Opinion
Decided April 19, 2004.
Attorney for Plaintiff: Pro Se.
Attorney for Defendant: Pro Se.
Claimant, Mama Amiekumo, commenced this Small Claims action against the defendant, Vanbro Motors, Inc., alleging that the defendant refused to refund a deposit she gave defendant in regard to the purchase of an automobile. A trial was held on February 25, 2004. Both sides appeared without lawyers.
On July 14, 2003 claimant entered into a written agreement with the defendant to purchase a motor vehicle. The car was to be purchased on a layaway plan. Claimant gave a total deposit of $2,080.00 on a purchase price of $5,495.00. She testified that she wants her money back because defendant sold the first car on which she gave the deposit. She then picked out a second car and the defendant sold that one as well. Defendant asserts that it does not have any obligation to return any deposit under the terms of the contract when it is a layaway purchase. Defendant asserts that its only obligation is to deliver another car. Defendant claims that the claimant did not complete payments as agreed and in December 2003 wanted her money back.
General Business Law 396-t governs merchandise sold according to a layaway plan. A layaway plan is defined as a purchase over the amount of $50.00 where the consumer agrees to pay for the purchase of merchandise in four or more installments and the merchandise is to be delivered in the future. (GBL 396-t(a)). The statute provides:
"Unlawful practices relating to layaway plans.
(b) It is an unlawful practice for a merchant to accept payment from a consumer to be applied to the purchase of merchandise on a layaway plan without first disclosing to the consumer in writing the following information:
(1) a description of the merchandise to be purchased on the layaway plan including, as appropriate, the type of item, the name of the manufacturer, brand name, color, size, style, or model number; and
(2) the total cost of the item, including tax, installation, delivery or freight charges; and
(3) the amount of any charge for the use of the layaway method of payment, such as a service or carrying charge or cancellation fee. Failure to make this disclosure shall preclude the imposition of such a charge or fee; and
(4) the duration of the layaway plan; and
(5) the required payment schedule, if any, and the consequences of missing payments; and
(6) the merchant's refund policy with respect to payments made by consumers; and. . . ."
An examination of the document prepared by the defendant, which the parties assert is the layaway contract between them, reveals that there has been substantial non-compliance with the statute by the defendant. Although this is the purchase of an automobile, there is nothing in the statute to indicate that an automobile is not to be considered "merchandise" and thereby preclude the transaction from the coverage of the statute.
First, there is insufficient description of the merchandise. Although the make and model of the car is included in the bill of sale, the vehicle identification number is not included, making it impossible to accurately identify the car from other models of the same type. Second, the total cost of the item is not listed. The purchase price is disclosed as $5,495.00; no sales tax is listed, nor is the application processing fee or registration fee disclosed. Third, the duration of the layaway plan is not disclosed. There is nothing in the agreement setting forth the number of payments to be made, the amount of the payments or when they are due. The agreement does not disclose any consequence of missing a payment. The agreement does not state that the defendant retains the right to sell the merchandise in the event the total payment is not received by a specific date. It is impossible to determine from the document when the payments would be completed and when the vehicle would be delivered.
The agreement does include a handwritten statement that there is "no cash refund exchange only." The agreement is also confusing in that it is dated July 14, 2003 and it shows a deposit of $2,080.00 from the claimant with a used car allowance of $3,415.00, making up the balance of the purchase price. There is nothing in the agreement to reflect when the deposit was made. From the written agreement it could not be concluded that this was a layaway plan. However, the testimony of the parties establishes that there was no intention to deliver the car until the payments were made in full. This created a de facto layaway plan for the purchase of the car. The only other way to structure the transaction is for the consumer to make a downpayment and then finance the purchase either through the seller or from a third party. The failure to have any financing and the defendant's insistence on keeping possession of the vehicle until the final payment is made, qualifies this transaction as a layaway plan; and as such, it is not in compliance with the GBL 396-t requirements for layaway plans.
Examining the transaction under contract law leads to the conclusion that there never was a contract. The consumer was never notified that the vehicle she thought she was buying was not the vehicle that the defendant dealer intended to deliver. The consumer thought she was buying one specific vehicle and the contract supports that conclusion. The seller, however, was treating the agreement as one in which it would deliver some undisclosed vehicle at some undetermined time in the future when the consumer finally completed paying the purchase price. Under contract law the agreement is unenforceable since there was never a meeting of minds as to the essential terms of the agreement.
Finally, GBL 396-t does not create a private right of action in regard to violations of the statute by the merchant. The claimant can only receive the return of her deposit under the statute and common law contract theory. However, the actions of the defendant in failing to comply with the requirements of GBL 396-t amount to a deceptive act in the conduct of the defendant's business. The defendant is licensed by both the New York State Department of Motor Vehicles and the New York City Department of Consumer Affairs; as such it is presumed to know the law and is required to comply with the statute. The failure to provide the disclosures of GBL 396-t is a per se deceptive practice in violation of GBL 349. Pursuant to GBL 349(h) the consumer is entitled to recover either actual damages or fifty dollars, whichever is greater. In this case, the claimant is entitled to the refund of her money and $50.00 damages under GBL 349.
Judgment for claimant, she is entitled to the refund of her $2,080.00 since the defendant failed to comply with the statute in regard to layaway plans and the failure of the parties to enter into a contract.
Claimant is also entitled to a judgment in the amount of $50.00 for defendant's violation of GBL 349.
Judgment for claimant in the amount of $2,130.00 with interest from the date of judgment costs and disbursements.
Exhibits, if any, will be available at the office of the clerk of the court 30 days after receipt of a copy of this decision.