“AS-IS” IS NOT ALWAYS A DEFENSE TO AN UNLAWFUL TRADE PRACTICES CLAIM
I often get calls from people that buy a car with a material defect and try to return the car to the dealer. The dealer then informs the consumer they bought the car “As-Is.” The dealer will often note that the consumer signed an As-Is clause prior to the purchase of the car. This often deters consumers that may have a valid claim against the dealer. However, these As-Is clauses don’t always protect the dealer from liability. Below is a modified draft from a recent motion I filed in Court on the issue:
As a licensed Automobile dealer, XXX cannot use an “As Is” clause to engage in Unlawful Trade practices. XXXX advertised the car as 1) having keys, and 2) the costs of repairs were $0.00. Ross Dec. Ex. 4. The As-Is Clause noted on defendant’s Exhibit D relates to Mr. XX purchase of the car directly from dealer. Therefore, this transaction is no different than a consumer purchasing a vehicle at a local Oregon car dealership that falsely advertised a vehicle and failed to disclaim material defects.
As a result, dealer cannot disclaim its obligations under the UTPA (ORS 646.608) or Fraud. A similar issue was addressed in Hinds v. Paul’s Auto Werkstatt, Inc., 107 Or App 63 (1991), rev. den., 311 Or. 643, (1991)). In Hinds, seller defendant sold XXX a vehicle that had been in an accident, but had been repaired. Seller defendant claimed because it used a standard “buyer’s guide” with a standard “As-Is” clause it was protected from a UTPA claim for failure to disclose known material defects. The trial court found for the defendant, stating that the “clear intent” of the buyer’s guide “is to make certain that a buyer purchasing a used car ‘as is’ is aware of the full consequences of the agreement.” Id. at 65 n. 3. However, the Court of Appeals rejected this argument and reversed the trial court, stating because 16 CFR§455.2 “The FTC As-Is Rule” is silent as to “disclosure of known defects” the UTPA requirement that a seller disclose defects that it knew of or should have known of is not affected. Id. at 65.
In Parrott v. Carr Chevrolet, Inc. the defendant argued that it was protected by an “As-Is” clause and a broad interpretation of ORS 646.608(1)(t) would “effectively nullify” a car dealer’s ability to use an “As-Is” clause. Parrott v. Carr Chevrolet, Inc. 156 Or App 257, 270 n. 9 (1998), rev’d in part on other grounds,331 Or. 537, (2001). The court disagreed, stating that an “As-Is” clause “calls the buyer’s attention to the exclusion of warranties and makes plain there is no implied warranty” whereas “ORS 646.608(1)(t) addresses the failure to disclose known material defects.” Id.
Furthermore, the Oregon Attorney General has promulgated rules related to Unlawful Trade Practices for Oregon Vehicle Dealers. Two subsections of OAR 137-020-0020 (3) relate to Unlawful Trade Practices by vehicle dealers. The Rules note:
(o) Disclosure of Material Nonconformities and Defects — A dealer or broker shall disclose existing material nonconformities and defects about which the dealer or broker knows or negligently disregarded when the dealer or broker should have known, prior to sale or lease of a motor vehicle;
OFFICIAL COMMENTARY: Unless explicitly disclosed prior to a sale or lease, a motor vehicle that is offered for sale or lease to the public is represented, either directly or by implication, to be roadworthy when it is sold, to have an unbranded title and to have no undisclosed material defects. The dealer is in a superior position to inspect and determine the condition of a vehicle prior to marketing the vehicle. It is an easy matter, through a number of industry and internet sources, for a dealer or broker to review a vehicle’s title, damage and ownership history. The intent of this rule is to conform its applicability to the maximum extent permitted by ORS 646.608 and the holding in State ex rel. Redden v. Discount Fabrics, Inc., 289 Or 375, 615 P2d 1034 (1980): “Under the terms [of the Unlawful Trade Practices Act] a defendant is liable for misrepresentations made negligently, without evidence that it was attended by either conscious ignorance or reckless indifference to its truth or falsity, whereas evidence that a misrepresentation was made negligently is insufficient in an action for common law fraud. In other words, the term ‘willful,’ as defined by (646.608), requires no more than proof of ordinary negligence by a defendant in not knowing, when it should have known, that a representation made by him was not true.” ORS 646.608 (2) states: “A representation under subsection (1) of this section or ORS 646.607 may be any manifestation of any assertion by words or conduct, including, but not limited to, a failure to disclose a fact.”
