as a negative statement towards the trade allowance amount that a willing buyer and willing seller agree upon, but this has caused some legal exposure for the dealerships who initially sell the Canadian vehicles. One argument now being presented is that because these motor vehicles are Canadian “grey vehicles,” a selling dealer should advise the consumer of the potential significant decrease in market value at the later time of trade-in. While this is quite a stretch of a legal theory, nevertheless, dealers are now faced with this particular type of claim. Objectively, models of all motor vehicles vary in how they hold “value.” I do not believe it to be a dealer’s legal duty to advise a consumer on such a detail. On the other hand, there are legal concerns that are real and need to be considered when selling a vehicle originally manufactured for, and sold in, Canada: • Be careful about recalls. Recalls are specific to the country of the vehicle’s origin. For example, a recall on a United States vehicle may not apply to the Canadian vehicle and vice versa. Also, can an open recall on a Canadian vehicle be repaired here in the United States, and a dealer receives manufacturer warranty payment? These are issues that have arisen in recent litigation. • A dealer should consider whether the manufacturer’s warranty coverage applies to a Canadian vehicle that has been transferred to the United States. This varies and is dependent upon the manufacturer. I encourage you to do your due diligence on this point before representing that the used motor vehicle has any remaining COUNSELOR’S CORNER WVADA News 18
RkJQdWJsaXNoZXIy ODQxMjUw