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Car Lemon

A resource to find a lemon law attorney in another state or your state's lemon laws, FAQ's, or Hot Lemon Tips www.lemonlawoffice.com

Below are representative settlements and verdicts pursued and won by The Consumer Law Group. After failing to reach satisfactory financial settlements, these clients came to us seeking justice and fair compensation. We believe they got justice. The following are some of our case results in various areas of the law.

Below are representative settlements and verdicts pursued and won by The Consumer Law Group. After failing to reach satisfactory financial settlements, these clients came to us seeking justice and fair compensation. We believe they got justice. The following are some of our case results in various areas of the law.

Virginia Lemon Law

Auto Fraud

Virginia Lemon Law

Virginia Lemon Law - Motor Vehicle Warranty Enforcement Act

TYPE OF ACTION: Virginia Lemon Law - Motor Vehicle Warranty Enforcement Act

Type of Damages: Full refund of money paid towards price of car, costs, attorney fees

Name of Case: W. and C. Williams v. Daimler Chrysler Corporation Court: Henrico County Circuit Court
Name of Judge: The Honorable Daniel T. Balfour

Settlement: Last demand was to take the car and agree to payoff the loan which was approximately $15,000 plus pay attorney fees accumulated to that point (estimated to be about $10 -15K at that point). Chrysler refused, offered the client $5K while keeping the car.

Jury Award: $55,028.59

 Breakdown: $33,829.76 for payments made to date, payoff of the lien and court costs; $23,250.00 in attorney’s fees (a compromised amount agreed upon by the parties), minus $2,051.17 for mileage. Plaintiff returned the vehicle.

Attorney for Plaintiffs: John Cole Gayle, Jr.

Other Useful Information:
     This vehicle, a 2002 Jeep Liberty, resided in the Tidewater area and was used by Mr. Williams primarily for commuting. Plaintiffs first consulted counsel in March, 2003, when the Jeep had about 50,000 miles on it, but by the time of trial, in June 2004, it had over 90,000 miles. Counsel knew a car with 50,000K miles was a risk, but decided to take the case anyway.
     Mrs. Williams refused to drive it after it was purchased for her since she alleged the speedometer and odometer would fluctuate wildly on occasion, and the air bag light coming on scared her. Both plaintiffs alleged that at times the engine ran rough, there was a banging and clanging noise in the engine, the engine would stall out, the engine light would come on, and the air bag light would come on for a while then go out. Some of these problems began with the purchase of the car, and, despite numerous repair attempts both before the warranty expired and afterwards, some of the problems continued to exist up to the present mileage of 90,000 miles.
     At trial, the only problem that Mr. Williams' the primary driver, testified to experiencing was the engine banging and air bag light coming on; however, Mrs. Williams claimed the electrical problems continued to exist. Chrysler’s expert could find nothing wrong with the vehicle. No expert for plaintiffs testified at the trial.
     Shortly before trial Chrysler moved for a continuance since its expert could not appear in person, to which counsel for the plaintiffs objected, which motion was denied. Prior to trial, the court granted DaimlerChryler’s motion that any repairs made to the vehicle after the warranty ran out at 36,000 miles would not be admissible at trial. The courts also ruled on a motion by the plaintiffs’ counsel that, since no repair after warranty expiration at 36K miles was admissible, whatever happened to the vehicle after 36k miles, including the current mileage , would not be relevant and thus was not admissible. The court also ruled that the Lemon Law’s remedies are mandatory, and thus the jury’s only decision was that of liability. If the jury found the Lemon Law had been violated, then the remedy would be imposed by the court, along with a determination of what the reasonable attorney fees and costs would be. The trial lasted one day, and the jury returned a verdict for the plaintiffs.

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Virginia Lemon Law Cases

The following Lemon Law cases are some recent settlements that John Cole Gayle, Jr. has obtained. The names of our clients have been withheld due to privacy laws.

  • John Doe v. Motorcycle Manufacturer: Plaintiff’s 2005 motorcycle has chrome popping off all over. Also having trouble shifting the gears up or down. The horn stopped working.

         In January 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • John and Jane Doe v. Chrysler: Plaintiffs’ 2005 Dodge Dakota shakes when braking. The air bag light keeps coming on.

         In February 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • John and Jane Doe v. Volkswagen: Plaintiffs’ 2005 Volkswagen  Beetle has water leaks. The ESP light comes on and stay on.

         In February 2007, the defendant agreed to replace the vehicle with a new 2007 Beetle with the same optional content as the plaintiffs’ original vehicle, with a small contribution from the plaintiffs for the upgrade. Volkswagen also paid attorney’s fees.
  • Jane Doe v. General Motors: Plaintiff’s 2006 Pontiac has a leaking trunk. The roof also makes a noise while driving. The power steering failed twice while driving.

     In February 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John and Jane Doe v. Major Manufacturer: Plaintiffs’ 2004 sedan has an oil leak and a cracked throttle body. There is also a high pitch noise coming from the vehicle at acceleration.

         In May 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • Jane Doe and Jane Doe v. Chrysler: Plaintiffs’ 2005 Dodge Neon will not start. There is a strong gas smell. The vehicle has a high idle. Electrical devices are not working. The battery has failed.

         In May 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • Jane Doe v. Chrysler: Plaintiff’s 2005 Jeep has a key-less entry that does not always work. The check engine light comes on. The engine surges from 35-70 MPH. Loss of power when driving 35-50 MPH. There is a surge/shudder when driving at higher speeds.

         In June 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • John and Jane Doe v. Ford Motor Company: Plaintiff’s 2005 Ford Expedition left front wheel keeps trying to put itself in 4X4 going down interstate at high speeds. Low tire pressure light coming on and saying that there is a fault.