This rule does not change the existing laws regarding warranties on used vehicles nor does it place any new requirements on dealers or brokers. Dealers and brokers should understand, however, that simply because they comply with the FTC “As-Is” rule it does not relieve them of their obligation to disclose material defects they knew or should have known about. A dealer is not required to guarantee, warrant or represent that a used vehicle will not have any mechanical problems or undetected material defects once the vehicle is sold. Further, a dealer need not create an exhaustive list of every ding, paint scratch, fabric tear or discoloration clearly visible upon inspection by an average consumer. Examples of negligent disregard of some things that should put a dealer on notice and trigger its duty to disclose might include, but is not limited to, a large pool of oil or antifreeze under the vehicle, dark colored smoke coming from an exhaust pipe, water stains on carpet or doors, a different color paint than the body under the hood or in the trunk or tires that are worn very unevenly.
(p) False or Unsubstantiated Representations — A dealer or broker may not make a misrepresentation or a false or incomplete statement of fact in conjunction with the sale or lease of a motor vehicle, or any other representation or statement which the dealer or broker does not have sufficient information upon which a reasonable belief in the truth of the representation could be based;
OAR 137-020-0020 (3) (o) (p) emphasis added
Here, XXX is a licensed Oregon Dealership. Dealer advertised a vehicle with keys and $0.00 damages and sold plaintiff a car without keys and with roughly $40,000.00 in undisclosed damage. As noted in the Hinds, Parrott, and OAR 137-020-0020 (3) (o) and (p), this type of conduct is expressly prohibited by the Unlawful Trade Practices Act and is not precluded by other statutes. To hold otherwise, would allow every used car dealer, or merchant, to flagrantly violate the UTPA and hide behind an “As Is” clause. As a result, there is a material issue of fact relating to whether or not this “As Is” clause shields dealer from UTPA liability.
WHAT TO DO WHEN A DRUNK DRIVER HITS YOU
Everyone knows Drinking and Driving (DUI) is illegal in Oregon. However, people need to understand that the fear of getting arrested should not be the only concern when a DUII driver gets behind the wheel. Statistics for the State of Oregon note hundreds of injuries and fatalities that result from DUI crashes each year. Alcohol, controlled substances, marijuana, and prescription drugs are all contributing factors to these crashes. Below is a terrifying video of a DUII driver that is lucky to be alive.
As a result, the law allows injured people in certain circumstances to collect additional compensation from the DUI driver that injured them. An injured party can obtain punitive damages from a DUII driver. An injured party may also be able to collect money from a bar that over-served the DUII driver.
The question then becomes what should you do if you are hit by a DUII driver. The following list should assist you in obtaining compensation when you are involved in a crash with a suspected DUII Driver:
- Report the Crash to the Police Immediately if you suspect you were injured by a DUII driver. Many police departments do not respond to minor crashes, but will respond to a crash involving a DUII driver. It is imperative to call 911 if you suspect you were in a crash with a DUII driver.
- Gather information from the DUII driver regarding where the DUII driver was consuming alcohol or the controlled substances. This may give rise to an additional dram shop claim.
- Gather Witness information and contact information. If someone saw any part of the crash or spoke with the DUI driver get the witnesses address, phone number, or email. Also it may help to take a photo of a witness’s license plate so you can look them up in the future if necessary.
- Take Photos. Pictures are worth a thousand words. Cell phone photos of the crash scene, and maybe an empty beer bottle is powerful evidence to assist in the prosecution of the DUI driver and to assist you in your personal injury case.
- Contact your Auto Insurance company immediately and inform them you think you were hit by a DUII driver. Provide them the police officer’s name and report information.
- If you, or a loved one, are seriously injured, call a personal injury attorney immediately and cooperate with law enforcement. Many times the DUI Driver’s minimal insurance policy of $25,000.00 will be expended by a two day hospital stay. This leaves the injured party with nothing, and only reduces the medical bills they will be forced to pay if they don’t have other insurance sources. It is important to contact a personal injury attorney so the attorney can investigate all potentially liable parties. An investigation may reveal additional sources of insurance that will provide the injured person compensation in the future.
