Auto Fraud

Pennsylvania Car Dealerships Allegedly Sold Totaled Cars without the Proper Repairs

January 29, 2023 | Peter S. Lubin and Patrick Austermuehle

When a vehicle is totaled in an accident, it doesn’t always go straight to the scrap heap. Some totaled vehicles, although worth less than their insurance coverage, are still reparable. As long as they can be repaired and pass safety inspections, they can be resold. When totaled vehicles are resold without meeting these requirements, that’s when the resellers run into trouble, as three car dealerships in Pennsylvania recently discovered.

According to a recent lawsuit filed by Pennsylvania’s Attorney General, three car dealerships, all located in Lebanon, Pennsylvania, conspired with each other to sell totaled vehicles while lying about the status of their titles and safety inspections. Continue reading ›

New Jersey Car Dealerships Settle Fraud Allegations for $400,000

January 21, 2023 | Peter S. Lubin and Patrick Austermuehle

Companies forcing their employees and buyers into arbitration to resolve any dispute has become an increasingly big problem for both consumers and employees. It prevents many complaints from ever getting resolved if the arbitration costs more than the complaint, and it prevents plaintiffs from combining many small complaints into one big action against a corporation to justify the costs of pursuing legal action. Arbitration also prevents many individuals from getting a fair hearing when going up against a big corporation hiring an arbitrator who wants to remain on good terms with a client who brings them a lot of business.

One of the most damaging aspects of forced arbitration is that it’s private, which means if someone goes to arbitration over a complaint, even if they win, they are denied from talking about it to anyone else, and there is no process for journalists to report on the case. That means other individuals with similar claims have no way of knowing someone else pursued legal action over the same issue. That, in turn, prevents more claims against the company from ever getting pursued, much less resolved. Continue reading ›

Tesla’s Arbitration Clauses Might Come Back to Haunt the Car Company

January 18, 2023 | Peter S. Lubin and Patrick Austermuehle

Most people buy their cars from car dealerships, but Tesla sells its cars directly to consumers, claiming to cut out the middle person and allegedly save its customers money in the process. Tesla claims it uses this system to benefit consumers, but a closer look at the contract it requires its buyers to sign may tell a slightly different story.

Tesla’s buyer contract includes an arbitration clause. That means any buyer that wants to sue Tesla, for any reason, is required to go through arbitration, rather than the courts, to pursue their claim against the electric car company. Continue reading ›

Car Dealer Fraud Lawyers in Chicago — Consumer Fraud Lawsuit Involving Classic Cars Settles for $7.1 Million

January 13, 2023 | Peter S. Lubin and Patrick Austermuehle

Acquiring, repairing, and maintaining classic cars isn’t easy. And when something is not easy to do, it’s often expensive. As a result, people aren’t likely to buy classic cars unless they have the money to pay for rare materials and specialized services. Unfortunately, when a lot of money is involved, fraud is usually not too far away.

William Oesterle found this out the hard way in 2011 when they bought a 1955 Austin Healey Model 100S car for $630,000. The Healey Werks Corp allegedly agreed to restore the vehicle before delivering it to Oesterle.

In 2013, Oesterle bought another car from The Healey Werks Corp, this time a 1956 Austin Healey 100M for $50,000. The car was unassembled at the time Oesterle bought it, so it was allegedly agreed that The Healey Werks Corp was going to arrange for the vehicle to be restored at some point in the future. Continue reading ›

Maker of Electronic Vehicles Gets Sued for Selling Cars Online

April 18, 2021 | Peter S. Lubin and Patrick Austermuehle

As our world becomes increasingly digital, we’ve been able to buy more and more things online, and that trend has only increased since everyone has been stuck at home due to COVID-19. One of the last things to make the switch to buying online was cars. Rather than going to a car dealership and test driving a car that who knows how many people have already been in, many people feel safer just ordering a car from a website and having it delivered to their door, but is that legal?

While it is legal for auto dealers to sell cars online (and some dealers have gone that route) electronic vehicle manufacturers have allegedly created a problem by trying to use the internet to sell their cars directly to consumers, rather than going through a licensed auto dealer as required by Illinois law. This direct-to-consumer tactic is the basis of a lawsuit recently filed in Cook County Circuit Court by the Illinois Automobile Dealers Association, as well as other trade associations, and various auto dealers.

The lawsuit was filed against Rivian, a startup that makes electronic trucks and is converting a Mitsubishi plant in Normal, IL into a factory for its own electronic trucks and SUVs. The company plans on opening a showroom in Chicago’s Fulton Market district later in 2021, but in the meantime, it has already begun taking advance orders of its electronic vehicles online. Continue reading ›

ARDC Hearing Board Recommends 2 year Suspension for Attorney Joel Brodsky

June 23, 2020 | Peter S. Lubin and Patrick Austermuehle

The ARDC Hearing Board recommended a two-year suspension for attorney Joel Brodsky due in large part to a case where his own attorney Joe “the Shark” Lopez admitted that Brodsky engaged in “Rambo” tactics. The Hearing Board found based on clear and convincing evidence that Brodsky harrassed opposing counsel and the Plaintiff’s expert witness with baseless claims. It held:

We find the Administrator proved a violation of Rule 3.1 by clear and convincing evidence. Moreover, we concur with the district court’s view of Respondent’s actions as “wildly inappropriate” and the Seventh Circuit’s opinion that his conduct was “beyond the pale.”

