Colorado Automobile Colorado Automobile Dealers AssociationDealers AssociationService Director Legal Compliance Service Director Legal Compliance

SeminarSeminarNovember 2007November 2007

Colorado Law Related to Colorado Law Related to Service and Repair of Motor Service and Repair of Motor

VehiclesVehicles

Presented By:Presented By:

Michael J. Dommermuth ofMichael J. Dommermuth ofMcGloin, Davenport Severson & Snow, McGloin, Davenport Severson & Snow,

P.C.P.C.

The Motor VehicleThe Motor Vehicle Repair Act Repair Act

Of 1977Of 1977

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977

Requires written estimate of costs and consent of Requires written estimate of costs and consent of consumer.consumer. Work Order will include written estimate of cost Work Order will include written estimate of cost

of repair and estimated completion date-of repair and estimated completion date- Signed by the customerSigned by the customer

If no written consent:If no written consent: No repairs can be made.No repairs can be made.

Civil and Criminal Penalties (treble damages and Civil and Criminal Penalties (treble damages and attorney fees)attorney fees)

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(continued)(continued)

Statutory Exceptions:Statutory Exceptions:

After hours or Early Bird Drop OffAfter hours or Early Bird Drop Off Tow InTow In Can only charge up to $100Can only charge up to $100

Towing charges are exempt from the Towing charges are exempt from the statutory requirementsstatutory requirements

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Oral consent is permitted:Oral consent is permitted:

Work Order:Work Order: DateDate TimeTime Manner of consentManner of consent Telephone number calledTelephone number called Name of service technicianName of service technician Amount of the estimateAmount of the estimate Completion DateCompletion Date Name of person giving consentName of person giving consent

Document retention – 3 years!Document retention – 3 years!

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

No estimate required if customer signs and dates:No estimate required if customer signs and dates:

I DO NOT WISH TO RECEIVE ANY ESTIMATE, I DO NOT WISH TO RECEIVE ANY ESTIMATE, EITHER WRITTEN OR ORAL, TO WHICH I AM EITHER WRITTEN OR ORAL, TO WHICH I AM ENTITLED BY LAW, BEFORE REPAIRS ARE ENTITLED BY LAW, BEFORE REPAIRS ARE AUTHORIZED.AUTHORIZED.

Must be Must be CONSPICUOUSCONSPICUOUS Recommended for Early Bird Drop OffsRecommended for Early Bird Drop Offs Need a separate statement authorizing repairsNeed a separate statement authorizing repairs

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Disassembly to diagnosis.Disassembly to diagnosis. Estimate must be given for cost of reassembly.Estimate must be given for cost of reassembly.

Estimate must include costs of any parts destroyed or Estimate must include costs of any parts destroyed or

consumed in disassembly/reassembly process.consumed in disassembly/reassembly process.

No act of disassembly shall be undertaken if the vehicle No act of disassembly shall be undertaken if the vehicle

cannot be restored to its pre-disassembly condition cannot be restored to its pre-disassembly condition

unless written consent given by customer.unless written consent given by customer.

E.g., if it was running before disassembly, it better be E.g., if it was running before disassembly, it better be

running after unless:running after unless:

Written consent from customer acknowledges.Written consent from customer acknowledges.

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Post-disassembly estimate:Post-disassembly estimate: Consent oralConsent oral Notation on Work OrderNotation on Work Order DateDate TimeTime Manner of communicationManner of communication Telephone number calledTelephone number called Name of service technicianName of service technician Name of person giving consent.Name of person giving consent.

Additional Repairs:Additional Repairs: Again, consent required.Again, consent required. Or limited to 10% of original consented amount.Or limited to 10% of original consented amount. Same rules.Same rules.

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

New Completion DateNew Completion Date..

Must notify customerMust notify customer Within 24 hours of original completion date.Within 24 hours of original completion date. If done orally,If done orally,

All requirements.All requirements. No change in completion date unless customer consents.No change in completion date unless customer consents. If consent not given or denied by customer, contract cancelled.If consent not given or denied by customer, contract cancelled.

If cancelled:If cancelled: Must reassemble without loss to customer.Must reassemble without loss to customer. Customer must pay for repairs already completed.Customer must pay for repairs already completed.

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Repair CancellationRepair Cancellation..

Can charge for work done up to amount of estimate.Can charge for work done up to amount of estimate.

Customer can specify reassembly or not.Customer can specify reassembly or not.

Must complete reassembly within three days.Must complete reassembly within three days.