         In June 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • John and Jane Doe v. Major Manufacturer: Plaintiff’s 2005 vehicle has problems disengaging the cruise control when applying pressure to the brakes. The airbag restraints have been worked on during four trips to the service department.

         In July 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • John Doe v. Ford Motor Company: Plaintiff’s 2006 Ford F250 Truck has a severe vibration while driving.

         In August 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • John Doe v. Swift Motorcycle Company: Plaintiff’s 2004 Swift Motorcycle keeps stalling. There is also a loud bang in the engine or the transmission.

         In August 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • John Doe v. Ford Motor Company: Plaintiff’s 2005 F-150 has a problem with the transmission slipping in and out of gear. Plaintiff also hears a loud clunking noise.

         In October 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • John Doe v. General Motors Company: Plaintiff’s 2006 Pontiac G6 has a leak in the sunroof. The sunroof panels make a loud knocking sound when going over even small bumps. The gas gage will suddenly drop.

     In November 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • Jane Doe v. Ford Motor Company: Plaintiff’s 2006 Range Rover has suspension problems. The vehicle completely lost all power while driving.

     In December 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John and Jane Doe v. General Motors Company: Plaintiffs’ 2005 Chevrolet Equinox has a rear view mirror panel not working. The service engine light and TC light keeps coming on.

     In December 2007, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John Doe v. Ford Motor Company: Plaintiff’s 2006 F-350 Ford truck has a belt that squeals from the front of the engine and there is a grinding noise. The transmission light comes on and the truck keeps jerking. The transmission and clutch slip causing the truck to run rough.

     In January 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John and Jane Doe v. Chrysler: Plaintiffs’ 2006 Chrysler 300 smells of exhaust fumes. The Check Engine lights come on and off. While running the air conditioner and idling, the engine almost shuts off completely.

     In February 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John and Jane Doe v. General Motors Corporation: Plaintiffs’ 2006 Chevy Equinox has heating and air conditioning problems. The rear end makes a thumping noise at low speeds. They are also having transmission problems.

     In March 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John and Jane Doe v. General Motors Corporation: Plaintiffs’ 2006 Chevrolet Silverado Z-71 will shimmy and vibrate at all speeds.

     In March 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • Jane Doe v. General Motors Corporation: Plaintiff’s 2005 Chevrolet Uplander has a defective rear passenger side door. The door opens while driving.

     In March 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John and Jane Doe v. Major Manufacturer: Plaintiffs’ 2007 vehicle has a sliding door that has problems opening and closing. The vehicle also rattles at the rear hatch and the sliding door. The vehicle won’t always start.

     In March 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John and Jane Doe v. General Motors Corporation: Plaintiffs’ 2005 Buick Terraza has doors that won’t always open. It is intermittently hard to start. The is a vibration problem and a humming and whining noise.

     In April 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John and Jane Doe v. Chrysler LLC: Plaintiffs’ 2005 Grand Caravan SE makes a singing and grinding noise. There is a ticking sound in the engine. The brakes also make a grinding noise as well.

     In June 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John Doe v. Chrysler LLC: Plaintiff’s 2006 Jeep Wrangler check engine light comes on and stays on. This results in a loss of power.

     In July 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John and Jane Doe v. Chrysler LLC: Plaintiffs’ 2007 Dodge Ram makes a cracking noise from the front end. The check engine lights keeps coming on. The transmission will jump out of reverse and the vehicle will move forward.
     In July 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John Doe v. General Motors Corporation: 2007 Chevrolet Uplander. The current nonconformities are the engine overheats; there is a severe vibration in the vehicle; there is a severe vibration when braking; the brakes chatter and grab; braking at all speeds is problematic - at low speeds there is a moderate shudder and pedal undulation during light braking, and at higher speeds there is a severe shudder and pedal undulation which is felt throughout the vehicle; a bad bearing has ruined tires; there is a roaring noise when driving; the air conditioning/heat system is defective; the vehicle is difficult to steer; and the rear speakers are inoperative.

     In October 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John Doe v. Chrysler LLC: 2005 Chrysler Pacifica. The current nonconformities are the passenger and driver’s side mirrors are defective resulting in the mirrors resetting to dangerous positions (serious safety defect); there is a significant leak in the power transfer unit; the reverse warning system is defective (serious safety defect); the throttle body accelerator pedal sticks (causing hesitation) and then lurches forward (serious safety defect); there are numerous interior and exterior trim problems, the shifter bezel moves when shifting into gear, and other nonconformities which have not been cured despite repair attempts by an authorized Chrysler dealership. There is a pattern of systemic faults on critical components in the vehicle.

     In October 2008, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.

  • John Doe and Jane Doe v. Major Manufacturer: The current nonconformities on the Plaintiffs’ 2006 vehicle are there is a grinding creaking noise from the clutch and a whining noise when releasing the clutch; the vehicle clangs on acceleration just after moving forward or reverse; there is a vibration when braking; the steering wheel makes abnormal sounds when turning; there is a severe vibration in the drivetrain and suspension from 60 or greater mph; there is paint scarring on the hood and headlight lens, there is a squeaking and creaking noise coming from the left side A-Pillar and the right side B-Pillar; the manual transmission gear shifter has popped out of gear on several occasions; the driver’s seat makes a pop sound in the lumbar support area; and the front window motor makes a loud noise when being put down.

     In December 2008, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential.

  • John Doe v. Major Manufacturer: The current nonconformities on the Plaintiff’s 2007 vehicle are the vehicle has failed to start on several occasions; the vehicle has stalled while about to merge into traffic (serious safety issue); the service tire pressure system light has illuminated on several occasions; and the express up on the passenger window is defective, and other nonconformities which have not been cured despite repair attempts by an authorized dealership. The Plaintiff feels unsafe in the vehicle and no longer drives it.

