The Battle Against Arbitration in Auto Fraud Cases

The auto dealer fraud case arose out of a Bill Heard deal in which Bill Heard sold my client a used GMC Yukon.  The client and his wife specifically asked if the Yukon had ever been wrecked.  They were informed that the Yukon had not been wrecked.  The client bought the car and drove it roughly 50,000 miles. The client went to trade the car and was informed that the car had been wrecked.  He went back to Bill Heard, which refused to help him.

I made demand on Bill Heard under the Fair Business Practices Act 10-1-390.  Bill Heard went belly up.  This left my client on the hook for over $10,000 to a major national auto lender for a vehicle which had been wrecked, which he could not trade, and which his wife no longer felt safe driving.

I asserted against the lender the FTC Anti Holder language contained within the contract.  The lender refused to acknowledge the fraud.  The lender then offered simply to cancel the remaining balance on the loan and accept return of the car.  This would not compensate the client for his payments of over $20,000.

We filed suit against the lender.  The lender asserted an arbitration agreement.  We argued before the trial court that the FBPA prevented the application of the arbitration agreement because it specifically allowed consumers to bring their action in court.  We also argued that the merger clause contained in the RISC prevented the application of a separate arbitration agreement.  The trial court agreed with us but was reversed on appeal.

The finance company argued that the clients drove the car a lot and that their use was worth something.  They also argued that there was insufficient fraud to warrant the cancellation of the remaining debt.  We argued that the FTC Anti Holder language specifically allowed us to make all claims we could make against Bill Heard against the Finance Company, including treble damages and attorney’s fees.

We filed for arbitration and AAA assigned an arbitrator.  After taking the depositions of my clients the case settled.  My clients obtained a return of a significant portion of the sums my client had paid for the car with the client retaining the car and the remaining loan balance being cleared and the trade line for the entire loan being removed from my client’s credit.  The clients intend to trade the car with full disclosure.

If you believe you’re a victim of dealer fraud, call our office today at 770-832-0300 or use our online form to request a free case evaluation.