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ReprintsShe signed the loan, so she's obligated
Ally Financial Inc. and a Peoria, Ill., dealership have won another round in a lawsuit by a woman seeking to rescind a loan that her then-husband used to finance a Hummer.
Plaintiff Mary Margarida admitted signing the loan documents but claimed she hadn't read them, didn't know she was the sole signatory and hadn't been told that her husband and his business already had twice been rejected for credit.
Margarida's husband negotiated with Green Chevrolet Inc. for the new 2003 Hummer in a deal valued at $91,769 after trade-in, according to legal documents. Ally's predecessor company, GMAC, rejected his individual credit application, then a second application listing both the company and Margarida. A third application was approved under her name only but listed her husband's income as if it were hers.
The Hummer had problems, and GM replaced it with another one.
Margarida said she didn't learn that she was the only one obligated on the loan until after it went into default and the second vehicle was repossessed. Her lawyer, John Stobbs Sr. of Alton, Ill., said his client didn't sign any loan applications and that the defendants failed to produce the originals that the dealership was supposed to retain under GMAC policy.
The suit sought damages and to rescind the transaction under the state consumer fraud and deceptive business practices law and other statutes. GMAC counterclaimed for the $57,835 unpaid loan balance.
A lower-court judge dismissed the suit without trial, and a unanimous Appellate Court of Illinois panel agreed, finding no evidence of violations by either GMAC or the dealership.
"She makes no claim that a specific misrepresentation was made at the time she signed the loan documents," Justice Melissa Chapman wrote for the three-member panel. Nor did she offer facts showing "deception on the part of the dealership or GMAC which in any way kept her from reading the documents. Nor could she because she admits the reason for not reading the documents was her fear of admonishment by her husband, not any actions or inaction on the part of the dealership or GMAC."
Even if Margarida believed that she was only a joint borrower, she would still be obligated on the loan, the court said. And as long as fraud couldn't be detected on the face of the loan documents, GMAC had no legal duty to look for possible misrepresentations.
Ally spokeswoman Sue Mallino said the company is pleased by the decision and "Ally's counterclaims against the borrower for the amount owed on the vehicle remain viable going forward."
Stobbs said Margarida expects to seek Illinois Supreme Court review.
You can reach Eric Freedman at freedma5@msu.edu.
