Business & Real Estate

Legal crossroads: Where lemon law meets auto fraud



Love watching exciting legal dramas on the tube? As many of you know, they are a bit of a stretch from real life, which is not always as compelling.

While my office handles mostly lemon law matters, wherein someone gets a bad car, we also handle auto fraud matters, wherein someone gets a bad car deal.

In a break from my normal routine, this column will cover an ongoing matter involving both lemon law and auto fraud issues. The case is filed in a court in Alameda County, and all allegations are public record. The matter has both Fiat Chrysler Automobiles (FCA) and a car dealership as co-defendants.

The plaintiff, my client, is a young professional in her early 30s. She also happens to be a single mother. At the time of the incident that sparked the case, she was driving a long way on a weekend to some friends’ home, basically in the middle of nowhere. She had her then-3-month-old child with her.

While driving, she felt a problem with the brakes. Concerned, she slowed down and pulled over. Her brake pedal was going all the way to the floor with no traction at all. When she finally came to a stop, she was, thankfully, fairly close to an FCA dealership. She was able to get a tow to the dealership and felt relieved. The great thing, she thought, was that she had a warranty that guaranteed her a rental car from FCA 24/7/365.

Shady deal

She was told that it was a failed brake booster that caused the problem, but there was no way they could fix it until after the weekend. She then asked the man working at the dealership for a rental, believing she could then go on her merry way. The dealership, full of cars, many of them demonstrators, told her that they simply did not have any extra cars on the lot – no rentals, no loaners – and there was nothing they could do. She asked them to find a local car rental agency and get one there for her.

The dealership told her that where they were, in the sticks, there were none and even if there were, it was too late and they were closed. She still faced another two or three hours of driving to reach her destination for the weekend. She was informed that her only option was to purchase a new vehicle and trade in her car with the failed brakes.

My client explained to the dealership that she could not afford a new car. They told her that they would agree to unwind the sale on Monday. With her back against the wall, a long drive ahead of her and mistakenly trusting the car dealer, she signed the papers for her new car.

After the weekend was over, the dealer, in a not-so-surprising move, declined to unwind her deal. She wrote to the dealer objecting, but also, thankfully, obtained the dealer’s assurance in writing that it was in fact a failed brake booster that caused her problems.

As she had told the dealer, she could not afford the new car and the payment that came with it. After approximately six months, the vehicle was repossessed and she was left high and dry. Armed with the admission from the FCA agent for the warranty repair (dealership) noting that the brake booster failed, there is a strong case here against FCA for selling this consumer a lemon vehicle in the first place. Combined with her testimony on how she was cheated by the dealer, we believed we could make a case for fraud – considering the promises made to her and broken, taking advantage of her in this situation in the middle of nowhere.

We first filed against FCA, hoping it would see the writing on the wall for what its agent did and help this young mother get on with her life. FCA chose not to do the right thing and fought it hard. We recently added the shady dealership to the case but fear it may push this into forced arbitration, a topic readers of this column know is near and dear to my heart.

If you keep watching this space, I promise to update you on the matter and hope it’s all good news when it’s finally over and done. This is a rare case that is at the crossroads of auto fraud and lemon law. The case may not be quite as exciting as the legal dramas you see on the tube, but if we get a trial, it will most certainly be a doozy.

Scott Kaufman is a consumer-protection attorney and founder of California Lemon Lawyers. For more information, call (408) 727-8882 or visit his office at 140 Third St., Los Altos.


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