NEW HAVEN, Conn.–Connex Credit Union here has filed a lawsuit against a local car dealership that alleges the terms of a prior settlement agreement have been breached.
Connex Credit Union filed the suit against the Barberino dealership for what it said were violations of an agreement that allowed the dealership to provide financing through Connex to their customers. According to the Meriden Record-Journal, the dealership agreed to pay Connex $780,000 to settle the claim in June 2015, but the credit union claims in the lawsuit that the dealership then violated a settlement agreement by continuing to tell customers to “return their keys and cars to Connex during the term of their loan.”
The Meriden Record Journal said that according to the lawsuit, prior to June 2015 the dealership “regularly encouraged their customers who were Connex borrowers to breach their retail installment contracts with Connex by turning the collateral (the borrower’s vehicle) over to Connex during the term of the loan.”
“Defendants repeatedly told customers to just deliver the keys to Connex and Barberino Country or Barberino Brothers would get them a new car either through a new sale or a lease,” the publication quoted the lawsuit as stating. “The loan collateral (the vehicle) was worth less than the outstanding balance of the loan, resulting in a substantial loss to Connex.”
The lawsuit goes on to allege Barberino violated the provision and dealership representatives “did not stop telling customers to return their keys and cars to Connex during the term of their loan.”
The Meriden Record Journal said that had the dealership not encouraged customers to turn in their cars and keys to Connex, the customers would not have been able to purchase another vehicle after they defaulted on their car loan, according to the lawsuit, adding that the practice resulted in substantial losses for the credit union, which seeks unspecified damages, including costs and attorney’s fees.