Klein & Wilson

California Court of Appeals denies class-action in CarMax suit

In 2008, a woman bought a 2006 Saab 9-7X from one of the CarMax Auto Superstores in California. She put $1,100 down on the car with a personal check and traded in her 2006 Honda Civic. In addition, she signed a form that would authorize the "holding' of that check for five days to give her time to get the money in her checking account.

The woman's sales agreement with CarMax, though, didn't quite cover everything. The Honda was listed as "sold" to the dealership - not that she had made a trade-in with her purchase of the Saab. In addition, there was another sales agreement that showed down payment.

The woman filed a lawsuit against CarMax because there wasn't one sales agreement for the entire purchase and the dealership didn't disclose her down payment. She wanted the deal rescinded and also sought damages.

CarMax won the first go-around in a lower court, with the judge awarding the dealership more than $12,000 in attorney fees. CarMax alleged that the woman was simply trying to "gain a windfall" and that she understood everything about the sale.

The California Court of Appeals agreed with the lower court's ruling. In addition, the court did not grant class-action status in the case and ruled against the woman's claim that CarMax had violated unfair competition laws. The court ruled that the woman must pay for the dealership's attorney fees.

Business tort issues such as unfair competition can be quite complex. However, unfair competition can break a business. Business law attorneys can help a business owner understand all of the intricacies involved in such cases and work to ensure that a company's interests are protected.

autonews.com, "Calif. ruling recognizes 1-year limit for finance law claims; dealers want precedent" Eric Freedman, Oct. 30, 2013

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