Diaz v. Paragon Motors of Woodside, Inc.

Decision Date29 March 2006
Docket NumberNo. CV-03-6466(CPS).,CV-03-6466(CPS).
Citation424 F.Supp.2d 519
PartiesEddie M. DIAZ, Plaintiff, v. PARAGON MOTORS OF WOODSIDE, INC. and Americredit Financial Services, Inc. Defendants.
CourtU.S. District Court — Eastern District of New York

Mitchell Taras, Sadis & Goldberg LLC, New York, NY, for Plaintiff.

Craig M. Bonnist, Bonnist & Cutro LLP, Rye, NY, for Defendants.

MEMORANDUM OPINION AND ORDER

CHARLES P. SIFTON, District Judge.

Eddie Diaz brings this action against Paragon Motors of Woodside, Inc. ("Paragon") and Americredit Financial Services, Inc. ("Americredit") alleging that defendant Paragon Motors violated (1) the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq.,1 (2) the Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691,2 (3) New York's Vehicle & Traffic Law § 417-a,3 (4) New York's "Used Car Lemon Law," New York General Business Law § 198-b,4 (5) the Magnuson-Moss Warranty Act, 15 U.S.C. § 2310,5 by breaching (a) express and (b) implied warranties, and (6) New York General Business Law § 349 by its deceptive sales practices.6 In addition, plaintiff alleges that (7) co-defendant Americredit is liable for damages on all claims which plaintiff asserts against co-defendant Paragon, pursuant to 16 C.F.R. § 433.2 (the "Holder Rule"), as a provider of consumer credit. Presently before the Court is the plaintiffs motion for partial summary judgment on Paragon's liability with respect to its TILA, ECOA and N.Y. V&T § 417-a claims. Also before the Court are Paragon's and Americredit's cross-motions for summary judgment on all claims alleged in the complaint.

For the reasons set forth below, plaintiffs Rule 56(b) motions for summary judgment on liability with respect to his TILA and N.Y. V&T § 417-a claims are granted. Plaintiffs motion for summary judgment as to his ECOA claim is denied. Paragon's motions for summary judgment are granted with respect to plaintiffs claims for violations of ECOA, Used Car Lemon Law, Breach of Express Warranty pursuant to the MMWA, and the New York Deceptive Sales Practice statute to the extent that claim is based on violations of ECOA. Paragon's motions for summary judgment are denied as to plaintiffs claims for violations of Breach of Implied Warranty and Revocation of Acceptance pursuant to the MMWA, and the New York Deceptive Sales Practice statute to the extent that claim is based on violations of TILA and N.Y. V&T § 417-a. Americredit's motions for summary judgment are granted with respect to plaintiffs claims for violations of TILA, ECOA, Used Car Lemon Law, Breach of Express Warranty pursuant to MMWA, and the New York Deceptive Sales Practice statute to the extent premised on violations of ECOA. Americredit's motions for summary judgement are denied with respect to plaintiffs claims for violations of N.Y. V&T § 417-a, Breach of Implied Warranty and Revocation of Acceptance pursuant to MMWA and the New York Deceptive Sales Practice statute to the extent these violations are premised on violations of TILA and § 417-a.

BACKGROUND

The following facts are drawn from the parties' Local Rule 56.1 statements, affidavits, depositions, and exhibits submitted in connection with these motions. They are undisputed except where noted.

On May 9, 2003, plaintiff Eddie Diaz visited Paragon's used car dealership at 57-02 Northern Boulevard, Woodside New York in Queens County. Diaz told Paragon's salesman that he was interested in purchasing a used 2002 Chrysler Town and Country advertised in the New York Daily News on May 8, 2003 for sale at a purchase price of $13,495.00.7 Plaintiff made a deposit of $500.00 towards the purchase of the car in order to assure its availability. He also signed a document listing "$4,000 Cash Down" in the space provided for price, under which was written, "Subject to Bank Approval", but with no total vehicle price or other fees listed. (Joint Ex. 2). The document, variously described as an "initial intent to buy", "customer's intention to buy" or "a buyer's order" by Paragon, (Benstock Dep., 26, 32-33, 43), included a description of the vehicle, its stock and VIN numbers, mileage of 30,540, and a notation of the $500 deposit. A form intended to disclose by checked boxes prior use of the vehicle as a police vehicle, taxi-cab, driver education or rental vehicle as required by Vehicle and Traffic Law § 417-a,8 was left blank. (Joint Ex. 2; Benstock Dep., 36).

