Calling All Cars

By Brian Hickey
Philadelphia Weekly
Week of July 3, 2002

By summer's end, there may be at least a dozen lawsuits pending against a prominent Philadelphia car dealership.

Things haven't been all that beautiful in Roxborough for the Gary Barbera Dodgeland folks since a local attorney recently filed a handful of suits against the well-known car dealership.

Accusing salesmen at both the Roxborough site and at their Chryslerland outfit on Roosevelt Boulevard of unethically – if not illegally – lining company pockets at the expense of naive customers, lemon-law attorney Craig Kimmel brought two claims to city courts last month.

With at least three more soon expected to enter the legal pipeline, Kimmel says he'll have more than a dozen suits pending against Barbera by the end of summer. It's a trend that has some stopping just short of crying frivolous, but one for which purported victims aren't hard to find.

Some nuances vary, but each of the complaints tells a similar tale. Drawn in by boisterous "Instant Credit, Come and Get It!" advertisements, the prospective car buyers were regaled with stories of how they'd drive off the lot with a new set of wheels that very day. And after negotiating, that's precisely what each did ... though they wouldn't be new car owners too long.

Shortly thereafter, court papers alleged that a salesman called to ask them to please return to the dealership because of an unforeseen problem. Those who went were told they must agree to higher monthly payments, fork over a bigger down payment or return the car. A repo man quickly did his thing to those who didn't come back. Not knowing any better, most thought the dealership was in the right and complied.

The problem is that some question whether the dealership has the right to require its customers to sign new deals at all. Kimmel maintains that the car is officially sold after the buyer signs – among other documents – a Retail Installment Sales Contract (RISC), a form signed during any legitimate automobile transaction. From there, dealers have no legal basis to make any new demands. If they do, he argues, they're breaking state and federal laws.

For their part, the dealerships have maintained in earlier cases that the signed contracts declared the deals weren't finalized on the spot.

Kimmel calls it a spot delivery, or yo-yo, scam. Named the second most prevalent "dealer scam" by last year, it's also something for which the state attorney general previously sanctioned Barbera.

One by one, they come into Kimmel's office in Ambler with their stories.

An elderly couple from Northeast Philadelphia traded in their old truck with 250,000 miles on it for a new Grand Voyager back in 1998. When they refused to sign a new deal two weeks later, it disappeared from their driveway within minutes. When they got their old truck back, the driver's seat was slashed in six spots. (Morton and Phyllis Smiler's suit is expected to be filed by early August.)

A Bridgeport, Montgomery County, laborer agreed to a deal substantially pricier than what a salesman told him to expect after a draining eight-hour visit. He soon got a letter telling him to come in to "straighten things out," which was salesman-speak for paying another $2,000 or giving up the keys to the new truck. He chose the latter.

"I felt like I was wrong, just figured that's the way it works. It's all pretty embarrassing," says Troy Schantz.

Then there's the 26-year-old guy from Roxborough who leased a Dodge Dakota truck last April. For him, the unexpected new deal called for either a cosigner or $40 more a month. After agreeing to the increased payments, the following week brought a demand for another $5,000. Like those before him, he couldn't do it and haggled for hours to get his deposit and old car back.

To the victims – two other women make similar accusations in yet-to-be filed suits – each story marks a personal hardship. Each was thrilled to have a new car. Each was crushed and confused when they lost it.

To Kimmel, they're just the latest in a parade of spot delivery cases linked to Barbera.

Civil suits already filed in Philadelphia by Schantz and Kevin Lougherty of Roxborough maintain that Barbera management trains salesmen in these "deceptive business practices... [to] reap millions in unearned, ill-gotten gains from unsuspecting consumers [who are] left in utter and complete helplessness."

It happens, according to the lawsuits, hundreds of times a year. But an attorney for the dealership says those numbers are inaccurate.

"It's the same story every time – they're very good at getting people to sign the deals they want them to sign," says Kimmel, a former auto mechanic whose 10-attorney firm has handled some 19,500 lemon-law cases since 1991 (they don't get paid unless they win the case). "There's a beehive mentality. They [salesmen] all want to put as much honey in as they can. Anybody who gets in their way gets stung."

In 1997 the state Attorney General's Bureau of Consumer Protection fined Barbera $3,500 after an investigation into much of what's alleged in the recent lawsuits.

They said dealerships must clearly tell customers that their deals aren't officially closed before sending them off in a new car. Though he didn't admit guilt, owner Gary Barbera signed an "assurance of voluntary compliance" that bound salesmen to those conditions.

According to the deal, they couldn't boast about low prices without being reasonably sure they could deliver.

Still, those now suing Barbera say they were never told their deals weren't complete and clearly didn't get the price they were promised.

Barbara Petito, spokesperson for the attorney general's office, said any violation could saddle Barbera with a contempt of court charge. Despite the lawsuits, she says they haven't received any complaints since the agreement was signed.

That same year saw two other Philadelphia dealerships scrutinized for spot delivery problems. The state filed a lawsuit against Metro Chrysler-Plymouth-Jeep-Eagle, while Philadelphia Honda officials signed the same agreement as Barbera and paid a $5,000 fine.

At the time, Metro's attorney said a dozen states had spot delivery conditions honored by the government and automotive-trade associations. Attorneys who defend dealerships say it's not a scam at all, maintaining that problems stem from customers who are dishonest on financing applications and those who don't read everything – particularly the "subject to credit approval" line – before they sign.

Though the state merely bound Barbera to be more open with customers, Kimmel takes it even further. A signed RISC completes a sale, he says in a claim that's backed by state officials. Calling customers back in, he continues, is nothing more than an unethical tactic to boost profits.

Though previous spot delivery cases were settled out of court – one can only suspect it's better to do it that way than face bad publicity and potentially huge awards – those deals restrict Kimmel from discussing the particulars.

But in the pending cases, Kimmel's clients are each asking for the vehicle's entire value in addition to $100,000 for fraud and $250,000 in punitive damages.

(Asked why the dealership should pay for a car that a person had for a matter of days, he likens it to someone buying a shirt on a credit card. Though they hadn't paid for it yet, it still belonged to them when they left the store.)

"They haven't filed a legal response to date. All we get are general denials," Kimmel says of the cases. "I suspect that they don't get into it because they can't win. There's really no defense. They'll say that they make mistakes, that it happens from time to time, but it's really just blatant fraud."

Barbera attorney Jeffrey Sotland declines comment on the pending litigation – he's handling the Schantz case but only recently heard about the Lougherty matter, which was filed on June 12.

"All I can tell you is that these are typical boilerplate accusations that come out of that [Kimmel's] office," he says, adding that there aren't nearly as many lawsuits as Kimmel cited.

Barbera spokesperson Eric Gerstein says he can't talk about Kimmel or the pending cases since the dealership currently has several cases in arbitration with the attorney. He says that when disputes arise, Barbera is happy to go to a court-recognized arbitrator for resolution.

"We're not looking to fight with people or to beat them up," says Gerstein. "Our whole business is based on customer satisfaction. Our goal is getting people into cars. But if there is a problem, somebody who comes in without Kimmel will have it resolved quicker and with better satisfaction. We want to solve any dispute, since we want customers, as mad as they may have been about something, to be happy in the end."

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