New v. CitiFinancial Auto Credit, Inc.
1:10-cv-00905
M.D. Ala.Aug 10, 2011Background
- Plaintiff James New purchased a 2006 GM Hummer H3 on credit, financed for 72 months by CitiFinancial Auto Credit, Inc.
- Plaintiff made timely payments through November 2008 under the promissory note in CitiFinancial’s favor.
- Plaintiff entrusted the Hummer to Saylors and PAC under a consignment arrangement to offer the vehicle for sale.
- The consignment provision obligated Saylors and PAC to pay CitiFinancial the balance due on Plaintiff’s note.
- Saylors and PAC tendered a payoff check with insufficient funds; CitiFinancial released the vehicle title to them.
- The Hummer’s title was transferred to a third-party purchaser; CitiFinancial later pursued collection and Plaintiff alleged breaches.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract viability | New contends CitiFinancial breached by continuing to seek payment and releasing title after a purported payoff. | CitiFinancial argues New’s nonperformance defeats a breach claim. | Count I dismissed; CitiFinancial entitled to judgment on the pleadings. |
| Proximate causation in negligence | New alleges CitiFinancial’s failure to verify funds caused loss of the Hummer. | Entrusting and in‑course transfer to a buyer extinguished New’s rights; no proximate causation. | Count II dismissed; CitiFinancial entitled to judgment on the pleadings. |
Key Cases Cited
- Twombly, 550 U.S. 544 (2007) (pleading standard for facial plausibility)
- Shaffer v. Regions Fin. Corp., 29 So. 3d 872 (Ala. 2009) (elements of breach-of-contract)
- DuPont v. Yellow Cab Co. of B’ham, Inc., 565 So. 2d 190 (Ala. 1990) (delegation does not relieve delegated party of duties)
- Jones v. Mitchell, 816 So. 2d 68 (Ala. Civ. App. 2001) (entrusting goods permits transfer of property rights)
- Crum v. SouthTrust Bank of Ala., N.A., 598 So.2d 867 (Ala. 1992) (title and possession affect ownership rights in consignment)
- Bankers Ins. Co. v. Fla. Residential Prop. & Cas. Joint Underwriting Ass’n, 137 F.3d 1293 (11th Cir. 1998) (judgment on pleadings standard in federal practice)
- Jiles v. United Parcel Serv., Inc., 413 F. App’x 173 (11th Cir. 2011) (Twombly standard applied to pleadings)