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DBM Law Blog

Marcus Bolda successful in class action suit against Eagle Ridge Pontiac in negligent misrepresentation case concerning a cashable voucher program.

In Payne v. Eagle Ridge Pontiac GMC Ltd. 2009 BCSC 530 DBM’s Marcus Bolda acted for Ms. Payne, the representative for a class of plaintiffs, seeking damages against the Eagle Ridge GM dealership for negligent misrpresentation.  More specifically, Ms. Payne was alleging negligent misrepresentation concerning a cashable voucher program designed to persuade customers to buy cars.  The program was advertised in The Tri-City News, a local Coquitlam newspaper, and promoted by Eagle Ridge sales representatives between October 6 and November 26, 2003.
Paraphrasing from the decision, the facts of Payne’s claim were that on October 9, 2003 she bought a 2002 Pontiac Sunfire from Eagle Ridge after being attracted by a newspaper ad published in the Tri-City News. Among other things the ad included phrases like “THIS IS NOT A MISPRINT,”  “EAGLE RIDGE PONTIAC IS OFFERING AN OPPORTUNITY TO CLAIM & RECEIVE UP TO $30,000 CASH BACK” and “If you think this is too good to be true…well think again.”  The ad also referenced a cashable voucher in the amount of $6,000 in relation to a 2002 Sunfire.  when Ms. Payne bought the Sunfire she was offered the $6,000 voucher and she claimed the voucher persuaded her to buy the car when she would not have otherwise.  When she signed the purchase agreement the Eagle Ridge office manager prepared and gave her a voucher with a face amount of $6000 and read her the terms and conditions on the reverse side of the document.  She didn’t ask for a price reduction in lieu of the voucher but instead read the terms and conditions when she got home and understood that she would have to follow the instructions to get the money from a company called Consumers Trust who she thought was part of General Motors.
In fact the cashable vouchers were issued by Eagle Ridge under an agreement with Consumers Trust – a UK company unaffiliated with GM.  Under the agreement Eagle Ridge could use the vouchers as a sales promotion tool for a fee of 15% of the written value of the vouchers issued but the vouchers themselves were to be ultimately paid by Consumers Trust.  The success of the program was based on the assumption that most people would fail to meet the stringent terms and conditions for redemption.  Further, the agreement specified that Eagle Ridge was not to help customers to meet the conditions, for example, by reminding them to send in the documents required.  Finally, even if the conditions were fulfilled a voucher holder was still only entitled to receive a proportional share of whatever fund was in existence 60 days after the 3rd anniversary of the date the voucher was issued.  Unfortunately, Consumers Trust went bankrupt well before the first possible date when any of the voucher holders could have applied to redeem their vouchers and Eagle Ridge made no claim in the bankruptcy proceedings nor did they advise voucher holders to do so.
One of the primary purposes of negligence law is to enforce reasonable standards of conduct to prevent the creation of reasonably foreseeable risks.  In short, it’s a disincentive to risk-creating behavior.  On behalf of Ms. Payne, Marcus Bolda successfully argued that Eagle Ridge had special knowledge of the cashable voucher program that gave rise to a special relationship between it and its customers that resulted in a duty of care and further Eagle Ridge should have foreseen its customers would rely on representations concerning the program to their detriment.   Bolda, argued that the wording of the newspaper ad itself “Eagle Ridge Pontiac is offering an opportunity to claim and receive…up to $30,000 CASH BACK” suggested that Eagle Ridge was backing the vouchers and reasonably led the plaintiff to believe that Consumers Trust was a part of General Motors.  By allowing customers to think it (and not Consumers Trust) was offering the opportunity, Eagle Ridge failed to meet the standard of care required of a reasonable person in this situation.
The Court reserved decisions on granting of relief to await further submissions from the parties and determination of individual issues.  During the time frame the program was in effect Eagle Ridge sold 256 vehicles and issued a total of 148 Cashable Vouchers. If you bought a car from Eagle Ridge Pontiac GMC between October 6 and November 26, 2003 contact Marcus Bolda at 604.939.8321 to find out if you are eligible to participate in the proceedings.
To read the full judgement click on the case name in the first paragraph.

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