Chuck Stevens Chevrolet of Atmore, Inc. sold Tamie Shufford a car that had about 1,000 more miles on it than they certified in their sale contract.
Their salesman told her the car was new and had only 67 miles on it. The paperwork and the odometer disclosure forms said the same thing. But as it turned out, the car had been previously sold to another woman. For some reason, that deal was later canceled, so Chuck Stevens then turned around and sold the car to Ms. Shufford, stating that it was still new and that it still had 67 miles on it.
She complained to the Alabama Attorney General’s Office and wrote Chuck Stevens asking for a partial refund, but they didn’t offer her any relief. They said that “This vehicle was contracted for sale to another person; however the financing never took place so the sale was reversed. Ms. Shufford was sold a new car…”
So we sued them under the Motor Vehicle Information and Cost Savings Act, a federal law that requires dealers to execute title transfer and mileage disclosure paperwork clearly and accurately. The matter went to arbitration, and the previous buyer of the vehicle came forward to testify that she not only had in fact taken the vehicle home and driven it for a few days, but that she had taken it on a trip to Tampa, Florida! Which would have meant that the odometer disclosures written in Ms. Shufford’s contract were off by about a thousand miles.
At the arbitration, Chuck Stevens had its employees and former employees testify that these sorts of deals were “common” in the industry. Their excuse for “forgetting” that the vehicle’s odometer reading was off by a thousand miles was that their computer system didn’t fix it for them.
The arbitrator wasn’t buying it. He found that:
The Respondent had knowledge that the vehicle had been operated to some extent by Ms. (redacted) and had the vehicle in its possession for a least a couple of weeks prior to the sale to the Claimant. It could have easily checked the “cumulative mileage registered on the odometer” as required by the MVICSA…the Respondent was at least grossly negligent or acted with disregard of the truth.”
Which was, of course, exactly what happened.
The Motor Vehicle Information and Cost Savings Act has a minimum penalty of $10,000 if a dealer violates it with intent to defraud, as Chuck Stevens was found to have done here. So the arbitrator awarded a judgment for that amount, plus $3,333 for attorneys’ fees. And Chuck Stevens also had to pay $2,200 for arbitration administration fees and $1,500 for arbitrator compensation.
Now, car dealers usually love arbitration because it keeps these sorts of lawsuits from getting before a jury. But this time, the dealer found itself on the losing end of its own arbitration clause. And here’s the beautiful part: once Chuck Stevens was faced with the consequences of its decision to use mandatory arbitration clauses, did they honor the arbitrator’s decision? No. They didn’t. Guess where they went?
To the public court system! The very court system that arbitration is designed to avoid!
Yes, they filed this gem of a motion: Chuck Stevens Wants A Re-Do After it Loses Arbitration
The motion asked the Escambia County Circuit Judge to overturn the arbitrator’s decision. Their motion basically said that since the arbitrator made the (in their opinion) wrong decision, they should give them another shot.
Believe me, as a lawyer who’s been on the losing end of arbitration before, I feel their pain. But, tough shit. It’s nearly impossible to overturn an arbitration award in Alabama (and, honestly, in most places in the USA), and this case was no exception. The statute authorizes an award of $10,000 plus a reasonable lawyer’s fee if the defendant violates the MVICSA statute with intent to defraud. The arbitrator found they’d violated it with intent to defraud and gave us exactly what the statute said.
Unsurprisingly, the Circuit Court flatly rejected Chuck Stevens’ argument, and entered this order: Judge Rejects Chuck Stevens’ Request to Overturn Arbitration Decision.
So now it’s official: Chuck Stevens Chevrolet of Atmore, Inc. has been found liable for violating its customer’s rights, and they’re going to have to pay.
Sure, arbitration is something that is used often to unfairly keep defrauded customers out of court, but in the right type of case, you can still get a fair result.
If you’ve been defrauded by a business who has stuck you with mandatory arbitration, don’t despair. Call an experienced fraud arbitration lawyer to discuss your legal rights.
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