Hovey Motorcars was imagined to promote a person’s automobile 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 type of my dream automobile. I at all times needed to get a automobile identical to that because it got here out. That individual colour they solely made like 400 of them,” Villarreal stated.
Sadly after the file inflation in 2022 and a number of 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 stated the dealership had been round for a few years and specialised in coping with “high-end” vehicles.
“Primarily based on their historical past, and dealing on these costly vehicles, I figured it was a great match,” Villarreal stated. “The automobile was parked within the showroom flooring 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 automobile was gone. The dealership had given the automobile to a different celebration and had no cash to point out 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 Common for an opinion as a substitute.
Rick Hovey Jr. despatched KENS 5 an announcement giving their facet of the story. The assertion stated partially, “On 10-20-2023, a suspect made a $10,000 down fee on the automobile, obtained auto insurance coverage, and was subsequently permitted for a mortgage to finance the steadiness. 5 days after the down fee was made, and sooner or later after the mortgage transaction was accomplished, Hovey Motorcars acquired 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 would not perceive the way it may occur.
“I work actually laborious for what I’ve together with that automobile,” 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 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 which 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 automobile.”
In the meantime, Villarreal’s insurance coverage has a selected exception that states it doesn’t cowl consignment gross sales. He’s now left paying down a, roughly, $60,000 mortgage for a automobile he not has.
“It appears like somebody hit you actually laborious within the intestine,” Villarreal stated.
However is Hovey Motorcars actually not legally responsibly for what occurred to Villarreal’s automobile? KENS 5 reached out to an insurance coverage professional 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, the truth is, 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 stated. “Most insurance policies, typical insurance policies, are going to have exclusions for consignment.”
Johnson additional stated, “In case you are consigning a automobile it’s sometimes not coated 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 may 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 identification theft. That is fraud.”
The final distinction is vital as a result of the contract requires the seller be “held innocent” for injury and theft however doesn’t point out fraud.
Clanton stated the dealership can also be open to a lawsuit due to one other authorized precept: bailment.
“It sounds rather a lot like a bailment. A bailment is like once you test your automobile at a valet: you give them your automobile and also you belief them with it.” Clanton stated.
Nonetheless, Clanton stated Villarreal would possible have to show that the dealership was negligent along with his property and would want extra info to show that. He stated Villarreal would have a greater probability if he had a full police report detailing what occurred.
Villarreal continues to be ready for the Texas Workplace of the Lawyer Common to rule on whether or not Boerne PD can launch that report.