Work order must CONSPICOUSLY state:Work order must CONSPICOUSLY state: ““Customer is entitled to the return of Customer is entitled to the return of

the replaced parts if the customer so the replaced parts if the customer so requests at the time of authorizing the requests at the time of authorizing the repairs”repairs”

Exceptions:Exceptions: Body shop parts, exchanged or Body shop parts, exchanged or

warranty parts (but customer has right warranty parts (but customer has right to inspect) and air bag partsto inspect) and air bag parts

Motor Vehicle Repair Act of Motor Vehicle Repair Act of 19771977 (Continued) (Continued)

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Parts – Used, Reconditioned or RebuiltParts – Used, Reconditioned or Rebuilt.. Original work order must specify:Original work order must specify:

OEMOEM NOEMNOEM USEDUSED RECONDITIONEDRECONDITIONED REBUILTREBUILT

If consent is oral:If consent is oral: DateDate TimeTime Telephone numberTelephone number Name of service technicianName of service technician Name of person receiving noticeName of person receiving notice Type of partType of part

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

InvoiceInvoice..

All repairs performed must be recorded on invoice.All repairs performed must be recorded on invoice. Invoice must be given to customer.Invoice must be given to customer. Copy retained for three years.Copy retained for three years. Must include:Must include:

Customer’s name and addressCustomer’s name and address Year, make, odometer reading, and license numberYear, make, odometer reading, and license number

Date into shop.Date into shop. Itemization of parts.Itemization of parts.

Description of parts by name and numberDescription of parts by name and number Identification of whether part was used, reconditioned or Identification of whether part was used, reconditioned or

rebuiltrebuilt Charge for partCharge for part

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Invoice (Continued)Invoice (Continued)..

Labor chargesLabor charges Full name of mechanic(s) or employee numberFull name of mechanic(s) or employee number If multiple mechanics – must identify which stage done by which If multiple mechanics – must identify which stage done by which

mechanicmechanic Itemized statement of charges including storage, service, handling, taxesItemized statement of charges including storage, service, handling, taxes Identification of any subcontracted repairsIdentification of any subcontracted repairs

Initials of person completing invoiceInitials of person completing invoice If “no charge,” itemization not requiredIf “no charge,” itemization not required Miscellaneous designations permittedMiscellaneous designations permitted

Shop suppliesShop supplies Paint and paint supplierPaint and paint supplier Shop materialsShop materials

Except flat rate work – no designation of mechanics, parts, labor, Except flat rate work – no designation of mechanics, parts, labor, etc. required.etc. required.

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Storage ChargesStorage Charges

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Storage ChargesStorage Charges..

Must be a separate written agreement.Must be a separate written agreement. Must include the following language:Must include the following language:

Storage Fee PolicyStorage Fee Policy

A storage fee may not be charged unless a A storage fee may not be charged unless a writtenwrittenagreement, separate from any other repair document, for anagreement, separate from any other repair document, for anamount is reached. A storage fee may be charged, beginning onamount is reached. A storage fee may be charged, beginning onthe fourth day, if a motor vehicle is not removed within three (3) the fourth day, if a motor vehicle is not removed within three (3) daysdaysafter the customer is notified that repairs have been completed, after the customer is notified that repairs have been completed, excludingexcludingSaturdays, Sundays, legal holidays, and any days the repair Saturdays, Sundays, legal holidays, and any days the repair facilityfacilityis closed for business.is closed for business.

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Storage Charges (Continued)Storage Charges (Continued)..

Cannot start storage charges until three business days Cannot start storage charges until three business days after completion.after completion.

Must notify customer that repairs are completed:Must notify customer that repairs are completed: If oral notification:If oral notification: DateDate TimeTime Manner of communicationManner of communication Telephone number calledTelephone number called Service Technician’s nameService Technician’s name Name of person receiving noticeName of person receiving notice

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

WARRANTYWARRANTY..

If warranty provided, must be If warranty provided, must be written.written.

Writing must include completion Writing must include completion date.date.

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Return of Replaced PartsReturn of Replaced Parts..

Must be returned if customer requests except:Must be returned if customer requests except:

Factory warranty partsFactory warranty parts

Air bag componentsAir bag components

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Air BagsAir Bags..

Must use new factory or salvageMust use new factory or salvage

If salvage, need written authorization from customerIf salvage, need written authorization from customer

If salvage, disclosure (conspicuous) must be prominent on If salvage, disclosure (conspicuous) must be prominent on

invoice:invoice:

Cannot specify “used” or “as is”Cannot specify “used” or “as is”

If salvaged, must include:If salvaged, must include: Date of sale of salvaged unitDate of sale of salvaged unit VIN of vehicle from which salvagedVIN of vehicle from which salvaged Part numberPart number

Motor Vehicle Repair Act of 1977Motor Vehicle Repair Act of 1977(Continued)(Continued)

Prohibited ActsProhibited Acts..

