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Toyota EX-1


J. Kiel, Farmington, CT, Margaret Rattigan, for defendants.

FITZSIMMONS, States Magistrate Judge.

and Alicja Dauti bring action for damages against Auto Plaza, Ltd, Hartford Toyota Superstore Toyota). They seek damages, statutory damages, damages and attorney’s fees, to the Consumer Leasing Act (CLA), 15 §§ 1667-1667f. Plaintiffs also state law claims of breach of fraud, and violation of the Connecticut’s Trade Practices Act, Conn. Gen.Stat. §§ 42-110a-q. is premised on 28 U.S.C. §§ 1331 and

A bench trial was held on 10-11, 2001. Alicja 1. Igli Dauti, and Julian Martinez, finance manager of the Toyota Superstore testified in case and Richard McAllister, manager and vice president of Auto Plaza, Ltd. on behalf of defendant.

Testimony and adduced at the hearing are summarized as necessary to explain the Court’s and conclusions.


on the credible testimony, the exhibits, and the record compiled during the 2. the Court finds established the facts which are relevant to ruling.

The plaintiffs, Igli and Dauti, are individuals residing in Connecticut. Igli Dauti to the United States from in 1997. Alicja Dauti was in Paris and raised in Poland. She met Dauti during summer in 1997, in Hartford. She returned to the States in 1998 and married Plaintiffs’ first language is 3 In spring 1999, plaintiffs as a waitress and a waiter at area In April 1999, Alicja was 21 years old and Igli Dauti was 20 old.

Hartford Toyota is in the business of selling and leasing new and cars to the public, with its place of business in Hartford.

In 1999, the Dautis were to lease or purchase a 4 × 4 vehicle. failing to gain approval in 1999 to lease a new Nissan at Hart Nissan, plaintiffs that they continued to for a 4 × 4 at area dealerships.

On Thursday, 1, 1999, plaintiffs test a 1996 Toyota 4-Runner at Toyota. Plaintiffs discussed options with Julian Martinez, finance manager of the Toyota Superstore. After with Mr. Martinez, the Dautis to lease, rather than the 4-Runner.

Mr. Martinez presented with a lease for a used Toyota 4-Runner, VIN # JT3HN87R5T0015609 vehicle),

for a term of 36 months. ¶ 1]. Mr. Martinez testified that in Hartford Toyota used Bank for third party of used car leases. The form in this case has Nations printed at the top. Paragraph 14 of the entitled Signatures, contains the of Igli Dauti and Alicja as Individual Lessees. Under Signature, the Lease states,

The signature of the Lessor below has the of: (1) accepting the terms and conditions of Lease; and (2) assigning all right, and interest in and to the vehicle and this including all amounts to become due to: NationsBanc Auto Leasing, 270 South Service Road, N.Y. 11747-0570 and its successors and subject to and in accordance with the and conditions of the separate Dealer between Lessor and Assignee.

1]. It is undisputed that the lease was not by a representative of Hartford Toyota. 1, ¶].

Section 3 states that the due at lease signing or delivery is Section 4, Monthly Payments, that $377.81 is due on April 1, followed by 35 payments of $377.81 due on the 1st of month, with total payments of $13,601.16. Section 7, of Amount due at Lease signing or reflects that the total due as

Plaintiffs testified that filled out a Credit Application and told by Mr. Martinez that were approved. The parties on the language used by Mr. Martinez at stage of the transaction. Mr. Martinez that he told plaintiffs looked good. He testified the lease was not signed because it was on approval from Nations which was never received.

signed the lease and made a down payment, splitting the on two credit cards. [Stip. ¶ 2; 2, 3, 4, 10]. Martinez testified although the lease agreement that plaintiff’s owed Hartford Toyota would paid the additional $45.15 if Bank accepted the lease. testified that he was not authorized by Toyota to sign leases and a representative of Hartford Toyota lease agreements on behalf of Bank only after the approves the transaction. After Nations Bank sends a coupon booklet directly to the who send their payments to the Bank.

