A Connecticut dealership that listed a fictional down payment on a customer's sales contract owes her damages, a federal district judge in Hartford has ruled.
Don Mallon Chevrolet Inc. in Norwich, Conn., must pay plaintiff Agdaliz Negron $1,000 plus attorney fees for violating the Truth in Lending Act, U.S. Magistrate Judge Thomas Smith said.
After a nonjury trial, Smith rejected the store's argument that it had merely made an inadvertent, "bona fide error" during a "super sale" when it hired five temporary salespeople and three temporary F&I managers on a part-time basis.
However, Smith ruled in favor of the dealership on Negron's claimed violation of the state unfair trade practices law.
The case stems from the May 2007 purchase of a 2004 Chevrolet Impala, including a service contract, VIN etching and a GAP policy. With financing, the total sale price was $27,580.
Documents listed a $250 down payment. In his decision, Smith said the $250 "fictitious down payment" resulted in assessing sales tax on that amount, making the extra sales tax "in reality part of the finance charge."
The dealership's procedures to avoid such an error were "casual and sloppy," Smith said. He noted that the store could not even identify the temporary sales and finance personnel who participated in the transaction.
The $1,000 statutory award is the maximum allowed for such a Truth in Lending Act violation. Smith has not yet ruled on the amount of attorney fees, but dealership lawyer Kevin Greene of Hartford said Negron requested $25,000, which, Greene said, is unreasonable and unsupportable.
At the same time, Smith found insufficient evidence to support the unfair trade practices claim that the dealership deliberately falsified Negron's credit application to defraud her and the lender. The application misstated her employment history, including job title and length of service.
The salesman who handled the sale denied supplying false information or telling Negron and her father to lie to the bank if asked about the down payment.
Smith emphasized that Negron signed the application, which had a provision stating that she had read and understood it.
Smith said the unfair trade practices allegation "boils down to a credibility contest" between the plaintiff and two men: one a used-car salesman and the other a used-car sales manager. "To argue that none of these three witnesses has a motive to lie is absurd," he said. "All three have a motive or motives to lie."
Smith gave no weight to "scant and sketchy testimony" by Negron's father, who attended only part of the transaction, and to testimony by another employee, which, Smith said, "does not ring true."
Defense lawyer Greene said the dealership hasn't decided whether to appeal the judgment. He added: "The financial discrepancy claimed by the plaintiff actually inured to her benefit because the disclosure of the financial terms was inaccurate."
Negron's lawyer did not respond to requests for comment.