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NOVI — Carvana LLC was denied its request for a temporary restraining order against the Secretary of State by the Michigan Court of Claims Oct. 19.
The company had filed a request for a temporary restraining order Oct. 13 after the Michigan Department of State suspended its licensure in Novi Oct. 7 for what the department said were multiple violations of the Michigan Vehicle Code.
Carvana LLC, located at 26890 Adell Center Drive, which is owned by Paul W. Breaux, is accused of multiple violations. The accusations include failing to maintain odometer records, improperly issuing temporary registrations, failing to have records available for inspection during reasonable or established business hours, possessing improper odometer disclosure records, and failing to apply for title and registration within 15 days of delivery.
“The Michigan Department of State protects consumers when they make what are often among their family’s most significant purchases and buy a car. The department does this in strict accordance with state and federal laws and does not provide special treatment to any dealership, including large, national corporations,” a Department of State spokesperson said prior to the suit. “Department staff met with Carvana on multiple occasions to explain Michigan law and suggest pathways to compliance. But instead Carvana continued selling vehicles without titles to scores of Michigan families, putting the residents at risk of legal violations, fines, and other penalties.”
According to the spokesperson, the department has received an additional 100 consumer complaints against Carvana since its license was suspended on Oct. 7. This reportedly makes 212 consumers who have notified the state of issues with receiving their vehicle titles from Carvana since May. The spokesperson also pointed out that Michigan consumers are not alone. He said that several other states have had issues with the corporation as well, including Florida, Georgia, Illinois, Maryland, Missouri, North Carolina, Pennsylvania and Texas.
“We are disappointed by the court’s decision and we are considering all legal options to protect our customers and ensure the Secretary of State is held accountable for their illegal actions,” a Carvana spokesperson said via email. “Despite a judge’s ruling, we maintain the Secretary of State’s recent actions are an illegal and reckless attempt to shut down a growing Michigan business with tens of thousands of customers over what amounts to technical paperwork violations involving title and transfer issues. The Secretary of State has brazenly violated its own rules, regulations and due process requirements while making false and reckless statements rather than engaging in constructive dialogue to remedy these technical paperwork issues.”
The state has agreed to let Carvana continue to sell vehicles to Michigan customers online. The Carvana spokesperson said that the company will continue to serve “extraordinary online car buying and selling experiences” to its Michigan customers. The spokesperson went on to say that they will be working collaboratively with the state to remedy the situation.
“We’re confident the facts and the truth will come to light through the court process, and with our modernized, industry-leading Carvana customer experience, we look forward to our continued growth, job creation and investment across Michigan,” said the Carvana spokesperson.
The administrative hearing to consider revocation of the dealership’s license is scheduled for Nov. 22.
