This article appeared in the July 2021 issue of
SubPrime Auto Finance News.
A lot of lawyers are afraid of numbers, but I'm one of the strange ones who enjoys handling the mathematical aspects of financial services law. To a lawyer like me, the beauty of a credit or lease contract is that if you've done it right, everything adds up. There's nothing extra and nothing missing. If there is something extra or something missing, then something's wrong with the contract. A recent motor vehicle leasing case from Texas illustrates this principle.
Quentin Holloway leased a Ford Fusion from Automotive Promotion Consultants, LLC. Even though the Consumer Leasing Act disclosure stated that Holloway paid $3,710 at lease signing or delivery, he alleged that he paid only $1,500 at lease inception and agreed to a payment plan for the remaining $2,210. Holloway claimed that the overstatement of the amount due at lease signing or delivery caused him to be confused about his payments and the true cost of the lease, and he sued Automotive Promotion for violating the CLA and Regulation M. After Automotive Promotion failed to answer the complaint, Holloway moved for a default judgment, and the U.S. District Court for the Western District of Texas denied the motion.