LEGAL FILE

CarMax cleared after refusing sale to used-car dealer

A 2013 Jeep Wrangler was at the center of a dispute between a CarMax store in Norcross, Ga., and a used-car dealer.
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A federal judge in Georgia has tossed a lawsuit by a used-car dealer who claims an Atlanta-area CarMax store wrongfully refused to sell him a new 2013 Jeep Wrangler.

LaVan Webster claimed he tried to buy the Wrangler for his wife's personal use. But the dealership, in Norcross, Ga., said it believed Webster intended to resell the Wrangler on behalf of his used-vehicle store.

Webster sued CarMax Auto Superstores Inc. for breach of contract, discrimination and unfair trade practices and asked for compensatory and punitive damages. U.S. District Judge Richard Story in Atlanta dismissed all three claims.

According to the judge's decision, a buyer's order in February 2013 listed Webster and his wife as individual purchasers of the Wrangler for a retail price of $37,869, including a rebate. But neither Webster nor the dealership signed the document.

Webster returned three days later with a check from Credit Master Auto Sales Inc., a Gainesville, Ga., business that buys and sells used vehicles and lists Webster as agent for service of process, according to the decision. The dealership told Webster it couldn't sell the Wrangler for less than $39,630 because "it could not offer rebates intended for retail customers to used-car dealers," the decision said.

Webster refused to pay the higher price. CarMax's assistant business office manager contacted a Chrysler representative, who said the dealership's Jeep sales and service agreement barred it from selling new vehicles to used-vehicle dealers for resale. The dealership then told Webster it could not sell him the Wrangler, according to the decision.

Webster bought an "identical vehicle" from a different dealership and registered it in his wife's name, the decision said.

The lawsuit asserts CarMax told Webster he did not meet the requirements to buy the Wrangler but did not explain what this meant, according to the decision. Webster believed "these requirements could refer to his race, mental capacity or some other discriminatory factor," the decision said.

In court papers denying liability, CarMax argued that Webster was ineligible to buy the Wrangler because such a sale "would have been in violation of CarMax's franchise agreement."

Not enough evidence


In his decision, the judge ruled that Webster failed to produce enough evidence to warrant a trial.

First, the judge rejected the breach-of-contract claim, finding that there was no valid buyer's agreement or other written contract.

Second, the discrimination claim was based in part on the fact that Webster is white and the store's assistant business office manager is African-American. But Webster's only evidence of discrimination was the statement that he didn't meet the requirements to buy the vehicle, the judge said.

"Even though he [Webster] presumed that this could mean CarMax refused to sell him the vehicle on the basis of race, such a presumption, without more, does not amount to direct evidence of discrimination," the judge said.

In addition, the judge said, the sales and service agreement was a "legitimate, non-discriminatory reason" for denying the rebate, and although Webster insisted that the Wrangler was for personal use, the business check led the store to think otherwise.

Last, the judge found no violation of Georgia's unfair business practices law because there was no proof that CarMax advertised the Wrangler with the intention to not sell it as advertised. "Rather, the evidence demonstrates that it only refused to sell the vehicle after it learned that selling the car would violate its agreement with Chrysler," the judge said.

'That didn't happen'


Webster, who represents himself in the case, said the judge got it wrong.

For one thing, Webster said, he wasn't a used-vehicle dealer at the time of the failed transaction. Although he founded Credit Master Auto Sales Inc. and was its agent for service of process, he said, he is retired, and the company is "100 percent" owned by his wife and managed by his son.

Webster also said the check he brought to the dealership was a credit union check, not a Credit Master check, and that Credit Master wasn't going to be the buyer.

In addition, Webster said, the judge was wrong in finding no violation of Georgia's unfair business practices law because CarMax's advertising had implied that "what you see is what you pay, and that didn't happen."

Webster said he intends to appeal.

CarMax spokesman Casey Werderman said the company would not provide information on the case.

You can reach Eric Freedman at freedma5@msu.edu.

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