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Why Timely Responses To Consumer Demand Letters Are Crucial For Florida Dealers

By: Micah A. Andrews

Why Timely Responses To Consumer Demand Letters Are Crucial For Florida Dealers

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Unfortunately, Florida dealers occasionally receive demand letters from agitated consumers who have hired an attorney to threaten the dealership with a lawsuit under the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”). See §501.976, .98, Fla. Stat. (2018). The vast majority of consumer demand letters will make claims under FDUTPA because the statute allows for the recovery of attorney’s fees for the prevailing party.  This presents consumer attorneys with the potential to seek large judgments against a dealer even if their client’s alleged damages are relatively small.

While these demand letters are frustrating and often include entirely false allegations, it is important to promptly provide these letters to your dealer attorney as timely responses can significantly protect a dealership against inflated awards for damages and attorney’s fees.

While FDUTPA (§501.976, Fla. Stat.) makes certain motor vehicle dealer activities “deceptive and unfair” and allows a consumer to bring a cause of action related to these activities, the statute also includes multiple dealer protections that can limit a dealer’s exposure resulting from these lawsuits. Nevertheless, dealers unfamiliar with these provisions often fail to timely assert their rights and waive their ability to enforce these protections.

Unlike other provisions of FDUTPA, Section 501.98 specifically requires a consumer making a claim against a motor vehicle dealer to provide a written demand letter to the dealership at least 30 days before initiating litigation.  The letter must include:

(1) The name, address, and telephone number of the claimant.

(2) The name and address of the dealer.

(3) Description of the underlying facts of the claim, including damages that are claimed.

(4) The amount of damages, or, if not available, a best estimate of the amount of damages.

(5) To the extent available, all transaction or documents upon which the claim is based.

See §501.98(2)(a)-(e), Fla. Stat.(2018)

The statute also states that a Claimant may not initiate civil litigation against a dealer if, within 30 days after receipt of the demand letter, the dealer pays the claimant the amount sought in the demand letter, plus a surcharge of the lesser of $500 or 10 percent of the damages claimed. See §501.98(4), Fla. Stat. (2018).  The statute also provides that a dealer “may not be required to pay the attorney’s fees of the claimant” if the dealer within 30 days after receipt of the demand letter notifies the Claimant in writing that the damages claimed in the demand letter are either unreasonable in light of the facts of the transaction or that the demand letter fails to sufficiently comply with Florida law preventing the dealer from adequately responding. See §501.98(4)(b), Fla. Stat. (2018).

It is typical that shrewd consumer attorneys will send demand letters under FDUTPA to dealers that: (1) demand damages which are unreasonable given the consumer’s allegations; and/or (2) which fail to sufficiently explain the consumer’s allegations.  When the dealer does not timely respond to the demand letter, the attorney then files suit, provides more detail substantiating their claim, and then asserts an entitlement to a large amount of attorney’s fees (often exceeding the amount they are seeking for the consumer).  It is therefore imperative that a dealer timely respond to a demand letter in order to prime their right to later dispute the consumer’s entitlement to recover attorney’s fees.  Not only will this right give the dealer considerable leverage in litigating the claim, it will also allow the dealer to avoid owing a large amount of attorney’s fees if the consumer ultimately prevails in their lawsuit.

While a dealer may be tempted to believe a baseless consumer demand letter simply does not deserve a response, it is important to timely respond to these letters in order to take advantageous of dealer protections written into Florida law. Specific questions about responding to a FDUPTA demand letter should be directed to your dealer lawyer.