Jenny Lee Holt and Kristopher Holt, etc. v. HHH Motors LLP., d/b/a/ Hyuandai of Orange Park, etc.

Jenny Lee Holt and Kristopher Holt, etc. v. HHH Motors LLP., d/b/a/ Hyuandai of Orange Park, etc.

When Jenny Lee Holt and Kristopher Holt purchased their car in 2010, they expected to pay some extra government fees.  What they didn’t expect — and had no reason to foresee — was that the car dealer would misrepresent a vendor’s fee for making a required filing as a government fee, mark up this fee by nearly 800 percent, and pocket the profits.

But that’s exactly what Hyundai of Orange Park (HOP) did to its customers.

For at least 4 years, the Florida dealership made buyers sign sales contracts that included a $100.50 (and sometimes more) “Government Certificate of Title” fee, which it claimed was to cover the fee for electronically filing title documents. In fact, the attorneys for the plaintiffs estimate based on similar scams that the actual cost of the filing fee was about $12, and HOP kept the rest for itself. 

HOP’s conduct is illegal under Florida’s Deceptive and Unfair Trade Practices Act, which prohibits sellers from overcharging customers for government fees in an attempt to squeeze additional profits. Accordingly, the Holts filed a class-action lawsuit on behalf of themselves and other buyers scammed by HOP, seeking reimbursement and injunctive relief. 

Rather than defend its conduct in court, HOP is fighting to force its wronged customers into individual arbitration, where they could not be part of a class action.  Without a class action, almost no consumers would bother to sue and those who did would be unlikely to find a lawyer willing to represent them over an individual loss of less than $100.  In addition, it’s likely that the arbitrator, who is chosen by an arbitration firm that was chosen by the dealer, would favor, would favor the car dealer and the entire process of arbitration would shield the evidence of its cheating from the general public. 

Ripped-off consumers like the Holts are entitled to have their lawsuit heard in court, unless they agreed in writing to arbitrate. In consumer cases, including this one, these documents are often contracts customers are forced to sign in order to make a purchase. In a fairer world, arbitration clauses would only be enforced when the consumer fully understood the terms.  Instead, the legal system only requires the court to review the contracts to determine whether the language shows the parties agreed arbitrate. 

In the appeal, the plaintiffs argue that the contract language clearly shows that they did not agree to arbitrate. The plaintiffs in this case signed two contracts when they purchased cars from HOP – a Retail Purchase Agreement, which covered the sale of the vehicle, and a Retail Installment Sales Contract, which outlined financing. The Purchase Agreement contained an arbitration clause, while the Installment Contract did not.  The Installment Contract also contained a clause that said it overrides the Purchase Agreement and reflects the entire agreement by the parties. 

In Florida, when consumers sign multiple contracts at the same time for the same purchase, the court should reconcile all the documents into a single agreement that it believes reflects the intention of the parties, according to the rule stated by Florida’s First District Court of Appeals in Duval Motors Co. v. Rogers (2011). In this case, because the Installment Contract excluded terms in the Purchase Agreement such as the arbitration clause, the plaintiffs argue that the court must hold that there is no agreement to arbitrate.  

The trial court denied HOP’s Motion to Compel Arbitration because the contracts HOP’s customers signed did not reflect a legally valid agreement to arbitrate. HOP has appealed that denial in Florida’s First District Court of Appeals, arguing that the Federal Arbitration Act (FAA) calls for an arbitrator, and not the court, to decide whether there is an agreement to arbitrate. 

Public Justice joined the team of lawyers who represent the plaintiffs in the appeal, arguing that the trial court decision should be affirmed because legal precedent holds that the court — and only the court — should decide the threshold question of whether the plaintiffs agreed to arbitrate. 

Attorneys for the plaintiff are Brian W. Warwick and Janet Varnell of Varnell & Warwick, P.A., William C. Bielecky of William C. Bielecky, P.A., and Deanna L. Blair of Jacksonville Area Legal Aid.

Public Justice Senior Attorney Paul Bland serves as co-counsel in the appeal and delivered oral argument on Jan. 16, 2014. 

photo credit: InSapphoWeTrust via photopin cc

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