Jacobs v. Healey Ford-Subaru, Inc.

• Decision Date: 10 January 1995
• Docket Number: INC,FORD-SUBAR,No. 14990,14990
• Citation: 652 A.2d 496,231 Conn. 707
• Court: Connecticut Supreme Court
• Parties: , 25 UCC Rep.Serv.2d 1043 Dawn JACOBS v. HEALEY

Page 496

652 A.2d 496

231 Conn. 707, 25 UCC Rep.Serv.2d 1043

Dawn JACOBS v. HEALEY FORD-SUBARU, INC.

No. 14990.

Supreme Court of Connecticut.

Argued Nov. 1, 1994.

Decided Jan. 10, 1995.

Joanne S. Faulkner, New Haven, for appellant (plaintiff).

Jeffrey D. Ginzberg, Seymour, for appellee (defendant).

Before PETERS, C.J., and CALLAHAN, BERDON, KATZ and PALMER, JJ.

KATZ, Associate Justice.

The issue before the court is whether the defendant, who has violated General Statutes § 42-98 ¹ of the Retail Instalment Sales Financing Act (RISFA) and General Statutes § 42a-9-504 ² of the Uniform Commercial Code (UCC), must pay damages under each statute to the injured plaintiff. We conclude that, because the remedies are not explicitly exclusive, there is no conflict between the two provisions. Accordingly, both must be given concurrent effect and cumulative remedies must be awarded.

The plaintiff, Dawn Jacobs, instituted this action against the defendant, Healey Ford-Subaru, Inc., for alleged multiple violations of RISFA and the UCC. She sought minimum statutory damages of $6500, costs and attorney's fees, pursuant to the UCC and RISFA, as well as actual and punitive damages pursuant to General Statutes § 42-110b, ³ the Connecticut Unfair Trade Practices Act (CUTPA), and General Statutes § 36-243b ⁴ of the Creditors' Collection Practices Act (CCPA). The defendant denied the allegations and counterclaimed for a deficiency of $1608.07. ⁵

Pursuant to Practice Book § 430, ⁶ the case was referred to an attorney trial referee (referee), who found the following facts. In October, 1988, the defendant sold a used 1987 Ford Tempo to the plaintiff. ⁷ The cash price of the vehicle was $10,647.03; the amount financed was $10,898.90; and the finance charge was $4196.14. There was a down payment of $2600, and the plaintiff made three payments of $314.48 each. In May, 1989, the plaintiff voluntarily returned the vehicle to the defendant. According to the National Automobile Dealers Association formula, at the time the vehicle was returned its value was $6500. ⁸

The referee further found that the defendant never gave the plaintiff advance notice of its intent to repossess the vehicle before the plaintiff returned it. See General Statutes § 42-98(b). ⁹ The defendant's only correspondence with the plaintiff consisted of two demands for a deficiency of $5285.07 that were mailed in August and November, 1989. Only the letter of November 10, 1989, however, arrived at the correct location and was received by the plaintiff. ¹⁰ On November 9, 1989, the vehicle was sold for $8427. The defendant was unaware that the vehicle had been sold the day before it sent the second letter because, while moving its dealership, it had misplaced the pertinent file. On or before February 18, 1991, the defendant located its file and directed its attorney to notify the plaintiff of the sale and of the corrected deficiency balance due of $1608.07.

The referee first concluded that the plaintiff was a "retail buyer" as defined by General Statutes § 42-83(h), ¹¹ and that, despite its voluntary return, the vehicle had been "repossessed" within the meaning of § 42-98(b). Neither of these conclusions has been challenged. Because the vehicle had been sold under a retail instalment contract, the referee concluded that the defendant was obligated under the notice and resale provisions of RISFA.

The referee also concluded that the defendant had violated § 42-98(c), (d) and (e) based upon his findings that the defendant had failed to provide the plaintiff with any notice of: (1) the right to redeem; (2) the proposed sale; (3) the actual sale; or (4) the disposition of the proceeds. Furthermore, the defendant did not credit the plaintiff with the statutory fair market value of the vehicle, either before or after its resale, as required by § 42-98(e) and (g). In light of the defendant's admitted violations of these provisions, the referee precluded it from recovering any claimed deficiency under its counterclaim. The referee then concluded that neither CUTPA nor CCPA had been violated and thereafter applied the statutory formula under RISFA to award the plaintiff $885.86 in damages. See General Statutes § 42-98(i). ¹²

The plaintiff objected to the report, pursuant to Practice Book § 440, ¹³ and claimed that: she was entitled to the minimum consumer damages provided by the UCC; she should have received attorney's fees under General Statutes § 42-150bb; ¹⁴ and the referee should have concluded that both CUTPA and CCPA had been violated.