         In January 2009, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential.
  • John Doe v. Chrysler LLC: The current nonconformities on the Plaintiff’s 2008 Jeep Liberty are there is a demonstrative, disturbing, high frequency (estimated 100 times per minute) shudder that is evident from over 35 mph into interstate speeds; there is a rumbling noise in the vehicle and a vibration felt in the steering wheel; shifting is difficult, the driver’s front door is hard to close, there is a water leak in the vehicle; and there is gear whine upon acceleration. These nonconformities have not been cured despite several repair attempts by Chrysler’s dealers.

         In February 2009, the defendant agreed to repurchase the vehicle for the full purchase price plus all collateral charges, and to pay attorney’s fees associated with the vehicle and/or the lawsuit.
  • John Doe v. Major Manufacturer: The current nonconformities on the Plaintiff’s 2007 vehicle are the transmission shimmies, shudders on upgrades, and does not shift properly; the vehicle has poor acceleration and lags gears during higher speeds; the steering wheel is off center and wanders to the left or right since repair; the vehicle lugs or lurches forward; there is a severe vibration while operating; and there is a transmission fluid leak. In addition the vehicle’s heat shields were bent during repair and there is paint on the antenna from hitting the roof of the dealership when place on its shop lift. The mufflers are now crooked from attempted repairs by the dealership. These nonconformities have not been cured despite several repair attempts by authorized dealers.

     In March 2009, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential.

  • Jane Doe v. Major Manufacturer: The current nonconformities on the Plaintiff’s 2007 vehicle are: the rear of the vehicle groans when on an uneven surface, the front of the vehicle produces a loud clicking noise when the front wheels are turned in either direction; the vehicle is slow to accelerate when first started; the driver’s window auto is inoperable at times; the transmission is not shifting properly and has a harsh downshift, especially when coming to a stop; and the hood lid is out of alignment. These nonconformities have not been cured despite several repair attempts by authorized dealers.

     In March 2009, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential.
  • John Doe v. Major Manufacturer: The current nonconformities on the Plaintiff’s 2008 vehicle are: the accelerator pedal sticks and the vehicle accelerates on its own (serious safety defect) which was diagnosed as a throttle malfunction and the Plaintiff was told by the dealership that it was repaired and safe to drive - this was not the case as the same problem happened again, again putting the Plaintiff in extreme danger. These nonconformities have not been cured despite several repair attempts by authorized dealers.

     In April 2009, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential.

 

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Lemon Law Case Results With Chrysler Vehicles

See a sample of Lemon Law case results that involve Chrysler vehicles in our Library.  Chrysler Vehicles 

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Lemon Law Case Results With General Motors Corporation

See a sample of Lemon Law case results that involve General Motors Corporation vehicles in our Library.  General Motors Vehicles

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Lemon Law Case Results With Ford Motor Company

See a sample of Lemon Law case results that involve Ford Motor Company vehicles in our Library.  Ford Motor Company

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Chrysler Violates Lemon Law, Has To Repurchase the Vehicle And Pays Over $70,000 in Legal Fees

Richmond, Va., September 5, 2008 - A Henrico County Circuit Court jury issued a verdict that Chrysler L.L.C., violated Virginia’s Lemon Law. The Plaintiff’s 2006 Jeep Commander had a bad odor from the a/c and heating vents causing the plaintiff serious nosebleeds and exacerbation of her allergies. The Plaintiff’s husband and several other people that rode in the car also complained of various ailments, such as light headedness, sinus drainage, and upper respiratory problems. Chrysler initially tried to fix the complaint of a "musty smell" or bad odor coming from the vehicle’s dash vents by cleaning it with chemicals, but then, according to the Plaintiffs, the chemical treatment caused such a bad odor, that it resulted in respiratory problems and the Plaintiff refused to drive it. Chrysler and its expert claimed the problem had been corrected and that there was no abnormal odor in the vehicle at any time during its inspections.

After two years of litigation, the Henrico jury found that Chrysler LLC had violated the Virginia Lemon Law and that it had to reimburse the Plaintiffs for all lease payments made to date, in the amount of $11,898.09, plus $2000 for their trade in, plus $1,613.91 for rental charges, plus $2,777.50 for the extra mileage they put on a substitute vehicle, plus payoff Chrysler Financial the remaining balance due on the lease, but that Chrysler was entitled to $986.27 for the mileage put on the Jeep Commander up to the date of the first notice of the problem to the Chrysler. Under the Lemon Law Chrysler was responsible for the Plaintiffs’ reasonable legal and expert fees, which, by agreement was to be heard in a separate, bifurcated hearing in front of trial judge on a later date if they were contested.

Chrysler did not agree that the trial fees of $69,000 were reasonable, and initially offered to pay $45,825.00. The disagreements continued, with fees continuing to increase. Chrysler’s attorney offered his "full authority" of $60,000, Plaintiffs’ countered with a final offer of $65,000, which was rejected. Plaintiffs’ filed their Motion For Expert and Legal Fees, and requested $76,680.00 in legal fees, plus their expert fees of about $4,000.00. Further negotiations continued, with Chrysler eventually agreeing to pay $75,250.00 for the fees and costs within thirty days, in addition to the jury award. These fees were paid on December 17, 2008.

John Cole Gayle, Jr., of The Consumer Law Group, P.C., in Richmond, Va., noted the fees incurred were avoidable since the Plaintiffs had offered to accept another comparable vehicle, an offer Chrysler not only rejected, but in when he asked if Chrysler wanted to settle, Chrysler’s attorney said, "John, that ship sailed long ago", but I will accept a nonsuit." Mr. Gayle estimates that this two year battle over a $30,000 Jeep cost Chrysler between $125,000.00 to $200,000.

