Kasra Sadr, The Car Law Firm: Defending Against Marginal Claims

It is often cheaper for dealers to settle consumer claims rather than fight because the costs of defense can be higher than the settlement demand. However, when the consumer brings a marginal case several years after purchase, and is also asking for an unreasonably high settlement demand, a dealer sometimes has no choice but to defend the case in a final arbitration or trial. Such was the case in a case Auto Legal Group successfully defended against Kasra Sadr and The Car Law Firm.

CLRA Violation Claim and Potential Consequences for the Dealer

The case was heard by a single arbitrator before the American Arbitration Association. Dennis McDonald testified as the customer’s expert. The customer’s main claim was that the dealer hadn’t properly disclosed that the vehicle had sustained damage in a prior accident, thus violating the Consumer Legal Remedies Act (CLRA). If the customer is successful, the dealer would have had to cancel the contract, pay thousands of dollars in damages, take back a vehicle back that had been used for more than two years, and pay tens of thousands of dollars in the customer’s attorney’s fees. Often, the finance company and the bond also want their attorney’s fees and costs in defending the case.

Challenging the Expert Testimony: Uncovering Weaknesses in the Claims

The Sacramento dealership had multiple disclosures of prior accident damage signed by the customer. But when the Car Law Firm saw the evidence, instead of giving up and dropping the case, they changed tactics and claimed through his expert that the vehicle – a 2017 Ford Mustang GT – was sold in an unsafe condition in addition to other things. Mr. Kamarei of AUto Legal Group thoroughly cross-examined Sadr’s expert’s assertions and pointed out numerous errors in his vehicle inspection report, which Mr. McDonald finally had to acknowledge. Mr. Kamarei also pointed out the weakness in Mr. Mc Donald’s analysis of the damage allegedly sustained to the structure or frame of the vehicle.

Additionally, with cooperation of the dealer, ALG’s investigation of the customer discovered that the customer was advertising the vehicle for sale at a price above what he had paid, and representing potential buyers that the vehicle was undamaged. He also regularly drag raced the Mustang at race tracks. Mr. Olives, another attorney at Auto Legal Group, pointed out those facts to the arbitrator, which made the customer not look very credible.

The arbitrator issued a 54-paragraph Final Award of Arbitrator, and the customer’s claim was denied in its entirety.

What To Do

The important lesson here for all dealers is simply our mantra: make proper disclosures, because every sale of a vehicle is a ticking time-bomb for at least three years. Up to three years (and sometimes more) a customer can sue a dealership for violation of the CLRA. Preferably use an AI driven disclosure software that helps you in making proper disclosures and takes photos of customers during the signing process. Paper disclosures are not very strong. However, if you don’t have specialized software, make sure you get full customer signatures that match the driver’s license signature on every page of vehicle history reports, and other documents. Make sure you have a good quality presale safety inspection report, that is hopefully by an outside third party mechanic, that is dated, and is signed by the mechanic who performed the inspection.

Take photos of the vehicle at the time of sale, especially the bottom of the car. Having proper documentation will greatly reduce the chances that you will get a demand letter or get sued, and if you do, it most often helps in either making the claim go away, or the settlement amount is greatly reduced.