JURY REJECTS CLAIM THAT AUTO DEALER DEFRAUDED CUSTOMER

A Suffolk County Supreme Court jury in Riverhead brought back a defense verdict last week for an automobile dealer and an extended service plan provider in a suit by a customer. I represented the auto dealer and service plan provider.

In Biber v. Toyota Motor Services Co. and Huntington Toyota, plaintiff Biber purchased a used 2008 Subaru Impreza from Huntington Toyota on 27 September 2010 for $33,827.85. At the time of purchase he also bought a 3-year maintenance agreement for $995.00, and a Vehicle Service Agreement (VSA) (called "Toyota Platinum Extra Care") offered by Toyota Motor Credit Company, for $2300.00. He financed the entire purchase price through Toyota Motor Credit.

At the time of purchase, Biber, 29, inspected the car, including the engine, and noted that the engine had been previously modified with high-performance aftermarket parts. He claimed asked the dealer for assurance that the VSA would cover this car even with the aftermarket parts. He claimed that he received a document on Huntington Toyota letterhead which stated that this particular car, with the described aftermarket modifications, would be covered by the VSA and that someone at Toyota Financial had agreed to this. The letter was signed by Huntington Toyota's billing clerk, who had left the company prior to the lawsuit being filed.

About two years after the purchase, Biber brought the Subaru to Huntington Toyota for service, complaining of starting problems and heavy black exhaust. Huntington referred Biber to a Subaru dealer (Metric Subaru) across the street. The Subaru dealer diagnosed a cracked engine block and called Toyota Motor Credit for an authorization to do repairs and be paid through the VSA. During the discussion, Metric Subaru informed Toyota Financial that the engine had been modified with aftermarket parts, and based on this, Toyota Financial denied the claim. The vehicle was also still under the Subaru factory warranty, but Subaru denied warranty service on the same grounds: aftermarket modifications.

Upon learning that the VSA claim had been denied, Biber authorized Metric Subaru to do the repairs and he paid out of his own pocket. He also stopped making payments on the auto loan which included both the vehicle price and the VSA.

A month after Subaru rebuilt the engine, the engine failed again. This time it was the other engine block that cracked. Biber had Subaru replace the other engine block and again paid for the repairs out of pocket.

A few weeks after this second rebuild, the engine failed yet again. It was at this point, in January 2013, that Biber filed this lawsuit. In his lawsuit, Biber alleged that he had been defrauded by both Huntington Toyota and Toyota Financial, and demanded treble damages and attorney fees as well as punitive damages. The suit also demanded that the note (loan) be voided and that his credit be repaired.

After the lawsuit was filed, Biber bought a brand new Subaru engine and brought it to a garage called TKX Performance. He requested that TKX modify this new engine with all the same aftermarket parts that the previous engine had at the time he purchased it. TKX modified the new engine and installed it in the Subaru, and again paid out of pocket.

But a few weeks after taking delivery of the Subaru from TKX with the new engine, he experienced problems again. Instead of taking the car back to TKX, he brought it to another garage, Tach Motor Works. Tach put in yet another new engine, and Biber again paid out of pocket.

After Tach put in this second new engine, Biber took the car home and decided not to use it again. He kept the car on his home property, where it deteriorated into disrepair and a tree later fell on it.

At trial, Huntington Toyota's finance manager testified that the letter signed by the dealer's billing clerk (which purported to extend the VSA to cover this Subaru) was not genuine. He said the stationery used for the letter was not Huntington Toyota letterhead, but had been created by using the header from the Service Department's work order form. He also said the billing clerk had no authority to extend the VSA or modify it in any way, and that Huntington Toyota had never attempted to do so.

A witness from Toyota Financial testified that the VSA has an exclusion in it for vehicles which have been modified after leaving the factory and that no exceptions to this rule are ever made.

In jury summations, Biber's attorney Robert Bruno argued that Biber had been "taken for a ride" by both Huntington Toyota and Toyota Financial, and that they defrauded him. He described Biber as a victim. He asked for $100,000 in damages.

Huntington Toyota and Toyota Financial, represented by Lawrence N. Rogak, summed up to the jury that the letter signed by the billing clerk was a forgery, and therefore neither Huntington Toyota nor Toyota Financial could be bound by it. In addition, it was argued, once benefits under the VSA were denied, it was unreasonable for Biber to both stop making payments on his loan and to keep putting one engine after another into the car; instead, he should have either returned the car to the dealer or preserved it.

The jury of 3 men and 3 women took 4 hours to return a verdict in which they found that neither Huntington Toyota nor Toyota Financial had either breached their contracts with Biber nor defrauded him. Zero damages were awarded.

Justice Daniel Martin presided over the trial.

Lawrence N. Rogak