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RumbergerKirk Partner Wins Important Case for Retail Auto Dealer Industry

RumbergerKirk Partner Wins Important Case for Retail Auto Dealer Industry

RumbergerKirk Partner Joshua Lerner won a landmark decision for King Motor of Deerfield, a result that will have significant and positive impact on the retail automobile industry, both in Florida and nationwide.

On August 31, 2007, the Honorable Victor Tobin, Chief Judge of the Circuit Court of the Seventeenth Judicial Circuit in Broward County, entered summary judgment in favor of RumbergerKirk’s client King Motor of Deerfield, on a consumer’s claim for violation of the federal Truth in Lending Act (TILA) and Florida Motor Vehicle Retail Sales Financing Act.

The court held the auto dealer did not violate TILA when it sold a vehicle to the plaintiff, allowed her to drive away in it and then required that she return the vehicle when no third party lender would approve financing of the deal.  The plaintiff had alleged the bailment agreement, commonly referred to as a “sign-and-drive agreement,” that allowed her to take immediate possession of the vehicle before her financing was approved negated the disclosures regarding the credit arrangement that are required by TILA.  Mr. Lerner argued that the sale was conditional, pending approval of financing by a third-party lender, but the Truth in Lending disclosures were not illusory because the only deal the consumer was bound to was the one contained in the contract.  Because the plaintiff was unable to secure financing, the sales contract was null and void.  

This was a case of first impression in Florida.  Prior to the decision in favor of RumbergerKirk’s client, no Florida state or federal court had previously been presented with the question.  A federal district court in Ohio had ruled on a similar case, but not identical facts, that the practice does violate TILA.


RumbergerKirk provides litigation and counseling services in a wide range of civil practice areas including products liability, commercial litigation, intellectual property, environmental, employment, insurance, professional liability, health care and administrative law. Offices are located in Orlando, Tampa, Miami, Tallahassee and Birmingham, Alabama.