How a dispute over $6,486 became a $409,000 Lemon Law defeat for Mercedes

Luxury car brand Mercedes-Benz owes a woman more than $400,000 because it failed to refund her money after a Lemon Law claim, the Wisconsin Court of Appeals ruled Tuesday.

Michelle Hinkley leased a 2014 Mercedes C 300 sedan from International Autos in Milwaukee in September 2013. But after having repeated transmission problems that couldn't be repaired, she sought a refund in July 2014 under Wisconsin's Lemon Law.

The law requires a manufacturer to make the refund to the consumer within 30 days, and the consumer to then transfer the vehicle to the manufacturer. Mercedes offered to pay $572, but Hinkley was looking for a refund of $7,058 — a difference of $6,486. While the two sides disputed the amount, the 30-day deadline passed.

Four days later, Mercedes deposited the $572 with the clerk of court in Waukesha County and sued there to have a judge make Hinkley accept that amount or declare she was entitled to nothing because she didn't follow the Lemon Law by taking the check and returning the car.

Hinkley, who lived in New Berlin when she got the car but now lives in Illinois, sued under the Lemon Law in Milwaukee County. The two suits were consolidated in Milwaukee County, where Circuit Judge Glenn Yamahiro found Mercedes violated the Lemon Law, ruling it had provided no real evidence to back its claim that Hinkley had intentionally interfered with its efforts to provide a refund.

Mercedes argured that it made the refund available and that it is "not required to chase down uncooperative consumers."  

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Like Yamahiro, the Court of Appeals ruled for Hinkley, noting that the law is very clear — Mercedes needed to have paid her or her attorney — by the deadline.

Mercedes could have paid the $572 it believes it owed, and then Hinkley would have gone to trial over the amount. If it had paid the refund as she calculated it, the matter would presumably have been resolved. Instead, the issue became whether Mercedes complied with the requirement of providing a refund.

Yamahiro entered the double damages allowed under the law, calculated on the entire lease amount Hinkley paid, plus her legal fees, arriving at the $409,275.67. 

Hinkley's attorney, Vince Megna, said there will now be interest on that award and more fees from the appeal. He said after Mercedes filed its first case, Hinkley offered to settle for $3,000.

"Now it's four years and probably $800,000 later," he said, when you add the new fees, interest and Mercedes' own legal costs. "I don't understand why they fight these cases." 

Despite those numbers, the case isn't the most Megna has won from Mercedes. In 2012 the Wisconsin Supreme Court affirmed a $482,000 Lemon Law verdict against the manufacturer.

"Mercedes-Benz just has the knack of fighting cases they can’t win," Megna said Tuesday.

A spokesman for Mercedes-Benz USA did not return messages Tuesday.

Judge Joan Kessler wrote the opinion for the District 1 Court of Appeals, joined by Judges Kitty Brennan and Timothy Dugan.