Auto Purchase Goes Wrong and Leaves Widow Holding a Big Mysterious Debt

In North Carolina a case is meandering it’s way through the courts regarding the purchase of a Jeep and the resulting financial quagmire.

If you have some free time to work your way through the document filed, you will wind up scratching your head. It’s confusing enough the consumer is named Hester and the car dealership was Vester but keep reading.

From the Appel document filed by the consumer.

Early September 2009: Jeep Sale Completed, Say Plaintiffs

Plaintiffs-Appellants Leland and JoAnn Hester were husband and wife until his untimely passing on 16 May 2013. R387. “End of August, beginning of September [2009,]” R148, their 20-yearold son Ryan Hester, then an E-4 intel specialist in the U.S. Army, saw an advertisement (Mrs. Hester said it came in the mail and she gave it to him, R250; “It had to have been in August.” R252) from Defendant-Appellee Hubert Vester Ford, Inc. (HVF) asking $22,000 for a used 2007 Jeep Wrangler. R147-48.

He called HVF straightaway, where Melvin Scott, whom he would meet the next day, took his financial information to estimate a payment, R148-49, and “told me over the phone he thought three or four hundred.” R164. Had the estimated payment been $614, “I probably would–I would have said no[.]” R169. “I asked him how much it was. He said 2200 (twenty-two hundred) [sic]. And I said, what do you think my payment is going to be. And he said, probably around three or four hundred (3-400).” R169, 594. However, Mr. Scott said he would need a cosigner. R253. He passed the phone to his mother, who knew he really wanted a Jeep and was willing to lend a hand–“What parent wouldn’t?”–to her son, a veteran of Operation Iraqi Freedom. R336. “He took my mom’s social, date of birth, address and said we’re pre-approved.” R168-69.

After Ryan got home from work the next evening, mother and son drove her 1993 Mercury Marquis to HVF’s premises in Clinton “in the beginning of the week [31 August 2009 was a Monday], middle of the week. It wasn’t the end of the week, because I drove–I know I drove the Jeep to work that–the day–the next day I had it.” R149. Mrs. Hester agreed. “And that was the first part of September … or the end of August?” “Yes.” R322-23.

It was already dark, but keeping the dealership open late just for them were, Ryan and Mrs. Hester testified, salesman Melvin Scott and Defendant-Appellee “Mr. [Larry] McPhail. He was there.

There were only two of them there.” R150, 169-70. Mr. McPhail was then the general manager of HVF. R370. “He had the Jeep sitting right out front for me. I took it for a test drive while they looked at my mom’s Mercury[.]” R151.

The test drive went well, so Ryan decided to buy the Jeep. R151, 255-56. To obtain credit, they presented Mrs. Hester’s bank statement, indicating a balance of perhaps $200, and Ryan’s LES from the Army showing that he took home $1,200 every two weeks. R158, 253, 255, 257, 594. “Did you do any title–any type of credit application?” “I did not fill out anything for credit.” “Were you told your credit was approved?” “Yes, sir.” R151.

Mr. McPhail on behalf of HVF offered, and they accepted, Jeep VIN1JGA39107L156485 for a base price of about $22,000, trade value of $1,000 for Mrs. Hester’s Mercury, and payments of “three hundred to three-fifty. It was in that price range. … I believe it was three-forty-three (343), if I’m correct on that.” R264, 592, 594.

Ryan: “The whole contract was in my name and my mother’s name.” R152. “I signed my name on what I thought was the contract and couple of other, you know, financing paper works … and then my mom started doing the title change over.” R171. Mrs. Hester: “I went into Mr. McPhail’s office and had to sign over the title to the Mercury and everything, because we had to sign it twice.” R263-64. “Did you all sign any paperwork at that time while you were there on the purchase of the Jeep?” “Yes, Ryan and I did.”

“And what did you sign at that time?” “The contract–I call it a contract paper.” R261. “Did you sign more than one document on that day?” “I do not remember signing any more.” R263.

No copy of this contract survives. “My mom kept it all, kept them all. … my mom kept all the paperwork.” R152. Mrs. Hester in turn might have put it in the Jeep, whereupon Ryan “probably threw it out.” R265. As the Jeep was not yet paid for, neither Hester got a title to it. R153. Mr. McPhail “put my tag on the Jeep. And he said he would call and get the insurance switched.” R322. The whole process took “an hour and a half.” R154.

