QUILLEN, Judge

This letter is the Court's Opinion and Order following a bench trial in the above captioned matter. The Attorney General has brought a consumer fraud case against Milford Motors, Inc. and its owner-operator, Alfred W. Gardiner.

Two preliminary matters.

First, the Court apologizes to the parties and counsel for the delay in issuing this Opinion. The matter got delayed due to some personal difficulties faced by the Court and some personal difficulties faced by counsel. Then the matter simply got away from me and the press of other business, at least some of which was of higher priority, made it difficult to return to this matter. So I am sorry for the delay which at this point is certainly inexcusable.

Second, and not totally unrelated to the first, is the Court's difficulty in grasping the magnitude of the case as viewed by the State. The State seems to think that this case should give rise to a recovery of over Two Million Dollars. To get to such a number, the State suggests in part the Court can consider the presumably draconian illustrative cases presented by the evidence as typical and extrapolate from that alleged horror damages based on the number of warranties sold. One could conceive of a case where that reasoning could be invoked. The difficulty here is the individual case evidence is neither draconian nor typical, and such extrapolative conclusions are clearly not justified. Mr. Gardiner's sins are not capital and the case must be kept within some reasonable dimension. The Court denies all and any damage based on extrapolation.

Milford Motors, now a defunct Delaware corporation, began operating a car dealership in Milford, Delaware in 1980. This lawsuit stems from the dealership allegedly selling ineffective or unfunded warranties on automobiles. The State claims violations by Gardiner and Milford Motors of the Consumer Fraud Act, codified at 6 Del. C. § 2511 et seq. As noted, the States seeks civil penalties in excess of Two Million Dollars plus costs and attorneys' fees and restitution for the alleged consumer fraud violations.

The State argues that Milford Motors and Mr. Gardiner, through the sale of extended warranty contracts, violated 6 Del. C. § 2513 by failing to disclose to customers that Mr. Gardiner was willing to deplete the trust fund which supported the warranty contracts. The State argues for recovery from Mr. Gardiner and Milford Motors under the Act for alleged false representations, inadequate warranty terms and coverage, and for a course of systematic bad faith dealings by the Defendants.

The State alleges that between February 10, 1994 and September 20, 1996, Mr. Gardiner and Milford Motors sold extended warranty contracts to purchasers of automobiles. These extended warranty contracts were to be over and above any sort of factory warranty programs offered by the manufacturer of the automobiles. The extended warranty contracts were administered by a third-party administrator, Dimension Service Corporation (also referred to as Dimension Resources Inc., hereinafter "Dimension"). Stipulated Ex., Vol. II, Ex. 2 (hereinafter "Stip. Vol. II, at ___"). Dimension assisted Milford Motors in the installation, maintenance, and administration of the retail vehicle service warranties. Id. When a warranty was purchased, Milford Motors retained a certain amount of profit for selling the warranty contract. The evidence shows that Dimension, as administrator, charged Milford Motors a fixed rate for the administration of the warranty contracts. Milford Motors would tack on an extra charge for its involvement with the sale. Individual sales people also received a commission for selling these extended warranties. Trial Tr. at 26-28. These warranties were of differing types; some were bumper-to-bumper type warranties and some were powertrain warranties. The consumer cost of these contracts would vary, but it appears that the retail cost of these warranties ranged between $600 and $1,500, and the average profit per warranty for the seller appears to have been approximately $500. Dkt. No. 39, at 47; Dkt. No. 48, at 40. Dimension did not regulate in any way what the dealer charged for the warranties. Dkt. No. 38, at 79-80.

The Court is satisfied that the product, the warranty contract, is a poor purchase from the point of view of the consumer. Such contracts evidently have become cash cows for dealers in a segment of the automobile sales business. I suspect the sale of warranty contracts arose as a profit center as competition gradually reduced drastically the dealer profit on the sale of cars. This case illustrates well the cost and risk to the consumer and some inherent unfairness. The cost is high; the benefit is questionable; and the dealer's ultimate return depends in part on low service volume limiting servicing cost. So the Court views the nature of this warranty business as not very nice. Simply put, it is a bad deal for the consumer. The Attorney General is right in being worried about it. That being said, no one has argued that the business is per se illegal and Milford Motors is hardly the only participant in the business.

