Buyer Cancelled Check

[SLERLICH]

My mother sold my dad's (who died at age 56 on Jan 13 2012) truck. The purchase price agreed between the two was $9,500.00. However, when they went to transfer the title the buyer and my mother agreed to list the vehicle's purchase price as $7,000.00 to save on the tax costs (I know this is wrong, but it's also pretty common). He wrote my mother 3 checks.The first in the amount of $1,000.00 for the deposit so she wouldn't sell to anyone else then he paid her $6,000.00 at the notary to show coverage for the cost of the vehicle. Then he wrote the final check in the amount of $2,500.00- totaling $9,500.00. Shortly after they left the notary and after she had deposited the checks to her personal bank account he calls her the following day and leaves her a voicemail saying that he cancelled the check for $2,500.00 because he feels that the vehicle is not worth $9,500.-- because he found out that he is the 3rd owner! We ran a Kelly Blue Book on the Truck, it never asks how many owners it's had and therefore has no barring on the value of the vehicle. She wants to take this to small claims court for the amount that he owes her for the truck and for any costs and fees that are acquired through the courts for him cancelling the check. Does her case hold water? We still have the voicemail of him admitting to the original purchase price and admithing that he cancelled the check AFTER the title was transfered.

I really need help with this one because we are going to the magistrate this afternoon to file a suit. I need to know if this is a waste of our time since the truck was sold "as is".

 

[LdiJ]

My mother sold my dad's (who died at age 56 on Jan 13 2012) truck. The purchase price agreed between the two was $9,500.00. However, when they went to transfer the title the buyer and my mother agreed to list the vehicle's purchase price as $7,000.00 to save on the tax costs (I know this is wrong, but it's also pretty common). He wrote my mother 3 checks.The first in the amount of $1,000.00 for the deposit so she wouldn't sell to anyone else then he paid her $6,000.00 at the notary to show coverage for the cost of the vehicle. Then he wrote the final check in the amount of $2,500.00- totaling $9,500.00. Shortly after they left the notary and after she had deposited the checks to her personal bank account he calls her the following day and leaves her a voicemail saying that he cancelled the check for $2,500.00 because he feels that the vehicle is not worth $9,500.-- because he found out that he is the 3rd owner! We ran a Kelly Blue Book on the Truck, it never asks how many owners it's had and therefore has no barring on the value of the vehicle. She wants to take this to small claims court for the amount that he owes her for the truck and for any costs and fees that are acquired through the courts for him cancelling the check. Does her case hold water? We still have the voicemail of him admitting to the original purchase price and admithing that he cancelled the check AFTER the title was transfered.

I really need help with this one because we are going to the magistrate this afternoon to file a suit. I need to know if this is a waste of our time since the truck was sold "as is".

In many states now it is a criminal action to put a stop payment on a check unless the check has been lost. She might want to speak to the police before she files a small claims suit.

 

[BL]

My mother sold my dad's (who died at age 56 on Jan 13 2012) truck. The purchase price agreed between the two was $9,500.00. However, when they went to transfer the title the buyer and my mother agreed to list the vehicle's purchase price as $7,000.00 to save on the tax costs (I know this is wrong, but it's also pretty common). He wrote my mother 3 checks.The first in the amount of $1,000.00 for the deposit so she wouldn't sell to anyone else then he paid her $6,000.00 at the notary to show coverage for the cost of the vehicle. Then he wrote the final check in the amount of $2,500.00- totaling $9,500.00. Shortly after they left the notary and after she had deposited the checks to her personal bank account he calls her the following day and leaves her a voicemail saying that he cancelled the check for $2,500.00 because he feels that the vehicle is not worth $9,500.-- because he found out that he is the 3rd owner! We ran a Kelly Blue Book on the Truck, it never asks how many owners it's had and therefore has no barring on the value of the vehicle. She wants to take this to small claims court for the amount that he owes her for the truck and for any costs and fees that are acquired through the courts for him cancelling the check. Does her case hold water? We still have the voicemail of him admitting to the original purchase price and admithing that he cancelled the check AFTER the title was transfered.

I really need help with this one because we are going to the magistrate this afternoon to file a suit. I need to know if this is a waste of our time since the truck was sold "as is".

Was the purchase price agreement in writing on the bill of sale with "as-is" ?

Both yours and their copy?

 

[swalsh411]

It appears you have a purchase agreement for 7,000 and payment for 7,000. (1,000 + 6,000). I'm not seeing any problem here. Why do you feel he owes you any money? The document you submitted to the DMV says 7,000 right?

Are you prepared to admit to the police and/or a Judge that you committed blatent tax fraud?

edit: This a common technique to save money on a used car from a private seller. The buyer is now in a legally defensible position. He could reasonably claim that your mother agreed to a last minute price reduction which he has paperwork to support. Why do you think he gave you a check for 2,500 and a check for 6,000 instead or one check? If he had given you just one check then stopped payment on it he couldn't claim the last minute price reduction. You got snookered.

 

[BL]

It appears you have a purchase agreement for 7,000 and payment for 7,000. (1,000 + 6,000). I'm not seeing any problem here. Why do you feel he owes you any money? The document you submitted to the DMV says 7,000 right?

Are you prepared to admit to the police and/or a Judge that you committed blatent tax fraud?

edit: This a common technique to save money on a used car from a private seller. The buyer is now in a legally defensible position. He could reasonably claim that your mother agreed to a last minute price reduction which he has paperwork to support. Why do you think he gave you a check for 2,500 and a check for 6,000 instead or one check? If he had given you just one check then stopped payment on it he couldn't claim the last minute price reduction. You got snookered.

Possibly, possibly not. The buyer did make out the check.

I didn't catch if the check was written out before DMV transfer or after .

The original bill of sales receipts would possibly determine ,as I ask.

The State might help as well, unless I missed it.

I once was a buyer that done this from a used auto dealer , I paid more but had put down less on the sales documents .

I went to court to sue and won BTW ,but was only awarded the amount on the sales document from the dealer.

So, was there any receipts prior to the DMV document with the lesser amount , as I asked?

 

[swalsh411]

If the $2,500 check was made out before the transfer, the buyer could reasonably claim a last minute price reduction and that the seller agreed the 2,500 check would be stopped and the 6,000 check accepted as payment in full. It is not illegal to stop payment on a check if both parties agree and the seller appears to have no evidence they did not agree. After all they did put 7,000 on the DMV form.

Regardless of the timing of events, the seller is going to have to admit to tax fraud if they wish to take action against the buyer.