The trial court accurately recited all the pertinent facts found by the referee and his conclusion of law that the notice provisions of RISFA had been violated. The trial court then concluded that because the referee's report contained insufficient factual findings to support the plaintiff's claim that the defendant had failed to resell the vehicle in a commercially reasonable manner, as required by General Statutes § 42a-9-504, the damages sought under the UCC could be predicated only on the plaintiff's claim that the notice provisions of the UCC had been violated. The trial court rejected the plaintiff's objection to the referee's denial of damages under the UCC concluding that the provisions of RISFA took precedence and thereby limited the amount of damages to which the plaintiff was entitled. In reaching its decision, the trial court relied on two statutes that assign priority to the provisions of RISFA when there is a conflict between RISFA and the UCC. General Statutes § 42-83(1) provides that "[a] transaction subject to this chapter is also subject to the Uniform Commercial Code, title 42a, but in case of any conflict the provisions of this chapter shall control." General Statutes § 42a-9-203(4) provides that "[a] transaction, although subject to this article, is also subject to sections ... 42-83 to 42-99, inclusive ... and in the case of conflict between the provisions of this article and any such statute, the provisions of such statute control. Failure to comply with any applicable statute has only the effect which is specified therein." The trial court also affirmed the referee's conclusion that the defendant's conduct did not amount to an unfair trade or collection practice. Finally, the trial court rejected the plaintiff's claim for attorney's fees pursuant to General Statutes § 42-150bb because the plaintiff had failed to assert this specific statutory claim to the referee and had, therefore, failed properly to place it before the referee for consideration. Accordingly, the trial court overruled the plaintiff's objection to the report and rendered judgment in favor of the plaintiff in the amount of $885.86.

The plaintiff appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c). The plaintiff raises three issues: (1) whether the trial court properly refused to award damages under both RISFA and the UCC when both statutes had been violated; (2) whether the trial court properly concluded that the defendant had not violated CUTPA; and (3) whether the trial court properly denied the plaintiff attorney's fees under § 42-150bb. ¹⁵ We affirm in part and reverse in part.

I

We first consider the question of cumulative remedies. The referee explicitly found that the defendant had violated RISFA. ¹⁶ In light of that finding, we must resolve: (1) whether a conflict exists between the provisions of RISFA and the UCC; and (2) whether, in the absence of a conflict, the provisions can be given concurrent effect. We conclude that there is no conflict and that the plaintiff was entitled to damages under both statutory schemes.

We begin our analysis with a review of the statutes themselves. Section 42-83(1) provides that a transaction subject to RISFA is also subject to the UCC, but adds that RISFA controls in case of any conflict. Similarly, § 42a-9-203(4) provides that a transaction subject to the UCC is also subject to RISFA. A creditor must therefore comply with both RISFA and the UCC unless a conflict exists. See Gaynor v. Union Trust Co., 216 Conn. 458, 582 A.2d 190 (1990).

The defendant argues that a conflict exists solely because the provisions of RISFA and the UCC include different and distinct remedies. RISFA provides a statutory formula that allows the retail buyer to recover "his actual damages, if any, and in no event less than one-fourth of the sum of all payments which have been made under the contract." General Statutes § 42-98(i). The UCC allows the debtor to recover "an amount not less than the credit service charge plus ten per cent of the principal amount of the debt or the time price differential plus ten percent of the cash price." General Statutes § 42a-9-507(1). Because the remedies are different, the defendant contends that only one can apply. On the basis of that supposition, the defendant further maintains that a conflict exists and therefore only the remedy provided by RISFA applies. Because we disagree with the defendant's underlying premise that each of the remedy provisions is exclusive, we find no conflict.

The defendant's argument has been considered and rejected in other jurisdictions. In Wilmington Trust Co. v. Conner, 415 A.2d 773, 779 (Del.1980), the court confirmed its adherence to the "absolute bar" rule that failure to comply strictly with the notice provisions of the Delaware UCC ¹⁷ acts as an absolute bar to recovery of a deficiency judgment by the creditor. The court found that both the "absolute bar" rule and the statutory remedy under the Delaware UCC § 9-507(1), ¹⁸ are available as debtor's remedies. The creditor had argued that the remedy in § 9-507(1) was intended to be exclusive and that the debtor was therefore not entitled to avail himself of the absolute bar rule. In rejecting this claim, the court referred to § 1-106(1) of the Delaware UCC,...