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Auto Fraud

Richmond Dealer Guilty of Fraud, Punitive Damages Awarded

Richmond, Va., October 6, 2004. - A Henrico County jury has found a Henrico County car dealership guilty of intentionally misrepresenting a vehicle as never having been in an accident when it knew it had a “Salvage History.”

The Circuit Court jury on Thursday, October 7, 2004, found that Windsor Auto Sales committed intentional fraud and violated the Virginia Consumer Protection Act when it described the 1996 Ford Bronco to the plaintiff as undamaged even though Windsor Auto had purchased the vehicle with an invoice that stated “Salvage History.” Windsor Auto’s owner testified that he told the plaintiff that the vehicle had been in an accident.

The jury awarded the plaintiff, Faye Teets, $6,000.00 in damages and awarded $34,000 punitive damages as well, Gayle said. The court subsequently awarded Ms. Teets almost $40,000 in attorney fees as well.

The lawsuit was based on intentional fraud and a violation of the Virginia Consumer Protection Act. “Ms. Teets was unaware that the vehicle had been in an accident. She even thought that car dealers had a duty to disclose whether a car they are selling has been in a wreck. Unfortunately, dealers most of the time do not volunteer this information,” Gayle said, “...and the buyer who trusts dealers to disclose damage during negotiations, is living in a dream world.” “Many dealers either will not advise of any damage, or will disclose some damage claiming it is minor, and intentionally not check the rest of the car in order to remain 'wilfully blind' about the other damage in the car so they can claim ignorance if the vehicle is returned due to prior wreck damage. When a car has any damage, that is a red flag that there may be some hidden damage lurking in a less than obvious place, and that a detailed inspection is necessary. When a car dealer learns of any damage the reputable ones will inspect the car to see if there is other accident damage, and if they find significant damage, then they should return it to the previous owner," Gayle observed. “This should be a warning to car dealers to stop selling cars unless they have done a thorough inspection, and if they find some damage, either return the car, or be honest to customers and take less of a profit." Gayle commented, “State inspections, nor the new fad, Car Fax reports, are no guarantee that a car has not been significantly damaged. The best way to avoid what happened here is to ask if the car has ever been damaged, and even if the answer is 'No,' demand that a body shop of your choice inspect it; if a dealer refuses to allow this, leave.”

The two-day case was tried before Circuit Judge Gary A. Hicks.

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Awarded: $34,000 in punitive damages

Dealership Found Guilty of Fraud in Sale of BMW

Dealership Found Guilty of Fraud in Sale of BMW

NEWPORT NEWS, Va., June 16, 2002 - A Newport News jury has found a luxury car dealership guilty of fraud for selling a $50,000 BMW to a collector as "new" when it knew the automobile had been previously titled to a leasing company.

The Circuit Court jury on Wednesday found that Casey Honda/BMW willfully violated the Virginia Consumer Protection Act and committed fraud when it sold a 1998 540i BMW as new even though Casey had previously titled the vehicle and it had been used as a demo, said Richmond attorney John Cole Gayle, Jr. "Using a car as a demo, or titling a vehicle makes it 'used' under Virginia law," Gayle said. "It all could have been avoided if the dealership had followed the law concerning odometer disclosure."

The jury awarded the plaintiff Gerald Wilkins, $113,862.86 in damages in an unusual verdict that both trebled the actual damages and awarded punitive damages as well, Gayle said. The lawsuit was based on the Virginia Consumer Protection Act and a claim of fraud, but relied on Casey’s violation of the Federal Odometer Act to show Casey’s intent to conceal that the car was used. The Federal Odometer Act’s regulations require that mileage disclosures be made on the title and signed by the buyer as opposed to the common practice among auto dealers of issuing a separate disclosure form, said Gayle. "Mr. Wilkins was aware the car had 972 miles on it," said Gayle. "He wasn't aware there had been a previous owner, and had the dealership followed the law and made the odometer disclosures at the time of sale, he would have seen the chain of ownership and would not have bought the car." "This should be a warning to car dealers throughout Virginia to comply with the law instead of relying on standard operating procedure," Gayle said.

Wilkins bought the car on March 31, 1999, and was promised that he would get a Certificate of Origin, which he had specifically requested since he collects cars, stores them and, if new, sells them later with the guarantee that the auto has never been titled, Gayle said. Five weeks after the purchase, Wilkins was mailed the title instead of the Certificate of Origin and discovered the car had in fact been previously titled in a leasing company's name, according to the lawsuit. Casey Honda-BMW claimed the titling of the vehicle was an error, that it contacted the leasing company and had the title assigned back to the dealership, Gayle said. The car then was sold to Wilkins as new.

The two-day case was tried before Circuit Judge E. L. Hubbard.

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CAR DEALER ORDERED TO PAY $140,000 + FOR FRAUD, CLAIMS POVERTY

CAR DEALER ORDERED TO PAY $140,000 + FOR FRAUD, CLAIMS POVERTY

John Cole Gayle, Jr., of The Consumer Law Group, P.C., recently won two significant arbitration awards for consumers through the American Arbitration Association. The awards against Charlie Falk Auto Wholesale, Inc., were entered as judgments in the Richmond and Henrico Circuit Courts.

The two cases arose out of car sales from two of Falk's Richmond locations. Falk's home office is in Virginia Beach, VA. The cases alleged numerous fraudulent practices and violations of Virginia's Consumer Protection Act (VCPA), and together cost the dealer over $140,000 in actual and punitive damages, administrative fees, plaintiff's attorney's fees, and costs. Yet the dealer, which previously claimed it was one of the largest independent dealers in the state, now claims it has no money to pay.

The first case, In the Matter of the Arbitration Between Stephanie Cruz and Charlie Falk Auto Wholesale, Inc., alleged misrepresentation of wreck damage, failure to advise that the vehicle had been repossessed (required under Virginia's UDAP), and use of the "five finger spread to cover up items packed into the monthly payment," and charged that this was the dealer's pattern and practice. (The "five finger spread" is a well-known technique in the auto loan industry where the finance manager puts his hand over the high interest rate and other products added to the contract, and presents the contract for the buyer to sign.)

