Hernandez v. Apple Auto Wholesalers of Waterbury LLC, 460 F.Supp.3d 164

In July 2017 Hernandez bought a 2011 Ford Taurus from Apple Auto, traded in a 2003 Volkswagen (assigned $1,000 trade-in) and made a $500 cash down payment; the Retail Purchase Order and Contract list a $1,000 cash payment.
Apple Auto’s Retail Installment Contract financed $12,206.82 (payments $400.93 for 41 months); Apple Auto assigned the contract to Westlake, which later reassigned it back to Apple Auto.
Post‑sale Hernandez discovered a CarFax showing prior structural damage and, within a month, an independent inspector (Collins) found structural damage rendering the vehicle unsafe and not merchantable.
On August 28–29, 2017 Hernandez returned the vehicle, revoked acceptance, and demanded refund of his $500 and the $1,000 trade‑in allowance; Apple Auto did not refund or otherwise resolve the dispute.
Procedurally Apple Auto defaulted for failure to appear; the court entered default judgment against Apple Auto (claims: TILA, breach of implied warranty, revocation under UCC § 2‑608, and CUTPA) and awarded rescission/cancellation of the contract and damages totaling $24,300. Westlake’s claims were reserved and its summary‑judgment issues were denied without prejudice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Truth in Lending Act (TILA) disclosure	Hernandez: Contract inflated amount financed by listing $1,000 cash down when he paid $500, inflating price and taxes	Apple Auto: contract and purchase order show $1,000 down (record)	Default judgment for Hernandez; court found no authenticated evidence that $1,000 was paid, awarded statutory TILA damages $2,000
Breach of implied warranty of merchantability	Hernandez: vehicle had preexisting structural damage and was unsafe; not fit for ordinary driving	Apple Auto: Form K‑208 indicated vehicle passed inspection	Default judgment for Hernandez; independent inspection and CarFax supported nonmerchantability
Revocation of acceptance (UCC § 2‑608)	Hernandez: revoked within a month after discovering defect, returned vehicle and notified seller	Apple Auto: did not meaningfully dispute (no authenticated contrary evidence)	Revocation upheld; contract cancelled; buyer entitled to return of payments and incidental damages
CUTPA claims (unfair/deceptive acts)	Hernandez: CUTPA violations based on TILA violation, negligent misrepresentation (false K‑208), failure to follow Conn. inspection statute, and selling above advertised price	Apple Auto: challenged by absence of proof that advertisement price was current and relied on inspection form	Default judgment for Hernandez on CUTPA theories tied to TILA violation, negligent misrep. and failure to comply with inspection statute; punitive damages awarded

Priestley v. Headminder, Inc., 647 F.3d 497 (2d Cir. 2011) (default‑judgment process under Rule 55)
New York v. Green, 420 F.3d 99 (2d Cir. 2005) (distinguishing clerk entry and court default judgment procedures)
City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114 (2d Cir. 2011) (well‑pleaded allegations deemed admitted after default, but court must determine liability as a matter of law)
Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151 (2d Cir. 1999) (damages ascertainable from documentary evidence may be awarded without hearing)
Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105 (2d Cir. 1997) (court should not accept plaintiff’s bare statement of damages without proof)
Mourning v. Family Publ’g Serv., Inc., 411 U.S. 356 (1973) (purpose of TILA is meaningful disclosure of credit terms)
Hensley v. Eckerhart, 461 U.S. 424 (1983) (standards for awarding attorneys’ fees)
Arbor Hill Concerned Citizens Neighborhood Ass’n v. County of Albany, 522 F.3d 182 (2d Cir. 2008) (factors for determining reasonable hourly rate)
Millea v. Metro‑North R.R. Co., 658 F.3d 154 (2d Cir. 2011) (lodestar method: reasonable rate multiplied by reasonable hours)