April 14, 2025
By Barrie Charapp Beaty
Charapp & Weiss, LLP
bbeaty@cwattorneys.com
Last month, we highlighted the importance of your dealership having a customer complaint process to ensure that all customer complaints, whether they are made directly, or through an agency, get handled and responded to in a timely manner. However, not every complaint is brought to the dealership’s attention prior to receiving lawyer communications. Your dealership should have a procedure for communications from counsel and most importantly should you receive service of process.
Calls from an “Attorney”:
Your personnel should be aware of what to do in the event a person calls claiming to be an attorney. Just because someone claims they are an attorney for an employee or a customer doesn’t make it true. It is easy for a disgruntled employee or an unhappy customer to get a friend or relative to call posing as an attorney, hoping to raise dealer concern and force a quick resolution. Dealership personnel should never deal with someone calling the dealership claiming to be an attorney. Personnel should advise the caller it is the dealership’s policy only to respond to written communications from attorneys. Advise the caller that any concerns should be put in writing on the attorney’s letterhead and sent to the dealership. Once dealership personnel receive an attorney’s letter, the dealership’s complaint handling process should kick into gear. The dealership may want its own attorney to handle the communication, or it may want to handle the communication with any necessary advice from an attorney.
Attorney Letters:
Once the dealership gets a lawyer letter, dealership personnel should be aware of how to handle the response. Often the letter may be passed to the corporate attorney for the dealership to draft a response. However, some dealerships want to handle some responses themselves. There should be designated personnel to handles such letters with experience in responding. Additionally, the personnel need to be careful of certain statements of the law that may not be true that lawyers may put in those letters. Here are some examples.
- “My client is entitled to examine the personnel file under federal law.” There is no federal law entitling an employee to examine his or her personnel file. Some states provide access under certain circumstances, and a dealer should consult its attorney regarding possible state law on the issue.
- “Federal law requires a written statement of the reason for terminating my client’s employment.” There is no federal law applicable to dealerships requiring an employer terminating an employee to provide a written explanation. Again, state law may vary or there may be differences in unionized shops, so consult with an attorney.
- “As a dealer, you are required to allow a customer to review the deal file. Please send me a copy.” A customer has no right to examine the dealership’s deal file. The dealership should provide copies of the deal papers to the customer when the deal is done. But once a deal is complete, a customer has no right to copies without binding compulsory process. It is alright to refuse an attorney’s demand. However, some dealers may choose to avoid a fight. If you choose to turn over some documents, you only need to provide those documents the customer signed and not the entirety of the deal file. And even if the dealership receives a subpoena, be careful. Some attorneys send out-of-state subpoenas to a dealership claiming it requires them to produce materials. Except in limited circumstances, they are not binding unless issued by a court in the dealer’s state.
- “My client is entitled to a three-day cooling off period to return the vehicle under federal law.” There is no provision in federal law providing for a cooling off period. A customer who signs a contract buys the vehicle, unless there are provisions in the agreement for rescission if an issue occurs with financing. Again, state law may vary or there may be differences in unionized shops, so consult with an attorney.
- “My client speaks Spanish and the dealership was required to do the purchase contract in Spanish under federal law.” There is no provision under federal law requiring deal documents be completed in another language – with one notable exception. The FTC Used Car Rule requires, under certain circumstances, that the used car buyer’s guide be in Spanish. There is no other requirement under federal law. There may be requirements under some state laws, and a dealer should check with its own attorney for advice under state law.
Service of Process:
Your personnel should be aware of what to do if your dealership is served with a complaint. First and foremost, it should be determined whether the dealership should accept service. Often times, service of process should be on the registered agent of your dealership. If the registered agent is a person named with the address of the dealership, then service of process may be proper. However, the registered agent is often someone other than a person located at dealership such as the dealership’s counsel and thus, any service of process at the dealership should not be accepted because its improper. In the event a process server does come to the dealership, personnel should be aware of who to direct that process server to. The designated person should know what to say and whether service should be accepted. Once accepted, the person should be providing the documents to legal counsel immediately for proper handling of the complaint.