This arbitration took about a year and a half, due in part to the withdrawal of two defense firms. Several witnesses/victims of the dealer who had experienced the same fraudulent practices testified. Their testimonies included information about use of "the five finger fold" by Falk employees when they purchased their cars. They also told of similar misrepresentations that an extended warranty came with the price of the car, when in fact Falk charged almost $1000 for this item.

The second case, In the Matter of the Arbitration Between Serena Laury and Charlie Falk Auto Wholesale, Inc., made almost identical claims to those in the Cruz case.

On July 15, 2004, the arbitrator made her award for the plaintiff and found Falk committed actual fraud, violated the VCPA, and breached its warranty to the plaintiff. In addition to the award, the arbitrator ordered the dealer to pay the consumer's arbitration costs and to notify the three credit reporting agencies to remove any derogatory information it may have caused.

In both cases, Falk's attorney now claims the company has no money to pay the judgments. Gayle said that as part of his collection efforts, he would make a complaint to the Virginia Motor Vehicle Dealer Board. He hopes the Board will take administrative action against Falk, as well as providing his clients a recovery of their damages under the Motor Vehicle Transaction Recovery Fund. The fund will pay up to $20,000 for an approved claim against a dealer convicted of fraud.

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Auto Fraud Case Results

The following Fraud cases are some recent settlements that John Cole Gayle has obtained. The names of our clients have been withheld due to privacy laws.

Certified Pre-owned Scam

Two different plaintiffs had cases against the same franchise dealership in Richmond. Both vehicles were sold as “Certified Pre-Owned” vehicles. In one case, the certified vehicle was involved in a prior wreck, which was not disclosed to the plaintiff. In the second case, the certified vehicle was sold with a Salvage Title. In May 2007, these two cases together settled for approximately $200,000.00.

Yo-Yo or Spot Delivery Scam

This lawsuit is about an often fraudulent practice in the automobile sales industry called a "yo-yo sale" or a "spot delivery". Under this scheme, the auto dealer sells a car to the consumer "on the spot" without regard to whether any third party will agree to assignment of the car note. Typically, the consumer will sign all necessary paperwork at the behest of the dealer and will receive temporary or transferred tags, a set of keys, and possession of the automobile. The consumer leaves the dealership believing he or she owns the vehicle.

In this case, the dealer is unwilling to accept the terms that the various finance companies are willing to pay for an assignment of the car note; in other words, the dealer wants to make more money selling the loan. This is where the term "yo-yo sale" comes from. Because the car dealer cannot make enough money selling the paper, the dealer attempts to "undo" or cancel the sale, and yank it back from the buyer, telling the buyer that he or she must come in and sign a new loan on less favorable terms or merely illegally repossessing the vehicle, as in the instant case. The dealer also does not send the consumer any written notice of adverse action.

In June 2007, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential

 

Used Vehicle Sold As New

In October 2004, the plaintiffs went to purchase a new 2004 vehicle. During negotiations for the vehicle, Plaintiffs discussed the vehicle with their salesman and asked specifically about the 1063 miles that were on the odometer. The salesman told them that the vehicle was new, that the mileage came from its use by the sales staff and from the mileage accumulated when it was driven to and from another car dealership from which this dealership purchased the vehicle. The salesman deliberately concealed from the Plaintiffs that the vehicle was a used vehicle, something he knew or should have known.

The vehicle was not purchased from another dealer but sold directly to this dealership by Ford Motor Company and ownership transferred to this dealership, which was discovered on the Certificate Of Origin. The mileage put on the vehicle, after it received the vehicle from Ford Motor Company was from its use during test drives, use as a demonstrator, and the personal or business of employees of this dealership; and the Plaintiffs were never told that the vehicle was a "used" vehicle.

Based on the rear end problems noted when they first purchased the car, and the apparent out of alignment of the body or frame and resulting shimmying that cannot be fixed, it is believed that the vehicle sustained some kind of rear end damage prior to the Plaintiffs’ purchase of it, possibly during the thousand plus miles the vehicle was driven while owned by this dealership. In August 2006, the plaintiffs discovered that the vehicle they purchased was not new but used. The plaintiffs would not have purchased the vehicle if they had known they were buying a used car, or one that had damage in the rear end and possible frame defects.

In July 2007, this case settled for approximately $60,000.00.

 

Prior Wrecked Vehicle

In March 2003, a dealer sold a previously wrecked vehicle to our clients. The dealership claimed that some touch-up paint work was done when asked if the vehicle had previously been damaged. When asked what was the touch-up paint was for, they were told "sh-t happens." In fact, the vehicle had been previously sold as salvage and repaired, all of which was known by the dealership since a prior owner they sold the vehicle to cancelled the sale due to the salvage history the prior owner discovered. The car dealer did refund all of the prior owner’s money plus some more, and then the dealer tried the sale again on our clients.

In December 2007, this case settled for less than $95,000.

 

Sale of Salvaged Vehicle Without Notice

A franchise dealership purchased a vehicle several days prior to its purchase by the Plaintiffs. Prior to the dealership purchasing the vehicle, it had been issued four different titles.

In February 2003, the Plaintiffs began negotiations for the purchase of the van that the dealership said they owned. The two sides came to an agreement about the price of the vehicle. The Plaintiffs advised the dealership that they had a trade-in, and they would also need financing. The dealership would take care of DMV title and paperwork. The Plaintiffs were given 30-day Temporary tags and were advised to transfer the license plates from their trade-in vehicle to the vehicle bought at the dealership.