When Dimension received its share of the sale, Dimension placed the money into a "trust account" to cover the cost of the repairs over the life of the warranty. Dimension then retained the authority to administer the warranty and determine the validity of the claims. If a customer had an extended warranty claim on a Dimension warranty, the customer should have been able to take the vehicle to any dealer to have repairs done. The servicing dealer was instructed to determine the problem with the vehicle and then call Dimension to see if the problem was covered by the warranty. Dkt. No. 49, at 62. Dimension was granted complete discretion under the agreement to determine whether a claim should be honored. Stip. Vol. II, at 2. Customers also had the option to cancel their warranties for a prorated refund, in part from Dimension and in part from Milford Motors. At times, however, warranty holders had problems asserting claims and receiving refunds for canceled warranties because Milford Motors did not submit the required paperwork to Dimension.

There were two separate trust accounts set up by Dimension. Trust accounts for warranties set up prior to August 1993 were in what was called the "first book of business" between Dimension and Milford Motors. Dkt. No. 38, at 36. All warranties sold after August 1993 were called the "second book of business." Id. The reason for the two different books is that the insurer of the first book, Colonial National Insurance Company, was put into receivership on August 1, 1993, and the accounts were thereafter insured by Homestead Insurance. Id. at 37. Each warranty contract included a premium for insurance.

Milford Motors had some financial trouble starting sometime in 1995. That financial trouble became increasingly severe. By 1996, Milford Motors had a delinquency of over two million dollars with Wilmington Trust Company. Dkt. No. 48, at 125. In 1996, Mr. Gardiner, along with his wife and his corporate entities, had debts to Wilmington Trust Company in excess often million dollars. Id. at 134-35.

Around the same time period, August 1996, Dimension and Milford Motors, through Mr. Gardiner, by means of a Termination Agreement, achieved a release of $125,000 from the trust account to Milford Motors. Stip. Vol. II, at 13. Releasing money from a trust account was not something normally done by Dimension, but a representative of Dimension testified that six to ten out of several hundred dealers who had a profit participation agreement with Dimension had been allowed to enter into termination agreements. Dkt. No. 39, at 115. Instead of holding the trust account money to pay claims on the warranty service contracts or putting the money into Milford Motors, the $125,000 taken from the trust account was pledged by Mr. Gardiner so that he could receive a business line of credit for his new and current dealership, St. Mary's Motors in Maryland. Dkt. No. 49, at 8-9. This withdrawal of funds still left a substantial amount of money in the Dimension trust account, but obviously the guaranty of the fund was less secure to the holders of warranty contracts. In case of a shortfall, Mr. Gardiner assumed the responsibility for any deficiency in the fund.

The warranties from the first book of business expired on August 20, 1999. Dkt. No. 39, at 129. As of April 1999, there were 447 contracts remaining on the second book of business. Id. at 132. In April 1999, Mr. Gardiner signed a covenant not to sue Dimension in exchange for Dimension paying the remaining claims covered by the trust account. Plaintiffs Ex. 15. At that time, approximately $92,000 remained in the trust account and was available to pay future warranty claims.

There is no question that the financial difficulties of Milford Motors had an adverse impact on the warranty business. But it seems somewhat a stretch to suggest the difficulty was part of a preplanned scheme to defraud. Mr. Gardiner was scrambling, cutting corners, and "robbing Peter to pay Paul" because he was in fact in financial trouble. He may have been better at it because he had been through it before, but, to hear the State tell it, one would think Mr. Gardiner was raking in bundles of cash and there is no evidence of ill-gotten luxury. Suffice it to say, the Court is not persuaded that Mr. Gardiner had a duty to keep operating a business which was losing money in order to service the warranty contracts. See Compl., ¶ 23.