- Cooperate with the District Attorney if you are asked to come to court or send documents to the District Attorney.
The above list is not exhaustive, and your situation will likely vary. However, these are things to keep in mind if you are hit by a DUII driver in Oregon. If you are injured by a DUII driver in Oregon call Portland Oregon Personal Injury Attorney Jeremiah Ross for yourfree personal injury consultation. Cal 503.224.1658. This post is not to be considered legal advice, so please call a lawyer.
INJURED BY A DRUNK PERSON COMING FROM A SUPERBOWL PARTY? THE LAW CAN HELP….
The Superbowl is here again. People are stocking up on junk food, beer, and liquor. This festive time of year can become disastrous if a person gets struck by a DUII driver. This is why people hosting Superbowl Parties must be careful to not over-serve a person alcohol and allow them to drive home. In Oregon, homeowner’s can be held responsible for injuries suffered by a person that were caused by a visitor to the homeowner’s party. This is important in serious injury cases when the bad driver’s insurance policy may only be $25,000.00. The $25,000.00 can be evaporated by an ER visit, surgery, and a short hospital stay. The injured person may be stuck with tens of thousands of dollars in unpaid medical expenses that can drive them into bankruptcy.
Oregon has a way to obtain compensation from additional insurance policies. Homeowner’s can be held responsible for serving alcohol to a person that is visibly intoxicated and later injures another in a DUII crash. (ORS 471.565). Oregon courts have determined a person who receives guests in a social l setting, in which the host serves or directs the serving of booze or beer to guests can be held accountable if the overly intoxicated person later injures another in a DUII crash. See Solberg v. Johnson, 306 Or 484, 490 (1988). This type of liability is referred to as “Dram Shop” liability. Dram Shop liability is important because home owner’s and renter’s insurance policies may cover DUII crash injuries and provide tens of thousands, or hundreds of thousands of dollars, in additional insurance coverage. This money can be used to pay medical bills, physical therapy, vocational rehabilitation, and to compensate the injured person or their family for their harms and losses.
It is important to keep in mind if you intend on making a dram shop claim there are time limitations that notice must be given in. Specifically, if it is a wrongful death claim then notice must be given within one year of the date of death, or within a year after the date plaintiff discovered, or should have discovered, the claim, whichever is later. (ORS 471.565) In a personal injury matter, notice must be given within 180 days of the injury, or 180 days after the injured person discovered or reasonably should have discovered, the existence of a dram shop claim which ever is later. (ORS 471.565) However, these notice requirements may not always apply and there are exceptions. Please refer to a current version of ORS 471.565 for notice requirements and time limitations.
Dram shop cases can be complicated and there are other theories an attorney can use to attempt to obtain maximum recovery for a person’s injury or loss. Please contact Portland Personal Injury Attorney, Jeremiah Ross, at 503.224.1658. for a free personal injury consultation. Please remember this post is for informational purposes only and you should rely on the current statute and case law when considering a dram shop claim. Please consult with an attorney if you believe you have a dram shop claim or have been injured by a DUII Driver.
ROSS LAW PUBLISHED IN STATE BAR PUBLICATION RELATED TO DEALER FRAUD
Ross Law LLC Elder Law Feature for OSB
Article by Portland Consumer Attorney Jeremiah Ross
BUSHING SCAMS, YO-YO SALES, AND SPOT DELIVERY OF VEHICLES
I often get frantic calls from people that recently purchased and financed a vehicle. These people are asking for help because the dealer is claiming the consumer must return to the dealership and sign additional financing documents with terms less favorable to the consumer. Consumers are confused and angry when they learn the financing fell through and the dealer no longer has their trade-in to return to them. Most of the time these consumers are victims of a bushing scam. These bushing scams are also known as “spot delivery” or yo-yo sales.
Here is the way bushing scams typically work. The dealer will sell a person a car and offer to finance the vehicle. The consumer signs financing paperwork and takes the vehicle home. Usually the consumer is under the impression the financing is complete and the vehicle is theirs. Unbeknownst to the consumer, after the consumer leaves the lot the dealer is still attempting to find a finance company to finance the vehicle. Consumers may receive credit denial letters in the mail, but think it is in error because the dealer told them the vehicle was financed. Eventually, the dealer contacts the consumer and informs them financing could not be obtained. The scam is complete when the dealer has the consumer agree to new less favorable financing terms for the vehicle. This often results in the consumer paying a higher interest rate and putting an additional down-payment down on the vehicle.
