The former finance manager of a suburban Denver dealership committed a fraudulent business practice by intentionally misrepresenting a couple's income to a bank to qualify them for lease financing, a Colorado appeals court has ruled.
At the same time, the court cleared the manager of a second disciplinary charge and ordered the state Motor Vehicle Dealer Board to reconsider a third misconduct allegation.
The administrative charges were filed against Michael Butterfield, Cherry Creek Dodge Inc.
Butterfield is now the Aurora dealership's sales manager, according to General Manager Carl Ventsam.
The Colorado Court of Appeals found sufficient evidence that Butterfield had qualified the couple for financing by increasing their claimed income by $1,000 in exchange for the promise of passes good for a free trip to Europe on the airline where the husband worked.
However, the court threw out a charge of defrauding the couple.
The dealer board had suspended Butterfield's sales license for three months, one on each charge, and fined him $5,000 on each charge. When he paid the $15,000 fine, the suspension was postponed during the appeal.
According to the decision, the couple applied for financing on a new 1998 Dodge Ram 1500. They took the truck home, but the bank denied credit because their debt-to-income ratio was too high. When Butterfield called them, the wife said they had no more income than listed on the original credit application.
At that point, the court said, Butterfield asked whether the husband could obtain 'buddy passes' from his employer, United Airlines, so he could fly to Europe. Employees buy 'buddy passes' so their relatives and friends can travel free, with 5 cents a mile deducted from the employees' paychecks.
'He solicited the passes in exchange for insuring that financing was secured for the truck transaction,' appeals Judge Edward Ruland said.
Butterfield then told the bank that the couple did have $1,000 in additional income, so credit was approved.
However, the couple later returned the truck to the dealership, and Butterfield never received the buddy passes.
The dealer board disciplined Butterfield on charges that he had defrauded the bank and the customers and was unfit to be licensed.
'The board felt very strongly about it since he was a finance manager,' said Assistant Attorney General Ceri Williams, who represented the board in the appeal.
Butterfield's lawyer, Michael McKinnon of Littleton, said criminal charges of commercial bribery and forgery were dismissed.
'JUST JOKING AROUND'
In its decision, the appeals court said there was enough evidence to uphold one of the allegations, defrauding the bank, although the bank suffered no damage because it ultimately didn't provide financing.
The wife testified that she told Butterfield they had no additional income, and a bank officer testified that the additional $1,000 was the reason for approval of the application.
In addition, Butterfield admitted asking for the buddy passes, it said.
As for the couple, the court found insufficient proof that they were defrauded or that Butterfield had misrepresented or failed to disclose any essential information to them.
As a result, it vacated one month of suspension and $5,000 of the fine.
It also told the board to decide whether there is still an adequate basis for the unfitness charge.
McKinnon said the court shouldn't have upheld any of the charges.
Butterfield's request for buddy passes was 'just joking around,' he said, and the couple in fact qualified for financing even without the extra $1,000 in income reported. 'Their gross incomes were sufficient to get them financed,' he continued, but the wife 'didn't know her gross income.'
McKinnon said he is asking the appeals court to reconsider its decision and if that fails will seek state Supreme Court review.