It is believed that the dealership’s employee suggested transferring tags from the other vehicle, rather than simply using 30-day paper tags indicated on the 30-day temporary registration, since she knew she could not get permanent registration for the vehicle within 30 days, and even though the 30-day registration would run out, at least the vehicle would have permanent plates on it.

The vehicle was sold and delivered to the Plaintiffs, yet the dealership had not secured a certificate of title for it, nor did it possess the certificate of title to the vehicle at that time, nor had the vehicle’s title been assigned to it at that time. At the time of sale of the vehicle to the Plaintiffs, the vehicle was owned and titled in the name of another person or company. At the time the dealership sold the vehicle to the Plaintiffs, the Defendants knew the dealership did not have possession of title to the vehicle, they knew that no title document for the vehicle had been assigned to the dealer and knew the dealer had not secured title to the vehicle in its' name. This was a clear violation of the Code of Virginia laws.

The title to the vehicle was not delivered or assigned to the dealership by the prior owner until over a year after the dealership sold the vehicle to the Plaintiffs, and was never provided to the creditor to whom the credit contract for the vehicle was assigned.

When the Plaintiffs’ temporary tags expired, they asked the dealership about the problem. They were informed, by the same employee, that she would go down to DMV herself and straighten out the problem. For several months, the same employee said that there was a problem at DMV and it was their fault. Several months went by without any response from the same employee.

About a year after the original sale of the vehicle, the Plaintiffs paid off the loan. At that point, they asked the finance company for the title to the vehicle. The finance company stated that it did not have a title, but that the dealership had it At this point an inquiry to DMV was made to find out on what car the license plates were registered to. The Plaintiffs discovered that the plates were not registered to any vehicle, after which they notified the dealer that they wanted to cancel the sale since the title was never put into the Plaintiffs’ name, and because they were driving in an vehicle which had never been registered with DMV, which was improperly licensed, and which they believed put them at risk with the police for breaking the law. The Plaintiffs then attempted to cancel the contract and returned the vehicle to the dealership.

Not until over fourteen months after the purchase, and after the vehicle had been returned to the dealership by the Plaintiffs, did the dealership cause an application for a duplicate title to be issued in the prior owner’s name, which it is believed that the dealership then assigned to the Plaintiffs without their authorization.

After returning the vehicle the Plaintiffs were forced to purchase another vehicle from another dealer to take the place of the vehicle from the first dealership. The Plaintiffs have been damaged because they fully paid for a vehicle that was never put in their name prior to them cancelling the contract and returning the vehicle and then never received a refund of their money once they cancelled the contract. Thus they are out not only the full purchase price plus the interest they paid on the loan, but also the vehicle, plus the cost of the substitute transportation, plus their inconvenience and embarrassment.

In January 2008, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential.

SALE OF CAR, WRECKED TWICE BEFORE:

Prior to July 2005, a 1999 Volvo wagon was involved in at least two collisions, requiring extensive repairs, which included the front end and the frame. After the first collision, the dealer was advised by the prior owners that the vehicle had been in a collision and the vehicle was traded into Mooers Volvo in July 2002. The dealership, even though it knew about the prior collision, inspected the vehicle to determine if it could be sold as a "Certified" Volvo, and in August 2002 sold the vehicle for $23,900, as "Certified, to the next purchaser, concealing the wreck damage it knew about from her.

During the second owner’s ownership of the vehicle, it was in another serious collision, requiring extensive repairs, and the second owner advised the dealership of the wreck damage. In June 2005, the second owner traded the vehicle in to the dealership, which, after inspecting it, agreed to purchase it from her. Even though it was aware of the two prior collisions and repairs and after becoming aware that portions of the vehicle had been damaged and repainted, the dealership chose to put the vehicle on its car lot for retail sale for a third time.

In July 2005, our client began negotiations with a salesman for the purchase of the vehicle. During the negotiations for the vehicle, the Plaintiff asked the salesman for a safe reliable car, and asked whether the vehicle had ever been in an accident. He replied, "No", and stated that, in fact, the dealership knew the repair history of the vehicle since the dealership had serviced it from "day one", and he showed her what was purported to be the vehicle’s service records. He said the vehicle had been a "one owner" car, that it had been driven by an elderly lady, but they only had one key since the elderly lady’s daughter had the other one. In reliance on the warranties, representations, and promises of the dealership, in July 2005, the Plaintiff purchased the vehicle from the dealership for $9,142.

After numerous problems with the vehicle, the Plaintiff decided to trade it in, and in September 2006 went to CarMax to see what she could get for the vehicle. After an inspection, CarMax reported that the vehicle had extensive body repairs and possible frame damage, and that it would only offer her $3000 for the vehicle. This was when the plaintiff discovered the dealership’s fraud.

In February 2008, the matter was settled for $80,000.00.

 

"Rebuilt" Vehicles

Two different plaintiffs had auto fraud cases against a major insurance company. In both cases, the vehicles purchased were involved in a prior collision. As a result of the collisions, the vehicles were treated as a salvage or total loss by the insurance company, but this information was never reported to the state’s DMV The insurance company never obtained a salvage or branded title, or a "rebuilt" title on either vehicle. Both vehicles were the subject of inadequate, improper, incomplete and/or potentially dangerous repair work and/or that while repaired wreck damage is generally undetectable by consumers, these repairs are obvious to persons in the business of buying and selling used vehicles as such. To make matters worse, this is just two cases of thousands of times the insurance company did this with other vehicles. Any vehicle purchased with a "salvage" or "rebuilt" Certificate of Title is worth a small fraction of the retail value of an non-branded, non-wrecked similar vehicle.

In December 2007, the matter was resolved by a cash payment acceptable to all parties. The terms of the settlement are confidential.

