Man Bites Dog

The courts sided with a New Jersey dealership in its suit against a customer whose soon-to-be-ex-wife turned out to be the co-owner of his trade-in.

September 2014, Auto Dealer Today - Feature

by Tom Hudson

The phrase “man bites dog” probably was coined by a newspaperman at about the beginning of the last century. One version of the full saying goes, “If a dog bites a man, that’s not news. If a man bites a dog, that’s news.”

In our business, it’s a “man bites dog” event when a dealer successfully sues a consumer. Such instances are rare, but not unheard of. A recent opinion describes such a “man bite.”

Robert Collier bought a 2012 Chevrolet Avalanche from Mall Chevrolet in Cherry Hill, N.J., for $50,740. As part of the transaction, Collier agreed to trade in his 2010 Avalanche. Collier signed a purchase agreement that provided that his 2010 Avalanche was free and clear of all liens and encumbrances, except as otherwise noted, and that he would provide satisfactory evidence of title to his trade-in vehicle. The purchase agreement did not contain a notation of any lien or encumbrance.

In fact, Collier owed $40,395 on the 2010 Avalanche to Ally Bank, and the car was jointly owned. Collier paid Mall Chevrolet for the 2012 Avalanche and traded in the 2010 car. Mall Chevrolet then reconditioned the trade-in vehicle and filled it with gas in preparation for sale.

Mall Chevrolet was later contacted by the South Carolina Department of Motor Vehicles, where the 2010 Avalanche was registered. The DMV informed the dealership that the vehicle was jointly owned by Collier and his wife, Shaunda Stewart, whom he was divorcing. The DMV informed Mall Chevrolet that Stewart’s signature was required to transfer title.

Collier offered to get his wife’s signature, but Mall Chevrolet declined the offer, citing a dealership policy against this practice to prevent forgery. When dealership personnel attempted to obtain her signature, Stewart refused. In a letter from her attorney, Stewart accused Collier of trying to exchange a jointly held vehicle for a solely held vehicle to interfere with her marital property rights.

Mall Chevrolet then contacted Collier and demanded that he pick up his trade-in and return the new vehicle. Collier argued that he told the Mall Chevrolet salesman about the joint ownership, but he signed the vehicle exchange agreement with Mall Chevrolet to make the transfer.

Mall Chevrolet then sued Collier, alleging breach of contract, lack of good faith and fair dealing, and unjust enrichment. The trial court found for Mall Chevrolet. Collier appealed, arguing, in part, that Mall Chevrolet had actual and constructive knowledge of the dual ownership of the 2010 Avalanche and that the dealership breached the contract by not allowing him to directly obtain his wife’s signature on the title transfer paperwork.

The appellate court found that the trial court acted reasonably in finding that Collier never informed the dealership about the joint ownership. Specifically, the appellate court thought it was reasonable for the trial court to determine that the employees of Mall Chevrolet were more credible than Collier, especially given that Stewart was never referenced in Collier’s emails or the purchase agreement.

The appellate court also upheld the trial court’s determination that Mall Chevrolet did not interfere with Collier’s attempt to provide clear title. Specifically, the court noted that Mall Chevrolet tried to aid Collier by attempting to get Stewart’s signature, and, based on the joint ownership of the car and the letter from Stewart’s attorney, it was clear that Collier falsely represented on the purchase agreement that he could provide clear title.

While it isn’t likely that this case is an omen of more successful dealership vs. consumer cases to come, it is still refreshing to see at least the occasional dealer victory.

Thomas B. Hudson is a partner in the firm of Hudson Cook LLP and the author of several widely read compliance manuals. © 2014, all rights reserved. Based on an article from Spot Delivery. Single print publication rights only, to Auto Dealer Monthly. HC# 4823-8510-8764 (8/14).

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