As to Brodsky’s failure to provide any meaningful apology or show true remorse the Hearing Board had this to say:

AutoNation Allegedly Selling Defective Vehicles

November 9, 2019 | Peter S. Lubin and Patrick Austermuehle

While buying a used car might sound like a great way to save money, a new investigation allegedly found that buying from AutoNation could mean the possibility of buying a car that AutoNation knows is defective (or is subject to recall) but never bothered to have repaired or to resolve the recall issue.

There is a federal law that prevents auto dealers from selling new defective automobiles, but there is no such law to prevent anyone from selling used cars with defects. A new federal bill was recently introduced that would close that loophole, but we have yet to see what the fate of that bill will be. In the meantime, some states have local laws against selling defective vehicles (new or otherwise), so if you live in a state with such protections and you recently bought a defective used car, you can sue the dealer that sold you the defective vehicle. Continue reading ›

Purchaser of Defective Classic Car Can Sue North Carolina Auction Company for Fraud in Illinois

October 4, 2019 | Peter S. Lubin and Patrick Austermuehle

A purchaser of a classic 1973 Ford Bronco sued the car’s auctioneer in Illinois court. The purchaser alleged that the vendor committed fraud by misrepresenting the condition of the vehicle in its advertisements and during the auction. The circuit court dismissed the case for lack of personal jurisdiction. The Illinois Appellate Court reversed, finding that the vendor had sufficient contacts with Illinois when it solicited the business of the purchaser via advertisements, its website, and its communications over email and the phone.

In January 2018, John Dixon saw an advertisement posted by GAA Classic Cars, LLC on a car-related website. The advertisement listed a 1973 Ford Bronco for sale at auction. Dixon responded to the advertisement by sending an email to GAA requesting more information about the Bronco including how to bid for it. GAA responded with an email to Dixon, inviting Dixon to bid on the Bronco at the auction scheduled for March 2, 2018. GAA’s email told Dixon that he could participate via live simulcast bidding or on the telephone via phone bidding. GAA added that Dixon could find more information about the Bronco at GAA’s website. Dixon asked for pictures of the Bronco’s engine. GAA responded by email that it would send him pictures of the engine once GAA received the Bronco from its owner. GAA told Dixon that the auction price for the Bronco should run around $30,000.00 – $40,000.00. Continue reading ›

Purchaser of RV Can’t Sue For Breach of Warranty Because Manufacturer Was Entitled to More Chances to Repair Vehicle

September 28, 2019 | Peter S. Lubin and Patrick Austermuehle

A couple purchased an RV from a retailer in 2014. The RV came with a warranty from the manufacturer that limited the warranties to one year from the date of purchase. The warranty required that the purchasers notify the manufacturer or an authorized dealer within five days of discovering any defect. The purchasers experienced continual problems with the RV over the time that they owned it. The RV was repaired multiple times, but the service technicians were never able to fully resolve the defects. The purchasers asked the manufacturer to repurchase the RV from them. When the manufacturer refused, the purchasers sued, claiming the manufacturer breached its warranties. The district court granted summary judgment to the manufacturer. The appellate panel affirmed, finding that the purchasers had not given the manufacturer enough chances under Indiana law to cure the defects with the RV.

Vanessa and Randy Mathews purchased a Holiday Rambler Presidential RV in May 2014 from Mellott Brothers Trailer Sales, Inc. The RV came with a warranty from the manufacturer, REV Recreation Group. The warranty limited both express and implied warranties to one year from the purchase date. To take advantage of the warranty, the Mathews had to notify REV or an authorized dealer within five days of discovering a defect.

The Mathews alleged that they encountered problems with the RV almost as soon as they drove it off the lot. They called the dealership to report that there were issues with the interior lights, the refrigerator, and the leveling system. A month later, the Mathews encountered further difficulty: the converter was blowing fuses, the leveling jacks worked only intermittently, the curbside slide cable broke, and there were problems with the TV and the DVD player. After calling the dealer again, the Mathews were given the number for REV so that they could locate an authorized repair center. Continue reading ›

Illinois Supreme Interprets UCC to Allow Revocation of Acceptance on Defective RV Without Requiring Giving Seller an Opportunity to Cure

September 19, 2019 | Peter S. Lubin and Patrick Austermuehle

Our Chicago auto fraud firm filed an amicus brief in the Illinois Supreme Court on the side of an RV purchaser who wanted to revoke acceptance due to a leaky roof and the inability to use the RV all summer even though it is a summer product. The lower court had ruled against the RV purchasers holding that had to provide an opportunity to cure before revoking acceptance. The Illinois Supreme Court disagreed and held there was no right to cure for a defective product and the seller should have permitted revocation of acceptance. You can read the entire opinion Chicago auto fraud attorneys. Continue reading ›