When Your Warranty Fails You
In late February 1999, Kimberly Poe purchased a new 1999 Ford Explorer for $28,896.62 from a local dealership. The Explorer had been a demonstrator, but it was sold as “new” with a standard warranty of three years or 36,000 miles.
The vehicle had 5,672 miles on the odometer when Poe purchased it. The dealership’s general manager had driven the Explorer while it was used as a demonstrator. He had complained to Ford of a knock in the engine at 4,701 miles and again at 5,485 miles. As a result, the engine was replaced by Ford, but no one ever told Poe. After purchasing the Explorer, Poe began to hear knocking in the engine, and as a result, she took it to the service department five times: at approximately 9,000 miles; 27,091 miles; 39,596 miles; approximately 44,000 miles; and 55,345 miles.
On the first four visits, the service writer for the dealership told Poe they could not verify the concern and that it was a normal operating condition. The dealership employees never told her that the same engine had had the same problem before she purchased the vehicle and that it had been replaced.
On her fifth trip to the dealership, they replaced the engine under the warranty as a “goodwill” gesture, and Poe was told that the new engine would have a three-year or 36,000-mile warranty. Again, no one disclosed to Poe that this would be the third engine for the Explorer.
According to the service records, a new short block engine was put into Poe’s Explorer with 55,345 miles on the odometer. At 57,345 miles, she took the Explorer to another Ford dealership. The representative at that dealership reported that he could not “duplicate the customer concern;” however, the service report did note a “low engine noise.”
According to Poe, the engine warranty was confirmed for three years or 36,000 miles. Given the representations of the length of the warranty, Poe continued to drive the Explorer until it finally quit on her with 71,693 miles on the odometer.
When the Explorer finally quit running, Poe asked Ford to repair the Explorer under the warranty. At that point, Ford refused, stating that the vehicle was out of warranty even though the knocking in the engine had been a consistent complaint since 4,701 miles, and unbeknownst to Poe, she had been driving an Explorer with its third engine.
Poe paid more than $28,000 for an Explorer that lasted 71,693 miles on three engines. She bought a vehicle with an engine that had already been replaced, and yet, she was never told. She was repeatedly told the knocking she heard was a normal operating condition. She was told the replaced engine would have a three year or 36,000-mile warranty.
However, when the third engine quit running, she was told she would have to pay for the repairs. Poe essentially paid $28,000 for an Explorer that she could not drive.
The only recourse for Poe was to sue the dealership and Ford, and we did, alleging damages for breach of contract, breach of warranty, misrepresentation, violations of the Magnusson Moss Warranty Act and suppression of a material fact.
Unfortunately, Poe had signed an arbitration agreement, so the case was removed to arbitration before Dean Henry Strickland, a law professor at Cumberland School of Law at Samford University. After litigating the case for two years, it was arbitrated for just one day.
While the arbitrator did rule in our favor on all allegations, the award Poe received was minimal. For all the aggravation and lies, she received $4,187.50 and an Explorer that won’t run and her $4,000 in attorney fees paid. Yet, the arbitrator earned approximately $2,000 for one day of work.