The dealer benefits from this transaction because the consumer is usually under the impression the vehicle was theirs the day they drove it off the lot. Consumers have often put money into the vehicle to buy things like floor mats, a stereo, or other items. As a result, they feel trapped and will sign new less favorable financing terms. Additionally, dealers may inform the consumer that their trade-in has been sold and the dealer does not have “authority” to refund their down-payment. These are frustrating issues for consumers and practitioners alike. However, in Oregon there are laws to protect consumers in these situations.
Below is a list of questions and answers to assist practitioners and consumers that are facing a spot delivery issue:
Is Spot Delivery Legal In Oregon? Yes, but dealers must comply with ORS 646A.90 and 137-020-0020 (3). These requirements allow dealers to make an offer to sell or lease a vehicle to a consumer that is subject to future acceptance by a lender. ORS 646A.90 (2)
How long does a dealer who spot delivers a vehicle have to obtain financing for the vehicle? A dealer must find financing for the vehicle under the exact terms negotiated between the dealer and consumer within 14 days after the date on which the buyer takes possession of the vehicle. ORS 646A.90 (3) (a)
What happens to a Consumer’s trade-in in a spot delivery deal? In a spot delivery deal, the dealer cannot sell or lease the consumer’s trade-in before the dealer has received final approval of funding from the lender. ORS 646A.90 (3) (b)
Can a dealer offer to obtain financing for a vehicle knowing that the financing will not be approved? No, a dealer cannot spot deliver a vehicle to a consumer unless the dealer has a “reasonable basis to believe the consumer could qualify for the terms of financing quotedat the time of delivery.” 137-020-0020 (3) (x) This is a powerful rule that consumers with horrible credit can use when the dealer initially has them sign a retail installment contract or lease with a low interest rate and little money down.
Does a dealer that fails to finance a spot delivered vehicle have to tell a person why the financing fell through? Yes, If a dealer spot delivers a vehicle and fails to obtain financing under the original terms, the dealer cannot make a misrepresentation regarding why the consumer does not qualify for the original financing terms or misrepresent why the transaction cannot be completed under the original terms. 137-020-0020 (3) (y) This rule prohibits dealers from calling the consumer back to the lot to sign new less favorable financing terms, even after the consumers original terms were approved by the lender.
What does the dealer have to do if they cannot obtain financing for the vehicle under the original terms? A dealer that spot delivered a vehicle to a consumer and later learns the consumer does not qualify for the original terms must do the following prior to offering, negotiating, or entering into new terms for the purchase or lease of the vehicle:
- Inform the consumer the consumer is entitled to have all items of value received from the consumer as part of the transaction, including any trade-in and down payment, returned to the consumer.
- If the consumer is physically present when the dealer informs the consumer that the consumer does not qualify for the terms offered, the dealer must return all items received from the consumer as part of the transaction. The dealer must have a refund check and the Trade-In keys immediately available.
- If the dealer informs the consumer by telephone, text, e-mail, letter, or other means without the consumer present, that the consumer did not qualify for the terms offered. The dealer must clearly disclose the consumer’s right to receive the immediate return of all items of value, i.e. trade in and down payment, when the consumer returns the vehicle. The consumer must have the actual ability to obtain these items of value and the dealer cannot simply inform them of their right to receive these items back. The dealer must have a refund check and the Trade-In keys immediately available. Dealers usually have a difficult time complying with this law as they usually sell the consumers trade-in prior to obtaining the financing.
Dealers shall inform consumers of these options and cannot hold the trade-in and down payment for ransom to have the consumer enter into a less favorable financing agreement. The Commentary 137-020-0020 (3) (z) makes it clear, “The consumer has an absolute right to walk away from the deal if the original offer is not going to be honored.” 137-020-0020 (3) (x); See Also, ORS 646A.90 (4)
In a failed Spot Delivery, can the dealer charge the consumer for vehicle damage and the mileage the consumer put on the vehicle?Yes, but only if the offer or contract to sell the vehicle provided in writing that the buyer is liable for: the fair market value of damage, excessive wear and tear, or loss of the motor vehicle while the vehicle is in the consumer’s possession. Additionally, if, within 14 days of that date the buyer takes possession of the vehicle the seller sends notice to the buyer by first class mail that financing is unavailable, the dealer may charge for mileage the buyer put on the vehicle. ORS 646A.90 (4) (b) explains how the mileage is computed and notes, “The [mileage] charge may not exceed the rate per mile allowed under federal law as a deduction for federal income tax purposes for an ordinary and necessary business expense.” ORS 646A.90 (4) (b).
