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The consumer claimed that the dealership charge but does not require a dealership to
breached its contract by miscalculating the only charge its actual cost for its document
finance charge. The court concluded that preparation services.
the consumer did not sufficiently establish
this claim; the calculations were accurate, Finally, the consumer claimed that the deal-
the bank purchased the contract, the con- ership violated the FCRA by causing unau-
sumer has continued to pay the bank with- thorized and excessive credit inquiries. The
out objection, and the bank never raised court found that the dealership obtained
PRE-LICENSE any issues about the calculations with the the consumer’s credit report only once. As
dealership.
for the bank’s multiple credit inquiries, the
CALENDAR The consumer also claimed that the dealer- court concluded that they were obtained
with a permissible purpose and with the
Monday, June 8 ship breached the contract by issuing mul- consumer’s consent, as set forth in his cred-
5:45 pm - 10:00 pm tiple RICs with different terms and without it application in which he agreed to having
cancelling the prior RICs. The court found his credit report obtained “in connection
Monday, June 15 that the parties intended that each subse- with the proposed transaction and any up-
9:45 am - 2:00 pm quent RIC served as a novation that can- date, renewal, refinancing, modification or
celled the prior RIC. extension of that transaction.”
Saturday, June 27
9:45 am - 2:00 pm The consumer claimed that the dealership Brogan v. Fred Beans Motors of Doylestown,
violated the covenant of good faith and fair Inc., 2020 U.S. Dist. LEXIS 58863 (E.D. Pa.
dealing by not timely paying off the debt on April 3, 2020).
Classes held at the car he traded in as part of his purchase.
Wyndham Atlanta Galleria, Atlanta Even though the dealership’s original pay- THIS MONTH’S CARLAWYER ©
off of the debt was returned, the creditor COMPLIANCE TIP
TO VIEW MORE DETAILS, VISIT: received a second payment, and there was Take a long look at the Brogan decision
georgiacardealerlicense.com no evidence that the delay caused the con- described above. This attack on the deal-
sumer any harm, including negative credit ership’s use of a series of changing contracts
reporting, from the alleged breach. failed. As we read the decision, we wonder
whether the dealership lucked into a pro-
The consumer claimed that the dealership cess that the court approved, or whether
Are you a GIADA violated the MVSFA by miscalculating the the process was the result of a good compli-
member that has a finance charge. The court found that the ance analysis followed by good implemen-
MVSFA permits several different methods of tation. We’re hoping that it was the latter,
dealer testimony or calculating the finance charge so long as the which brings us to this month’s tip. Your
story you'd like to share method is disclosed in the RIC. The court documents and procedures dealing with
found that the calculations were proper and what you need to do when you replace one
with other Georgia the method was properly disclosed. contract with another need to be set before
dealers? Contact us! Our the event, not afterward. Can you point
publications team would The consumer claimed that the dealer- to written policies and procedures at your
ship violated TILA because, among other dealership dealing with this situation? If
love to share content things, the financing terms in the first RIC not, maybe it’s lawyer time! n
provided by dealers, were subject to change and, therefore, illu-
sory. The court rejected this claim, noting Nikki (nmunro@hudco.com) is a Partner in
for dealers. Email that the terms of the third RIC, which re- the law firm of Hudson Cook, LLP, Editor
publications@giada.org placed the prior RICs, were not illusory be- in Chief of CounselorLibrary.com’s CAR-
cause the consumer continued to perform LAW®, a contributing author to the F&I
on that contract. Legal Desk Book and a frequent writer for
Spot Delivery®, a monthly legal newsletter for
The consumer claimed that the dealership auto dealers. Tom (thudson@hudco.com) is
violated the UTPCPL by, among other Of Counsel to the firm, has written several
things, charging a dealer fee without show- books and is a frequent writer for Spot Deliv-
ing that the fee bears a rational relation- ery®. He is the Senior Editor of CARLAW®.
ship to the costs associated with preparing For information, visit www.counselorlibrary.
transaction documents. The court found com. ©CounselorLibrary.com 2020, all rights
that Pennsylvania law sets a cap on the doc- reserved. Single publication rights only, to
ument preparation fee that a dealer may the Association. HC/4850-6410-1051.1
GIADA Independent Auto Dealer MAY/JUN 2020 | 37
