New Florida law requires demand letter to car dealers before litigating under FDUTPA

New demand letter to car dealer requirement

In 2014 the Florida legislature introduced a new law that imposes a new presuit requirement of a demand letter before filing lawsuits against motor vehicle dealers for violations of Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA)

The statute, section 501.98, spells out express requirements.  The letter to car dealer must:

√   Be sent in good faith and delivered with return-receipt requested;

√   Include the names and addresses of both the claimant and dealer;

√   Describe the underlying facts of the claim

√   Include a statement describing each item of damages, and provide a total estimated amount of damages; and

√   Include all transaction documents on which the claim is based.

The motor vehicle dealer has 30 days to respond, and the claimant cannot initiate any civil lawsuit or arbitration action against the dealer for FDUPTA without first doing this demand letter.

If the dealer pays the amount of alleged damages plus a 10% or $500 surcharge (whichever is less), the claimant is barred from taking any further civil action.

It must provide an amount of damages, which should be reasonably recoverable.  If a lawsuit is later filed and the court finds that the amount of damages in the demand letter was unreasonable, the claimant may not be able to recover his or her attorney fees, even after winning the lawsuit.

If, after receiving the letter, the dealer opts to pay the claimed damages and surcharge, the payment does not constitute an admission of wrongdoing and releases the dealer and its agents from any claim that could be brought out of or in connection with the transaction or occurrence described in the demand letter.

In addition to requiring the demand letter to car dealers, the new law also imposes a requirement on dealers to provide a written notice of this statute to consumers.  The notice must be in at least 12-point type and acknowledged by the consumer and should include specific language outlined in the statute.  If the dealer fails to provide the notice, the demand-letter requirement may not apply.

Before this new legislation, it was easier for a dealer to get trapped into an inadvertent statutory violation, such as, for instance, failing to provide written estimate or some other statutory requirement.  Now, with the presuit notice requirement, the dealer has an opportunity to cure the problem before a lawsuit is filed.

In our law office, we are no strangers to sending pre-suit demand letters to auto dealers.  I myself began sending written demands shortly after receiving my bar card.  Demand letters are beneficial because they are not as costly for the consumer and, like the statute intends, they provide an opportunity to cure the problem.  They also allow the attorney to fully examine the matter and negotiate with the dealer before getting involved with litigation.

Because this statute is still new, I have yet not seen any lawsuits or cases yet involving it.  However, overall, I think the statute will benefit consumers and dealers alike because it encourages the amicable resolution of consumer disputes.

If you have an issue with an automobile dealer you would like resolved, contact us to see if we can help.