Dynamic Guidance And Advocacy Throughout Northern Virginia

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Excellent Verdict Received on our latest Car Dealer Fraud Case

We just had an excellent result in a consumer car fraud case against Koons of Woodbridge – a fairly large, multi location car dealership!

Our client went to Koons in October 2016 and looked at a used 2016 Lincoln MKX, with only 5,000 miles on it. Koons told her that the car came with the full factory bumper to bumper warranty, which would cover everything except routine maintenance. However, unknown to the client, the car had been in an accident prior to Koons purchasing it, and sustained significant damage. The car had originally been a rental car through Enterprise, but was in a wreck. Enterprise sold it at auction, and another company purchased it for $20,000, spent $4,500 in repairs, and then sold it at auction to Koons. Koons paid $29,300 for the car. There was a dispute regarding whether the auction disclosed to Koons that the car had structural damage – Koons denied receiving any such disclosure. The NADA fair market value for the car in an undamaged condition was $37,400. Koons sold this car to our client for $42,701 – a profit of $13,401, and a sales price $5,301 over book value for an undamaged car! 

In February, 2017, the client discovered the prior accident damage – a headlamp was leaking and the Ford dealer she took it to advised her that the car had been in a prior accident, and that the manufacturers warranty would not cover the headlamp repairs because of that accident. When the headlamp assembly was removed, over $5,000 in unrepaired or poorly repaired damage was discovered. The client contacted Koons and asked for assistance in repairing the damage. Koons refused any help.

The client then came to us. We started by revoking her acceptance of the car, since it did not conform to the warranties (or promises) made by Koons. At that time, all the client wanted was to return the car and receive a refund of the money she had paid on the car, and her attorney fees (which were only $500 at that time). She also offered to allow Koons to substitute a different comparable vehicle instead of cancelling the sale entirely. Koons refused. Koons claimed that it had lost $13,000 on the trade in vehicle (despite having given her less than the book value for her trade in and despite having made a $13,000 profit on the sale of the Lincoln). Koons maintained this position throughout the case, and would not consider any resolution that did not “compensate” it for the $13,000 loss on the trade in.

During this time, the client could not drive the car, since she had revoked her acceptance of it. She was thus forced to rent another car.

We filed a lawsuit against Koons seeking a cancellation of the sale and damages. Koons had an arbitration clause in their contract so we were required to litigate this in arbitration rather than in front of a jury. By the time we had an arbitration hearing in June, 2018, the client had over a year of rental car expenses. Luckily, we had been able to get the finance company to allow the client to stop making payments on the car while the arbitration was pending.

The Arbitrator heard all of the evidence, and ordered the transaction to be cancelled, which means Koons needs to take back the car, the loan gets cancelled, and the client gets back all payments she paid for the car (including down payment, loan payments, car repairs, rental car expenses, property tax and insurance) – over $12,000 in addition to the cancellation of the loan. Koons also had to pay attorney fees and costs of $62,500! We put a lot of time into fighting the nonsense Koons threw at us.

Koons could have settled this case early on by taking the car back and paying as little as $2,500 to cover the client’s losses in the beginning. They wound up having to take the car back and pay $75,000, plus $10,000 in arbitration costs, plus whatever they paid their own attorneys. Playing hardball doesn’t always work.