Confidential
Settlement – $5,068,250Judge
Court
USDC Northern
Attorneys
Plaintiff
Defendant
L. Joseph Lines
(Crowell Moring LLP)
Gregory R. Oxford
(Isaacs, Clouse, Crose & Oxford LLP)
Facts
In 1987, the defendant automobile manufacturer produced a new luxury automobile. To support its sales efforts for the car, the automobile manufacturer devised a "Guaranteed Resale Value Plan" which provided that the resale (trade-in) value of the vehicles would be maintained at a level proportionate to that of other luxury automobiles. Specifically, the vehicle was guaranteed to retain the same percentage of its original MSRP as was retained by a "comparable" luxury vehicle. The plan was evidenced by a "certificate" which was forwarded to each buyer after delivery of the vehicle, in which the comparison vehicle utilized to establish the vehicle's resale value was identified as a Mercedes 560SL and, later, a Mercedes 300. The certificate was redeemable upon trade-in of the luxury vehicle and purchase of a new product of the defendant manufacturer. In July 1991, the defendant wrote to owners of the new luxury vehicles indicating that it was exercising the option to designate a different vehicle as the "comparable" point of reference for determining resale value under the Guaranteed Resale Value Plan certificate. Specifically, the defendant changed the comparable vehicle from the Mercedes to a Jaguar XJS. The plaintiffs brought this action against the defendant manufacturer and related companies based on breaches of Business and Professions Code º17200 et seq. and the California Consumer Legal Remedies Act.
Settlement Discussions
The settlement discussions were not disclosed.
Damages
The plaintiffs sought damages in an amount equal to the difference in certificate redemption value between employing the Jaguar versus the Mercedes as the comparable vehicle. The plaintiffs claimed that amount to be approximately $11 million.
Other Information
The settlement was reached approximately one year and 11 months after the case was filed. A full mediation was held on May 31, 1996 before Judge Daniel H. Weinstein, retired, of JAMS/Endispute resulting in the reported settlement. Judge Weinstein was then appointed by stipulation to act as a special master.
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