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DaimlerChrysler Settles Lemon Case

March 22, 2002

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SACRAMENTO, Calif. (AP) _ DaimlerChrysler Corp. agreed to pay $325,000 to settle a longstanding ``lemon law″ case that alleged the automaker resold defective cars to customers.

In the settlement with the Department of Motor Vehicles, announced Thursday, the automaker admitted no wrongdoing.

The state agency had filed the lawsuit in 1994, alleging Chrysler bought back 119 defective Chrysler, Plymouth, Dodge and Jeep vehicles and then resold them without telling buyers about their histories _ and in some cases without fixing the problems.

Under the state’s lemon law, new cars that need repeated major repairs must be bought back by the manufacturer. The vehicles can be resold if their history is disclosed.

DaimlerChrysler denied it hid problems.

``We have always complied with California lemon laws in terms of disclosing vehicles’ repair history and sharing those with customers,″ spokeswoman Ann Smith said.

As part of the settlement, the motor vehicle agency dropped its request for a 45-day suspension of DaimlerChrysler’s state business license.

``It has gone on now through four different DMV directors, and it was time to get it resolved,″ DMV Director Steven Gourley said.

Consumer advocates faulted the deal.

``I’m sorry Chrysler wasn’t banned for at least one day, because what they did was endanger people, and I don’t think the penalty fits the crime,″ said consumer advocate Rosemary Shahan.

DaimlerChrysler has been hit with other lemon lawsuits. In April,an Illinois jury awarded $81,000 to a customer who was sold a new Jeep Cherokee that had been damaged before purchase. In December, an Ohio jury ordered the automaker to pay $237,000 to a woman who was sold a defective 1996 Chrysler Sebring.

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