A purchaser entered into a consumer credit contract and a retail installment contract with the seller regarding the purchase of a motor vehicle. That same day, the purchaser found out the seller withheld information from him and informed the seller of the recission of the contract. The purchaser brought suit seeking damages and recission under the Truth in Lending Act (TILA), claiming the seller engaged in deceptive practices by requiring a down payment and withholding information. The seller filed a motion to dismiss.
In McCrae v. A Better Way Wholesale Autos, Inc., No. 3:23-CV-133 (VDO), 2024 WL 175925, 2024 U.S. Dist. LEXIS 8906 (D. Conn. January 17, 2024), the court dismissed the purchaser’s pro se claims without prejudice. The court began by discussing the statute of limitations period for statutory damages under the TILA and concluded the purchaser had brought the claim three months too late. Therefore, the claim for damages was barred by the one-year statute of limitations. Next, the court discussed the right of recission claim and determined it failed as a matter of law. In order to reserve the right to rescind under the TILA, the security interest for the loan must include the borrower’s principal dwelling. Here, the purchaser gave the seller a list of items to be used as a security interest for the motor vehicle, including the vehicle itself, but did not list the purchaser’s principal dwelling. Therefore, the TILA’s right to recission does not apply to the purchaser. The court granted the motion to dismiss but gave the purchaser an extra month to amend its complaint.
By: The Editors