R & B Auto Center

One might reasonably assume new car dealerships and used car dealerships are apples and oranges. But when a lemon is added to the mix, the lines can become blurred. When the Department of Motor Vehicles classifies a used vehicle with a "title brand," a purchaser of that used vehicle may sometimes bring suit under the lemon law, a procedure usually associated with defective new cars. (See the Song- Beverly Consumer Warranty Act, Civ. Code, 1790 et seq.). Here, a car dealership licensed to sell only used cars sent out a bid for lemon law insurance, including coverage for liability arising in connection with the sale of "title branded" lemon law buyback vehicles. (See Civ. Code, 1793.23, 1793.24.) It was furnished a policy containing lemon law coverage. To its chagrin, when sued under the lemon law, the dealership discovered the coverage only applied to the sale of new vehicles. The insurance carrier would not agree to either defend or indemnify the dealership in connection with the lemon law suit.