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Freeman v. A Better Waywholesale Autos, Inc.

Court of Appeals of Connecticut

July 18, 2017

SHARAY FREEMAN
v.
A BETTER WAYWHOLESALE AUTOS, INC.

          Argued March 28, 2017

         Appeal from Superior Court, judicial district of Hartford, Huddleston, J.

          Kenneth A. Votre, for the appellant (defendant).

          Richard F. Wareing, withwhom was Daniel S. Blinn, for the appellee (plaintiff).

          DiPentima, C. J., and Prescott and Mullins, Js.

         Syllabus

         The plaintiff sought to recover damages for violation of the Connecticut Unfair Trade Practices Act (CUTPA) (§ 42-110a et seq.) and fraudulent misrepresentation. The plaintiff alleged, inter alia, that the defendant automobile dealership refused to return a deposit she had paid after she had attempted to purchase a motor vehicle from the defendant. The listed sales price for the vehicle was $10, 995, and upon test driving the vehicle, the plaintiff signed a purchase order that set forth the purchase price and other costs and expenses, including an initial deposit of $2500. The plaintiff was told that her deposit would be returned if the defendant could not secure financing for her purchase. The plaintiff used an online loan calculator that estimated that her financing payments for the vehicle would be approximately $320 per month for forty-two months, and thereafter she paid the deposit. A few days later, the plaintiff was informed by the defendant that her monthly payment would be more than $500, more than what she could afford. The defendant's loan officer stated that because of the plaintiff's credit history, the lending bank had set a higher interest rate than what was permitted by law, and the defendant had to buy down the loan to bring it within legal limits. The plaintiff was also informed that the bank was requiring her to take out gap insurance and a service contract for the vehicle. After the plaintiff told the loan officer that she could not afford those payments, the loan officer calculated a new monthly rate of $447 per month, with other service-related fees included, which was still too expensive for the plaintiff. When the plaintiff asked for a return of her deposit, the defendant told her it was nonrefundable, but could be applied to a different vehicle for purchase. Thereafter, the plaintiff returned to the dealership and spoke with the defendant's finance director, who informed the plaintiff that he had secured new financing terms and proposed monthly payments of $334.40 for forty-eight months, six months longer than the original term. The plaintiff declined those terms, again requested a refund of her deposit, and when the defendant refused, the plaintiff was unable to purchase another vehicle for about one year while she saved money for another deposit. Following a trial, the court rendered judgment for the plaintiff on both counts of her complaint, awarding her $2500 in compensatory damages and $7500 in punitive damages. The court also ruled that the plaintiff was entitled to attorney's fees, but set a future hearing to determine the amount. From the trial court's judgment, the defendant appealed to this court, claiming that the trial court erred, as a matter of law, in concluding that the defendant violated CUTPA and committed fraudulent misrepresentation by not disclosing certain material facts, and by awarding the plaintiff punitive damages and attorney's fees. Following the filing of the appeal, the trial court awarded the plaintiff $26, 101.50 in attorney's fees, but the defendant did not amend its appeal to challenge that award.

         Held:

1. The portion of the defendant's appeal challenging the trial court's award of attorney's fees was dismissed: it is well settled that an appellate court lacks jurisdiction to review an award of attorney's fees until the trial court actually determines the amount of those fees, and the trial court here having issued a postjudgment award of attorney's fees following the defendant's initiation of its appeal, and the defendant having failed to amend its appeal once that award was issued, this court did not have subject matter jurisdiction over the defendant's claim because the specific amount of attorney's fees was not properly before the court.
2. The trial court properly applied the law to the facts in the case and found that the defendant violated CUTPA: the evidence in the record demonstrated that the defendant violated the public policies behind the federal Truth in Lending Act (15 U.S.C. § 1601 et seq.) and the relevant regulation (§ 42-110b-28 [b] [1]) of state agencies by failing to disclose the financing terms to the plaintiff before requiring that she place her deposit, and that the defendant's conduct was unethical because it only offered the plaintiff financing deals that either included unwanted products and services, a higher sales price, or both, and provided a misleading assurance regarding the refund of the plaintiff's deposit to induce the plaintiff to pay the deposit; furthermore, the record also supported the determination that the plaintiff suffered an ascertainable loss of her $2500 deposit, as having a dealership credit was not the equivalent of having full use of the money.
3. The trial court did not abuse its discretion in awarding the plaintiff punitive damages after finding that the defendant acted in reckless disregard of the plaintiff's rights and that it did so in order to augment its profit, as those findings were fully supported by the record; the defendant never presented a financing package to the plaintiff that contained only the items that she had agreed to purchase at the price she had agreed to pay.
4. The trial court properly determined that the defendant committed fraud by nondisclosure of material facts: there was ample evidence that the defendant perpetrated a fraud against the plaintiff by failing to disclose material facts regarding the financing of the vehicle and the plaintiff's deposit, as the refund ability of the plaintiff's deposit and how it tied into the terms of the financing and the levying of extra costs to recoup the defendant's buy down were never disclosed to the plaintiff and the defendant misled the plaintiff into paying the deposit.

