May 26, 2006 11:29 AM PDT

Police blotter: eBay suit over $380,000 Porsche

"Police blotter" is a weekly CNET News.com report on the intersection of technology and the law.

What: Porsche enthusiast in South Carolina buys a top-of-the-line, 605-hp Carrera GT, isn't happy, and sues.

When: Federal district court in South Carolina ruled May 11.

Outcome: Case referred to arbitration.

What happened, according to court documents:

Robert A. Gossett, a resident of Hilton Head, S.C., spotted a black Porsche Carrera GT on eBay and bought it for the princely sum of $380,000.

This is not your average Porsche 911 or Boxster. The Carrera GT is the closest thing Porsche makes to a street-legal race car, with 605 hp, a 0-62 speed of 3.9 seconds, and a top speed of 205 mph. Porsche calls it a "race-bred sports car" outfitted with a carbon fiber chassis, a V10 engine, a six-speed racing gearbox, and a ceramic clutch.

Porsche Carrera GT
Credit: Porsche
The Carrera GT, suggested list price:
$440,000

The eBay seller was HBL, which operates the Porsche Tyson's Corner dealership in Virginia. Both Gossett and HBL agreed to substitute a silver Carrera GT for the black model, and it was delivered without incident to South Carolina.

That, according to the documents, was where the problems started. Gossett says he heard a knocking noise from the engine and took it to a local dealer, who said the engine would have to be lifted to diagnose the cause.

Fearing the value would be diminished, Gossett didn't want to do that and sued for breach of contract, breach of warranty, breach of implied covenant of good faith and fair dealing, negligence, unfair trade practices, misrepresentation, conspiracy, and even more lawyerese that is, frankly, too lengthy for even Police Blotter to list in its entirety. In short, Gossett claimed, a car listed as "new" on eBay should have zero problems.

The United Auto Group (the successor to HBL as a result of a merger) asked the judge to dismiss the case based on lack of jurisdiction and also based on an arbitration clause in the purchase agreement.

Gossett claimed the arbitration clause should be unenforceable because the sale was complete at the time the eBay auction closed, but U.S. District Judge C. Weston Houck referred the bulk of his claims to arbitration.

Excerpt from Houck's opinion: "The U.S. Supreme Court has held that 'as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay or a like defense to arbitrability...'

"When a arbitration agreement governed by the Federal Arbitration Act covers claims that have been asserted in a lawsuit, the court must compel arbitration and either dismiss the action or stay further judicial proceedings until the arbitration has been held.

"Congress, in the Federal Arbitration Act, declared written agreements to arbitrate 'valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'

"Courts have consistently interpreted this mandate broadly, addressing questions of arbitrability 'with a healthy regard for the federal policy favoring arbitration...'"

"The plaintiff's motion for reconsideration is denied...UAG's motion to compel arbitration is granted."

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10 comments

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Not surprising
I thought "how could a dealer of an expensive, custom-made automobile NOT stand behind their product?" Then, I read those three magic letters: HBL. It doesn't appear to matter that HBL was purchased by United Auto Group. Consider this situation carefully before you purchase your next Porsche, Audi or Mercedes from HBL/UAG.
Posted by TarasBulba1 (1 comment )
Reply Link Flag
Please Do Kick The Tires
I bought a VW from long-distance and it was the worst purchase
I've ever made. There's nothing like actually seeing the car that
you're gonna buy.
Posted by baquiano (18 comments )
Link Flag
Customer didn't want dealer to fix the problem.
The dealer didn't say they would not fix the problem. The local Porsche dealer told the owner they would have to remove the motor to diagnose the knock. The customer chose NOT to have this done as he was worried about the car depreciating. That is ludicrous. If the dealer was going to fix the problem and this guy chose to sue instead, he doesn't have a leg to stand on in court. Regardless of price, this is still a car and is subject to the same manufacturing issues that can affect $10k Kia's as much as $1,000,000 super cars.
Posted by philnye (19 comments )
Link Flag
Buy a car site unseen
So he has enough money to buy the nearly 400,000 car but not enough to get a plane ticket.
Posted by averad (7 comments )
Reply Link Flag
This happens on eBay...
I guess if you've got lots of dollars to waste, the car is just as legitimate a place to waste them as anything else...

But eBay?

There are plenty of stories out there about people getting screwed over on eBay for just about everything you could imagine.

Why somebody would shovel out 380k for a car through >eBay<is beyond me.

Charles Whealton
Chuck Whealton @ pleasedon'tspam.com
Posted by chuck_whealton (521 comments )
Reply Link Flag
WHAAA?
Buy a $380,000 car on eBay sight unseen! Really now! This guy was just begging for it!
Posted by Mister C (423 comments )
Reply Link Flag
Atypical complaint
Most eBay-related scams involve merchandise that did not exist and would never be delivered; take-your-money and run schemes.

In this case, a reputable dealer delivered a product. There was a flaw that likely could have been corrected. The buyer chose to reject the remedy and go for litigation rather than arbitration.

Was the buyer an enthusiast who wanted an exotic car or an investor who got a seemingly good buy and wanted to turn a fast buck? If it was the latter, he should play with his money in the stock market and leave fun cars to those who appreciate them.

There is already too much litigation in this nation.
Posted by ArtDowns (4 comments )
Reply Link Flag
A nice sunday drive
Lives in Hilton Head has to go alllll the way to Tyson Corners
Va.. If he was a serious car guy and not the fast buck artist he
appears to be that deal would have been done in person at the
dealership. The then existing dealership may have had a bad rep
but so what sounds like two guys trying to get in each others
pocket.
Posted by Luvaduc (3 comments )
Reply Link Flag
What Happened?
The guys shipping the car prolly took it for a high speed spin, missed a shift, and blew something in the motor. Dealer's fault? Buyer's fault? Shipper's fault? Somebody will end up paying big time to get this puppy working right again.
Posted by YankeeZ (5 comments )
Link Flag
Cheap moron probably used 87.
The cheap moron probably put 87 octane in the tank instead of paying up for 92 or 93 octane and caused the knock with detonation. Hey, if the car is covered under waranty, get it fixed, don't sue.
Posted by philnye (19 comments )
Reply Link Flag
 

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