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Car Dealer Agrees to Pay Large Class Settlement to Avoid Trial On Allegedly Mislabeled Fees and Resulting Alleged Hidden Profits

 

Many people are intimidated by the idea of making large purchases, such as a new home or car. This is because these kinds of purchases often come with all sorts of extra fees, which can be confusing for consumers. Not everyone is aware of what constitutes a fair deal and auto dealerships sometimes take advantage of this by adding fees to a customer’s purchase without a clear explanation of what those fees are for.

Such was allegedly the case with Panhandle Automotive Inc., which does business as Bay Lincoln Hyundai Mitsubishi. Jesse Page, who represented the class of plaintiffs, filed the lawsuit against the car sales company after having bought two cars from the dealership. For each purchase, Page was allegedly charged $49 for an electronic filing fee and $489 for a delivery fee.

Of the electronic filing fee, Panhandle allegedly gave $12 to a third party that performed the electronic filing and kept the rest. Panhandle’s electronic filing fee was later raised to $147. Panhandle allegedly got to keep all of the delivery fees.

Bill Bielecky, the attorney who represented the class of plaintiffs, said that fees like this are common among car dealerships in Florida, but that they add little or no value to the consumer.

Under Florida’s Deceptive and Unfair Practices Act, the fees would have been legal if the documents used by Panhandle had expressly stated that the fees would be profit for the dealership. According to Bay County Commissioner George Gainer, who owns Panhandle, the failure to include the language in the documents was due to an error.

Such seemingly small omissions can have large consequences, as in this lawsuit, which resulted in thousands of dollars in settlement costs. “It’s just a no-brainer,” said Bielecky. “They didn’t have the language: they were going to lose.”

Gainer feels differently about his case, though. He said in a statement that if they had continued to fight the lawsuit in the courts, “we’d have won the thing.” This attitude is reflected in the fact that, as part of the settlement agreement, Panhandle refused to admit to having done anything illegal. Instead of an admission of guilt, Gainer maintains that the settlement was merely a way to avoid the expenses of a litigation, which could drag on in the courts for months.

Circuit Court Judge Timothy McFarland, on the other hand, felt that both sides had an equally strong case. When he approved the settlement, McFarland noted that “this factor weighs in favor of settlement because it is unclear which party will prevail at trial.” By agreeing to a settlement, the class of plaintiffs receives some relief, while Panhandle gets to save face.

Under the terms of the agreement, every member of the class who paid the $49 electronic filing fee will receive a check for $20, and those who paid the $147 fee will receive a check for $60. Everyone who paid the delivery fee will receive a check for $40 and 13 separate vouchers worth $25 each that “they can use for an oil change to a new car and anything in between” at a Panhandle dealership.

Panhandle is also required to pay $395,000 to the plaintiffs’ attorneys and a $12,000 incentive award to Page for his contribution as a class representative.

Our Chicago autofraud and Lemon law attorneys near Waukegan and Wheaton bring individual and class actions suits for defective cars with common design defects and auto dealer fraud and other car dealer scams such as selling rebuilt wrecks as certified used cars or misrepresenting a car as being in good condition when it is rebuilt wreck or had the odometer rolled back. Super Lawyers has selected our DuPage, Kane and Cook County auto-fraud, car dealer fraud and lemon law lawyers as among the top 5% in Illinois. We only collect our fee if we win or settle your case. For a free consultation call our Chicago class action lawyers at our toll free number (877) 990-4990 or contact us on the web by clicking here.