Plaintiff was told he was purchasing full coverage car insurance.

Brian Heath Crockett

Case Conclusion Date:August 30, 2012

Practice Area:Litigation

Outcome:Verdict: $104,060 - $42,000 Attorneys Fees

Description:On June 16, 2010, plaintiff Daniel Soto bought a car from Shabana Motors, Houston, and financed the car through Shabana's in-house financing program. That August, Soto purchased collateral protection insurance through Shabana. The insurance was "single-interest," in that it covered only the lender's interest in the collateral (the vehicle), not the plaintiff's interest in it. The plaintiff claimed that he thought the insurance protected his interest in the vehicle in case of an accident. On Sept. 11, 2010, Soto was in an accident, for which he was at fault. He filed a claim on the insurance, and it was denied. Soto claimed that the person who persuaded him to buy the policy was Mohammed Khan; that Khan was an employee of Shabana or a related company, Platinum Investors LLC; and that these companies were owned by Aftab Rahmtulla. Soto alleged that Shabana sold the vehicles and that Platinum was responsible for the financing and insurance sales. Soto sued Shabana, Khan, Platinum and, Rahmtulla for Deceptive Trade Practices Act violations, unconscionability, fraud in the inducement, negligent misrepresentation and gross negligence. According to Soto, the car was having mechanical problems soon after purchase, and when Soto complained to the dealer, he also complained of the high cost of full-coverage car insurance. He said that Khan then told him that Shabana could provide him with such insurance, and Soto bought a policy. Soto also claimed that the defendants cropped, erased and retyped parts of the insurance policies in violation of rules established by the company that had provided the insurance products to Shabana. The defendants denied the allegations. Khan said that he was not involved in collateral protection insurance and that he does not remember ever speaking with Soto. The defense further argued that Soto should have read the contract and that he should have made sure he understood what the insurance policy did and did not cover.

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