The pertinent, very vague allegations, insofar as consumer fraud conduct is concerned, are paragraphs 18 and 22 of the Complaint:

18. After withdrawing the money from the trust account, and assuming sole liability for performance of the warranty contracts, defendants began to minimize expenditures by refusing to pay for claims, telling customers that claims were not covered, and telling customers they could not cancel their contracts.

22. As to every purchaser of a Dimension-Milford Motors extended warranty contract between February 10, 1994 and September 20, 1996, defendants willfully violated 6 Del. C. § 2513 by omitting to disclose this material fact: that defendant Gardiner intended to deplete the trust fund that supported these contracts by withdrawing a large portion of the amount in the fund, which would result in the insurance being canceled.

Before turning to the specific evidence of misconduct, the Court will make some general comments about the law and its relation to this case.

The purpose of the Consumer Fraud Act is to protect customers and legitimate business enterprises from unfair and deceptive merchandising practices in the conduct of any trade or commerce. 6 Del. C. § 2512. Because the primary purpose of the Act is to protect the customer, the Act should be liberally construed. Young v. Joyce, Del. Supr., 351 A.2d 857, 859 (1975). The Consumer Fraud Act does not require proof of all of the elements of common law fraud. Pack Process, Inc. v. Celotex Corp., Del. Super., 503 A.2d 646, 658 (1985). It is useful to begin with the pertinent language of the statute, 6 Del. C. § 2513 (a):

§ 2513 Unlawful practice.

(a) The act, use or employment by any person or any deception, fraud, false pretense, false promise, misrepresentation, or the concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale, lease or advertisement of any merchandise, whether or not any person has in fact been misled, deceived or damaged thereby, is an unlawful practice. (Emphasis added).

There are two categories of unlawful practices, separated in the statute by the first "or." Everything from "in connection" through "damaged thereby" appears applicable to both categories.

The statute is in liberalization of common law fraud in that, for misrepresentation, a defendant need not have intended to make a deceptive or an untrue statement. Stephenson v. Capano Development, Inc., Del. Supr., 462 A.2d 1069, 1074 (1983). The definition of unlawful practices incorporates the principle that a negligent misrepresentation is sufficient to violate the statute. Id. The only intent element of the Act is that, concealing, suppressing, or omitting a material fact, the defendant must have intended that others rely on the concealment, suppression, or omission (the second category). Id.; State v. 3-D Auto World, Del. Super., C.A. No. 98C-02-075, Quillen, J. (Jan. 19, 2000).

Similarly, under a traditional common law fraud analysis, a plaintiff has to demonstrate that he reasonably or justifiably relied on the defendant's statements. Stephenson, 462 A.2d at 1074. Under the Act, a violation occurs regardless of actual reliance by the plaintiff. Id. In relation to the first category in § 2513, statutory misrepresentation, is distinct from common law fraud. Common law fraud has a requirement that any misrepresentation must be made with the intent to induce action or inaction by the plaintiff. Id. The Act does not require proof of intent to induce action or inaction by the plaintiff. Id. Additionally, the Act does not require that the defendant profit or benefit from his fraudulent conduct. Id. at 1075. Thus, stated simply, the Act does not require (1) an intent to make an untrue statement, (2) actual reliance by the plaintiff, or (3) intent to induce action or inaction by the plaintiff. Id. at 1074. In all other respects, however, the statute must be interpreted in light of established common law definitions and concepts of fraud and deceit. Id. The last statement is almost tongue in cheek, since there is so little left.

It should be noted, however, that the statute contemplates injunctive and restitutional relief in the Court of Chancery ( 6 Del. C. § 2523). To the extent that the statute authorizes civil monetary penalties, the State must prove the violation was "willful" ( 6 Del. C. § 2522 (b)). For purposes of consumer fraud, a willful violation occurs when the person committing the violation knew or should have known that the conduct was of the nature prohibited by the consumer fraud law. Id.

