Prohibited interest rate on automobile loan: Breach of warranties: Excess interest: Repair costs: Settlement

Law Reporter, Jun 2000

Prohibited interest rate on automobile loan: Breach of warranties: Excess interest: Repair costs: Settlement.

Doe v. Roe Auto Saks, Inc., N.C., Guilford County Dist. Ct., confidential docket number, Jan. 28, 2000.

Doe purchased a car from Roe Auto Sales. She financed approximately $8,000 of the cost through a consumer credit sale and security agreement at an interest rate of 22 percent. Less than a month later, the car's engine failed and Roe allegedly replaced it with a used engine. Nine months later, that engine failed, but Roe refused to repair the car. Doe paid about $875 for repairs. In the meantime, Roe had assigned its rights to the loan agreement to a financial corporation.

Doe sued Roe and the financial corporation, alleging they had violated the state Retail Installment Sales Act, N.C. Gen. Stat. 25A-1 et seq., by charging an interest rate greater than 20 percent. Additionally, plaintiff claimed that Roe had breached express and implied warranties and negligently repaired the vehicle.

Defendants contended that plaintiff had purchased the car "as is" and had ignored indications that the car needed servicing.

The parties settled for about $7,500, with the financial corporation contributing approximately $4,000, and Roe, the rest.

Plaintiff's Counsel

*Jonathan Wall, Greensboro, N.C.

Documents in this case are available through the Court Documents section in the back of this issue, courtesy of Mr. Wall.

An asterisk (*) appearing beside the name of plaintiff's counsel indicates that the attorney is an ATLA member. To obtain additional information about a case report, contact counsel through your ATLA membership directory.