         Procedural History

         Action to recover damages for, inter alia, violation of the Connecticut Unfair Trade Practices Act, and for other relief, brought to the Superior Court in the judicial district of Hartford, where the defendant was defaulted for failure to comply with a court order; thereafter, the court, Huddleston, J., granted the defendant's motion to open the judgment; subsequently, the matter was tried to the court; judgment for the plaintiff; thereafter, the court denied the defendant's motion to reargue, and the defendant appealed to this court; subsequently, the court granted in part the plaintiff's motion for attorney's fees and costs. Dismissed in part; affirmed in part.

          OPINION

          MULLINS, J.

         The defendant, A Better Way Wholesale Autos, Inc., appeals from the judgment of the trial court rendered in favor of the plaintiff, Sharay Freeman, on her complaint. On appeal, the defendant claims that the court erred, as a matter of law, in concluding that (1) the defendant violated the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. (CUTPA), (2) an award of punitive damages was appropriate, (3) the defendant committed fraudulent misrepresentation by nondisclosure of material facts, and (4) an award of attorney's fees to the plaintiff was appropriate. We dismiss for lack of a final judgment that portion of the appeal contesting the award of attorney's fees[1] and otherwise affirm the judgment of the trial court.

         The parties stipulated to the following facts before the trial court. ‘‘The defendant is a Connecticut corporation that operates a motor vehicle dealership in Nauga-tuck [(dealership)] . . . . It advertised a 2007 Honda Odyssey EX-L [(vehicle)] for sale at a price of $10, 995. The plaintiff paid a $2500 deposit for the vehicle on February 18, 2013. She submitted a credit application to obtain financing for the vehicle. The defendant forwarded the plaintiff's credit application to two financing companies, American Credit and United Consumer Finance. The plaintiff did not agree to the terms offered to her and did not purchase the vehicle. Before bringing this action, the plaintiff requested a refund of her deposit, but the defendant refused to return it.''

         In addition to the parties' stipulation, the court also found the following relevant facts. The plaintiff was in need of reliable transportation to get to work and to transport her children. When she saw the defendant's advertisement for the vehicle, it was priced approximately two thousand dollars less than other comparable vehicles. She telephoned the dealership to make sure the vehicle still was available. Upon finding that it was available, she rented a car to drive from Manchester to Naugatuck in order to test drive the vehicle.

         When she arrived at the dealership in Naugatuck, the plaintiff met with Alex Pierre, a salesman, and inquired as to what costs she would incur in addition to the price of the vehicle if she were to purchase it. Pierre told her that she would have to pay a conveyance fee, registration, sales tax, and finance charges for the vehicle. Pierre also told the plaintiff that she would have to put down a deposit of $2500 to initiate the credit approval process. He also told her that the deposit would be refundable if the credit application was not approved; otherwise, the deposit would be nonrefundable.