The above list is not exhaustive as many other statutory violations often occur during bushing scams. However, each situation is unique and these statues and rules are helpful in guiding the practitioner and consumer who is facing a spot delivery issue. ORS 646A.90 and 137-020-0020 (3) do not explicitly state a consumer has a right of action to sue under these statutes and rules. However, a creative practitioner can use these laws as a basis for a claim for relief. If you have any questions feel free to contact Portland Oregon Attorney Jeremiah Ross at 503.224.1658.
Please remember the law is constantly changing and you should refer to the statute and applicable case law before relying on any of the information in this post.
TEENS, TEXTING & DRIVING, A DEADLY COMBINATION
Imagine having your hopes and dreams shattered by a decision to take your eyes off of the road for a few seconds to text on your cell phone. Many young drivers are being forced to face the consequences of their actions. A new video released notes that many state prosecutors are charging teens that cause a crash while they are texting with serious crimes. Instead of spending their summer on vacation these teens will be spending their summer in Jail or prison.
Great Video Regarding Texting and Driving
According to the video, texting and driving has become the leading killer of American drivers. This is a serious issue and most states have laws preventing texting while driving. In Oregon ORS 811.507prohibits drivers from using a mobile communication device while driving. There are exceptions to ORS 811.507, but even a person using a hands free device must be over the age of 18.
Despite these laws, the vast majority of young drivers believe they are good drivers while texting. This false confidence results in these inexperienced drivers taking their eyes off of the road for an average of five seconds for each text message sent or received. Five seconds is a very long time to take your eyes off of the road.
In Oregon, a texting driver that injures another in a crash may be charged with the crimes of assault, reckless driving, reckless endangerment and more serious crimes relating to manslaughter if the texting and driving kills someone. Furthermore, most likely the injured person will be forced to file a lawsuit against the at fault driver if the at fault driver’s insurance company refuses to reasonably compensate the injured individual. Many teens find themselves being the defendant in a lawsuit because their insurance won’t agree to pay a reasonable settlement. This is a difficult position for the injured person and the teen that caused the crash, but the teen must be held responsible for texting and driving and the civil process is a way to do so.
If you or someone you know were injured by a driver that was texting and driving call Portland personal injury lawyer Ross Law LLC at 503.224.1658 for your free personal injury consultation. Jeremiah Ross is happy to discuss your case with you at no cost and no obligation to you. Please remember this post is for informational purposes only and is not to be considered legal advice. Please remember to consult with an Oregon attorney about your case.
ROSS LAW PREVAILS IN PUBLISHED LEGAL OPINION
Jeremiah Ross and Ross Law LLC recently won a judicial battle relating to an insurance company's legal right to take money from Ross’ client’s settlement. The issue involved a Worker’s compensation case that was resolved by a Disputed Claims Settlement (DCS). Jeremiah Ross’ client then sued the injured worker’s non-complying employer and settled that case.
The Worker’s Compensation Insurance company claimed they were entitled to a portion of the settlement proceeds. The insurance company relied on Oregon Statutes ORS 656.587 and ORS 656.593 and the language of the signed DCS. The statutes that the insurer relied on allow for the insurance company to receive a portion of a personal injury settlement if the insurance company is deemed a paying agency that paid benefits on a compensable claim.
Jeremiah Ross argued that the insurance company was not a paying agency because there was not a compensable claim and the insurer never provided benefits. The Worker’s Compensation board agreed with Ross and determined the insurance company was not entitled to a portion of the settlement proceeds and ORS 656.587 did not apply. For the full opinion Click here.Worker’s Compensation Board Opinion Regarding DCS Extinguishing Lien
If you have been injured or have questions about a worker’s compensation lien on your personal injury settlement, please call Jeremiah Ross at 503.224.1658. Please remember the law is constantly changing and this post may not be accurate if the Decision is overturned on appeal.