 

Prior Wrecked Vehicle - Settled for $52,000

In October 2006, a 2005 Toyota Corolla, while operated by a previous owner, was involved in a collision requiring repairs to almost the entire right side of the vehicle, resulting in body panels that are poorly aligned with obvious gaps and possible structural damage. According to Carfax, the vehicle collided with another vehicle in New Jersey in October 2006. It was repaired and sold at an auction to Nationwide Imports in April 2007, then at another auction it was sold to Koons Tysons Toyota in May 2007.

In May of 2007, our client began negotiations with a salesman for the purchase of a vehicle and specifically asked if the vehicle had ever been damaged, wrecked, or repaired. He claimed that he was told by the salesman that it had not been damaged or repaired in an accident, that it was a "Certified" used Toyota Corolla, that it was in excellent condition, and he explained that it had been rigorously inspected by Koons and its vehicle history was reviewed via Carfax to determine that the vehicle was qualified to be sold as a Toyota "Certified" Used car. He was also sold an extended warranty or service contract for the car that he purchased. Relying on the warranties and representations, the remainder of the factory warranty, the service contract, the vehicle history, its "Toyota Certified Used Vehicle" status, and representations about the vehicle’s condition from Koons, our client agreed to purchase the vehicle. At no time during the negotiations for the vehicle was our client advised by Koons that the certification of the vehicle would cost him an additional $995.00, since he had been told it was already certified, which the dealership charged him to certify the vehicle, misrepresenting it as a "We Owe" charge on the Buyer’s Order.

In July 2007, the plaintiff took the vehicle to have it appraised at CarMax in Dulles, Virginia for possible resale and at this appraisal he learned that the vehicle had been wrecked, that it had extensive body repairs, that there was possible structural or frame damage, and that CarMax would purchase the vehicle for $8,500.00, about $11,000.00 less than what he paid for it less than two months earlier.

According to the Toyota web site for Toyota Certified Used vehicles, in order for a vehicle to achieve the status as a Toyota "Certified" Used vehicle, it must be "the best of the best", it must pass a "rigorous 160 point quality assurance inspection by factory-trained technicians" and get a Car Fax report to ensure it is worthy of the Toyota Certification process. Our client alleges that the prior accident history, damage, and repairs to the vehicle were known by Koons, or in the exercise of the reasonable diligence, should have been known, prior to the selling of the vehicle to our client, but were never disclosed to him prior to his purchase of the vehicle. He alleges that these repairs were obvious to anyone inspecting the vehicles in the auto purchase industry.

 

In August 2008, the matter was resolved by a cash payment with the agreement of all parties. This case settled for approximately $52,000.

Prior Wrecked and Repainted Vehicle Sold as New

The Plaintiff filed a claim against a dealership for selling him a new vehicle in September 2007, that had been in an accident, repaired, repainted, and then sold to him as a new vehicle, but the dealership concealed from him the prior accident damage and repairs.

The Plaintiff intended to purchase a new vehicle, not a new previously damaged, repaired, and repainted vehicle, but that is what the dealership sold him. Several paint experts inspected the vehicle and advised that parts had been repainted and there were noticeably different shade colors, there were two small dents in the roof, and there was over spray. Although the dealership offered to repaint the vehicle, the Plaintiff did not intend to purchase a repainted vehicle. Our expert indicated that the retail repair cost for the repairs to the damage, if properly done, would have been $2000.00. Our expert vehicle appraiser indicated that in view of the accident damage and repaint, the vehicle ‘s diminished value at the time of purchase was $10,000.00.

In February 2009, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential.

Prior Wrecked Vehicle Sold as a "Certified Used Vehicle"

Prior to November 2006, a vehicle was involved in one or more collisions, requiring extensive repairs or replacement of various parts, which would be obvious to any experienced professional buyer. The vehicle was purchased by a dealership at an auction. It is believed that when deciding whether to purchase the vehicle at the auction, the dealership inspected it to determine whether to purchase it and how much to bid, and then after its purchase at the auction, put it through another 117 point inspection to determine whether it qualified as a Certified Used Vehicle. Because of this inspection, the dealership knew, or because of the obviousness of the damage and repairs should have known, that portions of the vehicle had been damaged and repaired. The dealership should have known the vehicle was in one or more collisions causing significant damage to the vehicle. The Defendant was aware of this when it sold the vehicle to the Plaintiffs as a Certified Used Vehicle.

In March 2009, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential.

Local Franchise Dealership Knowingly Sells a Vehicle with Wreck Damage

Prior to March 2006, a 2004 vehicle was involved in one or more collisions with damage to the rear which required repainting of the entire car. In late February, 2006 the Plaintiffs began negotiations at a local franchise dealership for the purchase of the vehicle. During these negotiations the Plaintiffs specifically asked if the vehicle had ever been damaged, wrecked, or repaired. Moreover, the salesman called and said the vehicle had just come in and that it still needed to be inspected and go through the certification process to make sure it met the manufacturer’s certification standards and had never been in an accident. The Finance Manager explained to the Plaintiffs the exhaustive nature of the certification process, that the car goes through a 156 point inspection to make sure it meets the manufacturer’s standards and has never been damaged. He also said the car comes with a 100,000 mile warranty and a maintenance contract that comes with the price of the car. After its certification, the salesman called and said that this vehicle had been qualified as a "Certified Pre Owned Vehicle", that it was in excellent condition, had never been in an accident. The Plaintiffs agreed to purchase the vehicle.

The vehicle was purchased by a dealership at an auction. It is believed that when deciding whether to purchase the vehicle at the auction, the dealership inspected it to determine whether to purchase it and how much to bid, and then after its purchase at the auction, put it through another 156 point inspection to determine whether it qualified as a Certified Pre Owned Vehicle. Because of this inspection, the dealership knew, or because of the obviousness of the damage and repairs should have known, that portions of the vehicle had been damaged, repaired, and repainted, and that some of the damage was still not fixed, or was done in a shoddy manner. The dealership should have known the vehicle was in one or more collisions causing significant damage to the vehicle. The Defendant was aware of this when it sold the vehicle to the Plaintiffs as a Certified Pre Owned Vehicle.

