Online used-car site Carvana said Friday that it is seeking a temporary restraining order against the state of Michigan after having its license suspended over no-title complaints from consumers.
The company said in a statement that it filed a motion Thursday "to immediately stop the Secretary of State's illegal and irresponsible 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 company went on to allege that the Secretary of State has "brazenly violated state (laws) in addition to its own rules, regulations and due process requirements while making false and reckless statements through press releases rather than engaging in constructive dialogue to remedy what are essentially paperwork issues."
Last week, the Michigan Department of State announced it had suspended the license of a Carvana dealership in Novi "for imminent harm to the public." The dealership, located at 26890 Adell Center Drive, opened in 2020 with one of Carvana's signature car "vending machines."
The state suspended the dealership's license for what the agency said were "several alleged violations of the Michigan Vehicle Code." Those violations were discovered during an investigation by the agency into complaints from multiple consumers that the dealership had failed to properly handle title transfers.
MDOS alleged the following violations on the retailer's part:
— Failing to make application for title and registration within 15 days of delivery for 112 customers since agreeing to an earlier probation extension.
— Committing fraudulent acts in connection with selling or otherwise dealing in vehicles. Those acts allegedly included Carvana employees destroying title applications and all applicable documents pertaining to the sale of three vehicles that Carvana took back after they were sold to customers.
— 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 on which the odometer disclosure had been signed on behalf of the purchaser.
— Violating terms of a probation agreement 127 times.
Carvana faces similar allegations in Illinois. The Arizona-based company filed its motion for a temporary restraining order in the state Court of Claims.
"The arbitrary and abrupt actions of the Secretary of State have angered and disappointed our customers, some of whom have literally been stranded without a vehicle they had counted on to get them to work, doctors' appointments or the grocery store," Carvana said in its statement.
"We respectfully ask the courts to hold the Secretary of State accountable, halt its disruptive actions and compel state bureaucrats to work collaboratively with Carvana and our customers to remedy these technical issues as quickly as possible. 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."
