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Service Compliance


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Service Compliance

  1. 1. Colorado Automobile Dealers Association Service Director Legal Compliance Seminar November 2007
  2. 2. Colorado Law Related to Service and Repair of Motor Vehicles Presented By: Michael J. Dommermuth of McGloin, Davenport Severson & Snow, P.C.
  3. 3. The Motor Vehicle Repair Act Of 1977
  4. 4. Motor Vehicle Repair Act of 1977 <ul><li>Requires written estimate of costs and consent of consumer. </li></ul><ul><ul><li>Work Order will include written estimate of cost of repair and estimated completion date- </li></ul></ul><ul><ul><li>Signed by the customer </li></ul></ul><ul><li>If no written consent: </li></ul><ul><ul><li>No repairs can be made. </li></ul></ul><ul><li>Civil and Criminal Penalties (treble damages and attorney fees) </li></ul>
  5. 5. Motor Vehicle Repair Act of 1977 (continued) <ul><li>Statutory Exceptions: </li></ul><ul><ul><li>After hours or Early Bird Drop Off </li></ul></ul><ul><ul><li>Tow In </li></ul></ul><ul><ul><li>Can only charge up to $100 </li></ul></ul><ul><ul><li>Towing charges are exempt from the statutory requirements </li></ul></ul>
  6. 6. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Oral consent is permitted: </li></ul><ul><ul><li>Work Order: </li></ul></ul><ul><ul><ul><li>Date </li></ul></ul></ul><ul><ul><ul><li>Time </li></ul></ul></ul><ul><ul><ul><li>Manner of consent </li></ul></ul></ul><ul><ul><ul><li>Telephone number called </li></ul></ul></ul><ul><ul><ul><li>Name of service technician </li></ul></ul></ul><ul><ul><ul><li>Amount of the estimate </li></ul></ul></ul><ul><ul><ul><li>Completion Date </li></ul></ul></ul><ul><ul><ul><li>Name of person giving consent </li></ul></ul></ul><ul><li>Document retention – 3 years! </li></ul>
  7. 7. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>No estimate required if customer signs and dates: </li></ul><ul><li>I DO NOT WISH TO RECEIVE ANY ESTIMATE, EITHER WRITTEN OR ORAL, TO WHICH I AM ENTITLED BY LAW, BEFORE REPAIRS ARE AUTHORIZED. </li></ul><ul><ul><li>Must be CONSPICUOUS </li></ul></ul><ul><ul><li>Recommended for Early Bird Drop Offs </li></ul></ul><ul><ul><li>Need a separate statement authorizing repairs </li></ul></ul>
  8. 8. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Disassembly to diagnosis. </li></ul><ul><ul><li>Estimate must be given for cost of reassembly. </li></ul></ul><ul><ul><li>Estimate must include costs of any parts destroyed or consumed in disassembly/reassembly process. </li></ul></ul><ul><ul><li>No act of disassembly shall be undertaken if the vehicle cannot be restored to its pre-disassembly condition unless written consent given by customer. </li></ul></ul><ul><ul><li>E.g., if it was running before disassembly, it better be running after unless: </li></ul></ul><ul><ul><li>Written consent from customer acknowledges. </li></ul></ul>
  9. 9. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Post-disassembly estimate: </li></ul><ul><ul><li>Consent oral </li></ul></ul><ul><ul><li>Notation on Work Order </li></ul></ul><ul><ul><li>Date </li></ul></ul><ul><ul><li>Time </li></ul></ul><ul><ul><li>Manner of communication </li></ul></ul><ul><ul><li>Telephone number called </li></ul></ul><ul><ul><li>Name of service technician </li></ul></ul><ul><ul><li>Name of person giving consent. </li></ul></ul><ul><li>Additional Repairs: </li></ul><ul><ul><li>Again, consent required. </li></ul></ul><ul><ul><li>Or limited to 10% of original consented amount. </li></ul></ul><ul><ul><li>Same rules. </li></ul></ul>
