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 sort of my dream automotive. I at all times needed to get a automotive identical to that because it got here out. That individual coloration they solely made like 400 of them,” Villarreal mentioned.
Sadly after the file inflation in 2022 and several other medical payments, Villarreal simply couldn’t justify the mortgage he nonetheless owed on the automobile. In October of 2023, Villarreal signed a take care of Hovey Motorcars in Boerne to do a consignment sale. Villarreal mentioned the dealership had been round for a few years and specialised in coping with “high-end” automobiles.
“Primarily based on their historical past, and dealing on these costly automobiles, I figured it was a superb match,” Villarreal mentioned. “The automotive was parked within the showroom flooring as we agreed. There have been no take a look at drives.”
Then, three weeks later, the dealership gave him a name. Villarreal mentioned he was instructed they, “had excellent news and dangerous information.”
In actuality, there was no excellent news. The automotive was gone. The dealership had given the automotive to a different occasion and had no cash to indicate for it.
“He instructed me it was a fraudulent purchaser,” Villarreal mentioned.
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 Basic for an opinion as an alternative.
Rick Hovey Jr. despatched KENS 5 a press release giving their facet of the story. The assertion mentioned partially, “On 10-20-2023, a suspect made a $10,000 down fee on the automotive, obtained auto insurance coverage, and was subsequently permitted for a mortgage to finance the steadiness. 5 days after the down fee was made, and in the future after the mortgage transaction was accomplished, Hovey Motorcars obtained a letter informing us that the down fee 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 turned victims of theft and fraud on this occasion.”
Villarreal nonetheless does not perceive the way it may occur.
“I work actually exhausting for what I’ve together with that automotive,” Villarreal mentioned. “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 mentioned Mr. Villarreal would want 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 chargeable for all damages, repairs, and/or theft that may happen to mentioned auto.”
The dealership additionally instructed KENS 5, “Sadly, our insurance coverage coverage doesn’t cowl the theft as we didn’t personal the automobile.”
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 exhausting within the intestine,” Villarreal mentioned.
However is Hovey Motorcars actually not legally responsibly for what occurred to Villarreal’s automotive? KENS 5 reached out to an insurance coverage professional and a shopper safety legal professional to search out out.
Insurance coverage Council of Texas Communications Director Wealthy Johnson instructed KENS 5 “full protection insurance coverage” doesn’t, in truth, usually embody consignment protection.
“Full protection is usually a time period that concerned collision insurance coverage, legal responsibility insurance coverage and complete insurance coverage.,” Johnson mentioned. “Most insurance policies, typical insurance policies, are going to have exclusions for consignment.”
Johnson additional mentioned, “If you’re consigning a automotive it’s usually not lined in a typical insurance coverage coverage, together with complete.”
Shopper Safety Lawyer Invoice Clanton instructed KENS 5, if the insurance coverage listed within the contract would usually not cowl this case, Villarreal may sue the dealership and declare the contract is imprecise.
“Mr. Villarreal’s argument can be that that is an ambiguous contract and the time period ‘full protection’ is imprecise. He would additionally argue that is neither injury, restore or theft. That is identification theft. That is fraud.”
The final distinction is necessary as a result of the contract requires the seller be “held innocent” for injury and theft however doesn’t point out fraud.
Clanton mentioned the dealership can be open to a lawsuit due to one other authorized precept: bailment.
“It sounds so much like a bailment. A bailment is like while you verify your automotive at a valet: you give them your automotive and also you belief them with it.” Clanton mentioned.
Nonetheless, Clanton mentioned Villarreal would seemingly must show that the dealership was negligent together with his property and would want extra info to show that. He mentioned 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 Basic to rule on whether or not Boerne PD can launch that report.
