Know Your Rights

Consumer Fraud -Car Dealer Waives Arbitration

In a recent decision in which our firm represents the consumer, a court held that a car dealer's conduct in dragging its feet while the plaintiff sought to adjudicate her case amounted to a waiver of the right to arbitrJustice _scaleate the case.   This decision,which came out this week, is a great victory for consumers who unwittingly find themselves losing the right to take their case to court.  See case

In this case, the consumer brought a fraud claim against a local car dealer alleging that the odometer did not accurately disclose the mileage on the vehicle.  Once the lawsuit got underway, after the parties engaged in some discovery, the car dealer made a motion to force the plaintiff to abide by an arbitration agreement in the sale of the vehicle.  This meant that the parties had to settle any dispute through the use of an arbitrator, forgoing the right to a jury trial.  The court granted the motion and the consumer then proceeded to attempt to bring her case to an arbitrator.  However, the car dealer was not going to let the consumer have their claim heard so fast in an arbitration either.  Instead of responding to the arbitration complaint, the dealer demanded a different forum be used than the one on the agreement, and then failed, despite repeated requests, to file any response to the arbitration complaint so that the matter could be processed. 

Having had enough foot dragging, our firm brought the matter back to the court that dismissed the case and requested that it be reinstated.   We claimed that the dealer waived the right to take this matter to arbitration.  The court agreed.  In holding that the dealers conduct amounted to a waiver, the court stated:

"Though it is entirely legitimate for a contracting party to prefer arbitration to litigation, using a contractual right to arbitration as a means of evading adjudication of a dispute is something else altogether. It is quite clear at this point that Frankie's has used the arbitration agreement as a stall tactic, the litigation equivalent of the four corners offense often used in college basketball before the NCAA adopted the shot clock in 1985. See Four corners offense . Frankie's first played along with Mulderink's effort to schedule an arbitration before the BBB, the forum that Frankie's itself had chosen, only to pull the rug out from under this effort. After insisting that it would arbitrate only before the AAA, Frankie's continued to delay, studiously ignoring Mulderink's entreaties to initiate arbitration before the AAA, even though this was (again) a forum that Frankie's had chosen. Frankie's did nothing meaningful to cooperating in the arbitration process until it after it had been called onto the carpet in court."

The case is back in court and the consumer has her right to have her case heard by a jury.  When dealing with unscrupulous car dealers who trick people into buying cars that do not possess the qualities as advertised, SmithMarco, P.C., protects the consumer.  Buy a vehicle with undisclosed damage or an odometer rolled back?  Contact us for a free case review. 


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