From mortgage brokers to car dealers, Ohio has been a longtime haven for shady sales practices, courtesy of lax consumer rights laws and even lazier law enforcement.
But all that may change, thanks to a new Ohio Supreme Court decision that now allows consumers to collect damages for the "stress" of being fleeced by unscrupulous companies.
Though the decision may seem like a righteous turning of tables, it arrives, ironically, as the result of a frivolous lawsuit brought by a schoolteacher against a reputable Akron dealership. "In three years, I've done 400,000 transactions and not once have I been taken to [common pleas] court," says Joe Stefanini, co-owner of Montrose Toyota.
In 2001, Craig Whitaker purchased a truck from Montrose. He signed a contract on the car before the dealership finalized the terms of his financing with the bank — a common auto sales practice called "spot delivery."
When Whitaker came back to finish up the sale, the dealership told him the bank wouldn't allow the financing terms they'd first agreed to. Instead of a 63-month financing, he'd have to pay the car off in 60 months, adding $11 a month to his payment.
Whitaker was furious. He gave the truck back, which he'd recently outfitted with a new stereo. He demanded his $1,500 down payment plus the cost of the new stereo. He also refused to return the factory car stereo. "I wasn't gonna give him his money back until we could get the stereo back," Stefanini says. "Plus, he didn't return the car in the same condition he bought it in, a provision of the contract."
But even after Whitaker returned the stereo, he claims Stefanini never coughed up his cash, so he sued. (Whitaker and his attorney could not be reached for comment.)
Stefanini offered to pay Whitaker $2,500 for his troubles, but Whitaker's lawyers refused. They wanted $4,500 to cover legal fees, too. "I thought that was ridiculous," says Stefanini. "So I let the case sit on the back burner for a while. What a mistake. I should have just paid him his $4,500."
In 2002, Whitaker took Montrose Toyota to Summit County Common Pleas Court. He not only wanted his downpayment back, but also compensation for the "embarrassment" he suffered after the botched deal. He said he had to bum rides until he could save up enough money for another car.
The jury awarded Whitaker over $300,000. An appeals court later reduced the award to $2,200, saying that consumers could only collect economic damages, not emotional ones.
But on November 8, the Ohio Supreme Court ruled that consumers could collect money for the "stress" of being bamboozled.
Stefanini will appeal. "We're honest men, and we don't deceive our customers," Stefanini says. "Sure, we have disgruntled customers, but this got way out of hand, and now we've taken a large hit for something that should have been in small claims court." — Denise Grollmus