Hartford Toyota spot delivery to its customers. this plan, the dealership release a car prior to finding Party financing.

Plaintiffs possession of the vehicle on April 1 executing a Delivery Sheet and a temporary registration, temporary plate and car insurance. 4 Id. ¶ 3; Pl.Ex. 5, 6; Ex. 501, 505. The Delivery dated April 1, 1999, in relevant part



Ex. 501. Plaintiffs and defendant’s Mr. Martinez, signed the Delivery in two places. Id. Plaintiffs testified were so excited about the 4-Runner that they did not the documents that they They agree that signatures appear on the sheet in two Martinez testified that he the lease and Delivery Sheet out to plaintiffs and asked them if understood what they signing.

During negotiations on 1, Mrs. Dauti testified she offered Hartford Toyota 1993 Pontiac Grand-Am as a but later declined Hartford offer of $800, reasoning they would be able to the car for more money on their Plaintiffs testified that placed an advertisement in the Hartford to sell the Pontiac. Although Dauti testified that placed an advertisement to begin on April 10, 1999, no supporting was offered into evidence. Dauti testified the Pontiac was on April 12. No further testimony or evidence was submitted to prove sale.

It is undisputed that were unable to secure approval for the lease from a party and that plaintiffs to obtain an additional co-signer or to an additional down payment. ¶¶ 5-6]. Mr. Martinez testified third party financing is refused. He testified he was very the Dautis were refused The parties dispute when and how was communicated. Plaintiffs declined to the vehicle to Hartford Toyota as [Stip. ¶ 7].

Mr. Martinez testified on April 1 he faxed an application to Bank at around 4:30 to 5 Martinez testified he told the that everything looked but they would have to for approval. Nations Bank to finance the Dautis’ lease, plaintiffs had insufficient credit [Def. Ex. 504]. Plaintiffs’ 504 is a fax transmission, dated April 1, at 6:06 p.m. from Banc Auto Leasing, to Anthony Martinez. Martinez that he contacted Nations and tried to get them to overturn decision, that he tried to terms that would get Richard McAllister testified Martinez sought assistance other Hartford Toyota who had a better relationship with Bank to get the deal to go through. He that more money or a co-sign will usually the situation. 5 Martinez testified he contacted the Dautis on April 14 or 15 to the matter. 6 The Dautis were to come up with a larger payment or a co-signer. Martinez that he explored financing for the of a new 4-Runner from April 14 April 20. On April 15, 1999, Automotive Finance and Toyota Credit Corporation denied the financing to

lease a 1999-4-Runner. 7 [Def. Ex. 503].

It is undisputed that, this time, Mr. Martinez plaintiffs several times, as as seven to eight times, to other finance terms and he requested they return the The Dautis made two appointments Martinez to return the car and then did not after which Martinez the Dautis to inform them Hartford Toyota would up the car.

On April 26, 1999, the 4-Runner was repossessed by Hartford [Stip. ¶ 8]. The vehicle had 1,100 miles since plaintiffs possession of the vehicle on April 1.

McAllister, General Manager and President of Hartford Auto Inc. testified that he has in the car business since 1984. He that, of the approximately 180 to 220 cars Toyota sold per month, 10 to 20 20 to 30 cars-are spot deliveries lease approval. Mr. McAlister that the Dautis’ car was the only delivery he has had to repossess since

Defendant’s Exhibit 507 is an estimate South Green Automotive to Igli Dauti, dated 27, 1999, for various repairs and for a 1993 Pontiac Grand Am $382.24. On cross examination, were unable to explain the between this exhibit and testimony that the car was sold by 12. The Court credits Mr. Martinez’ that plaintiffs asked if could use the Grand Am for a trade-in to financing after the car was repossessed. testified that Hartford offered plaintiffs $1,000 for the but that they needed to their cash down by at least $2,000 to get financing.