These statutory changes from the common law make the burden on the State relatively light, and require a limited amount of proof to satisfy the Act's mandates. But simply because the State does not have a heavy evidentiary hurdle to overcome does not mean automatic victory for the State based simply on general allegations. The standard for proving fraud in Delaware is by a preponderance of the evidence. Miller v. Falconetti, Del. Super., C.A. No. 87C-03-021, Ridgely, P.J. (Oct. 6, 1993); George v. A.C. S. Co., Inc., Del. Super., C.A. No. 82C-MR-71, Taylor, J. (Feb. 16, 1988); Nye Odorless Incinerator Corp., 162 A. at 510. Moreover, § 2522(a), speaking of injunctions, requires the Complaint to "state the nature of the conduct constituting a violation . . . and the relief sought thereunder." Surely no lesser requirement should govern civil penalties under § 2522(b). See also Superior Court Rule 9(b).

Notwithstanding the liberal statute, the problem with the State's case for civil penalties is that none of its illustrative witnesses suffered any significant out-of-pocket harm. It is just hard to say it is an aggravated case when no one got hurt. Customers were given a run-around and neither Milford Motors nor Dimension were anxiously waiting at the door to process and pay claims, and the whole operation has a bad odor. There is, indeed, some real unfairness in the situation with regard to customers' peace of mind. But, with the possible exception of refunds due from Milford Motors, not one of the witnesses proved to have a valid claim that was not paid by someone when pursued.

There is another area that is troublesome. The State seems to feel it can make general allegations and leave it to the Court to frame the actual accusations, that is, to furnish the specification of each unlawful practice. Barring that, the suggestion is that the unlawful practices can be counted by the number of customers buying warranties. The Court has difficulty with such a general approach. It seems to this Judge that, if the State is going to come to Court and seek a $10,000 civil penalty for each violation, the State should have to specify the nature of each charge in relation to the statute and give a specification somewhat akin to an indictment. It should not be up to the Court to try and figure out what the unlawful practice, under the statutory definition, is, and relate, under the statutory policy, the "willful violation" to a specific penalty.

The Court is going to treat the allegations in this case as falling under two general headings: first, the significance of the 1996 Termination Agreement; and, second, the significance of the parade of witnesses that appeared at trial.

This case centers on the withdrawal of funds from the trust account before all of the warranty business in all of the books expires, and the suggestion that such withdrawal will result in a shortfall of funds for eventual claims. Milford Motors is now out of business. Wilmington Trust took over Milford Motors in 1997 and eventually sold the business and released Mr. Gardiner from all of the debt that was not recovered from the sale of the business. Forbearance Agreement, Plaintiffs Ex. 29. The Court has trouble attributing to Mr. Gardiner an intent ab inititio to deplete the trust fund. See Compl., ¶ 22. But the withdrawal itself is admittedly troublesome.

The heart of the State's claim for the imposition of a penalty is that Mr. Gardiner stripped out the trust fund safety net, established to secure the warranties, by withdrawing $125,000 and using that money to secure his new dealership. This act, while not precisely so alleged, could be a willful statutory deception. Although it is surmised by the State that the funds will run out before all of the possible warranty claims can be made, that assertion has certainly not been proved by a preponderance of the evidence. The very term "trust fund" is probably inapplicable, at least in the contractual context we are presently talking. Indeed, as the Court understands it, Mr. Gardiner, as the successor in interest to Milford Motors, will be entitled to any balance in the "trust fund" when the time for all warranty claims has expired. No doubt Mr. Gardiner has been lucky in this respect, and, had it been attempted, it may have been a lot easier to attribute to him negligence or reckless indifference or intentional wrongdoing to the rights of the customers in August 1996 than it is as of the time of trial or now. The evidence as of the time of the termination is speculative and the Court finds we should consider the evidence as of trial, even if theoretically that is not the most appropriate time. The Court is simply not convinced that the $92,000 remaining in the Dimension trust fund as of the time of trial will be insufficient to cover the cost of any future warranty claims. And, if it is not, Mr. Gardiner must personally cover the remaining claims. See supra, footnote 4. Nothing in this Opinion protects Mr. Gardiner from that future liability. The State did not prove consumer fraud on this point because the trust fund must be inadequate under proper business practice in order for there to be a misrepresentation to consumers. There is no evidence to establish the fund was inadequate in 1996 and there is even less reason on the present record for the Court to infer inadequacy in retrospect.

