Sometimes it just doesn’t pay to cheap out on what’s owed. Paccar Inc. in Wisconsin has learned this lesson the expensive way.

A Fortune 500 company recently ranked as the third-largest manufacturer of heavy-duty semi-trucks in the world, Paccar refused to refund a $53 title fee to a customer, the James Michael Leasing Company, after it complained about a truck it purchased.

James Michael Leasing determined after driving the truck about 3,000 miles that the vehicle was defective, and returned it to Paccar. The buyer demanded a refund under Wisconsin’s Lemon Law.

Paccar went so far as refunding the purchase price of $135,847 plus interest. But it refused to refund the $53 title fee.

So James Michael Leasing sued Paccar in court, and wound up winning a $369,196 judgment, plus a $157,697 attorneys’ fees award.

Paccar is now on the hook for half a million dollars all because it wouldn’t cough up $53.

“Playing chicken with the consumer regarding the amount of the refund and the return of the vehicle is not a viable [option],” wrote U.S. District Judge Robert Dow, Jr. in his ruling. “As the Wisconsin Supreme Court has stated, the manufacturer must weigh very carefully when to hold 'em and when to fold 'em…and PACCAR made a bad bet here.”

In 2011, Paccar was accused of paying no taxes on its $465 million in profit while receiving $112 million tax rebates.

-Noel Brinkerhoff, Danny Biederman

To Learn More:

Dispute Over $53 Costs Trucking Firm $500K (by Jack Bouboushian, Courthouse News Service)

James Michael Leasing Company v. Paccar Incorporated (Seventh Circuit Court of Appeals)