Stevenson v. Riverside Motorcars, LLC

• Decision Date: 01 November 2021
• Docket Number: 3:21-CV-00320 (KAD)
• Parties: AARON EDWARD STEVENSON Plaintiff, v. RIVERSIDE MOTORCARS LLC Defendant .
• Court: U.S. District Court — District of Connecticut

AARON EDWARD STEVENSON Plaintiff,
v.
RIVERSIDE MOTORCARS LLC Defendant

.

No. 3:21-CV-00320 (KAD)

United States District Court, D. Connecticut

November 1, 2021

MEMORANDUM OF DECISION RE: PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (ECF NO. 11)

Kari A. Dooley, United States District Judge

This action arises out of Plaintiff Aaron Stevenson's purchase and financing of a used vehicle from Defendant Riverside Motorcars LLC. Plaintiff brought this action alleging violations of the Truth in Lending Act (TILA), the Connecticut Retail Installment Sales Financing Act (RISFA), and the Connecticut Unfair Trade Practices Act (CUTPA). Pending before the Court is Plaintiff's Motion for Default Judgment. For the reasons set forth below, the Court grants Plaintiff's motion and directs that Judgment enter in favor of Plaintiff in accordance with the following.

Facts^[1]

Defendant advertised on its website a 2008 Infiniti EX35 (“vehicle”) for $7, 150. On September 11, 2020, Plaintiff agreed to purchase the vehicle for that amount and to make a down payment of $1, 000. Plaintiff also received a $500 allowance from Defendant for the trade-in of his Toyota Solara (“trade-in vehicle”) and financed the balance with Defendant. Defendant provided a Purchase Order for the vehicle. However the Purchase Order lists the purchase price as $8, 150,

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and indicates that Plaintiff paid $1, 600 down. The Purchase Order further reflects a finance charge of $1, 887.49, and that Plaintiff would make 130 installment payments of $86.89 to Defendant commencing September 18, 2020. The Purchase Order is the only document that Defendant provided to Plaintiff with respect to the financing of the transaction or terms of credit. The Purchase Order does not accurately reflect the agreed purchase price or the down payment, and it fails to account for the trade-in allowance. As a result, the Purchase Order miscalculates the sales tax, the amount financed and, ultimately, the total payments due. Moreover, it does not indicate the frequency of installments to be made or the consequences of a late payment.

On February 1, 2021, Plaintiff returned the vehicle to Defendant. The following day, on February 2, 2021, Plaintiff, through counsel, notified Defendant that he was rescinding the contract due to violations of RISFA. Plaintiff also demanded a return of all sums paid to Defendant, to include twenty installment payments. Defendant, still in possession of the vehicle, failed to return any sums paid by Plaintiff.

On March 11, 2021, Plaintiff brought this action alleging violations of TILA, RISFA, and CUTPA based on the fact that the Purchase Order fails to include the statutorily required terms of the retail installment agreement, an accurate recitation of the agreed purchase price and the like. Plaintiff also alleges a violation of CUTPA based on Defendant's sale of the vehicle for a price greater than advertised. Plaintiff avers that, as a result of Defendant's conduct, he suffered ascertainable losses and damages. Plaintiff seeks TILA statutory damages, punitive damages, a return of all amounts paid to Defendant, attorneys' fees, and an order granting rescission of the contract.

Although served on March 29, 2021, Defendant failed to appear, answer, or otherwise defend the action. Therefore, Plaintiff moved, pursuant to Rule 55(a), for entry of default against

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Defendant, which motion the Court granted on June 15, 2021. That same day, on June 15, 2021, Plaintiff filed, pursuant to Rule 55(b), the instant Motion for Default Judgment. Plaintiff supplemented the motion on September 23, 2021. On September 24, 2021, the Court held an evidentiary hearing on the motion. At the hearing, the Court heard testimony from Plaintiff and admitted exhibits into the record.