Labor Day to October 2009: Witnesses See Ryan and the Jeep

After bringing it home, Ryan drove the Jeep to work at Fort Bragg where many people saw it. “God, everybody on base. My whole unit because I was giving everybody rides … everybody was looking at mine, because I had the only four door at the time.” R167. Plaintiffs’ neighbor Ronald Walts’ daughter held a Labor Day 2009 cookout at which Ryan arrived in a red (Flame Red to be precise, R544) Jeep, “which we all looked at.” R439. Ryan specifically recalled showing Mr. and Mrs. Walts the Jeep on that same occasion. R167-68. So did Mrs. Hester. “Labor Day, we went there to our friends that’s having a cookout, and we were in the Jeep.” R262.

24 September 2009: Defendants “Enhance” Mrs. Hester’s Credit

No credit application with Ryan’s name on it ever surfaced. “I don’t know when or at what time the credit application was completed,” said Mr. McPhail, R87, and Defendants never produced one, so Plaintiffs subpoenaed Marine Federal Credit Union, R440, which responded with a credit application it received specifically for Jeep VIN1JGA39107L156485 (the exact vehicle that Ryan had) from “Branch: Hubert Vester Ford, Inc. Application Entered by Risk Manager on 09/24/2009.” R441. Among its discrepancies were:

Mrs. Hester’s highest education was “a year and a half of college and some trainings (sic) of nursing assistant.” R224. She was married to Plaintiff Leland Hester, and their entire income at the time was $1,031 per month in Social Security and disability, of which about $842 was Mrs. Hester’s. R257-60, 317. That was in real life; on the MFCU app, she became an unmarried retired high school principal with a $714.59 mortgage payment and $2,858.37 monthly pension. R442. Pages later, her pension ballooned to $3,800 and her house was paid off (“Owns Free and Clear”). R448.

“Loan officer spoke with customer – she said she retired in 1989. Her retirement is 2858 a month and she receives disability of 1200.” R450. However, this note is dated 01 October 2009, when Mrs. Hester was in UNC Hospital recovering from surgery the day before and was not able to talk on her home phone, the only phone number listed on the app. R460-61, 593. Had anyone asked whether she were single, a retired principal, or received $2,858.37 a month, she “would have truthfully denied it.” R592. MFCU at first gave “Appvoval [sic] with Stips,” R441, but being unable to confirm what Defendants told it (“Cannot use bank statements for verification of income. Need retirement statement” R450; Mrs. Hester testified to giving Defendants a bank statement), ultimately declined the application on 07 October. R441, 450.

Q. [Paragraph] 30 [of the Amended Complaint], on information and belief, Vester falsified Plaintiffs financial information to make them more credit worthy because no sensible lender will approve a used car payment sixty percent of a married couples combined income. That is flatly denied. Would you stand by that?
A. Yes, Sir.

So, at first, said Mr. McPhail. R102. Defendants also claimed: “Plaintiffs either signed the credit applications attesting to their truthfulness, confirmed the contents of the credit applications to the creditors by phone, or both.” R558. In fact, nobody signed the MFCU app at all, and as seen, Mrs. Hester was in the hospital when MFCU said it called her. R460-61. Eventually, Defendants admitted in open court: “They also have forecast evidence with respect to the credit application that indicated that Melvin Scott enhanced, use a polite word, the credit worthiness of these particular plaintiffs. We are going to take those as true, he puts some information in those credit apps that inflated what they made on a monthly basis.” T31-32.

24 or 30 September 2009: Defendants Say They Bought the Jeep

“50. Defendant Vester purchased the vehicle of which Plaintiffs complain from its previous owner on September 24, 2009.” So said their Verified Answer, R27. Defendants provided no evidence of this until just before summary judgment, when a single page from a purported sales log appeared without supporting oath. R551. But on the title application, Michelle Dismukes certified that previous owner Danny Lee personally appeared before her and transferred the Jeep exactly on 30 September 2009. R511, 540.

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28 September 2009: Jeep and MFCU Are On Mrs. Hester’s Policy

Johnny Tatum, Plaintiffs’ insurance agent and custodian of their Travelers Insurance records, testified that as of 28 September 2009 the Jeep was covered under Mrs. Hester’s policy and that MFCU was the loss payee, which does not happen until after a customer takes delivery of a vehicle. R596-99. Mrs. Hester agreed that these were her correct insurance documents. R309-12, 356- 57. Mrs. Hester said that “Vester Ford Company” had put in for
that change. R311. When asked how she knew that: “Because I didn’t call.” R322. “We would contact the license agent on behalf of the customer” if asked, said Mr. McPhail. R98-99. “[C]an you actually buy insurance on a vehicle before you purchase it?” “I, that’s an insurance question. I don’t know.” 31:14-16. “Your testimony was that there was just one contract and it was with the Ford Motor Credit Company?” “Sure.” “How did this [MFCU as designated loss payee] get on there then?” “I don’t know.” R125.

