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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

In <a href="http://publicdocs.courts.mi.gov:81/OPINIONS/FINAL/COA/20150602_C319187_41_319187.OPN.PDF" target="_blank" rel="noreferrer noopener"><em>Jay Chevrolet, Inc. v. Dedvukaj</em>, No. 319187</a>, the Court of Appeals held that a retail installment sales contract did not govern a buyer’s promise to make a down payment on the purchase of a vehicle, which was instead secured by the buyer’s oral promise to&nbsp;make the down payment. Therefore, the Court of Appeals affirmed the holding that defendant breached his obligation to pay the down payment and reversed the holding that defendant was required to pay attorney fees according to the terms of the sales contract.

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Defendant Dedvukaj purchased a car from Jay Chevrolet in 2012. The Retail Installment Sales Contract (RISC) contained an “itemization of amount financed” that showed a down payment on the vehicle for $10,000. The RISC said nothing else about the down payment. Jay Chevrolet claimed that at the time of delivery, its staff member forgot to obtain the $10,000 and when Jay Chevrolet later requested the money, Dedvukaj refused to pay. Dedvukaj maintained that he paid the sum in cash when the parties executed the RISC, which was shown by its inclusion in the contract’s itemization section. Jay Chevrolet subsequently filed suit in district court. The district court determined that Dedvukaj failed to pay the $10,000, but denied Jay Chevrolet’s request for attorney fees. The circuit court affirmed the judgment for down payment, but reversed the holding regarding attorney fees. Both parties appealed.

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The Court of Appeals concluded that Dedvukaj was required to pay the $10,000 because the promise to pay was not based on the terms of the RISC. The court explained that the contractual language of the RISC indicates that it did not govern Dedvukaj’s down payment and that the lower court’s findings indicate the down payment was secured by another contract—that being Dedvukaj’s oral promise to pay upon delivery, which he breached. The court then reversed the circuit court’s grant of attorney fees because its conclusions were based on the terms of the RISC, which did not govern the oral contract for down payment. Because there was no indication that the oral contract contained an attorney fee provision, the general rule barring attorney fees in contract disputes applied. Therefore, the Court of Appeals affirmed the circuit court’s order affirming the district court’s judgment in favor of Jay Chevrolet for $10,000 and reversed the circuit court’s order reversing the district court’s denial of attorney fees.

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Jason L. Byrne

Labor and Employment

COA holds that the terms of an installment sales contract did not apply to the down payment on a vehicle

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COA holds that the terms of an installment sales contract did not apply to the down payment on a vehicle

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