  10. 10. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>New Completion Date . </li></ul><ul><ul><li>Must notify customer </li></ul></ul><ul><ul><li>Within 24 hours of original completion date. </li></ul></ul><ul><ul><li>If done orally, </li></ul></ul><ul><ul><ul><li>All requirements. </li></ul></ul></ul><ul><ul><li>No change in completion date unless customer consents. </li></ul></ul><ul><ul><li>If consent not given or denied by customer, contract cancelled. </li></ul></ul><ul><li>If cancelled: </li></ul><ul><ul><li>Must reassemble without loss to customer. </li></ul></ul><ul><ul><li>Customer must pay for repairs already completed. </li></ul></ul>
  11. 11. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Repair Cancellation . </li></ul><ul><ul><li>Can charge for work done up to amount of estimate. </li></ul></ul><ul><ul><li>Customer can specify reassembly or not. </li></ul></ul><ul><ul><li>Must complete reassembly within three days. </li></ul></ul>
  12. 12. <ul><li>Work order must CONSPICOUSLY state: </li></ul><ul><li>“ Customer is entitled to the return of the replaced parts if the customer so requests at the time of authorizing the repairs” </li></ul><ul><li>Exceptions: </li></ul><ul><li>Body shop parts, exchanged or warranty parts (but customer has right to inspect) and air bag parts </li></ul>Motor Vehicle Repair Act of 1977 (Continued)
  13. 13. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Parts – Used, Reconditioned or Rebuilt . </li></ul><ul><ul><li>Original work order must specify: </li></ul></ul><ul><ul><ul><li>OEM </li></ul></ul></ul><ul><ul><ul><li>NOEM </li></ul></ul></ul><ul><ul><ul><li>USED </li></ul></ul></ul><ul><ul><ul><li>RECONDITIONED </li></ul></ul></ul><ul><ul><ul><li>REBUILT </li></ul></ul></ul><ul><ul><li>If consent is oral: </li></ul></ul><ul><ul><ul><li>Date </li></ul></ul></ul><ul><ul><ul><li>Time </li></ul></ul></ul><ul><ul><ul><li>Telephone number </li></ul></ul></ul><ul><ul><ul><li>Name of service technician </li></ul></ul></ul><ul><ul><ul><li>Name of person receiving notice </li></ul></ul></ul><ul><ul><ul><li>Type of part </li></ul></ul></ul>
  14. 14. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Invoice . </li></ul><ul><ul><li>All repairs performed must be recorded on invoice. </li></ul></ul><ul><ul><li>Invoice must be given to customer. </li></ul></ul><ul><ul><li>Copy retained for three years. </li></ul></ul><ul><ul><li>Must include: </li></ul></ul><ul><ul><ul><li>Customer’s name and address </li></ul></ul></ul><ul><ul><ul><li>Year, make, odometer reading, and license number </li></ul></ul></ul><ul><ul><li>Date into shop. </li></ul></ul><ul><ul><li>Itemization of parts. </li></ul></ul><ul><ul><ul><li>Description of parts by name and number </li></ul></ul></ul><ul><ul><ul><li>Identification of whether part was used, reconditioned or rebuilt </li></ul></ul></ul><ul><ul><ul><li>Charge for part </li></ul></ul></ul>
  15. 15. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Invoice (Continued) . </li></ul><ul><ul><li>Labor charges </li></ul></ul><ul><ul><ul><li>Full name of mechanic(s) or employee number </li></ul></ul></ul><ul><ul><ul><li>If multiple mechanics – must identify which stage done by which mechanic </li></ul></ul></ul><ul><ul><ul><li>Itemized statement of charges including storage, service, handling, taxes </li></ul></ul></ul><ul><ul><ul><li>Identification of any subcontracted repairs </li></ul></ul></ul><ul><ul><li>Initials of person completing invoice </li></ul></ul><ul><ul><li>If “no charge,” itemization not required </li></ul></ul><ul><ul><li>Miscellaneous designations permitted </li></ul></ul><ul><ul><ul><li>Shop supplies </li></ul></ul></ul><ul><ul><ul><li>Paint and paint supplier </li></ul></ul></ul><ul><ul><ul><li>Shop materials </li></ul></ul></ul><ul><ul><li>Except flat rate work – no designation of mechanics, parts, labor, etc. required. </li></ul></ul>