On or April 28, the Dautis met with to discuss whether they reacquire the vehicle or obtain the of their full $3,000 payment. Defendant sought to some money for the use of the car and the increased [Pl.Ex. 7]. No agreement was reached. 8

was the Dautis’ first experience in or financing a car. Plaintiffs did not Hartford Toyota that had been refused credit at Toyota in March 1999.

Dauti testified that she her insurance company to cancel the after April 26 but received no No documentary evidence was produced to this testimony. Mr. Dauti that he did not know whether the new car purchased on May 7, 1999, was insured the same policy.

Plaintiffs compensation for the loss of a second car for two Mrs. Dauti testified a rental car costs $45 per day and she considered a car but it was too expensive. 9 Plaintiffs did not submit a or receipt for the cost of a rental Plaintiffs also seek for the inconvenience suffered by the loss of the Mrs. Dauti testified she either took a taxi or hours at work to drop off and up her husband; however, no time or taxi receipts were in evidence.

The parties stipulate that, plaintiffs hired an attorney, was made for the return of the $3,000 payment. Hartford Toyota the Dautis’ credit cards in the amount of $3,000 on May 7, 1999. 10]. On that day, purchased a new 4-Runner from dealer. The car payments for the new car were $600 per month.

On May 28, 1999, filed this lawsuit statutory damages of $1,000 the Consumer Leasing Act, the $45 per day for a rental car for two weeks during they lost use of a second car 10 ; $600 in insurance costs for 3 11 ; attorneys fees 12 and punitive

1. Consumer Leasing Act

Plaintiffs argue that the lease § 1667 of the Consumer Leasing because Hartford Toyota did not state the amount required to be at the lease’s inception, but instead a higher amount and correspondingly the vehicle’s capitalized cost in an to make it a wash. [Doc. # 53 at 1]. The stated that the amount due at was $3,045.15, when the actual plaintiffs paid was $3,000.

The Leasing Act (CLA) is part of a statutory scheme known as the in Lending Act (TILA), 15 U.S.C. §§

The primary purpose of TILA is to the informed use of credit. 15 U.S.C. § The Act requires creditors to disclose terms in a uniform manner and by all additional mandatory charges by the creditor to be included in the computation of the charge, the consumer is given the needed to compare the cost of and make an informed buying Since TILA is a remedial it is interpreted strictly in favor of the

Frazee v. Seaview Toyota Inc., 695 F.Supp. 1406. (D.Conn.1988) (buyer brought a year after financing, that the difference between the market value of the car purchased and the paid reflect a hidden charge in violation of TILA). One of the purposes for enacting TILA and CLA was to a meaningful disclosure of the terms of so as to enable the lessee to compare readily the various lease available to him. Lundquist v. Pacific Automotive

Financial Corporation, Civ. No. 5:91CV754, WL 475651, at *2 (D.Conn. June 9, TILA is interpreted strictly in of the consumer. (citation omitted). violations of the disclosure provisions and limitation of CLA support an award of damages. Id. (citing 15 U.S.C. § (1982)). Like the rest of the the CLA is a disclosure rather than statute. Turner v. General Acceptance Corp., 180 F.3d 454 (2d Cir.1999) (citation omitted).

argue that it does not that they actually less than the listed The Court credits Martinez’ that, although the contract $3,045.15, Hartford Toyota to accept $3,000 from and Hartford Toyota would paid the $45.15 difference or it.

While CLA is concerned with full credit disclosure, the Act did not providing a right of action a consumer was declined credit. The CLA to provide a prospective lessee meaningful disclosures concerning all of the associated with the lease so he or she could compare the costs of alternative. Pettola v. Nissan Acceptance Corp., 44 F.Supp.2d 447 (D.Conn.1999). Plaintiffs do not challenge the Bank Lease Agreement used by defendant. Defendant and the Court agrees, that has been no failure to disclose the payable by plaintiffs. Turner, 180 at 455 (section 1667a(4) requires to disclose, in addition to charges at lease inception and the amounts of all payments, the amount of `other payable by the lessee.’).

