Negron v. Mallon Chevrolet Inc.
To prevail on a defense that a bona fide error took place, a defendant in a Truth In Lending Act suit must establish the error was not intentional and took place although there were procedures reasonably intended to prevent that type of error. Allegedly, the plaintiff, Magdaliz Negron, went to a used-car sale at Mallon Chevrolet Inc. in Norwich and decided to buy a 2004 Chevrolet Impala with 41,555 miles for $17,001. The plaintiff signed a purchase order and a retail installment contract with payments of $379 per month for six years at an annual percentage rate of 16.9 percent. The plaintiff sued and alleged that the defendant dealership violated the Truth in Lending Act, 15 United States Code §1601. The court found that the plaintiff proved the Truth In Lending Act count, because she was wrongly charged sales tax on a fictitious downpayment. The court rejected the dealership's defense that this was a bona fide error that resulted because it hired a temporary salesperson, although the dealership had procedures in place that were reasonably expected to prevent this type of error. In part because the dealership was unable to identify the temporary salesperson who allegedly was responsible, the court was not persuaded that the dealership's procedures were reasonably intended to prevent this type of error. The court awarded the plaintiff statutory damages of $1,000, costs and attorneys' fees. The plaintiff also alleged that the defendant dealership's salesperson wrongly reported her job title as assistant manager and greatly inflated her earnings on the credit application, in violation of the Connecticut Unfair Trade Practices Act. The court found that the plaintiff signed the false credit application, which indicated that she perused it and that the application was correct. "[E]ither plaintiff knowingly signed a false application," wrote the court, "or recklessly signed a document without bothering to read." The dealership's permanent salespeople denied that they knowingly prepared a false credit application and plausibly claimed that temporary salespeople could have been responsible. The plaintiff failed to prove, by a preponderance of the evidence, that the dealership violated the Connecticut Unfair Trade Practices Act.