The Court is also satisfied that if any misrepresentations were made, some of the fault would have to fall on Dimension's shoulders. Before $125,000 was withdrawn from the trust account by Mr. Gardiner, Dimension had to agree to allow the funds to be withdrawn. While the Court recognizes that Gardiner most likely did not disclose the financial problems of his business, without Dimension's consent, neither Gardiner nor Milford Motors could have received the funds. Mr. Gardiner had no general per se duty to disclose to all of his customers that he was going to withdraw the $125,000 and, since the inadequacy of the balance has not been established, no duty has arisen. To the extent that concealment from Dimension might be extended to customers, the concealment would seem irrelevant if the trust fund balance were sufficient to cover future warranty claims and there is nothing illegal in withdrawing the money. Recognizing that Mr. Gardiner is benefitting from delay since 1996 and is perhaps getting a windfall, the Court nonetheless declines to impose any liability on account of the withdrawal of the $125,000. At the present time, the Court must conclude, as a matter of evidence, that the "trust fund" will cover the obligations under the warranty contracts.

A large portion of the State's case focused on the difficulty of customers in having their claims honored. Many of the complaints stemmed from other dealers not honoring the Dimension warranty or Dimension not approving claims. On that score, Milford Motors and Mr. Gardiner had little direct control, although some fault could be attributed to them. Admittedly, there were times where consumers got the so called "run-around" and consumers had to endure considerable hassle in order to get their claims paid by both Dimension and Milford Motors. But these complaints have only an indirect relationship with the State's ultimate allegation, that Gardiner and Milford Motors committed consumer fraud by stripping the safety net set up to pay warranty claims. The State did not prove a consistent pattern of misrepresentations and, in fact, eventually, most people got coverage for or did not pursue their claims for repairs. Certainly, the way that people were treated at the Milford Motors dealership service department was deplorable in some cases. But, in order to impose a civil penalty under 6 Del. C. § 2522 (b), it is necessary for the Court to find a "willful violation" of the consumer fraud subchapter. 6 Del. C. § 2522. It is hard to figure out what precisely is being alleged in paragraph 18 of the Complaint. A brief look at the evidence unfortunately demonstrates only more confusion as to what the State's case is.

Several consumers testified at trial concerning problems with their warranties. A host of allegations arose from the consumer testimony. Some consumers testified that their claims were not paid by Dimension. Others claimed that, despite having bumper-to-bumper warranties, Milford Motors would not honor their claims until after they vigorously protested. Other customers claimed that, after they canceled their warranties, they had to struggle to get the refunds they were entitled to from Dimension and Milford Motors.

Much of the witness testimony provided in this case did not go to prove that Mr. Gardiner or Milford Motors initially expressly misrepresented anything to customers. Rather, much of this testimony proved the difficulties customers had in collecting their money or getting coverage for their repairs. For instance, Ms. Kristina Zongker was told by the dealership in 1998 that her warranty, for which she paid $1,495, was invalid. She called Dimension, who stated that the warranty was valid, but the dealership would not honor it. Her claims, however, were eventually covered by her Toyota factory warranty. Dkt. No. 47, at 46. Mrs. Helena Puryear stated that, when she went to Milford Motors to have her engine repaired, she was told that her powertrain warranty did not cover her repairs. She took the car to another service provider who fixed the car, but never submitted the repair bills to Dimension for coverage. Mrs. Brosha Conaway-Jenkins also had some problems with her car but she never submitted any claims because she thought that if her oil change was not covered by the warranty, nothing else would be. Dkt. No. 44, at 34. It appears that Ms. Susan Mundorf was entitled to a refund from Dimension and Milford Motors because she traded in her car before the Dimension warranty had expired. Ms. Mundorf, like some others, did not contact anyone to find out the status of the refund. Mr. Willie Purdue did not receive his warranty card until some time after the warranty expired. When his car required a $700 repair, he traded in the car and never attempted to contact Milford Motors to see if the repair was covered under the warranty. Id. at 56.

