The Oklahoma Supreme Court has overturned an award of attorney fees to a dealership that successfully defended itself against a customer's claim that it violated state consumer protection law.
The court said the customer's claims, although rejected on the merits, were not frivolous, made in bad faith or 'motivated by an improper purpose.'
The case was filed by Larry Whitlock, who attempted to finance the purchase of a used 1986 Cadillac for $5,944, plus $950 for an extended warranty, from Bob Moore Cadillac Inc. of Oklahoma City. However, a bank rejected his initial application for financing.
He then bought a different vehicle from the same dealership for the same price, but negotiated different terms to qualify for financing.
Attorney Jerry Colclazier of Seminole, who argued the case for Whitlock, said his client ended up paying $1,000 more for the second car through the 'complicated sales transaction,' even though the purchase price was nominally the same.
Whitlock sued for fraud and violation of the Oklahoma Consumer Protection Act. A judge in Oklahoma County District Court dismissed the suit and ordered Whitlock to pay Bob Moore Cadillac $5,626 in attorney fees and court costs.
The state Supreme Court upheld the dealership's victory in Whitlock's suit, but said it is not entitled to recoup attorney fees under the circumstances.
The court said the consumer protection law does not authorize a winning defendant to collect attorney fees from the loser unless the suit is clearly frivolous, maliciously motivated and without a legitimate factual basis.
Otherwise, an assessment of attorney fees would have a 'chilling effect' on the willingness of consumers to sue to protect their rights, it said.
Colclazier insisted the suit was not frivolous. But the lawyer for Bob Moore Cadillac, C. Craig Cole of Oklahoma City, sharply criticized the decision as the state Supreme Court's 'effort to encourage the populous to prey on businesses.
'It encourages people to file lawsuits of questionable quality against auto dealerships,' he said. 'I find that absolutely dumbfounding. If you can afford to file a frivolous lawsuit, you should pay the piper.'
There will be no further appeal, Cole said.