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Dealership tripped up by preprinted sales contracts with illegible due date

A Connecticut dealership is waiting to learn whether it will have to pay damages in a class-action lawsuit stemming from illegible sales contracts.

A federal judge in Bridgeport ruled last month that the dealership and its lender violated the Truth in Lending Act by using preprinted sales contracts that obscured the due date of borrowers' first payments. The suit involved 104 contracts.

U.S. District Judge Warren Eginton rejected the argument of defendants Key Hyundai of Manchester in Vernon, Conn., and Citizens Automobile Finance Inc. that they had acted in good faith and that any truth-in-lending technical violations resulted from a "bona fide error."

The suit was filed by Gail LeFoll, who bought a 2009 Sonata from Key in June 2009. The due date of LeFoll's first payment was printed over a preprinted section of the retail installment sales contract form that Citizens supplied to the dealership.

The suit sought damages on behalf of LeFoll and 103 other customers whose contracts showed the same problem in a one-year period.

The judge said no trial is needed to determine the defendants' liability.

"The payment due date is not clear or conspicuous on any of the 104 contracts," he said in his decision. "The printed due dates range from indistinct to indiscernible, but an average, reasonable person could not find any of the disclosures to be clear and conspicuous."

As for lender Citizens, found liable for accepting the contracts, "the violations on the contracts are apparent on the face of the disclosure statements," the judge said.

Defense lawyer Kevin Greene of Hartford said the problem was not caused by the lender's preprinted forms "but was more the function of an occasional anomaly with the computer system used by the dealership." He said there will be no appeal.

The judge has not set a hearing date to determine the amount of damages and attorney fees.

The plaintiff has requested $1,000 in statutory damages for each class member for a total of $104,000. Her lawyer, David Blinn of Rocky Hill, Conn., said the maximum potential damage award in such a class-action suit under the Truth in Lending Act is $500,000.

Blinn said LeFoll suffered "some amount of trepidation" from not knowing when she needed to make her first loan payment. He added: "It's difficult to prove the value of any of these disclosures."

Key and Citizens are looking for the judge to award no damages or only a token $25 per plaintiff, arguing there is no evidence that any class member was confused or suffered any economic harm. Said Greene, their lawyer: "This case is a further example of how dealerships are unfairly penalized under the Truth in Lending Act."

Still unresolved is LeFoll's individual claim that Key violated the state's unfair trade practices law in its handling of the Sonata's $1,500 manufacturer's rebate. She alleges that Key deposited the $1,500 manufacturer's rebate into a bank account instead of crediting the rebate against the purchase as promised.

Key disputes the allegation.

You can reach Eric Freedman at

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