In 2004 Roberto Basulto and Raquel Gonzalez went to a dealership in Hialeah, Fla., to buy a new 2005 Dodge Caravan. Although they spoke only Spanish, all the documents they signed were in English and some were incomplete when they were signed.
The paperwork included three different, inconsistent provisions for resolving disputes -- two conflicting arbitration provisions and a waiver of their jury rights.
When the couple discovered that the sales contract provided a lower trade-in allowance than the amount verbally agreed on, Potamkin Dodge refused to correct the situation, so they returned the Caravan to the store, having driven it only seven miles.
They demanded the return of their trade-in, only to learn it had already been sold.
So they sued.
That’s the story as laid out by the Florida Supreme Court in a dispute about whether the dealership can insist on arbitrating the couple’s fraud and deceptive trade practices claims.
A trial-level judge concluded that there was no valid arbitration agreement; however, a state appeals panel ordered arbitration of their damage claims.
‘No meaningful choice’
Now the state Supreme Court has agreed with the buyers that the arbitration provisions are unconscionable and unenforceable because the plaintiffs “had no meaningful choice” and the contract terms were “unreasonably favorable” to the dealership. The decision entitles Basulto and Gonzalez to a jury trial.
Dealership lawyer Mark Goldstein of Miami said the ruling has a potentially large impact on dealerships in Florida:
“First, dealers should double-check their arbitration clauses to make sure they do not internally conflict with each other,” he said. “Secondly, dealers might want to consider having a Spanish and/or Creole version of the deal documents for non-English speaking buyers to sign.
“Thirdly, dealers should not have their employees explain anything about the contracts to buyers because if they improperly explain it, the judge could find a lack of meeting of the minds on contractual terms,” he said.
The dealership, which is no longer operating, is asking the Supreme Court for a new hearing, according to Goldstein, who said the decision “undermines a whole line of Florida law which holds you are bound by what you sign.”
In its decision, the Supreme Court cited testimony by the dealership’s F&I manager and sales representative that they’d explained arbitration to the plaintiffs in Spanish. However, those employees themselves “did not have any basic understanding about the nature of arbitration,” Justice James Perry wrote in the court’s opinion.
In addition, the court found no evidence that the store had explained the “potential valuable rights the buyers were waiving,” including their right to punitive damages for fraud.
It rejected the dealership’s argument “that it should not matter, under Florida’s law of contracts, if a party is blind, illiterate or has limited understanding of the language.”
Finally, the court said the couple is entitled to attorney fees for the appeal because the retail installment sales contract allows attorney fees for the store if the dealership prevails in litigation.
In its motion for rehearing, the dealership argues that an award of attorney fees is premature because the buyers haven’t won the underlying lawsuit yet.
The plaintiffs’ lawyer, Timothy Blake of Miami, declined to comment on the case.
You can reach Eric Freedman at email@example.com