Mrs. Hester specifically denied going to any car dealers in the last half of September or the first half of October, indeed going much of anywhere except to arrange for surgery, because her health had declined to where her life was in danger. R593.

30 September 2009: Plaintiffs Are in Sampson County Signing Jeep Purchase Documents Before a Notary, Defendants Say

Paragraph 51 of Defendants’ Verified Answer: “Plaintiffs purchased the vehicle from Vester on [not about] September 30, 2009[.]” R27. “And your testimony is that the vehicle is not sold until September 30th of ’09, correct?” “That’s what–yes, Sir, that’s what I’m–that’s the date of the contract, yes, Sir.” R124. No defense witnesses could confirm the date of sale “other than Mr. Scott. And his whereabouts is unknown.” R118.

Defendants claimed that “title transferred September 30, 2009.” T46. And that “title to that Mercury was signed over on October 1st[.]” T64. “[T]he only transaction between the parties is memorialized in a Retail Installment Contract executed by the Plaintiffs and dated September 30, 2009.” R42, 43. So read, under oath, at least three answers to Plaintiffs’ Requests for Admissions served 31 December 2012. R46. But Mr. McPhail as of January 2013, R69, was not familiar with Plaintiffs’ handwriting, and could not recall whether he was present when they signed. R108.

By May 2013, Mr. McPhail was again willing to swear: “That the contract and all of the documents in Exhibit 2 [the purported sales documents, R373-85] bear the signature of the Plaintiffs. … and the same is true of my own knowledge.” R370, 371.

In yet another affidavit dated 15 August 2013: “I have no personal recollection of having met the Plaintiffs in this matter and did not negotiate the sale of the vehicle here at issue.” R491. But notary Michelle Dismukes certified that Mr. McPhail and Plaintiffs all personally signed a dealer’s reassignment of title in Sampson County on 30 September 2009. R538. He did not deny that Mrs. Hester and Ryan may well have left with the Jeep “prior to the closing of the transaction for a variety of legitimate purposes.” R491. It was also “possible” for a customer to be turned loose with a car only to be denied credit later. R93-94.

30 September 2009: Plaintiffs Were In Chapel Hill, Not Signing Papers in Sampson Co., They (and UNC Hospital Records) Say

Before dawn on 30 September 2009, Leland Hester got in the Jeep’s back seat, JoAnn Hester got in the front passenger seat, and Ryan Hester drove them all to Chapel Hill. R593-94. Ryan specifically remembered that “I drove her up there in the Jeep. And came–drove my dad back in the Jeep. And she stayed up there for a couple of days.” R173-74. All day 30 September, Mrs. Hester was in surgery or recovery, and Mr. Hester and Ryan stayed with her until evening. R593-95. She stayed at the hospital the next day too, and did not come home until 02 October. R460-61.

As to Defendants’ purported sales documents, R377-85 and 501-11 among others, dated 30 September 2009:

21. I had surgery that day and was in the hospital continuously from 30 September to 02 October 2009.
22. The Full Discharge Summary from UNC Hospital is a true and accurate record of the dates I was there and of the COA14-233 Appellant’s Brief page 11 medical treatment I received.
23. I did not sign any vehicle purchase documents or car titles on 30 September or 01 October 2009.
24. Although what looks like my signature may be on them, I have not seen before this case started, and I did not sign, any documents in Defendants’ Exhibits B, Buyers’ Guide; C, Bill of Sale; D, Damage Disclosure Statement; E, Odometer Disclosure Statement (and Leland’s name is misspelled “Leeland” on that one, which he never would have done); F, Certificate of Repossession; G, Certificate of Title; H, Title Application; I, Reassignment of Title (Vester as seller); or J, Reassignment of Title (Vester as purchaser).

R593. Long before executing that affidavit, in response to Defendants’ Requests for Admissions asking them to “admit the genuineness of you[r] signature on the ‘As-Is Warranty’ accompanying the aforementioned contract,” Plaintiffs answered under oath on 30 November 2012: “DENIED. Plaintiffs never saw that document. Their signatures were either forged or copied-and-pasted onto the documents labeled ‘As Is–No Warranty.’” R65. Mrs. Hester reiterated this in deposition when asked about the “Buyers Guide As Is-No Warranty,” R364: “That’s our signature, but I have not seen this.” R305. She would have, had it been posted where it was supposed to be. “[W]hen he was looking at it, there was no–to me these are supposed to be in a window.” R306. “But I didn’t see this one, nor was it in the window.” R307.