Defendant argues that, the $45.15 was paid by defendant or its inclusion does not constitute a CLA Plaintiffs have made no that this $45.15, but not paid by plaintiff, contributed to Bank’s decision to decline 15 U.S.C. § 1667a. Nor have identified any specific harm from the fact that a charge was disclosed but that only paid $3,000.

claim is essentially that finalized a lease agreement them and then changed the or as they argue under claim for breach of lease, defendant engaged in a yo-yo See Frazee v. Seaview Toyota Inc., 695 F.Supp. 1406. (D.Conn.1988) (declining to find a violation where plaintiff’s is in essence a claim in warranty.). The history of the CLA indicates that the Reserve Board recommended cost disclosures before a lease was consummated and in lease in order to provide consumers meaningful information about the and aggregate costs of consumer so that they could more informed choices. 44 F.Supp.2d at 445 (citing S.Rep. No. (1976), reprinted in 19 U.S.C.C.A.N. Notwithstanding plaintiffs’ claim in post trial memorandum Hartford Toyota did not accurately the amount required to be paid at the inception, but instead stated a amount and correspondingly increased the capitalized cost in an effort to it a wash, [Doc. # 53 at 1], plaintiffs to demonstrate this at trial. provided plaintiffs with all the necessary to enable them to lease terms with leases. Turner, 180 F.3d at 456 12 C.F.R. § 213.1(b)(1)). Here, made a slightly lower payment with no corresponding in the total contractual obligation. 13

the Court was not persuaded that was a deliberate effort by defendant to the Dautis. The Court was persuaded Martinez wrote up the form and, when the Dautis they would only be to pay $3,000, he agreed to it. The Court not believe that such rises to the level of a CLA violation. The has found no cases addressing issue and the parties did not cite any on point. On this record, the finds no CLA disclosure violation.

2. of Contract

Yo-Yo Transactions

argue for the first time in post-trial brief that engaged in a yo-yo sales designed to deceive them thinking they had a deal for the of later renegotiating terms to them. In support, plaintiffs to their post-trial memorandum a of Unfair and Deceptive Acts and (National Consumer Law Center) § a (2000 Supp.), arguing [t]he evidence at trial that plaintiffs suffered this type of harm. # 53 at 2]. After considering this the Court concludes that did not establish by a preponderance of the evidence defendant engaged in a yo-yo and did not prove that defendants the contract.

Plaintiffs first that the lease agreement is without defendant’s signature. it is undisputed that an authorized of Hartford Toyota did not sign the agreement, plaintiffs argue the filled in contract should be as the dealer’s offer, and the consumer’s as acceptance, so the contract is binding. # 53 at 3] (quoting Deceptive Acts and § 5.4.3a.2.3). However, plaintiffs no case law to support the proposition defendant’s signature was unnecessary to the agreement. At trial, Martinez that the lease agreement not be signed until financing was and that plaintiffs were notified by signing the Delivery that credit approval was a before Hartford Toyota enter into the lease. Martinez minimized the likelihood the Dautis would have to the car. The Court credits testimony that he genuinely plaintiffs would be approved for Plaintiffs did not inform Martinez they had not been approved to a Nissan Pathfinder a month

There is no dispute that parties executed the Delivery Plaintiffs confirmed that signatures appear on the Delivery although they had no clear of signing it. Plaintiffs ask the Court to the Lease and exclude consideration of the Sheet because the Lease an integration clause. Pl.Ex. 1, ¶ H. careful consideration of the record, the finds that the integration contained in the lease was not in effect.

The rule is that where a of mature years and who can read and

signs or accepts a formal contract affecting his pecuniary it is that person’s duty to it and notice of its contents will be to that person if that negligently fails to do so.

