Originally published in
the Verdicts & Settlements section of the Los Angeles and San
Francisco Daily Journals on July 12, 2002. ©Copyright 2002,
Daily Journal Corporation. Reprinted with permission.
Settlement: $286,000
L.A. Superior Central - Mar. 21, 2002, Hon. Richard L.
Fruin Jr. Topics: Torts, Fraud, Failure to Disclose
Facts: The plaintiffs’ lawsuit against the defendant
stems from four separate cases, which they contend showed fraud,
illegal repossession and "switch and bait" tactics on the part
of the defendant, a car dealership. On April 13, 2001, plaintiff
Jose Farias, a 43-year-old Mexican immigrant, read an ad in "La
Opinion" that offered a used 2001 Chevrolet extended cab pickup
for $16,388.
Upon inquiring at the defendant dealership, plaintiff Farias was
told that there were two left in stock and, after he examined
them, decided to purchase one of them. Plaintiff Farias returned
the next day with his sister, plaintiff Blanco, who spoke no
English, and proceeded to purchase the vehicle and make an
$8,500 down payment, even though no Spanish language contract
was presented to them. Later that evening, after plaintiff
Farias’ wife read the contract, it was discovered that the
plaintiffs had leased the vehicle with a "cost" of instead of
purchasing it as they had attended, according to the plaintiffs.
On April 15, the three returned to the dealership to ask that
the contract be rewritten to conform with what they thought they
had agreed upon. The dealer refused. On April 16, plaintiff
Blanco forwarded a notice under the Consumer Legal Remedy Act to
the dealership, asking that the contract be rescinded. There was
no response. On April 16, the defendant submitted a lease
agreement to a finance company and was rejected. On April 26,
the defendant submitted a new lease, containing a signature
attributed to plaintiff Blanco, to the finance company and
obtained approval. On June 1, 2001, the vehicle was repossessed
without notification and resold, seven days later, to another
plaintiff. On June 8, 2001, plaintiff Amezcua called his son,
who was looking for a new truck, about an ad he saw in La
Opinion that offered a used 2001 Chevrolet extended cab for
$16,388, the same truck that was repossessed from plaintiff
Blanco.
After negotiations during which the defendant attempted to
convince the plaintiffs to lease the vehicle, the vehicle was
again purchased. That evening, while rereading the contract, the
plaintiffs discovered that the price had been raised to $28,999.
The plaintiffs returned to the dealership the next day and had
the contract re-written to a seven-year loan. The plaintiffs
obtained counsel after they discovered that the vehicle was a
prior rental and a CLRA letter was sent to the defendant with no
response. On Feb. 22, 2001, plaintiff Ochoa went to the
defendant to purchase a new GMC Yukon. The plaintiff had already
found that the dealer invoice on the truck was $31,283, but,
over a period of seven hours at the dealership, was convinced to
execute a lease agreement for $37,745. Plaintiff Ochoa retained
counsel after he tried to contact the general manager and CEO of
the defendant for four months with regard to the plaintiff’s
claim that he was promised he could refinance the vehicle after
two payments and received no response.
On October 29, 2001, plaintiff Gariepy, went to the defendant to
purchase a new Chevrolet truck. The plaintiff agreed to the
lease after he was informed that the defendant could offer a
good price for a used vehicle. The defendant told the plaintiff
that many of the used trucks offered had been prior rental
vehicles from Enterprise Rentals, but the plaintiff said he was
not interested in a prior rental. The plaintiff decided upon a
vehicle but told the dealership that he would like to "sleep on
it." Before leaving the dealership, the plaintiff claimed he was
told that he should "sign the contract and if he decided in the
morning that he did not want the truck, he could bring it back."
The plaintiff agreed, signed the contract, and drove the vehicle
home, where he found a "Buyers Guide" stuffed inside the glove
box with a notation on it that said the vehicle was a prior
rental.
Contentions: The plaintiffs contend that the defendant
acted fraudulently and in violation of the California Consumer
Legal Remedies Act. The plaintiffs contended that plaintiffs
Farias and Blanco believed they were purchasing the vehicle when
they signed the defendant’s contract to lease. They also
contended that the defendant forged plaintiff Blanco’s signature
on the contract submitted on April 26th and that they were never
told where to make payments on the truck. Plaintiff Amezcua
contended that the defendant never disclosed that the vehicles
was previously leased and repossessed and that no Spanish
language version of the contract was provided to him. Plaintiff
Ochoa contended that the defendant advised him that the price of
the truck would stay at $31,000 regardless of what the contract
said.
Plaintiff Gariepy contended that the vehicle’s prior rental
status was never disclosed to him and that he was promised he
could change his mind over the course of the evening if he
wished. The defendants denied acting fraudulently and forging
plaintiff Blanco’s signature on the April 26 lease agreement.
Defendant expert Lew Linet testified that it was wrong to forge
a client’s name on documents, but that it is something done in
the industry and "acceptable if it is done to accomplish the
buyer’s intent in the transaction."
The defendant also contended that a Spanish language contract
was supplied to plaintiff Amezcua and that the plaintiff was
notified of the prior rental status of the vehicle. The
defendant contended that plaintiff Ochoa was fully aware of the
circumstances and events surrounding the purchase of the vehicle
and was "too intelligent" to be snookered by them. The defendant
denied that any promise was ever made to plaintiff Gariepy that
allowed him to change his mind the next day. The defendant also
contended that it notified the plaintiff of the prior rental
status of the vehicle.
Result: cont. of FACTS: The plaintiff attempted to
return the vehicle the next day, but was informed that a binding
contract existed.
RESOLUTION BY AGREEMENT: Settled pre-trial,
after two days of mediation with Daniel Ben-Zvi. The first
plaintiff received a total of $85,000; $25,000 in general and
$60,000 in attorney fees. The second plaintiff received $70,000;
$38,000 in specials and $32,000 in attorney fees. The third
plaintiff received $68,000; $33,000 in specials and $35,000 in
attorney fees. The fourth plaintiff received a total of $63,000;
$27,100 in specials and $35,900 in attorney fees.