When asked about the “Bill of Sale,” Mrs. Hester testified, R303-04: “But that does look to be your signature?” “Yes.” “And you don’t recall signing that?” “Nope, no Bill of Sale.” “Agreement to Provide Insurance,” R351: “This [signature] is mine, but I did not see this [document].” R301.

“Notice to Cosigner,” R353: “That’s [Mr. Hester’s] writing, but … I don’t know if he seen that or not because I haven’t. As a matter of fact, I don’t even remember seeing it when I cosigned for Ryan in the first contract.” R301-02.

“Total Loss Protection Program,” R355: “Does that appear to be your signature?” “What little bit I can see right here, yes.” “Does it appear to be the signature of Mr. Hester?” “Yes.” R302-03. (She did not say “I signed this document.”)

“Odometer Disclosure Statement,” R344: “That’s my signature. That’s Leland’s signature. … but I didn’t see this [document] either.” (She did not say “I signed this document.”)

“Damage Disclosure Statement,” R363: “Yes, those are our signatures.” “And does it have a date on that?” “September the 30th, 2009.” R304-05 (when she was in the hospital 90 miles away, R460-61, 593). (She did not say “I signed this document.”)

“Title Application,” R366: “Does it appear to be y’all’s signatures?” “Yes.” “Does it appear to be notarized?” “Yeah, because here’s the stamp.” R307-08. It was dated 30 September 2009 in Sampson County, when Mr. and Mrs. Hester were 90 miles away. R460-61, 593. (She did not say “I signed this document.”)

Mr. Hester was examined extensively as to eight documents that seemed to show his signature, but firmly and repeatedly testified to only signing one document one time, which would be the installment contract with a preprinted date.

Q. Do you recall any signing documents in regard to the purchase of the vehicle?
A. No, just that one time when I got my driving license.
Q. Uh huh. And—
A. And that’s the only paper I signed.
Q. And that was at your house?
A. Yeah.

R193-94. He denied signing anything on 30 September 2009, when he was with Mrs. Hester at UNC Hospital. R593-95. “How come all them says 30? … Well, the date I signed that paper at night time is 10/6/2009, because that day I got my driving license.” R211.

Especially as to the “Odometer Disclosure Statement,” R231, somewhat better copy at R383: “Does that appear to be your signature?” “I don’t know, because whoever is writing my name they doing a very good job of it. … I didn’t sign but one paper.

I don’t see how my name got on so many papers.” R205. “What about over here?” “That ain’t mine period. … How come it got two E’s there? [Next to the correctly printed “Leland” is a signature misspelled “Leeland.”] It’s supposed to be L-E-L.” R205-06.

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Mrs. Hester acknowledged, R299, her and Mr. Hester’s signature on the installment contract, R348-49, but not the printed date. “I signed the paper October the 6th [2009].” R300.

06 October 2009: Plaintiffs Tricked Into Signing Unaffordable Contract, They Say

Still at home recovering on 06 October 2009, Mrs. Hester was startled to receive a phone call from the same Mr. Scott of HVF who had sold them the Jeep. He “said that they were changing the contract to the Ford Credit Company. And that I had to sign the papers or they were going to repossess the Jeep.” R268. “I remember now. The reason why Ryan was taken off [was] because of his KIA. He already had one vehicle and that company did not want to do the Jeep because he already had one.” R279. She recognized that repossessions are embarrassing and damaging to credit. R315. “And my mind just went haywire. And I said, okay, I will sign it. Because everything was supposed to same, we were just going with
Ford Credit Company.” R270.

Mr. Scott told Mrs. Hester “it was the same thing. And me like a trusting person believed.” R273. “Did not even know the payments, because he told me it was going to be the same. Everything was going to be the same.” R274. “[T]hey were going to take his vehicle away from him. I did not want to see that done. So, that’s why we signed it–the second one.” “And you thought you were signing for the very same amount?” “Yes.” R276.

“I had surgery. I could not go there to sign those papers.” R271. “So he come to the house. He got Leland. They come to town. He got his driver’s license. He made a copy of them, come back to the house, have Leland sign and had me sign. And I said, where’s my copy of the contract. I’ll mail it to you.” R270.

Ryan concurred that “about a month, month and a half after I had got the Jeep. … the salesman came to–actually came to the house–to my mom’s house and had them sign the contract, took my dad to the driver’s license place, got his driver’s license renewed and paid for it, and did all the work right there at the home–at my mom’s house–while she was still on the couch just gotten home from the hospital.” R173-74.

