CarMax Auto Superstores Inc. claims that a New Rochelle used car dealer owes $881,890 for 125 cars it bid for at auctions over the past two-and-a-half years.
CarMax accused Mike Cerreta Auto Sales Inc. and Michael Cerreta of not paying for its winning bids, in a complaint filed on April 18 in U.S. District Court, White Plains.
The defendants “represented to CarMax that they had adequate financing to complete payment for the vehicles,” the complaint states, but “knew that they lacked adequate financing.”
Efforts to contact Cerreta for his side of the story were unsuccessful.
Mike Cerreta Auto Sales consists of a small office and a dirt and gravel sales lot on a 0.15-acre plot on Huguenot Street across from Faneuil Park.
In 2018, Michael Cerreta, of Pound Ridge, registered with CarMax to buy cars at auctions in Connecticut, Massachusetts, New Jersey and New York.
Each time Cerreta made a successful bid, he was required to pay the full purchase price by the close of business on the day after the auction, according to the complaint. And he personally guaranteed each deal.
From October 2021 through this past January 8, Mike Cerreta Auto Sales submitted the highest bids for 125 vehicles at CarMax auctions, according to the complaint.
Last September, for instance, Cerreta bought a 2021 Kia Telluride with 32,857 miles but no catalytic converter, for $30,560 at an auction in Hartford, Connecticut. On Dec. 26, he bought a 2017 Nissan Pathfinder with 116,005 miles and major engine defects for $4,955 at an auction in Westborough, Massachusetts.
But Cerreta allegedly failed to pay for those cars and others and has “retained possession, custody, and control” over them.
CarMax says it notified Cerreta that he had breached his personal guarantee agreement and gave him an opportunity to fix the problem.
But “Cerreta did not cure the breach.”
CarMax accused Cerreta and his dealership of breaches of contract, conversion of property, fraudulent inducement and unjust enrichment.
It is demanding immediate return of the vehicles and $881,890.
