Hovey Motorcars was imagined to promote a person’s automotive in a consignment settlement however launched it to a fraudster. The dealership says the person’s insurance coverage should pay.
BOERNE, Texas — Felipe Villarreal purchased a bight orange 2020 Ford Mustang GT 500 again in 2022. He discovered it in a dealership in Las Vegas and paid greater than $90,000.
“It was form of my dream automotive. I all the time wished to get a automotive identical to that because it got here out. That exact coloration they solely made like 400 of them,” Villarreal stated.
Sadly after the document inflation in 2022 and several other medical payments, Villarreal simply couldn’t justify the mortgage he nonetheless owed on the car. In October of 2023, Villarreal signed a cope with Hovey Motorcars in Boerne to do a consignment sale. Villarreal stated the dealership had been round for a few years and specialised in coping with “high-end” vehicles.
“Based mostly on their historical past, and dealing on these costly vehicles, I figured it was match,” Villarreal stated. “The automotive was parked within the showroom ground as we agreed. There have been no check drives.”
Then, three weeks later, the dealership gave him a name. Villarreal stated he was advised they, “had excellent news and unhealthy information.”
In actuality, there was no excellent news. The automotive was gone. The dealership had given the automotive to a different social gathering and had no cash to indicate for it.
“He advised me it was a fraudulent purchaser,” Villarreal stated.
Now, seven months later, the dealership nonetheless hasn’t paid Villarreal something in compensation.
KENS 5 reached out to Boerne PD and requested for the report on the fraud case to learn how it occurred. The Metropolis of Boerne determined to not present the report and requested the Texas Lawyer Normal for an opinion as an alternative.
Rick Hovey Jr. despatched KENS 5 a press release giving their facet of the story. The assertion stated partly, “On 10-20-2023, a suspect made a $10,000 down cost on the automotive, obtained auto insurance coverage, and was subsequently accepted for a mortgage to finance the stability. 5 days after the down cost was made, and sooner or later after the mortgage transaction was accomplished, Hovey Motorcars acquired a letter informing us that the down cost was made utilizing a stolen bank card. We instantly reported this to the Boerne Police Division. Regardless of our diligent efforts and our twenty-six years of enterprise expertise, we grew to become victims of theft and fraud on this occasion.”
Villarreal nonetheless does not perceive the way it might occur.
“I work actually arduous for what I’ve together with that automotive,” Villarreal stated. “For it to be taken so simply, it is simply baffling.”
Villarreal had already gone to the dealership and had anticipated that both his insurance coverage or the dealership’s insurance coverage would cowl the loss. The dealership stated Mr. Villarreal would wish to file a declare on his insurance coverage due to the contract he signed.
The contract states that Villarreal declared “to have in have an effect on full protection insurance coverage and acknowledge that I’m completely answerable for all damages, repairs, and/or theft that may happen to stated auto.”
The dealership additionally advised KENS 5, “Sadly, our insurance coverage coverage doesn’t cowl the theft as we didn’t personal the car.”
In the meantime, Villarreal’s insurance coverage has a particular exception that states it doesn’t cowl consignment gross sales. He’s now left paying down a, roughly, $60,000 mortgage for a automotive he now not has.
“It appears like somebody hit you actually arduous within the intestine,” Villarreal stated.
However is Hovey Motorcars actually not legally responsibly for what occurred to Villarreal’s automotive? KENS 5 reached out to an insurance coverage skilled and a shopper safety lawyer to search out out.
Insurance coverage Council of Texas Communications Director Wealthy Johnson advised KENS 5 “full protection insurance coverage” doesn’t, in actual fact, usually embrace consignment protection.
“Full protection is usually a time period that concerned collision insurance coverage, legal responsibility insurance coverage and complete insurance coverage.,” Johnson stated. “Most insurance policies, typical insurance policies, are going to have exclusions for consignment.”
Johnson additional stated, “If you’re consigning a automotive it’s sometimes not lined in a typical insurance coverage coverage, together with complete.”
Client Safety Lawyer Invoice Clanton advised KENS 5, if the insurance coverage listed within the contract would usually not cowl this case, Villarreal might sue the dealership and declare the contract is obscure.
“Mr. Villarreal’s argument could be that that is an ambiguous contract and the time period ‘full protection’ is obscure. He would additionally argue that is neither injury, restore or theft. That is id theft. That is fraud.”
The final distinction is essential as a result of the contract requires the vendor be “held innocent” for injury and theft however doesn’t point out fraud.
Clanton stated the dealership can be open to a lawsuit due to one other authorized precept: bailment.
“It sounds rather a lot like a bailment. A bailment is like if you verify your automotive at a valet: you give them your automotive and also you belief them with it.” Clanton stated.
Nonetheless, Clanton stated Villarreal would doubtless must show that the dealership was negligent along with his property and would wish extra info to show that. He stated Villarreal would have a greater likelihood if he had a full police report detailing what occurred.
Villarreal remains to be ready for the Texas Workplace of the Lawyer Normal to rule on whether or not Boerne PD can launch that report.
