KANSAS CITY, Kan. - It's a Call For Action investigation that left a metro car dealership closed. Our investigation also prompted lawsuits from the Missouri and Kansas Attorneys General and class action lawsuits.
While there have been a lot of legal filings, the troubles continue for customers.
Customers are still feeling the impact 11 months after the Call For Action investigation into Chad Franklin Suzuki also known as Legend Suzuki.
Customers are still stuck with cars they can't afford as their car payments unexpectedly skyrocketed.
The million dollar ad campaign caught the attention of hundreds. They share similar stories of what the Attorneys General call deception.
Last April, customer Anne Willis told us, "I would like to see the Attorney General at least make them own up to what they said they would do."
Their calls for action were heard. Months after our stories aired, the Missouri and Kansas Attorneys General both filed lawsuits on behalf of more than 650 customers.
Together they have a claim, but they're being settled as individuals. Every customer is choosing a different path, and they're getting different results. Some customers are working with their state's Attorney General, others chose arbitration, and still others chose lawsuits.
Several individuals have settled with their lender and turned in their car without a ding on their credit report.
Arbitration
Anne Willis chose arbitration.
"It beats going and paying for a lawyer," Willis said.
Willis signed an arbitration agreement along with most customers. It limits a customer’s ability to sue Franklin. Franklin is using these agreements as a defense in court.
One Federal Judge ordered a stay in a case until the customer goes through arbitration. Just last week, that stay was lifted and the case was removed from federal court. It's now back in State court.
Customers like Anne Willis, who have been through the arbitration process, feel it doesn't solve anything.
"It's not effective. Nobody will honor it," Willis said.
Franklin himself did not participate and did not pay for the arbitration even though the agreement says Franklin will advance the filing fee.
"My parents came up with the money for me to pay the arbitrator," Willis said.
The arbitrator decided the program was misrepresented to Willis, and ordered Franklin to refund Willis $250. He also told her to turn in her car to the bank and stop making her payments.
It sounds good, "But the bank won't accept it," Willis said.
It's yet another roadblock that is financially and emotionally ruining Willis. She has a car payment she simply can't afford and was not expecting as part of the "Drive a Suzuki" deal.
She tried calling her lender, but says she can't get anywhere with Fifth Third Bank.
"The customer service lady made me cry on the phone," Willis said.
We called Fifth Third Bank, but the company would not talk about this case citing privacy concerns. After our calls, lawyers for the bank called Willis to explain the next step.
Willis says the lender wants her to take the decision to court. Generally, that costs about $100. Check with your local county for the exact price. In Jackson County, the cost is $105. The Court says you need to post the filing fee, and then the file goes right to the Judge. If everything is in order, the Judge adopts the arbitration award and makes it a final judgment.
While Fifth Third won't honor Willis' arbitration award at this point, Fifth Third is trying to get customers to go to arbitration versus suing. In another case, Fifth Third said customers signed a "Retail Installment Contract and Security Agreement" as well as an 'Arbitration Agreement' and they were both assigned to Fifth Third. "The claims asserted by the Fifth Third Plaintiffs against Fifth Third are covered by these Arbitration Agreements because they necessarily arise out of the 'Retail Installment Contract and Security Agreements' and lending relationships created by them. Accordingly, the Court should order the Fifth Third Plaintiffs to arbitrate their claims against Fifth Third and dismiss the claims asserted against Fifth Third in the First Amended Complaint..."
Attorneys General Update
KANSAS ATTORNEY GENERAL UPDATEMany customers have been calling Call For Action wanting an update on the Attorney General's actions. We called the AG, but it refused to comment beyond saying legal negotiations continue.
In August, we spoke with the Attorney General and he mentioned he hoped to work out a deal within six months. We know some customers have been able to work out deals with their lenders and have given back their cars without it impacting their credit rating. However, many customers tell us their lender is unwilling to negotiate such a deal.
The Kansas and Missouri cases are now in federal court. Court records reveal a Jury Trial has been scheduled for Jan. 4, 2010. A confidential settlement proposal was submitted, and in December a Federal Judge felt neither party was being realistic.
Court records say, "Even taking into account that typically there is a fair amount of bluff and bluster involved in the negotiation process, it is apparent neither plaintiff nor defendant is being realistic, practical, and creative in approaching settlement of this admittedly complex case. Since that suggests that mediation or any other form of alternative dispute resolution probably would be a waste of time and money at this early juncture..."
MISSOURI ATTORNEY GENERAL UPDATEThe Missouri Attorney General's case is also in Federal Court. The State tried to have it sent back to State Court, but the Federal Judge did not allow that.
The ruling said, "This Court agrees with Defendants that Plaintiff is attempting to disguise federal issues in a state claim in order to avoid federal court."
According to court records, the Missouri AG was scheduled to take Chad Franklin's deposition in the middle of March.
The case is scheduled for a jury trial starting July 19, 2010.
Lenders File Lawsuits
Lenders are also filing suits including Wells Fargo, Fifth Third Bank and Wachovia.
Wells Fargo filed the latest lawsuit just last week in Federal Court. The lender says Chad Franklin National Auto Sales North, Chad Franklin, and CFS Enterprises, Inc. have damaged Wells Fargo in excess of $75,000.
Wells Fargo alleges the promotional campaign breached their Master Dealer Agreement.
We have called Chad Franklin's Attorney for a statement, but have not received a comment.