She could not see this “same” contract “because when we signed them papers, he was bent down in front of me.” R271. “[H]e covered up about the top half of it.” R313. This contract appears in the record at least six times, R32, 222, 348, 373-76, 464 (sharpest), 497, but the first time Mrs. Hester saw it was “[t]he day I was served the summons.” R270. “How many documents did you sign?” “One document. … I signed it one, two, three, four times, but this was the only paper I signed.” R272. Ryan did not sign this one. R277, 464. “And how long did he let you see it [the back of the contract]?” “Not very long because I signed it and he closed the book and got up and talked a couple minutes and then out the door he left.” R316.

Hitherto, Mr. Hester “didn’t really go with [Ryan] or nothing like that. I don’t get involved in what he buys.” R181. “Only time I remember is when the salesman came to the house and brought me to town to get my driving license. And he paid for them because I had no money.” R182. Mr. Hester’s 20-day certificate issued on 06 October 2009. R538. Mr. McPhail admitted that in dealer records “the names have to match and you have to have–there has to be a valid driver’s license, and they can’t be expired.” R100.

Between 06 and 21 October 2009: Defendants Submit “Monkeyed” Credit Application to FMCC, Exaggerating Plaintiffs’ Income

FMCC became the lienholder on 21 October 2009. R508. Mr. McPhail swore that “the financing of the vehicle was obtained through Ford Motor Credit Company.” R370. In response to subpoena duces tecum, R462-63, and supported by affidavit, R609-10, FMCC produced copies not only of the installment contract but also of other sales documents and a credit application through RouteOne, which Mr. McPhail explained is “a company [through which] we submit credit application electronically to banks.” R113. As the MFCU application had been, Defendants admitted that this one was “enhanced, [to] use a polite word,” in that Mrs. Hester was still supposed to be a retired high school principal, and her pension had crept up from $3,800 to $3,880 monthly. R465.

Mr. Hester had roughly an eighth-grade education and enjoyed a career as a construction painter and automotive bodyman until becoming permanently disabled in the 1990s. R180-87, 212. But FMCC was told that Mr. Hester had been retired for five years from an unspecified career and awarded a pension of $2,150. R466. He was correctly identified as Mrs. Hester’s husband, but now their mortgage payment was $525, down from $714.59 on the MFCU app. R442, 466. Mrs. Hester denied ever telling anybody any such things, R592, and neither she nor Mr. Hester acknowledged signing the FMCC app, nor are their purported signatures dated or notarized. R467. Defendants admitted in open court to “the fact that somebody monkeyed around with the plaintiffs’ credit report, made them more likely to get credit.” T41. This “monkeying” added up to $6,130 a month when Plaintiffs really made $1,031, a $4,999 boost that got Plaintiffs $37,889.80 in debt, counting principal and interest to be paid. R32, 222, 348, 373, 464, 497.

November 2009 to November 2011: Plaintiffs Learn the Truth, Cannot Pay, Jeep Repossessed, Sued for Balance

About a month after Melvin Scott’s visit to their home, Mrs. Hester learned for the first time what he had been covering up. “What did you do when you found out that the payment was six hundred and some dollars a month?” “I blew my stack. … I called the Ford Company. And I told them why was it so high that it was supposed to been between three hundred and three-fifty (300-350)…. I said, you can’t lower it. And they told me no.” R282-84.

Ryan made at least a few payments, but by June 2010, neither he nor his parents could afford $614 a month. R164. By then, the Jeep had developed a steering problem known as the “death rattle,” a jarring front axle vibration that sent Ryan off the road more than once, and which defied all repair attempts. R159-61, 188-89. FMCC peaceably repossessed the Jeep on 14 July 2010. R161.

In June 2011, FMCC served Plaintiffs with a lawsuit for the deficiency balance remaining after the Jeep sold at auction. By way of answer to FMCC’s complaint, Plaintiffs filed a letter pro se, which Mrs. Hester adopted under oath, R320, reading in part:
“As far as the contract you enclosed was the first time we had seen it, because it was totally different than the first one I signed. I had just returned from surgery in Chapel Hill when we were told we had to sign another paper that was needed, stupid part on us as it almost doubled the payment.” R471-72.

At the summary judgment hearing on 29 November 2011, R327, Plaintiffs suffered a deficiency judgment in excess of $8,000. R329. Plaintiffs happened to meet and retain undersigned counsel right afterward, who got the judgment set aside and commenced the instant action. R287-291, T28. Not until her deposition did Mrs. Hester finally understand that she was free of FMCC. “So, they’re not going to come get my stuff?” “No, Ma’am.” R291. – Source

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