Facts

Plaintiffs Gregorio and Dominga Lopez purchased a new Mercedes Benz SLK350 together with a package of after-market products including an extended warranty, a Guaranteed Auto Protection (GAP) contract, a theft recovery device, chrome wheels and paint and fabric protection. A portion of their $6,000 down payment was deferred for 30 days. When the vehicle was totaled 2½ years later, it was discovered that the GAP contract had been inadvertently cancelled by an employee in the dealer's business office two months following the purchase, leaving plaintiffs obligated to pay the uninsured loan balance.

PLAINTIFF'S CONTENTIONS:
Plaintiffs claimed that defendant engaged in "payment packing" by offering a lower interest rate on the loan only if plaintiffs purchased the additional products. Plaintiffs alleged that multiple violations of the Consumers Legal Remedies Act, the Automobile Sales Finance Act, and Business and Professions Code section 17200 by the failure to properly disclose all the purchase and finance terms. They also alleged violation of Civil Code section 1632 when the dealer failed to provide a Spanish language translation of the retail installment sale contract.

DEFENDANT'S CONTENTIONS:
The dealer denied it committed payment packing. During negotiations, plaintiffs were shown and initialed a document disclosing the low interest was available with or without the purchase of any additional products. The documentary evidence also established full and correct disclosure of all purchase terms in compliance with ASFA, and that the hold check agreement for the deferred down payment did not change any of those terms and give rise to a violation of the single document rule. Defendant also contended that it was not required to furnish plaintiffs a Spanish language translation of the retail installment sale contract because the dealer employees did not negotiate the transaction in Spanish as none of them even spoke Spanish.

Settlement Discussions

Plaintiffs demanded $340,000. Asbury Fresno Imports offered $40,000.

Result

Defense as to Asbury Fresno Imports. The GAP contract issuer Jim Moran & Associates settled the day before trial for $50,000.

Other Information

The court found that the dealer's employees did not engage in payment packing by fraudulently using a 20 percent interest rate during negotiations, only to later offer a lower 10.69 percent rate in the finance department if plaintiffs would purchase a package of additional products including an extended warranty, a GAP contract, a theft recovery device, chrome wheels and surface protection; that the deferred down payment and all other terms were properly disclosed in the installment contract; that the use of a hold check agreement did not violate the single document rule; and that there was no violation of Civil Code section 1632 because the dealer's employees did not negotiate in the Spanish language. Plaintiffs' objections to the tentative statement of decision were denied. FILING DATE: Oct. 1, 2009.

Length

five days