At the time, the parties agreed that Paragon would assist Diaz in financing the car.9 Paragon thereafter submitted Diaz's loan application via an electronic data system called Dealer Track to determine whether Diaz was eligible for financing by a sub-prime lender, and at what amount.10

On the same day, May 9, Consumer Portfolio Services, Inc. (CPS), a sub-prime lender, pre-approved a loan to Diaz subject to certain conditions, including income and employment verification and payment by Paragon of an acquisition fee of $199 later charged to Diaz. The pre-approval provided for a maximum payment per month of $350, at an annual interest rate of 19.95%. (Joint Ex. 5). Based on these terms, Paragon set a selling price of $16,130.13, with CPS to provide financing. Additional charges included $1,500 for an extended warranty,11 $1,454.49 in taxes and $140 in license, title, state inspection and processing fees. The total selling price listed on the proposed bill of sale, dated May 10, 2003, was $19,224.62. The down payment was fixed at $6,000, so the total remaining due would be $13,224.62. (Joint Ex. 11, Proposed Bill of Sale). Because Diaz would ultimately send $21,000 in payments to CPS, the total amount financed was $7,775.38 ($21,000 less $13,224.62), according to a proposed Retail Installment Contract, also dated May 10, 2003. (Joint Ex. 10, Proposed Retail Installment Contract). CPS turned down the loan for unexplained reasons, and it was eventually picked up by Americredit.

On the following day, May 10, 2003, Diaz again offered to purchase the car for the advertised price of $13,495, gave an additional deposit of $1,000.00, and again asked Paragon to obtain financing. According to Diaz, there were no further negotiations with respect to the purchase price of the vehicle on May 10. (Diaz Dep. 26). The next day, May 11, Paragon informed Diaz that in order to obtain financing, he would have to put $6,000 down, instead of $4,000 as previously provided for in the May 9 agreement.

Diaz stated that on May 12, 2003, he returned to Paragon to pay the additional $4,500 requested for the down payment, but did not execute any documents until the following day.12 According to Diaz, on May 13, 2003 he returned to Paragon and executed a Retail Installment Contract ("RISC"), dated May 12, 2003, which disclosed the final details of the sale, and reflected an increase in the purchase price of the vehicle. According to Diaz, the Paragon finance manager told him that the original advertised price of $13,495 was not available because a primary lender would not finance the car, because a secondary lender had to be used, and because the extended warranty was necessary to obtain financing. (Diaz Dep., 34-37). Because he was putting down $6,000, the balance of $14,047.18 was to be financed by Americredit Financial with 60 monthly payments at $367.87 per month, equaling $22,072.20. The total finance charge listed in the RISC was $8,025.02. The "total sale price" for the vehicle including $16,590 purchase price, $1,517.18 sales tax, $8,025.02 finance charge, $1,800 extended warranty, and other license, title, state inspection and processing fees was stated as $28,072.20. (Joint Ex. 3, Retail Installment Contract).

On a bill of sale dated May 12, 2003, but not signed until May 13 according to Diaz, the purchase price was listed as $16,590 plus $1,800 described as "Other Equipment" apparently representing the new price for the extended warranty, $1,517.18 sales tax, and $140.00 for license, title, state inspection and processing fees, for a total cash price of $20,047.18.13 (Joint Ex. 9, Bill of Sale). The bill of sale included a statement, signed by Diaz, that the "principal pride [sic: prior?] use of th[e] vehicle was as a rental vehicle." (Joint Ex. 9). Diaz stated the bill of sale was the last document he signed before taking possession of the vehicle. (Diaz Dep., 32-33).

