A Shaker Heights, Ohio, dealership may have to pay a customer's $5,000-plus legal bill even though it was penalized only $200 for a violation of a consumer protection law.
The Ohio Court of Appeals ruled that a large award of attorney fees may be justified even if it dwarfs the amount of damages imposed on a dealership. However, it ordered the lower-court judge who made the award to explain on the record the specific basis for the amount he awarded.
The decision stemmed from a suit by Carlos Santoscoy, who paid a $150 deposit to lease a 1995 Nissan Sentra XE from Ganley Nissan Inc. The deal never was consummated because Santoscoy refused to accept a car without the CD player depicted in Nissan's promotional brochure. The deposit later was credited to his charge card, according to the dealership's attorney.
The suit accused Ganley of a series of violations of Ohio's consumer sales protection law by failing to provide the CD player and cassette/stereo depicted in the brochure, by failing to provide a dated receipt for his deposit and by changing the terms of the standard Nissan lease agreement.
An arbitration panel awarded $200 for a single violation but did not specify which of the allegations it upheld. It also assessed about $4,500 in attorney fees. Ganley did not challenge the $200 award but contested the attorney fees as unreasonable.
Cuyahoga County Court of Common Pleas Judge Stuart Friedman rejected the dealership's argument and increased the attorney fee award to $5,128.
The appeals court panel in Cleveland said the full amount may be warranted but told Friedman to explain how he calculated it.
'We reject Ganley's contention that the attorney fees awarded are unreasonable in relation to the award of $200 in compensatory damages,' Appeals Judge Ann Dyke said. 'A rule of proportionality would make it extremely difficult for aggrieved consumers to obtain redress and ignores the fact that the consumer protection action may produce a benefit to the community at large.'
Santoscoy's lawyer, John Kluznik of Cleveland, said he already has proposed to Friedman the factors that must be detailed to finalize the fee award.
The dealership's lawyer, Russell Harris of Lakewood, said Santoscoy suffered no financial damages in the canceled deal, and 'the only thing we did wrong was not put the $150 deposit on his copy of the purchase order.'
Ganley may appeal further, he said.