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August 25, 2014

SJC Clarifies Statutory Duty to Defend as Between Car Manufacturers and Car Dealers

The Massachusetts Supreme Judicial Court (SJC) recently interpreted a statute under M.G.L. c. 93B, section 8(a), which requires a car manufacturer, under certain circumstances, to defend a car dealer against a claim "predicated upon the negligent design or manufacture of a new motor vehicle, or any part or component thereof." While a "duty to defend" often arises based on the terms of contractual relationships between parties, it is less common that a duty to defend arises in a statutory context.

In Ferreira v. Chrysler Group, LLC, the plaintiff had purchased a new Jeep Wrangler from the car dealership, Somerset Auto Group ("Somerset"). The vehicle was manufactured by Chrysler Group LLC, and came with a standard limited warranty, which covered all costs of parts and labor necessary to repair any defects on the vehicle for a period of thirty-six months or 36,000 miles, whichever came first. The plaintiff alleged that after he purchased it, the vehicle underwent six separate repairs, and was out of service for up to forty-two days at a time. In a demand letter to Chrysler and Somerset, the plaintiff alleged that Chrysler's inability to repair the vehicle constituted a breach of warranty, a violation of M.G.L. ch. 93A (unfair and deceptive acts and practices), and the Massachusetts Lemon Law, while Somerset's inability to repair the vehicle was a breach of warranty and a violation of 93A.

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