Standard of Review

“It is well established that a party is not entitled to a default judgment as of right; rather the entry of a default judgment is entrusted to the sound judicial discretion of the court.” Cablevision of S. Conn. Ltd. Partnership v. Smith, 141 F.Supp.2d 277, 281 (D. Conn. 2001) (internal quotation marks omitted) (citing Shah v. N.Y. State Dep't of Civil Serv., 168 F.3d 610, 615 (2d Cir. 1999)). In civil cases, however, “where a party fails to respond, after notice the court is ordinarily justified in entering a judgment against the defaulting party[.]” Bermudez v. Reid, 733 F.2d 18, 21 (2d Cir. 1984). In making this determination and evaluating the allegations asserted against a defendant, the Court may “deem[ ] all the well-pleaded allegations in the pleadings to be admitted.” Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997). Here, the Court also has the benefit of Plaintiff's testimony and a series of documents establishing both liability and damages.

In determining damages, “[t]he outer bounds of recovery allowable are of course measured by the principle of proximate cause. The default judgment d[oes] not give plaintiff a blank check to recover from defendant any losses it had ever suffered from whatever source. It could only recover those damages arising from the acts and injuries pleaded[.]” Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158-59 (2d Cir. 1992) (internal brackets and citation omitted).

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As discussed below, Plaintiff has sufficiently alleged facts supporting his claims and has produced evidence of damages to the Court's satisfaction. Accordingly, Defendant's failure to appear, respond or otherwise defend the instant action renders a default judgment in favor of Plaintiff appropriate.

Discussion

TILA

TILA seeks to “assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit[.]” 15 U.S.C. § 1601(a). Thus, “TILA provides for a private right of action for damages where a creditor fails to make disclosures required by the Act.” Sylvia v. Kensington Auto Serv., Inc., No. 3:20-CV-01622 (KAD), 2021 WL 2634502, at *2 (D. Conn. June 26, 2021) (internal quotation mark omitted).

Upon consideration of Plaintiff's allegations, which are deemed admitted, his testimony and the Purchase Order, it is manifest that the Purchase Order does not include many of the disclosures mandated by TILA. See 15 U.S.C. § 1638(a). For example, the Purchase Order does not include the period of payments scheduled for Plaintiff to repay his obligation. See id. § 1638(a)(6) (requiring disclosure of “due dates or period of payments scheduled to repay the total of payments”). Further, the Purchase Order omits any information regarding the consequences of a late payment. See id. § 1638(a)(10) (requiring disclosure of “[a]ny dollar charge or percentage amount which may be imposed by a creditor solely on account of a late payment”). Moreover, the Purchase Order also does not include any statement with respect to default, the right to accelerate the maturity of debt, or prepayment rebates or penalties. See id. § 1638(a)(12) (requiring “[a] statement that the consumer should refer to the appropriate contract document for any information

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such document provides about nonpayment, default, the right to accelerate the maturity of debt, and prepayment rebates and penalties”). To the extent that the Purchase Order arguably includes the alleged missing disclosures, or sufficient information from which the missing disclosures might be gleaned, the TILA requirements are not “clearly and conspicuously in writing, ” as required. 12 C.F.R. § 226.17(a)(1). Thus, the Court finds that Plaintiff has established a TILA violation.

RISFA

“RISFA sets forth the conditions governing retail installment sales contracts under Connecticut law.” Sylvia, 2021 WL 2634502, at *2. It provides that “[e]very retail installment contract shall be in writing, shall contain all the agreements of the parties and shall be completed as to all essential provisions prior to the signing of the contract by the retail buyer.” CONN. GEN. STAT. § 36a-771(a). It also “requires sellers to comply with the Connecticut Truth in Lending Act, which in turn incorporates the requirements of the federal TILA and Regulation Z.” Sylvia, 2021 WL 2634502, at *2; see CONN. GEN. STAT. § 36a-771(b). Thus, insofar as Defendant violated TILA, it also violated RISFA. And given the vague and very limited content of the Purchase Order, the only document generated memorializing the sale and financing of the vehicle, it strains credulity to consider the document a “retail installment contract” at all. Indeed, Plaintiff's allegation that he was not provided with any retail installment contract is deemed admitted.

CUTPA

CUTPA provides that “[n]o person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” CONN. GEN. STAT. § 42-110b(a). It also provides that “[a]ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment of a method, act or practice prohibited by section 42-110b, may bring an action . . . to recover actual damages.” Id. § 42-110g(a).

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A CUTPA claim consists of three basic elements: (1) an ascertainable loss of money or property (2) that was caused by an unfair...