Charges in excess of estimate/consentCharges in excess of estimate/consent

Represent that repairs required if not trueRepresent that repairs required if not true

Represent that repairs are performed if not trueRepresent that repairs are performed if not true

Perform unnecessary omissions repairsPerform unnecessary omissions repairs

Failure to use proper invoiceFailure to use proper invoice

Failure to given notice of additional repairsFailure to given notice of additional repairs

Require customer to sign repair order that does not state that Require customer to sign repair order that does not state that

customer requested repairscustomer requested repairs

Fail to state odometer readingFail to state odometer reading

Alter airbagAlter airbag

TERMS AND CONDITIONSTERMS AND CONDITIONS

Recommended on both Repair Order and Invoice and Prominently Recommended on both Repair Order and Invoice and Prominently Displayed SignDisplayed Sign

Warranty – Disclaimers and LimitationsWarranty – Disclaimers and Limitations

Remove valuables: Not liable for lost or stolen itemsRemove valuables: Not liable for lost or stolen items

Payment TermsPayment Terms

Lien RightsLien Rights

Shop Supply ChargesShop Supply Charges

Hazardous Waste Disposal ChargesHazardous Waste Disposal Charges

Exclusive Remedy – Damage Limitation-RefundExclusive Remedy – Damage Limitation-Refund

Limited ArbitrationLimited Arbitration

Attorney Fees Attorney Fees

Test Drive AuthorizationTest Drive Authorization

Parts Return PolicyParts Return Policy

Automobile Theft LawAutomobile Theft Law

DAILY RECORDDAILY RECORD

Must maintain a daily log of VINsMust maintain a daily log of VINs

Can use your invoices as your daily recordCan use your invoices as your daily record

Automobile Theft LawAutomobile Theft Law(Continued)(Continued)

Daily Record (Continued)Daily Record (Continued)

LegibleLegible Name and address of ownerName and address of owner Time and date of serviceTime and date of service Name and address of driverName and address of driver Model year, make & styleModel year, make & style License numberLicense number Must be available for inspection during regular Must be available for inspection during regular

business hours.business hours. Must report altered VINs.Must report altered VINs.

Garageman’s LienGarageman’s Lien

Garage has lien on vehicle to recover cost of repairs.Garage has lien on vehicle to recover cost of repairs.

Repairs made at the request of owner or agent.Repairs made at the request of owner or agent.

Possessory lien – meaning must have possession of Possessory lien – meaning must have possession of vehicle.vehicle.

Subject to purchase money security interestSubject to purchase money security interest

Garageman’s LienGarageman’s Lien(Continued)(Continued)

If car released on open account orIf car released on open account or

If paid with bad checkIf paid with bad check Send written notice of bad checkSend written notice of bad check

NoticeNotice: Must be sent via registered or certified mail, return: Must be sent via registered or certified mail, return

receipt requested and postage prepaid at address on thereceipt requested and postage prepaid at address on the

check or account records.check or account records.

If 12 days have passed, may repossess the vehicle without If 12 days have passed, may repossess the vehicle without

breach of peace.breach of peace.

Must file a foreclosure action quickly or the lien expires.Must file a foreclosure action quickly or the lien expires.

Abandoned VehiclesAbandoned Vehicles

At least 24 hoursAt least 24 hours Licensed tow operator must notify Licensed tow operator must notify

law enforcementlaw enforcement Tow operator sells-need appraisalTow operator sells-need appraisal Must sell in a commercially Must sell in a commercially

reasonable mannerreasonable manner

Abandoned VehiclesAbandoned Vehicles (continued) (continued)

Special Rules for vehicles under $2000Special Rules for vehicles under $2000 Appraise within 15 to 30 days Appraise within 15 to 30 days

www.revenue.state.co.us/mv_dir/wrap.asp?incl=titlereg/info/appraisalguidelines

appraisal notify sheriffappraisal notify sheriff If not reported stolen, then notify DMVIf not reported stolen, then notify DMV DMV forms DR2542DMV forms DR2542 Complicated procedures-Call your Complicated procedures-Call your

attorneyattorney

DisclaimerDisclaimer

This presentation was created for the This presentation was created for the Colorado Automobile Dealers Association Colorado Automobile Dealers Association for informational and educational purposes for informational and educational purposes only. You should consult with your attorney only. You should consult with your attorney about specific compliance issues. about specific compliance issues.

This information is not intended as legal This information is not intended as legal advice. Laws and regulations change advice. Laws and regulations change frequently and are subject to different frequently and are subject to different interpretations. This information is not interpretations. This information is not intended as a substitute for competent, intended as a substitute for competent, independent and individualized legal independent and individualized legal counsel of your choice.counsel of your choice.

Thank You!Thank You!

Michael J. DommermuthMichael J. Dommermuth Attorney at LawAttorney at Law 303 863-9800 303 863-9800 303-571-1600 Fax 303-571-1600 Fax 1600 Stout Street 1600 Stout Street Suite 1600 Suite 1600 Denver, CO 80202-3103 Denver, CO 80202-3103 miked@mdsslaw.com