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Negative Equity

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District Court (Cal.) Says Song-Beverly Does Not Require Automobile Manufacturer to Pay Negative Equity

by Scott J. Hyman |

In Gonzalez v. Ford Motor Co., No. LA CV 19-00652 PA (ASx), 2019 U.S. Dist. LEXIS 185279 (C.D. Cal. Oct. 23, 2019), Judge Anderson held that a vehicle manufacturer need not reimburse the consumer for negative equity financed into the RISC. Finally, Plaintiff argues Ford's repurchase offer was "less than 50% the amounts he had paid for the vehicle." (P.… Read More

District Court (Conn.) Says Car Dealer’s Inflation of Vehicle’s Purchase Price to Account for Trade-In Did Not Violate TILA; Distinguishes Thompson v. 10,000 RVs

by Scott J. Hyman |

In Morales v. Barberino Brothers, Inc., 2016 WL 2626826, at *4-7 (D.Conn., 2016), Judge Haight dismissed a TILA claim brought by a consumer against a car dealer who inflated the car's purchase price to account for the vehicle that the customer traded in. Two provisions of TILA are at issue. Section 1638(a)(2)(B) requires in certain instances that a creditor provide a… Read More

It’s Baaaacccckkk! 9th Cir. Says In re: Penrod Debtor Gets Attorneys’ Fees Under Civ. Code 1717 Because Hanging Paragraph Litigation Was an Action “On the Contract”

by Scott J. Hyman |

In In re Penrod, --- F.3d ---- (2015), the Court of Appeals for the Ninth Circuit found that the debtor who prevailed in the “hanging-paragraph” litigation was entitled to attorneys’ fees under Civil Code § 1717. AmeriCredit does not contest that the contract contains a unilateral attorney’s fees provision for purposes of the second condition. Nor does it contest that… Read More

9th Cir. BAP Allows Secured and Unsecured Claims under Penrod; Says Unsecured Claim is Not Zero

by Scott J. Hyman |

In In re Johnson, 2014 WL 6953306 (9th Cir.BAP 2014), the 9th Cir. BAP applied In re: Penrod to bifurcate secured and unsecured claims on an automobile subject to a retail installment sales contract, but found that the unsecured claim should not be reduced to zero. On August 3, 2012, Johnson purchased a 2013 Hyundai Accent from Win Hyundai Carson. Win Hyundai financed… Read More

Court of Appeals (Mich.) Finds that Car Buyer Stated a Claim against a Dealer for Including Negative Equity in Purchase Price of Vehicle Nothwithstanding Representations to the Contrary

by Scott J. Hyman |

In Durocher v. Westborn Chrysler Jeep Inc., 2014 WL 5162384 (Mich.App. 2014), the Michigan Court of Appeal found in an unpublished case that a Plaintiff could state a case through trial for violation of state law by concealing negative equity in the purchase price of a vehicle notwithstanding representations to the contrary. Durocher testified that Westborn represented that he would… Read More