Mr. Alfred Hubbard also bought a warranty contract from Milford Motors. After having an aggravating time trying to work out the problem, the dealership paid for the repair of his transmission and even the fee for his rental car. Id. at 72. Mr. Horace Knowals testified that he never received the benefit of his Dimension warranty. The one claim that he did have was paid under his Ford warranty and he has never incurred any out-of-pocket expenses. Dkt. No. 45, at 11. Mrs. June Ammons testified she received 100% of the refund to which she was entitled. She stated, however: "I really think if I had not persisted in calling that I don't know whether I would have gotten [a refund] or not." Dkt. No. 45, at 32. Mr. Scott Pleines testified that he paid $1,200 for an extended warranty, and the Dover Dodge dealership would not honor it. Aamco Transmissions, however, did honor the Dimension warranty after he paid the $100 deductible. He sold the car before any further repairs were made and was further dissatisfied with the dealer's service because Milford Motors could not find anything wrong with the car. Additionally, he received a $200 refund from Dimension after he traded in his car. Id. at 47. Mrs. Elizabeth Connor did not go back to Milford Motors for repairs, and had difficulty getting Dimension to pay. When she traded in her car, she received a refund from Dimension for time left on her warranty, and never sought a refund from Milford Motors or Mr. Gardiner. Mr. Charles Burton purchased his automobile from Milford Motors. Dkt. No. 46, at 20. He and his wife testified that Milford Motors refused to satisfy their extended warranty. When they called Dimension, the Dimension representatives could not find their warranty number. Their car, however, was totaled before the repairs were made.

It appears that the most unsettling consumer complaints came from the people who did not get the money to which they were entitled. Mr. James Smith purchased a vehicle with an extended warranty. After he sold the vehicle, he was entitled to a rebate. Dimension told him that he had to go back to the dealer to get the rebate. Unfortunately, at that point, the dealership did not exist. Eventually, he did receive a rebate check for $410 from Dimension but nothing from Milford Motors. Dkt. No. 47, at 33. Petty Officer Patrick Reiley testified that he was entitled to a prorated refund because he traded in his car before the warranty expired. He received a Dimension refund, but he never got a refund from Milford Motors because Milford Motors was out of business by that time. Mrs. Myrna Vonthenen testified that she was charged for a warranty but she never received any paperwork for it. And, she did not recall ever discussing the warranty with the seller when she bought her truck. Dkt. No. 46, at 8. Therefore, she never had the benefits of the warranty.

Probably the one witness who had the greatest difficulty with Milford Motors was Ms. Darlene DeChicchis. Ms. DeChicchis bought a used car from Milford Motors on January 15, 1996. She paid $1,495 for her warranty. Id. at 43. The actions of the dealership appear to show that Ms. DeChicchis' paperwork was not forwarded to Dimension. She had several repairs that needed to be made on her car, and each time she attempted to have her repairs made under warranty, Milford Motors denied her coverage. Although all of her repairs were eventually paid for, she had extended battles with the Milford Motors service people to have her repairs covered.

Some of the consumer testimony concerning warranty holders' inability to get claims paid must be attributed to the fact that, for a period of time, Dimension was refusing to pay certain claims and referring the customers to Milford Motors for payment of the warranties. Milford Motors or its successor entities would then refer claims back to Dimension, which resulted in customers getting the run-around. Mrs. Elizabeth Connor, for example, could not get Dimension to cooperate to get her claims paid. Dkt. 45, at 63. Mrs. Pamela Hutchins had to go so far as to hire an attorney to have her warranty claim for her transmission paid. Id. at 85. But it appears that these claims had little, if anything, to do with any specifically directed action of Mr. Gardiner or Milford Motors. Eventually it was determined that Dimension would comply with the terms of the service agreement and continue to approve or disapprove claims. Dimension represented to the Court that it would pay claims from the second book of business, so long as it still had the money to pay those claims. Dkt. No. 39, at 82. In fact, Dimension has agreed to notify Mr. Gardiner monthly of amounts it feels are Mr. