LEGAL FILE

Mitsubishi store prevails in finance dispute

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A customer who denies signing a sales contract for a Chrysler Pacifica but accepted loan proceeds and racked up 20,588 miles can't disavow the deal, the North Carolina Court of Appeals has ruled.

The three-judge panel unanimously rejected the customer's forgery, breach of contract and negligence claims against a Mitsubishi dealership that sold the used 2004 Pacifica: CBS Quality Cars Inc. in Durham, N.C. However, the panel said the victorious store isn't entitled to attorney fees.

In September 2008, Horace Huff and his wife signed a bill of sale conditioned on financing and took the Pacifica the same day. The total purchase price, including financing charges, was $27,028. Coastal Federal Credit Union bought the paper.

Seven months later, Huff stopped making payments, and the Pacifica was repossessed.

Huff sued the dealership to rescind the deal and recoup what he had paid. The suit asserted that the store had sent documents to Coastal Federal Credit Union without Huff's permission and without his valid signature.

Plaintiff's lawyer Martin Horn of Durham said a handwriting expert concluded that Huff hadn't signed the documents.

Dealership lawyer Glen Bachman of Durham said Huff rejected a settlement offer during mediation. The case then went to a nonjury trial, where a Superior Court judge ruled in favor of the dealership and ordered Huff to pay the store's attorney fees and costs of $7,875.

The Court of Appeals upheld the dealership's lack of liability, saying Huff's actions showed that he had accepted the benefits of the vehicle sales contract whether or not he had signed it and other loan paperwork. The panel said Huff ratified the contract by accepting the loan proceeds, taking possession of the Pacifica, making payments and using the vehicle until it was repossessed.

Horn said Huff hasn't decided whether to appeal further.

The appeals panel overturned the award of attorney fees to the dealership, saying there was no legal basis to support it. The dealership won't appeal, Bachman said.

You can reach Eric Freedman at freedma5@msu.edu.

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