The Limited Warranty

The sale included a limited warranty which covered repairs to covered parts, for 90 days or 4,000 miles. The warranty provided that the dealer would repair "covered parts listed on the reverse side" of the warranty or would reimburse the buyer for such repairs.14 The warranty is dated May 10, 2003, but is not signed by either party.

The Vehicle Repairs

A few days after Diaz took possession of the vehicle on May 13, 2003, he complained that the brakes were not responding, the front wheels made a strange sound upon turning, and that there were problems with the air conditioning and mirrors. (Diaz Dep., 56-59). On May 20, he brought the vehicle back to Paragon for repairs to the mirror, ABS light and air conditioning, which were completed at no charge on May 23. (Def.'s Mem. Opp'n, Ex. 17).

Diaz brought the car back to Paragon again on May 30 for repairs to the C/S ABS15 and brake light, and "the links and bushings." According to Diaz, the vehicle was sent to a Chrysler dealership, and returned about one month later, during which time Diaz rented another vehicle. Diaz did not pay for the repairs or rental vehicle, but stated that he paid $278 for additional insurance for the rental vehicle, which he did not seek to have reimbursed. (Diaz Dep., 70). The invoice from Bayside Chrysler, Plymouth, Jeep, Inc. describes repairs to the front suspension and ABS light, where "Hustomer states noise in front end over bumps" and "that the anti lock [sic] brake light is on and brake light on". Id. at Ex. 18. It is unclear from the invoice when the car was received and when it was delivered to...

To continue reading

Request your trial
55 cases
  • Pierre v. Planet Auto., Inc., 13–CV–675 (MKB) (JO)
    • United States
    • U.S. District Court — Eastern District of New York
    • June 21, 2016
    ...2007) (first citing Chavis , 415 F.Supp.2d at 624–25 ; and then citing Barnes , 249 F.Supp.2d at 739 ); Diaz v. Paragon Motors of Woodside, Inc. , 424 F.Supp.2d 519, 527 (E.D.N.Y.2006) ; Chavis , 415 F.Supp.2d at 623–25 & n. 3 (collecting cases); Wetzel v. Am. Motors Corp. , 693 F.Supp. 246......
  • Claude v. Wells Fargo Home Mortg., CIVIL ACTION NO. 3:13-cv-00535 (VLB)
    • United States
    • U.S. District Court — District of Connecticut
    • August 14, 2014
    ...more readily the various credit terms available to him and avoid the uninformed use of credit.'" Diaz v. Paragon Motors of Woodside, Inc., 424 F. Supp. 2d 519, 528-29 (E.D.N.Y. 2006) (quoting 15 U.S.C. § 1601). "TILA seeks to 'protect . . . consumer[s] against inaccurate and unfaircredit bi......
  • O'Connor v. Ford Motor Co.
    • United States
    • U.S. District Court — Northern District of Illinois
    • October 19, 2021
    ...purchaser to transport herself upon the streets and highways ... in a reasonably safe manner" (quoting Diaz v. Paragon Motors of Woodside, Inc. , 424 F. Supp. 2d 519, 541 (E.D.N.Y. 2006) )). The Complaint's allegations, read in the light most favorable to Plaintiffs, support a conclusion th......
  • Hernandez v. Saybrook Buick GMC, Inc.
    • United States
    • U.S. District Court — District of Connecticut
    • December 4, 2020
    ...in order to increase the amount financed were sufficient to state a claim under 15 U.S.C. § 1638 ); Diaz v. Paragon Motors of Woodside, Inc. , 424 F. Supp. 2d 519, 530 (E.D.N.Y. 2006) (finding that an "increase in price above the advertised price constitute[d] a hidden finance charge [requi......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT