(LOUISVILLE, Jan. 31st, 2006) -- A car dealer will pay $7.1 million to settle a lawsuit by the Kentucky attorney general accusing it of selling substandard cars and trucks at inflated prices.
The settlement, between the attorney general and J.D. Byrider of Louisville, calls for $500 in restitution to each of 14,400 people who bought vehicles at the Louisville dealer from Jan. 1, 2000, through Dec. 31, 2004.
The dealer's franchisor, J.D. Byrider Systems Inc. of Carmel, Ind., will contribute an additional $300,000 to the settlement, and will cancel the Louisville store's franchise and won't let it use the Byrider name, the company said.
Byrider Systems has 123 stores in 28 states.
"The problems in Louisville should never have happened -- and they will certainly never happen again," J.D. Byrider chief financial officer Steven Wedding said in a statement Tuesday.
Attorney General Greg Stumbo, who filed suit against the dealership in December 2004, praised the settlement and said he hopes it will have a chilling effect on any other business considering similar practices.
"It sends a message to businesses across the state that we will not tolerate shady practices," Stumbo said during a press conference Tuesday.
Marc Maguire, who owns the franchise with his father, James "Scotty" Maguire, said in a statement that the dealership settled because the litigation was too expensive to continue.
The Maguires' lawyer, Thomas Clay, said they have not decided whether they will continue to operate the store under another name. Both the Louisville and parent companies denied any fault or
Todd Leatherman, the director of the attorney general's Consumer Protection Division, said at a news conference Tuesday that investigators spoke with dozens of consumers.
"There were lots of consumers whose car blew up, they had an engine blow up on the way home. There were people who lost their jobs because they didn't have any transportation," Leatherman said. There were tales about incredibly rude business practices by the local franchise, totally unsympathetic to those types of complaints."
Byrider customer Dedra Means was happy with the settlement. Four years ago, she paid $7,395 for a 1995 Chevrolet Cavalier with 0,192 miles. Means saw the car break down six miles from the lot.
"You can't put a dollar figure on what people had to go through, but this is great news," she said.
(Copyright 2006 By The Associated Press. All Rights Reserved.)