Pa. Chrysler store loses bid to toss suit over financing

A customer who sued a Pennsylvania Chrysler dealership claiming the store deceived her about the financing and condition of a used car may pursue truth-in-lending, fraud and consumer law claims, a federal judge has ruled.

However, U.S. District Judge Gerald Pappert of Philadelphia dismissed claims of negligence and negligent misrepresentation against the dealership, Milford Chrysler Sales Inc. in Milford, Pa.

The dispute centers on the June 2014 purchase and financing of a 2011 Volkswagen Tiguan by Ann Pannetta, a retiree on a fixed income.

According to the suit, Pannetta went to Milford Chrysler because of a prize promotion she had received in the mail. When she arrived, she was greeted by two employees of Members Only Automotive, a dealership marketing firm, who were acting as “sales agents” for the dealership. These sales agents convinced her to buy the Tiguan and refinance it later, the suit alleges.

Payment solution

Pannetta claims the sales agents “failed to acknowledge her inquiries as to the advertised prizes that lured her in.”

She also claims that when she insisted she couldn’t afford the approximately $350 monthly payment on the Tiguan, one of the sales agents offered a solution. The dealership would pay her $5,600 for the 2008 Suzuki she had driven to the dealership. She could use the money to pay off her credit cards and to help with the loan payments on the Tiguan. After 10 months, she could return to the dealership to refinance the balance on the loan. The sales agents then turned Pannetta over to a Milford employee, according to the suit.


The suit asserts that the retail installment sales contract on the Tiguan showed a $5,600 trade-in allowance for the Suzuki offset by a $5,600 payment to Panetta. Thus, Pannetta’s trade-in didn’t reduce the $22,777 purchase price of the Tiguan listed on the contract. The dealership, however, did reduce the purchase price of the Tiguan on Pennsylvania’s sales tax form.

With the addition of other fees, the retail installment sales contract showed the Tiguan’s total price as $26,008 and monthly payments of about $350. The truth-in-lending disclosure listed $26,008 as the amount financed.

Pannetta signed the papers and drove away but returned later in the day, concerned about the affordability of the $350 monthly payment, according to the suit. The dealership told her she couldn’t refinance and that she’d have to find a way to make the payments. She received a check for $5,600 from the dealership the next day.

Plausible down payment

Pannetta’s suit alleges that the dealership’s failure to reduce the purchase price of the Tiguan caused a misstatement of the interest rate and finance charge on the retail installment sales contract. It also alleges that Pannetta was misled about being able to refinance and wasn’t told about damage to the vehicle’s frame.

The dealership denies the violations in its court filings.

The judge, in rejecting the dealership’s request to throw out the case, said it was plausible that at least part of the $5,600 the store paid Pannetta was a down payment under the truth-in-lending act and that failing to reduce the amount financed by that amount would result in a faulty disclosure.

The judge also said that alleged misstatements about the validity of the paperwork and the affordability of the Tiguan could constitute fraud and could violate the Pennsylvania consumer protection law.

He dismissed the suit against third-party lender First National Bank, saying there was nothing on the face of the disclosure paperwork to alert it to a possible truth-in-lending violation.

The dealership’s lawyer, Robert Balch of Allentown, Pa., and the plaintiff’s lawyer, Robert Cocco of Philadelphia, declined to discuss the case.

Marketing role

Members Only Automotive also was sued. Its CEO, Roe Hubbard, said his company’s only role was preparing print marketing material for Milford Chrysler. He said the company had no employees at the store at the time.

“I don’t think anybody did anything wrong as far as I know,” Hubbard said. Pannetta “wanted money back to pay her credit card bills,” he said, referring to the $5,600 check she received and cashed.

Members Only Automotive is still looking for a lawyer to represent the company in the case, he said.

You can reach Eric Freedman at

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