Phoenix Inc. v. Kosinski, 47 Conn.App. 654, 707 A.2d 314 (1998) and quotation marks omitted). introduced no evidence of coercion, or mistake. Id. Nor did plaintiffs claim they did not understand the language. the Court finds no evidence of or intimidation, as plaintiffs insisted on the return of their $3,000 payment and retained counsel after the vehicle was repossessed. The believes that the Dautis’ age and at the time of the transaction contributed to a 14 Accordingly, this Court that plaintiffs had a duty to the Delivery Sheet and cannot enforcement by arguing that did not review it or receive an executed Id. 654-55, 707 A.2d 314; # 53 at 3.

Hartford Toyota argues, and the agrees, that the Delivery is enforceable. Defendant contends the unsigned Lease was not enforceable credit approval from a institution was obtained. Def. Ex. The condition precedent was approval of In plaintiffs’ selective reading of and Deceptive Acts and Practices, failed to cite the following which clearly supports position.

The dealer’s conditioning the credit sale on the assignee’s approval can be a condition precedent to the Until the financing approval is the sale is not made. The dealer the consumer use the car awaiting the resolution of the the deal, however, is not consummated the condition is met, that is, the agrees to purchase the note.

and Deceptive Acts and Practices §

Here the record demonstrates Hartford Toyota retained to the car in its files, and the car had temporary dealer Martinez testified that its was not sent to the Department of Motor because financing was never Plaintiffs also agreed, the Delivery Sheet, to insure the while their credit was pending. Def. Ex. 501. The to insure was separately acknowledged by a set of signatures from both Toyota and the Dautis. Id.; see and Deceptive Acts and Practices § (In a true condition precedent the dealer retains title in the the dealer’s plates should be on the and the dealer should pay for the insurance the dealer’s blanket policy.).

The cited by plaintiffs continues:

If the cannot assign the note, the is never consummated. Then the returns the dealer’s vehicle to the If the consumer does not do so, then the attempt to seize the vehicle is not an 9 repossession because the car’s remains with the dealer.

Unfair and Deceptive Acts and § 5.4.3a.5.2. While this does not accord any special to Unfair and Deceptive Acts and despite the enthusiasm with plaintiffs cite it, the treatise support defendant’s case on the of contract claim and plaintiffs

no other authority or case law to the The Court finds based on the that the Delivery Sheet was and there was no contract to lease the condition precedent was not satisfied. the Court rules in favor of on the breach of contract claim.

contend that defendant induced them to accept of the vehicle in a manner so that the would be bound, but not Hartford They relied upon statement to their detriment, and Toyota should be liable for its [Doc. # 53 at 5]. Specifically, plaintiffs that they were that their credit had approved and that the vehicle was Id.

As previously stated, the Court Martinez’ testimony that he did not plaintiffs they were and that he reviewed the contents of the Sheet with them. The finds that plaintiffs the Delivery Sheet and they are by it. On this record, the Court in favor of defendant on the fraud

4. Connecticut Unfair Trade Act

In their post-trial memorandum, argue that Hartford violated multiple statutes the sale or lease of motor and violations of these laws per se unfair trade practices. # 53 at 5].

Defendant persuasively countered if plaintiffs returned the car on April 15 as there might not have any negotiation for payment for their use of the Defendant argues that behavior was unfair and that benefitted from free use of the for 25 days. The Court does not it unfair or deceptive for defendant to sought compensation for the use of the vehicle plaintiffs drove it over miles. Defendant also had to the vehicle. The Court credits testimony that the Dautis’ car was the spot delivered vehicle he has since 1984. It is undisputed plaintiffs were refunded money in full on May 7, 1999.

The has not found that defendant the CLA or breached the contract. While of a buyer’s down payment be a CUTPA violation under circumstances, the Court cannot a violation on this record, and in favor of defendant on the CUTPA

Based on the foregoing, the Court in favor of defendant on all counts.

is not a recommended ruling. The parties to proceed before a United Magistrate Judge [Doc. # 43] on 28, 2001, with appeal to the of Appeals.

Judgment shall in favor of defendant on all counts.

SO at Bridgeport this 3rd day of June

Toyota EX-1
Toyota EX-1
Toyota EX-1
Toyota EX-1

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