Kerry Dieter and Donna Hermes purchased a new Dodge vehicle from a Dodge dealer in Milwaukee. They asked to have some accessories installed, specifically a tonneau cover, bug shield and rust proofing. When Kerry and Donna went to pick up their vehicle, they noticed some scratches on the vehicle as a result of the accessory installation. They pointed it out to the dealer who said the scratches would be repaired.

Kerry and Donna took the vehicle and later brought it back for repair. The dealer attempted to fix the scratches, however, the repair was unsatisfactory. Kerry and Donna requested a return of their money pursuant to the Wisconsin "Lemon Law."

Wisconsin's Lemon Law allows the purchaser of a new motor vehicle to return the motor vehicle if there is something wrong with the vehicle which is covered by the warranty.  However, before the purchaser can return the motor vehicle, the purchaser must first allow the dealer a reasonable attempt to repair the problem.  The statute defines a "reasonable attempt to repair" as allowing the dealer at least four times to fix the problem, or if the vehicle is out of service for at least thirty days due to the problem.  The purchaser must make the vehicle available for repair  within one year of delivery or the expiration of the warranty, whichever occurs first. 

The trial court dismissed Kerry and Donna's claim. The Court of Appeals agreed.

The Court of Appeals determined that the Lemon Law was designed to protect buyers from defects in motor vehicles that the buyers did not know about prior to delivery of the vehicle. The Court found that because Kerry and Donna knew about the defect when they accepted the vehicle, that the Lemon Law did not apply. The Court said "the Lemon Law was enacted to protect the consumer who makes a large investment in a brand new vehicle only to find out that the vehicle is a dud. He or she drives the new vehicle home, expecting problem-free dependability. Problems develop, but it is too late for the consumer to back out of the deal. The Lemon Law protects this consumer from a seller who is unable or unwilling to repair the defective vehicle."

When a purchaser returns a defective new vehicle to the dealer, the dealer has two choices. The dealer can replace the new car with a comparable new vehicle and refund any collateral costs or return the person's money plus all of their costs. In addition, if the dealer refuses, the purchaser can file a lawsuit and recover twice the amount of their damages together with costs, disbursements and reasonable attorney fees. The idea is to put the purchaser back in the position they would have been if they had not bought the dud. It also motivates dealers to work with new car purchasers to avoid the double costs and attorney fees. The Lemon Law does not apply to used cars.