A Philadelphia used-car dealership and a third-party lender must pay damages to a customer who bought a stolen car, a Pennsylvania Superior Court panel ruled.
The court upheld a jury verdict that found Bavarian Motors Inc., Mercury Finance Co. and MFN Financial Corp. jointly liable for selling Jennifer Neal the 1992 Lexus SC 400. But it ordered a recalculation of the attorney fees they must pay her lawyer.
Neal bought the car in 2001, and Mercury financed it, the court said. Neal made her payments but never received the title or permanent registration.
"The dealer could not provide her with a registration. She went back several times and got somewhat evasive answers," her lawyer, Eric Milby, of Narberth, Pa., told Automotive News. He also said the finance company's internal alarms should have gone off when month after month passed without Bavarian providing the title certificate that secured the loan.
Eighteen months after the transaction, the state police notified Neal that the car had been stolen, the court said. Milby said the finance company still demanded monthly payments after police impounded it.
Neal sued in Philadelphia County Court of Common Pleas, where the jury awarded her $31,000 in damages for breach of contract, consumer protection violations, breach of warranty and other claims. The total award reached almost $71,000 after the trial judge reduced damages to reflect the value of Neal's use of the car, made other adjustments and added $42,600 in legal fees.
In its decision, the three-judge superior court panel rejected defense challenges to the amount of damages. It also upheld triple damages for the consumer protection violations, saying the defendants' conduct was "egregious and their liability clear."
At the same time, it ordered attorney fees to be recomputed to reflect the fact that state law makes the defendants responsible only for attorney fees related to Neal's successful consumer protection claims.
Dealership lawyer Andrew Gay, of Philadelphia, said the defendants did not contest their liability in the appeal, only the size of the award and attorney fees. He said the car was actually sold by the Bavarian employee who owned it, rather than the dealership. The car was displayed on the lot, and the employee wanted to use Bavarian for financing.
The case shows the importance of dealers having a legal title before transferring a vehicle, Gay told Automotive News.
A lawyer for Mercury and MFN Financial did not return phone calls seeking comment.
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