Corvette Custody Battle

Everyone liked the last Corvette story so much, I thought I'd tell you about another Corvette that found itself in a legal squabble I got to handle. As I have mentioned before, I specialize in Lemon Law but people often call my office when they have any case involving a car.

And before you accuse me of making this one up or of publicizing clients' secrets, I can tell you that this case was widely reported after it went up to Michigan's Court of Appeals. My client owned a 1968 Corvette. There was nothing crazy-special about it and it was just sitting in his garage. You know: "One of these days I'll restore it." My client met someone whose adult nephew LOVED Corvettes. Hey, who doesn't?

After a lot of badgering and "You'll never restore it," my client agreed to sell it to - let's call the young man - "Biff." They agreed on the price of $3,500. (The sale took place in 1987 so adjust that price for inflation etc.) The problem was that Biff didn't have the money. And his prospects for every having the money were nil, just like his bank balance. Take note: When someone is pressuring you to sell something they can't afford to buy, it is okay to tell them: "Come back when you have the money." The parties agreed that Biff would take possession of the Corvette and make payments.

Before everyone comments about how this was a mistake (it was) keep in mind that most good stories start with the protagonist making a mistake. My client, though, did something to offset the mistake. He put his name on the back of the title at the time of the sale, listing himself as First Secured Party. You know how hindsight is 20-20? This time, my client's foresight was 20-20.

After making "sporadic" payments totaling $1,100, Biff decided he no longer needed to make payments on the Corvette. He also decided he did not need to give the car back. He thought about selling the car. That was when I entered the story. I raced to court (insert comical screeching tire sounds ->here<-), and got an injunction forbidding Biff from disposing of the car until he either 1) gave it back to the seller or 2) paid for it.

Now, you might think that was the end of it but these things always have a twist. When Biff filed his paperwork with the state, he claimed the sales price was only $500 (turns out he couldn't afford the sales tax either) despite my client's bill of sale showing the sale price of $3,500.

It is important to know that this case happened in Port Huron, Michigan, a relatively small town compared to Detroit, which my office was near. For perspective: the population of Port Huron is less than 31,000. the average attendance at a Detroit Tigers game at Comerica Park is 36,000.

I remember the first hearing quite well. I wore a suit and tie, traditional uniform for an attorney in America. Opposing counsel wandered into court late, wearing a polo shirt and dockers. When our case was called and we stated our names for the record, the judge turned to opposing counsel and asked,"How's the boat, Tom?"

The court ruled in favor of the local as they often do when the Defendant is local and Plaintiff's counsel is from "The Big City." According to Tom's boating pal judge, Biff had extinguished the lien when he paid $500 toward the Corvette - the amount he had told the state he had paid for it.

I filed an appeal and the Court of Appeals agreed with me: Biff would have to pay for the car or give it back. My client's documents constituted a valid security agreement. Oddly, this case is so unusual (Article 9 of the Uniform Commercial Code for the one or two readers who are curious) it is cited in casebooks. Really boring ones.

Seriously. They write books on how to write boring contracts, and my case is somehow instrumental in that process. The joke was on us though. By the time the dust settled, the amount of money we were fighting over had to have been less than the cost of the action to either party. But, you can't blame my client for not wanting to give his Corvette away.

Steve Lehto has been practicing consumer protection and lemon law for 23 years in Michigan. He taught Consumer Protection at the University of Detroit Mercy School of Law for ten years and wrote The Lemon Law Bible. He also wrote Chrysler's Turbine Car: The Rise and Fall of Detroit's Coolest Creation and The Great American Jet Pack: The Quest for the Ultimate Individual Lift Device both published by Chicago Review Press. Follow him on Twitter: @stevelehto