  16. 16. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Storage Charges </li></ul>
  17. 17. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Storage Charges . </li></ul><ul><ul><li>Must be a separate written agreement. </li></ul></ul><ul><ul><li>Must include the following language: </li></ul></ul><ul><ul><li>Storage Fee Policy </li></ul></ul><ul><ul><li>A storage fee may not be charged unless a written </li></ul></ul><ul><ul><li>agreement, separate from any other repair document, for an </li></ul></ul><ul><ul><li>amount is reached. A storage fee may be charged, beginning on </li></ul></ul><ul><ul><li>the fourth day, if a motor vehicle is not removed within three (3) days </li></ul></ul><ul><ul><li>after the customer is notified that repairs have been completed, excluding </li></ul></ul><ul><ul><li>Saturdays, Sundays, legal holidays, and any days the repair facility </li></ul></ul><ul><ul><li>is closed for business. </li></ul></ul>
  18. 18. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Storage Charges (Continued) . </li></ul><ul><ul><li>Cannot start storage charges until three business days after completion. </li></ul></ul><ul><ul><li>Must notify customer that repairs are completed: </li></ul></ul><ul><ul><li>If oral notification: </li></ul></ul><ul><ul><li>Date </li></ul></ul><ul><ul><li>Time </li></ul></ul><ul><ul><li>Manner of communication </li></ul></ul><ul><ul><li>Telephone number called </li></ul></ul><ul><ul><li>Service Technician’s name </li></ul></ul><ul><ul><li>Name of person receiving notice </li></ul></ul>
  19. 19. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>WARRANTY . </li></ul><ul><ul><li>If warranty provided, must be written. </li></ul></ul><ul><ul><li>Writing must include completion date. </li></ul></ul>
  20. 20. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Return of Replaced Parts . </li></ul><ul><ul><li>Must be returned if customer requests except: </li></ul></ul><ul><ul><ul><li>Factory warranty parts </li></ul></ul></ul><ul><ul><ul><li>Air bag components </li></ul></ul></ul>
  21. 21. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Air Bags . </li></ul><ul><ul><li>Must use new factory or salvage </li></ul></ul><ul><ul><li>If salvage, need written authorization from customer </li></ul></ul><ul><ul><li>If salvage, disclosure (conspicuous) must be prominent on invoice: </li></ul></ul><ul><ul><li>Cannot specify “used” or “as is” </li></ul></ul><ul><ul><li>If salvaged, must include: </li></ul></ul><ul><ul><ul><li>Date of sale of salvaged unit </li></ul></ul></ul><ul><ul><ul><li>VIN of vehicle from which salvaged </li></ul></ul></ul><ul><ul><ul><li>Part number </li></ul></ul></ul>
  22. 22. Motor Vehicle Repair Act of 1977 (Continued) <ul><li>Prohibited Acts . </li></ul><ul><ul><li>Charges in excess of estimate/consent </li></ul></ul><ul><ul><li>Represent that repairs required if not true </li></ul></ul><ul><ul><li>Represent that repairs are performed if not true </li></ul></ul><ul><ul><li>Perform unnecessary omissions repairs </li></ul></ul><ul><ul><li>Failure to use proper invoice </li></ul></ul><ul><ul><li>Failure to given notice of additional repairs </li></ul></ul><ul><ul><li>Require customer to sign repair order that does not state that customer requested repairs </li></ul></ul><ul><ul><li>Fail to state odometer reading </li></ul></ul><ul><ul><li>Alter airbag </li></ul></ul>
