Car dealership slapped down for unethical conduct
The Kelly Automotive Group lost yet another appeal, attempting to overturn a decision that it must return a single mother's down payment on a pickup truck. The case is Boillat v. Kelly Automotive Group, Inc. The case reads like an economically struggling single parent's nightmare. Fortunately, in these days of de-regulation and conservative politics, the story appears to have a satisfying ending.
Boillat told the court she explained over the phone to a salesman that she could spend only (her life savings of) $1700.00 and also explained that she could only afford to spend $200.00 per month on a vehicle, including " lower cost PL and PD" insurance. The salesman sent a courtesy car to pick her up, and then insisted on giving her "down payment" money to the manager, "to show that she was serious."
She picked out a truck but was then told she had to purchase "full coverage" and the dealership committed her to $150.00 per month (3/4 of her budget) for insurance. The salesman told her that he would finance the truck balance of $4852.60 over 30 months to make the payment "do-able" and Boillat was escorted to another building to sign paperwork. She was presented with an installment contract that showed a total price of $10,213.70, which included gap insurance and a service warranty, and told that the dealership would not make the sale without these items. The interest rate charged in the contract was 25%. Boillat suffered a panic attack and told the financing agent, one Melanie Pulver, that she could not afford the truck, which now came with a monthly payment of $433.00--more than twice her budget.
When she asked for a ride home, Boillat says she was told that the shuttle driver had left for the day. When the salesman and Pulver declined to give her a ride home, Boillat signed the contract and took the new truck and her kids and left, believing it was her only way to get home. At home, she called the dealership's owner, Russ Kelly, in an attempt to work matters out, however, neither he nor the manager, Gary Kelly, would return her calls. Eventually, with the help of a friend from church [who later testified in support of her account], Boillat scheduled a meeting with Kelly where the dealership agreed to rescind the purchase. It claimed, however, that the rescission was contingent on Boillat purchasing a second vehicle from Kelly Automotive, and refused to return her down payment. It registered a $6,000.00 debt from Boillat on her credit report.
Boillat sued Kelly Automotive in Small Claims Court, and Kelly's lawyer moved the case to District Court. Boillat amended her complaint to allege a violation of the Michigan Consumer Protection Act (MCPA), and secured a judgment against Kelly. That judgment was upheld first in the Circuit Court, and two years later by the Court of Appeals. The lower court also awarded attorney fees and sanctions, finding that Kelly Automotive was attempting to "disadvantage" the Plaintiff. The Court of Appeals upheld all of the lower courts' rulings, and rejected Kelly Automotive's cynical claim that it was a mistake to allow Kelly to remove the case from Small Claims to District Court.
The Court held that while a recent decision by the Engler Majority of the Supreme Court might invalidate the application of the MCPA to car dealers, Kelly Automotive had not properly raised that affirmative defense (perhaps because even crooks didn't anticipate that the insurance-oriented activists on our Supreme Court would go that far in rejecting consumer protection). Finally, the Court rejected Kelly's claim that the sanctions and fees awarded against it were too high. The court noted that just last year, Michigan's Supreme Court had rejected a similar claim by the same dealership, pointing out that a party which pursues frivolous appeals cannot then argue about the proportionality of fees awarded against it. (the other case is Beach v. Kelly Automotive Group, Inc., 482 Mich 1101).
Perhaps if Kelly keeps it up, even the conservative justices on our Supreme Court will conclude that some level of reasonable consumer protection is justified.