Salesman's Statement that He Could Not Get Buyer Into Car She Wanted Was Not Actionable
Cleopatra Jones sued Sonic Automotive, Inc. and Sonic-Montgomery FLM, Inc., doing business in Montgomery, Alabama as Friendly Ford Lincoln Mercury, for failing to give her notice under the Fair Credit Reporting Act when it allegedly took adverse action against her based on information contained in her credit report. The facts presented by this case make for a good study of what triggers the "adverse action" notice requirement under the FCRA.
Jones telephoned Friendly Ford in response to an advertisement she saw for a Toyota Camry. Even though she told the dealership she had recently filed for bankruptcy, she was encouraged to come in. Jones went to the dealership and after looking at the Camry she agreed to buy it for $6,700, subject to financing approval. The salesman helped her complete a credit application, and Jones provided verification of her address, her sources of income, and the bankruptcy discharge.
Friendly Ford obtained Jones' credit report from Equifax to select an appropriate financing source for her vehicle purchase. Friendly Ford sent the credit application to HMC Finance Corp. HMC approved financing for the Toyota Camry that Jones selected. However, when the Friendly Ford salesman met with Jones the following day, he told her, for reasons unknown, that "he could not get her into the Toyota but … he could get her into a Chevrolet Cavalier." The salesman did not explain why he could not get Jones into the Camry, nor did he tell her that her credit application had been approved. The court notes that although parts of Jones' deposition indicated that she dealt with the same salesman on both days, the court found the record unclear on that point.
Jones decided she didn't want to buy the Cavalier because she was interested in the Toyota Camry. She assumed that her credit application had been denied. Friendly Ford never provided her notice of adverse action. Jones later filed this lawsuit.
Friendly Ford maintained that its company policy was to prevent salesman from accessing credit reports or making any decisions based on credit. On that basis, the dealership moved for summary judgment. The U.S. District Court for the Middle District of Alabama granted the motion, writing a short opinion.
The court concluded:
Even assuming that the salesman's statement constituted an adverse action under the FCRA, Jones' claim fails because she has not demonstrated that this action was 'based in whole or in part on any information contained in a consumer report' as required under 15 U.S.C. § 1681m.
The court cited several cases for the proposition that the dealer usually does not take any action in reliance on a consumer credit report where the salesman has submitted a credit application to an outside financing source. The court ultimately denied Jones' motion for summary judgment and granted the dealership's motion for summary judgment.
The problem with Jones' case was that a jury could not infer from "unknown events that occurred between HMC's decision to approve Jones' application for credit and the salesman's statement that they couldn't get Jones in the Camry" that the salesman or the dealership made a decision based on information in Jones' credit report. Thus, Jones could not make the cause-and-effect connection needed to support her FCRA claim based on the salesman's statement. Jones v. Sonic Automotive, Inc. , 2005 WL 1801415 (M.D. Ala. July 28, 2005). Copyright © 2004 CounselorLibrary.com, LLC. All rights reserved.
This publication is designed to provide accurate and authoritative
information regarding the subject matter covered. It is provided with
the understanding that the publisher and editor are not engaged in
rendering legal counsel. If legal advice is required, the service of
a competent professional should be sought.
For more information about Thomas Hudson and Spot Delivery® go to www.spotdelivery.com
or contact: tbhudson@hudco.com
Consumer Credit
Compliance Company, LLC
971 Corporate Boulevard
Suite 301
Linthicum, MD 21090
877.464.8326
410.684.6923 (fax) |
Past Issues
