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James v. Lopez Motors, LLC

United States District Court, D. Connecticut

March 31, 2018



          Hon. Vanessa L. Bryant United States District Judge.

         I. Introduction

         Plaintiffs John James and Rosette Molnar bring this action for damages arising out of Defendant Lopez Motors, LLC's (“Lopez Motors”) alleged violations of the Truth in lending Act (“TILA”), 15 U.S.C. § 1601 et seq., and the Electronic Funds Transfer Act (“EFTA”), 15 U.S.C. § 1693, et seq. Plaintiffs also assert state law claims for breach of the implied warranty of merchantability, for violation of the Connecticut Retail Installment Sales Finance Act (“RISFA”), Conn. Gen. Stat. §§ 36a-770 et seq., and the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. §§ 42-110a et seq. Now before the Court is Plaintiffs' Motion for Default Judgment, in which Plaintiffs' seek an award of $2, 000 in statutory damages under TILA, $1, 000 in statutory damages pursuant to EFTA, actual damages of $2, 366 pursuant to RISFA, and punitive damages of $7, 500. Plaintiffs also seek an order affirming that the contract was rescinded and for post-judgment interest pursuant to Conn. Gen. Stat. § 37-3a. For the reasons that follow, Plaintiff's motion is GRANTED IN PART and DENIED IN PART.

         II. Background

         On December 11, 2015, Molnar visited Lopez Motors and looked at ¶ 2010 Volkswagen Jetta (the “Vehicle”). [Dkt. No. 1 (“Compl.”) ¶ 9]. While Lopez Motors told Molnar that it had purchased the Vehicle from a friend, in reality, the Vehicle had been offered for sale by Whaling City Ford less than two months before Molnar viewed the Vehicle. Id. ¶¶ 10-11. Molnar agreed to purchase the Vehicle from Lopez Motors. Id. ¶ 12. James was not present at the dealership, but he gave Molnar verbal permission to enter into a contract and sign the contract documents on his behalf. Id. ¶ 13. Molnar paid a deposit of $500.00 and gave Lopez Motors two post-dated checks each in the amount of $500.00 dated January 15, 2016 and January 29, 2016. Id. ¶ 14.

         Lopez Motors prepared a Purchase Order and a Retail Installment Contract that listed the buyer as James and the co-buyer as Molnar. Id. ¶ 15. Lopez Motors was required by Connecticut law, specifically Conn. Gen. Stat. § 42-224, to provide a written warranty that the Vehicle would be mechanically operational and sound for a period of 60 days or 3, 000 miles because the Vehicle was six model years old and was sold for more than $5, 000. Id. ¶ 16. Lopez Motors did not provide this express warranty and attempted to disclaim the implied warranty of merchantability on the purchase order. Id. ¶ 17.

         The Retail Installment Contract included a charge of $1, 480 for a service contract that Plaintiffs neither requested nor desired. Id. ¶ 19. When Molnar asked Lopez Motors about the service contract charge, she was told that she was required to purchase the service contract as a condition of financing. Id. ¶ 20. Defendant also required Plaintiff to enroll in automatic withdrawals of the loan payments as a condition of financing the Vehicle. Id. ¶ 48. The Retail Installment Contract stated that the amount of the down payment was $2, 000, even though only $1, 500 had been requested or paid. Id. ¶ 21. Consequently, the cash price listed for the Vehicle was inflated by $500, and Plaintiffs paid sales tax on that excess $500. Id. ¶ 22.

         Molnar executed the Retail Installment Contract and agreed to be liable for the payments for James's Vehicle without compensation, rendering her a “cosigner” within the meaning of the Federal Trade Commission's Credit Practices Rule. Id. ¶ 23; see also 16 C.F.R. § 444.1 (defining “cosigner” as “[a] natural person who renders himself or herself liable for the obligation of another person without compensation.”). Molnar executed the Retail Installment Contract by electronically signing her name and James's name on a pad, and she was permitted the view the terms of the Retail Installment Contract on a computer monitor. Id. ¶ 24. The TILA disclosures were not made to James in any form or manner prior to the time that he became obligated under the RISC. Id. ¶ 25.

         After Molnar executed the Purchase Order and Retail Installment Contract, Lopez Motors delivered the Vehicle to her. Id. ¶ 26. Lopez subsequently assigned the Retail Installment Contract to Credit Acceptance Corporation, a sales finance company located in Michigan. Id. ¶ 27. Within weeks of delivery of the Vehicle, and within the sixty day and 3, 000 mile warranty period, Plaintiffs experienced mechanical problems and the vehicle's coolant light illuminated. Id. ¶ 28. Plaintiffs brought the Vehicle back to Lopez Motors for repairs on multiple occasions, but it was unable to repair the Vehicle. Id. ¶ 29. On February 1, 2016, Plaintiffs brought the Vehicle to Lopez Motors one final time for repairs. Id. ¶ 30. At that time, Lopez Motors refused to repair the Vehicle. Id. ¶ 31. Subsequently, Credit Acceptance paid Lopez Motors the $866 Plaintiffs had paid to Credit Acceptance in monthly payments.

         On or about March 7, 2016, Molnar spoke with David Brown of Lopez Motors, who offered to permit her to replace the Vehicle with a different vehicle. Id. ¶ 34. On March 8, 2016, Molnar advised Brown that Plaintiffs did not want to select another vehicle, and she demanded that Lopez Motors repair the Vehicle. Id. ¶ 35. Brown told Molnar that the Vehicle could be repaired, but Plaintiffs would need to sign a new contract for the Vehicle in order to retake possession. Id. ¶ 36. On April 12, 2016, Plaintiffs requested through counsel that they be allowed to have the Vehicle inspected by an independent facility prior to entering into the new proposed contract. Id. ¶ 37. Lopez Motors responded by stating that it would refund the money paid by Plaintiffs. Id. ¶ 38.

         Notwithstanding that promise, Lopez has failed to refund the amounts paid by Plaintiffs, including $1500 to Lopez Motors and $866 to Credit Acceptance, all of which Lopez Motors has wrongfully retained.

         III. Legal Standard

         Rule 55 of the Federal Rules of Civil Procedure establishes a two-step process for obtaining a default judgment. See, e.g., New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005). First, a plaintiff must acquire an entry of default against the defendant in question. Fed.R.Civ.P. 55(a). Second, after the default is entered, a plaintiff must either request a default judgment from the clerk or move the court for a default judgment. Fed.R.Civ.P. 55(b)(1)-(2). The clerk can enter a default judgment only if the amount sought is a sum certain or a sum that can be made certain by computation. Fed.R.Civ.P. 55(b)(1). “In all other cases, the party must apply to the court for default judgment.” Fed.R.Civ.P. 55(b)(2). “The determination of whether to grant a motion for default judgment lies within the sound discretion of the district court.” Int'l Brands USA, Inc. v. Old St. Andrews Ltd., 349 F.Supp.2d 256, 261 (D. Conn. 2004) (citing Shah v. New York State Dep't of Civil Serv., 168 F.3d 610, 615 (2d Cir. 1999)). Plaintiff properly served Defendants of the instant action, but Defendant has failed to respond or enter a notice of appearance.

         The Court “may forgo an evidentiary hearing ‘as long as [it] ensure[s] that there [is] a basis for the damages specified.'” Andrade, 2012 WL 3059616, at *3 (quoting Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)). Because the Plaintiffs have offered ...

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