  23. 23. TERMS AND CONDITIONS <ul><ul><li>Recommended on both Repair Order and Invoice and Prominently Displayed Sign </li></ul></ul><ul><ul><li>Warranty – Disclaimers and Limitations </li></ul></ul><ul><ul><li>Remove valuables: Not liable for lost or stolen items </li></ul></ul><ul><ul><li>Payment Terms </li></ul></ul><ul><ul><li>Lien Rights </li></ul></ul><ul><ul><li>Shop Supply Charges </li></ul></ul><ul><ul><li>Hazardous Waste Disposal Charges </li></ul></ul><ul><ul><li>Exclusive Remedy – Damage Limitation-Refund </li></ul></ul><ul><ul><li>Limited Arbitration </li></ul></ul><ul><ul><li>Attorney Fees </li></ul></ul><ul><ul><li>Test Drive Authorization </li></ul></ul><ul><ul><li>Parts Return Policy </li></ul></ul>
  24. 24. Automobile Theft Law <ul><ul><li>DAILY RECORD </li></ul></ul><ul><ul><ul><li>Must maintain a daily log of VINs </li></ul></ul></ul><ul><ul><ul><li>Can use your invoices as your daily record </li></ul></ul></ul>
  25. 25. Automobile Theft Law (Continued) <ul><ul><li>Daily Record (Continued) </li></ul></ul><ul><ul><ul><li>Legible </li></ul></ul></ul><ul><ul><ul><li>Name and address of owner </li></ul></ul></ul><ul><ul><ul><li>Time and date of service </li></ul></ul></ul><ul><ul><ul><li>Name and address of driver </li></ul></ul></ul><ul><ul><ul><li>Model year, make & style </li></ul></ul></ul><ul><ul><ul><li>License number </li></ul></ul></ul><ul><ul><ul><li>Must be available for inspection during regular business hours. </li></ul></ul></ul><ul><ul><ul><li>Must report altered VINs. </li></ul></ul></ul>
  26. 26. Garageman’s Lien <ul><ul><li>Garage has lien on vehicle to recover cost of repairs. </li></ul></ul><ul><ul><li>Repairs made at the request of owner or agent. </li></ul></ul><ul><ul><li>Possessory lien – meaning must have possession of vehicle. </li></ul></ul><ul><ul><li>Subject to purchase money security interest </li></ul></ul>
  27. 27. Garageman’s Lien (Continued) <ul><ul><li>If car released on open account or </li></ul></ul><ul><ul><li>If paid with bad check </li></ul></ul><ul><ul><ul><li>Send written notice of bad check </li></ul></ul></ul><ul><ul><ul><li>Notice : Must be sent via registered or certified mail, return </li></ul></ul></ul><ul><ul><ul><li>receipt requested and postage prepaid at address on the </li></ul></ul></ul><ul><ul><ul><li>check or account records. </li></ul></ul></ul><ul><ul><li>If 12 days have passed, may repossess the vehicle without breach of peace. </li></ul></ul><ul><ul><li>Must file a foreclosure action quickly or the lien expires. </li></ul></ul>
  28. 28. Abandoned Vehicles <ul><li>At least 24 hours </li></ul><ul><li>Licensed tow operator must notify law enforcement </li></ul><ul><li>Tow operator sells-need appraisal </li></ul><ul><li>Must sell in a commercially reasonable manner </li></ul>
  29. 29. Abandoned Vehicles (continued) <ul><li>Special Rules for vehicles under $2000 </li></ul><ul><li>Appraise within 15 to 30 days </li></ul><ul><li>appraisal notify sheriff </li></ul><ul><li>If not reported stolen, then notify DMV </li></ul><ul><li>DMV forms DR2542 </li></ul><ul><li>Complicated procedures-Call your attorney </li></ul>
  30. 30. Disclaimer <ul><li>This presentation was created for the Colorado Automobile Dealers Association for informational and educational purposes only. You should consult with your attorney about specific compliance issues. </li></ul><ul><li>This information is not intended as legal advice. Laws and regulations change frequently and are subject to different interpretations. This information is not intended as a substitute for competent, independent and individualized legal counsel of your choice. </li></ul>
  31. 31. Thank You! Michael J. Dommermuth Attorney at Law 303 863-9800 303-571-1600 Fax 1600 Stout Street Suite 1600 Denver, CO 80202-3103 [email_address]