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Our own little Awesometown has hit the big time, legally speaking.

One of the newer additions to Auto Row has been fighting a legal claim that has found itsway to the California Court of Appeal.

Mercedes-Benz of Valencia (whose real name is Valencia Holding Company LLC — doesn’t exactly roll off your tongue, does it?) sold Gil Sanchez a 2006 Mercedes-Benz
S500V with an advertised price of about $48,000. All of the facts in this column come from the court’s ruling. Any quotes are also from that same document.

According to the opinion, the battle between Sanchez and MBV started over Sanchez’s passion to have a “certified pre-owned” vehicle. Now this gets a little complicated, so
stay with me.

Sanchez already had a 2004 Cadillac Deville on which he owed more than $20,000. According to MBV, the Caddy was worth only about $6,000, leaving Sanchez upside
down more than $14,000.

But Sanchez really wanted the Mercedes. MBV made him an offer he couldn’t refuse. All Sanchez had to do was make a $10,000 down payment, turn over the Caddy for a $6,000
credit, and pay an additional $3,700 to have the Mercedes-Benz certified in order to qualify for an interest rate of 4.99 percent.

The following is a direct quote from the Court of Appeal:

“That statement was false. The $3,700 payment was actually for an extended limited warranty, which was optional and unrelated to the interest rate. Sanchez agreed to the
additional payment, believing it was a certification fee required to obtain the offered rate.”

But Sanchez was sold, so he signed the retail installment sale contract (you’ve all seen these — they are three or four pages of legal-sized paper with tiny printing on both sides)
and got the car.

He didn’t object to the $28 optional DMV electronic filing fee or the new-tire fees of $8.75 for used tires. Also in the contract were an arbitration clause and a purported
waiver of class actions. Sanchez didn’t object to these, either. And a few weeks after the deal was done, Sanchez had to come back and pay an additional $5,000 down.
According to Sanchez, his dream car turned out to be a nightmare.

He went back to MBV, complaining about the electrical system and water leaks inside the car and the trunk. MBV told Sanchez he’d obviously tampered with the car and
wanted to charge him $14,000 to repair it.

And that “pre-certified” thing — it didn’t apply. Sanchez went to another garage, where he was told that the car had either been in an accident or had not been properly repaired.
So, Sanchez sued MBV. And, to make matters more bothersome for MBV, he classified the lawsuit as a class action, alleging (among other things) that MBV had improperly
charged the DMV fee and the “new tires” fee and that, obviously, there had been numerous past victims of MBV’s actions.

MBV responded that, pursuant to the sale contract, Sanchez had waived his right to class actions and had agreed to refer all disputes to binding arbitration. The arbitration
provisions are several paragraphs long and very comprehensive.

Seemed like a slam dunk for MBV. Only problem — neither the trial court nor the court of appeal agreed with MBV.

The court of appeal ruled, “We conclude that the arbitration provision is unconscionable: The provision is adhesive — involving oppression and surprise due to unequal bargaining
power — and contains harsh one-sided terms that favor the car dealer to the detriment of the buyer. Because the provision contains multiple invalid clauses, it is permeated with
unconscionability and unenforceable. We cannot sever all of the offending language.” The court also stated about the appearance of the contract: “Also, in comparison to the
rest of the contract, the line spacing in the arbitration provision was reduced, giving it a … squashed appearance and making it relatively more difficult to read.”

As a result the court of appeal denied MBV’s motion to compel arbitration. So you see, sometimes, the small print can actually save you. However, I would
recommend to Sanchez (and any other car buyer) to read the contract carefully. After all, you’re committing yourself to tens of thousands of dollars. Don’t you want to
know what you’re actually doing? If you don’t understand it or disagree with it, say so. As for MBV, I would tell them the same thing I’ve always advocated here: Keep your
contracts simple, clear and understandable.

Always think about how a jury (12 car buyers, not other dealers) will feel about the paperwork you’ve prepared.

If you’ve used a document that looks and reads as being straightforward, open and easy to understand, you’re already miles ahead. ©