TD Auto Finance v. Fitzpatrick CA3

BACKGROUND

In September 2012, Lisa entered into a retail installment sales contract with Chico Nissan Hyundai (the dealer) for the purchase of a new car. The dealer assigned the retail installment sales contract to TDAF. The purchase price for the car was $39,667. Lisa made a down payment of $7,232 and financed the rest. Under the contact, Lisa was required to make 72 monthly installment payments in the amount of $450, beginning in October 2012. Alternatively, she could pay the entire amount due. Under the contract, Lisa gave TDAF a security interest in the car. TDAF was identified as a lien holder in the certificate of title submitted to the Department of Motor Vehicles. Lisa made the first monthly payment as scheduled. A week later, Lisa sent TDAF an instrument in the amount of $28,332 to pay off the remaining balance on the car loan. The instrument was drawn on an account with JPMorgan Chase Bank (Chase).2 Upon receipt of the check, TDAF released its lien on title and notified Lisa that it had done so. TDAF subsequently learned from Chase that the check had been dishonored because it was drawn on a closed account. TDAF contacted Scott in November 2012 and asked him to either:…