Many consumers who are injured by The Murphy Consumer Law Firm Fort Lauderdale, FLlaw breaking businesses are shocked to learn that their right to bring a claim in the courts – including having a jury of their peers to decide their case – may have been unknowingly contracted away by a so-called “mandatory arbitration.” Often such arbitration provisions are tucked away inside boiler-plate contracts or in purchase documents that are superseded by subsequently executed agreements.

In a recent case filed by the Murphy Law Firm in the Northern District of Florida, a Fort Walton Beach couple asserted that Hampton Automotive Group fraudulently sold an undisclosed wrecked daily rental car. According to the allegations of the Complaint, Hampton Automotive Group sold a 2010 Hyundai Genesis representing that the vehicle was a “demo.” In the automobile sales industry, a “demo” or a “demonstrator car” is trade slang for vehicles that are driven by managers or sales persons of the dealership for test drives for interested prospective buyers. “Demo” cars are considered “new” despite such usage as the vehicles are typically not titled in the name of the dealership, but rather still under the so-called “manufacturer’s certificate of origin” (“MCO”). Under state law, a vehicle having an MCO is considered a “new” vehicle for title purposes.

With respect to the Genesis, the consumers learned shortly after the purchase of the vehicle that the vehicle had been previously titled in the name of Avis Rent-a-Car and had been used in a rental car company under a short term lease since the acquisition of the vehicle by Avis. According to the Complaint, contrary to the requirements of Florida Statutes §319.14, Hampton Automotive Group failed to disclose the prior use of the vehicle as a rental car at any time prior to its sale to the car buyers. Moreover, according to the car buyers, the vehicle had also been in a accident to the extent that it had been sold at a junk and salvage auction in August, 2010. Consumer Law Firm Fort Lauderdale

In response to the Complaint filed in federal court for recovery of damages, Hampton Automotive Group filed a Motion to Compel Arbitration asserting that the retail buyer’s order for the purchase of the Genesis required that any dispute be resolved through the American Arbitration Association (“AAA”). In response to the Motion to Compel Arbitration, the consumers argued that the so-called “buyer’s order” had been superseded by a subsequently executed finance agreement that did not require the parties to submit their dispute to an arbitrator.
On June 6, 2012, United States District Judge Richard Smoak entered an order denying the Motion to Compel Arbitration. Judge Smoak recognized that state law governs interpretation of contracts. Florida state law provides that a subsequently executed finance agreement which did not contain an arbitration provision controls the resolution of the dispute between the parties.

The Murphy Consumer Law Firm Fort Lauderdale, FL considers the decision by Judge Smoak to be a significant victory for consumers. In many instances, consumers find that the arbitration process limits the ability of consumers to prepare their claims for resolution. Under the rules of the AAA, the ability to take depositions, request documents and the like are sharply curtailed. Moreover, consumers typically will not have the right to appeal to a higher court in the event the arbitrator does not rule correctly.