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Consumer Fraud -Car Dealer Waives Arbitration

On Behalf of | Jan 16, 2012 | Consumer Protection

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 arbitrate 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
for a free case review.