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GMAC ‘Unfairly’ Repossessed Vehicle Under Illinois Consumer Fraud Act, Appeals Court Decides

 

DiTommaso Lubin Austermuehle’s auto fraud, lemon law, and consumer fraud trial lawyers were impressed by a recent First District Court of Appeals ruling against the credit arm of General Motors for a wrongful repossession. The court said a trial court was correct to rule that General Motors Acceptance Corporation acted unfairly when it repossessed a truck in violation of its agreement with the owner. In Demitro v. General Motors Acceptance Corporation, No. 1-06-3417 (Ill. 1st. Feb. 9, 2009), the appeals court declined to overturn a Cook County trial court ruling that GMAC violated the Illinois Consumer Fraud and Deceptive Business Practices Act.

Demitro purchased a Chevrolet Suburban in 2002 and had no trouble making payments until 2003, when he underwent surgery and went on disability in May of 2003. His payment checks for June and July of that year bounced, and in August, he spoke with a GMAC representative who told him so. The next day, Demitro called GMAC and authorized about one month’s payment to be deducted from his checking account. The GMAC representative then called a repossession agency that had already been authorized to take Demitro’s truck and put the repossession on hold. The representative sent Demitro a letter giving him seven days to make the back payments and keep his account current. After that time expired, it said, GM could exercise its right to repossess the truck.

On the very next day, Demitro awoke to discover that his truck had been repossessed. The GMAC representative was notified. He acknowledged that the repossession was a mistake and a violation of the seven-day extension in the letter, but nonetheless recommended to management that they keep the truck. They did, and informed Demitro that he was now liable for repossession charges of $39,695.04 as well as the outstanding balance on his account. Unable to get to the bank, Demitro informed GMAC that his telephone payment would bounce. GMAC later withdrew that payment from his account after he had added more money, but failed to credit him for the payment.

Demitro offered to pay his entire account balance, minus the repossession charges, before the seven-day period was up, but the offer was refused. GMAC sold the repossessed truck, applied the proceeds to Demitro’s payment plan, and held Demitro legally responsible for paying the remainder, as well as repossession and sales costs. Demitro sued and the parties filed cross-motions for summary judgment. After a hearing, the trial court granted him summary judgment on his Consumer Fraud Act claim, saying GMAC violated the law by retaining the repossessed vehicle in violation of the seven-day extension letter. He was granted actual damages, attorney fees and costs totaling more than $61,000. GMAC appealed.

The First District started with GMAC’s argument that no evidence of a Consumer Fraud Act violation existed. The act requires that the defendant’s conduct was deceptive or unfair, that consumers relied on it and that it happened during trade or commerce. Demitro’s suit claimed GMAC’s conduct in violating its seven-day extension was unfair because it was oppressive. Noting that the facts were not in dispute, the appeals court agreed. GMAC did not merely breach a contract, as it argued, because its behavior raised consumer protection concerns.

GMAC also argued that it was entitled to repossess because Demitro’s telephone payment bounced, either because he defaulted under the agreement or because that action was a repudiation of the contract. In either case, the court wrote, Demitro still had six days under the letter to bring his account current, and made multiple statements showing he intended to do so. In fact, the judges wrote, the undisputed facts show that GMAC prevented Demitro from meeting the terms of the extension by refusing to accept his offer of payment in full by the deadline.

Finally, the court rejected multiple arguments by GMAC that the large attorney fees award was unreasonable, since GMAC never requested a hearing on the matter and “vigorously contested all issues.” It upheld the trial court in all respects and remanded the case for consideration of an additional attorney fees award for Demitro for the appeal.

The Chicago consumer rights litigation firm of DiTommaso Lubin Austermuehle represents consumers like Demitro who have been victims of auto dealer finance fraud by an auto company or a lender. Based in Chicago and Oakbrook Terrace, Ill., we represent consumers all over the Chicago area including in Naperville, Wheaton and Aurora who were harmed financially by misconduct by a business including car dealers and automobile finance companies. If you’re a victim of these unfair business practices and you’re ready to fight back, please contact us to set up a free consultation.