The Minnesota Supreme Court has given the go-ahead for a private consumer fraud class-action lawsuit against a Minneapolis-area dealership group that already had settled complaints with the state attorney general.
The lead plaintiff, Jeff Wiegand, alleges that the sales staff at Walser Automotive Groups Inc. dealerships misled him and at least 100 other customers into believing that service contracts and credit insurance were required to obtain financing.
Two lower courts had rejected the case because the written documents Wiegand signed when he bought a used 1995 Isuzu Trooper at Walser's Chevrolet dealership in 1998 clearly stated that service agreements and credit insurance were optional.
The attorney general's office had investigated Walser dealerships' sales and business practices related to service contracts.
In 2002, the dealership group settled without admitting any wrongdoing.
The settlement requires tape recording of sales transactions for optional finance and insurance products and a promise not to tell consumers that service contracts are required. It also provides an arbitration option for customers with complaints.
The Supreme Court didn't decide the merits of Wiegand's claims but unanimously ruled that consumers can try proving at trial that they were damaged by relying on alleged verbal misrepresentations.
Wiegand's lawsuit seeks damages and the option of rescinding the questioned F&I contracts, said plaintiffs' lawyer Richard Fuller of Minneapolis.
Walser Automotive Groups' lawyer, William Hart of Minneapolis, said his client denies any violations and also will argue that the settlement precludes private suits by consumers.
You may e-mail Eric Freedman at [email protected]