In March 2009, the matter was resolved by a cash payment with the agreement of all parties. The terms of the settlement are confidential.

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Charlie Falk Auto Wholesale, Inc. Pays Judgments

S. Laury v. Charlie Falk Auto Wholesale, Inc. S. Cruz v. Charlie Falk Auto Wholesale, Inc.

In these cases, John Cole Gayle, Jr., of The Consumer Law Group, obtained two judgments against Charlie Falk Auto Wholesale, Inc. (“Falk”), a Virginia used-car dealer. The judgments amounted to approximately $90,000, which included punitive damages for fraud in the sale of automobiles. Falk refused to pay these judgments, claiming lack of funds and that the company was going out of business. The dealership then re-opened under another name. Mr. Gayle then applied to a fund established by the state of Virginia for compensation of our client’s compensatory damages and attorney fees. This fund is set up to partially compensate consumers when dealerships go out of business after judgment for fraud. The maximum recovery is $20,000 per case. On the eve of receiving an award from the fund, and after Mr. Gayle advised Falk that he was filing another suit for fraudulently transferring assets during litigation, Falk capitulated and paid a compromise settlement of $81,000 to satisfy these judgments.

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Settled Case - Auto Fraud

In March of 2005, The Consumer Law Group settled a case against a Virginia franchise car dealership. The dealership advertised a vehicle at one price, but when our client went to pick up the vehicle, the dealership sold it to him for about $5,000 more without his noticing the change since the contract’s monthly payment was what had been promised. Three weeks later, after our client signed the contract and made a large down payment, the vehicle was repossessed because the financing fell through. This practice is known as a “yo-yo deal” or “spot delivery.” The Consumer Law Group threatened a law suit under the Truth in Lending Act (TILA) and the Uniform Commercial Code (UCC). The case was settled for $35,000.

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Settled Case - Prior Wreck Auto Fraud

In March of 2005, The Consumer Law Group settled a case against a franchise dealership in the western part of Virginia. Our client was a victim of fraud. The dealer sold our client a vehicle that had been wrecked, while telling her the vehicle had not been wrecked. The Consumer Law Group also discovered that the interest rate the dealer gave our client had been marked up above the rate she had been approved at by the lender. The dealer received an undisclosed kick back from the lender based on the amount the dealer inflated the rate above the rate for which our client was approved. Car dealers call this practice “rehashing” or “participation.” The suit was filed based on fraud and the Virginia Consumer Protection Act (VCPA). Prior to the trial, the case was settled for $47,500.

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Automobile Fraud

In September of 2005, The Consumer Law Group settled a case against a car dealer in Virginia. In this case, the client was sold a used vehicle that had been involved in a previous accident. There was clear evidence that the dealer knew about the damage yet misrepresented the car as undamaged anyway. The Consumer Law Group was able to obtain a settlement on terms mutually agreeable to both parties. The release requires the actual amount of the settlement to remain confidential.

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Auto Fraud - Settled Case

In September of 2005, The Consumer Law Group settled a case of fraud against a car dealer. In this case, the client was sold a vehicle as “new” when the vehicle was used. It had been sold to a previous customer, and was in a serious accident, repaired, and repossessed. The Consumer Law Group was able to obtain a settlement on terms mutually agreeable to both parties. The release requires the actual amount of the settlement to remain confidential.

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Car Dealership Pays Over $114,500 For Fraud In Selling Wrecked Vehicle

January, 2007 - Misrepresentations Costly For Norfolk Dealership. - See Car Dealership Pays Over $114,500 For Fraud In Selling Wrecked Vehicle in our Library tab.

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Awarded: Over $114,500

Misrepresentation costly for Norfolk dealership

Virginia Lawyers Weekly, Volume 21, Number 36, February 12, 2007

Sunshine Hardison told the salesman at Checkered Flag Motor Car Co. in Norfolk that she wanted a one-owner vehicle in her price range that had not been wrecked. The salesman assured her that the 2000 Hyundai Elantra she bought for $6,400 was just what she had asked for. In fact, the car had had several owners. It had been in a major front-end collision, and it had been repossessed. The salesman did not disclose that the car had been repossessed, as Virginia Code §59.1-200 requires. The transaction proved to be very expensive for the dealership.

Retired Judge John E. Clarkson arbitrated Hardison’s claims of fraud and violations of the Virginia Consumer Protection Act and awarded her a total of $114,400 - $2,500 in actual damages trebled under the VCPA because of what Clarkson found to be the willful and fraudulent misrepresentations of the dealership, $50,000 in punitive damages for fraud, $60,400 in attorneys’ fees and costs and $4,700 in arbitration costs, less a $7,500 offset for the duplication of the VCPA willful misconduct and punitive damage awards.

John Cole Gayle Jr. of Richmond, who represented Hardison along with John M. Barrett of Virginia Beach, said the attorneys’ fees reflected extended litigation before the arbitration. Hardison won a $10,000 judgment in general district court, which the dealership appealed to circuit court. The sales contract required arbitration of any claims, and the trial court finally decided to enforce the clause after several hearings on the issue. The parties agreed the The McCammon Group would arbitrate the claim, Gayle said.

Gayle said the dealership contended that it was unaware of the vehicle’s history. That contention was refuted by the company’s own records, which showed multiple owners and the repossession, and the testimony of the owner of the car when it was wrecked. She said she had bought it from Checkered Flag and sold it back to the dealership after the wreck.

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Awarded: $114,400

Please note that every case is different and these verdicts and settlements, while accurate, do not represent what we may obtain for you in your case.

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