Houston Independent Automobile Dealers Association December 2015 Issue: Year in Review | Page 12

payments of $882. They sued the dealership, alleging violations of the federal Truth in Lending
Act and the Maryland Consumer Protection Act, fraud, and negligent misrepresentation, among
other claims. The dealership moved for summary judgment, and the court granted the motion in
part and denied it in part. The buyers alleged that the dealership violated TILA's requirement to
provide certain disclosures before credit is extended by preventing them from reading the
documents they were asked to sign. The court granted summary judgment to the dealership on
this claim with respect to statutory damages, finding that statutory damages are not available for
timing violation claims, but did not grant summary judgment with respect to the claim for actual
damages. The buyers also alleged that the dealership committed fraud, made negligent
misrepresentations, and violated the MCPA by orally representing that their payments would be
significantly less than the documents provided. The dealership claimed that the buyers could not
prove they reasonably relied on oral statements that were directly contradicted by documents.
The court refused to grant summary judgment to the dealership on these claims, finding that it
was reasonable for relatively unsophisticated buyers allegedly prevented from reading the
documents to rely on the dealership's oral representations about the monthly payments. See
Price v. Berman's Automotive, Inc., 2015 U.S. Dist. LEXIS 129823 (D. Md. September 28,
2015).
Assignee of Retail Installment Sale Contract Not Liable under TILA for Inconsistencies
Between Contract and Sales Invoice: In connection with a vehicle sale, the dealership
provided the buyer with a retail installment sale contract reciting a total purchase price of
$33,877.89. The RISC and related documents were assigned to a finance company. The sales
invoice listed the car’s price as $25,629 and the total price as $31,038.25. With tax, the invoice
listed the total price as $34,129.39. The buyer sued the dealership and the finance company for
violations of the Truth in Lending Act, among other claims, for these inconsistencies. The
finance company moved for summary judgment, and a magistrate judge recommended that the
court grant the motion. The buyer argued that the finance company violated TILA because the
RISC was "wildly inconsistent" with other transaction documents, especially with regard to the
sales price. However, the judge explained that, under TILA, an assignee of a contract is liable
only if the violation is apparent on the face of the disclosure statement. In this case, the judge
found that there were no violations apparent on the RISC, and, therefore, the finance company
could not be liable for a TILA disclosure violation. See Pierre v. Planet Automotive, Inc., 2015
U.S. Dist. LEXIS 134253 (E.D.N.Y. September 11, 2015).
Dealer Lacked Duty to Investigate Driving History or License Status of Co-Buyer: Two
individuals bought a car from a dealership. One of the buyers did not have a driver's license, but
produced a state ID as a form of identification. Eight days after the sale, that buyer hit another
individual with the car. The injured party sued the dealership for negligence and negligent
entrustment. The dealership moved for summary judgment, arguing that it owed the injured
party no duty to investigate the co-buyer's driving record and did not know or have reason to
know that the buyer was likely to use the car in a risky manner. The trial court granted summary
judgment for the dealership, and the injured party appealed. The Court of Appeals of Colorado
affirmed, finding that the dealership did not owe a duty to the injured party to investigate the cobuyer's license or driving history. As a result, the injured party had no negligence claim. Next,
the court decided that the dealership did not know or have reason to know that the co-buyer
was likely to use the car in a way that would cause an unreasonable risk of physical harm to
others simply because he did not produce a driver's license when he bought the car. As a result,
the dealership did not have a duty to prevent th