         On February 16, 2013, the plaintiff signed a retail purchase order (purchase order) for the vehicle. The purchase order set forth a cash purchase price for the vehicle of $10, 995, a VIN etch service fee of $198, a dealer conveyance fee of $598, sales tax of 6.35 percent, an unspecified amount for registration of the vehicle, which the plaintiff reasonably expected to be under $150, and the plaintiff's deposit of $2500. The order did not show any financing information or other charges. The plaintiff placed her initials near each of the listed fees. Just under the area that showed the plaintiff's deposit was the statement, ‘‘NO REFUND OF DEPOSIT.'' Notwithstanding that statement, Pierre told the plaintiff that her deposit would be returned if the defendant could not secure financing for the plaintiff's purchase of the vehicle.[2] The plaintiff, however, did not put down her deposit at that time.

         After leaving the dealership, the plaintiff used an online loan calculator to determine the amount of her monthly payments over a forty-two month term. Taking the purchase price of $10, 995, and adding the additional fees and costs as set forth on the purchase order, and then subtracting the required $2500 deposit, the plaintiff determined that her monthly payments would be approximately $320 per month, assuming the maximum possible interest rate of 19 percent; see General Statutes § 36a-772.[3] She believed she could afford a monthly payment in this amount.[4]

         On February 18, 2013, the plaintiff returned to the dealership and paid the $2500 deposit. Pierre told the plaintiff that the dealership would process her application and let her know whether she was approved, which he did a few days later. Pierre told the plaintiff to bring in her W-2 form and an insurance card for the new vehicle. The plaintiff obtained insurance, and brought a copy of her W-2 form and her insurance card to the defendant. Because the plaintiff recently had received an increase in her income, which was not reflected on her W-2 form, her credit approval was delayed until she could obtain additional documentation.

         On February 23, 2013, the plaintiff traveled back to the dealership, where she met with Rob Italiano, a loan officer, who asked her to sign papers. The plaintiff asked Italiano how much her monthly payment would be, and he told her that it would be more than $500. The plaintiff was shocked that the cost was so much higher than her calculations and much higher than she could afford. Italiano told her that because of her credit problems, the bank had set her interest rate at 26 percent, and, because Connecticut law does not permit a rate higher than 19 percent, the defendant had to buy down the loan to get it within the legal limits. He also told her that the bank was requiring her to take out gap insurance and a service contract for the vehicle. The plaintiff told Italiano that she could not afford those payments.

         Italiano then came back with a new monthly rate of $447. He used two different methods to calculate that payment. One listed the sales price as$10, 995, but added other service related contracts amounting to $3163. The other listed a sales price of $12, 441.58, with stated sales tax of $949.58, and various service related contracts amounting to $2864. Each of these proposals required the plaintiff to pay approximately $21, 292.90 over the forty-two month life of the loan, and was thousands of dollars more than she would have paid under her own calculations. Furthermore, the plaintiff did not want the service contracts, lifetime oil changes, or the tire and wheel service, each of which would have required her to drive from Manchester to Naugatuck for service. Accordingly, she asked for the return of her deposit. Pierre told her that the deposit was nonrefundable, but that it could be applied to a different vehicle. The plaintiff left the dealership without signing the sales agreement.

         On March 3, 2013, the plaintiff returned to the dealership and spoke with John Albano, its finance director. Albano told the plaintiff that he had been able to secure financing within the range of the monthly payment that the plaintiff originally had sought. Albano proposed a payment arrangement of $334.40 for forty-eight months, [5] which was six months longer than the original financing, and which substantially increased the total cost to the plaintiff.[6] The plaintiff refused those terms, and, again, requested that the defendant refund her deposit. The defendant refused. As a result, the plaintiff was unable to purchase another vehicle for approximately one year, while she saved money for another deposit.[7]

         In her complaint, the plaintiff alleged a violation of CUTPA and fraudulent misrepresentation. The defendant filed an answer to the complaint, and it set forth six special defenses, namely, that (1) the defendant did not violate the federal Truth in Lending Act 15 U.S.C. § 1601 et seq. (TILA);[8] (2) the defendant complied with all federal laws and maintained procedures and training reasonably adapted to avoid violation of TILA, and therefore, the plaintiff's claims were barred; (3) the defendant's actions fell outside its primary trade or business of selling automobiles, and therefore CUTPA was inapplicable; (4) the plaintiff's action was barred by the doctrine of unclean hands; (5) the defendant was not required by TILA to make any ...


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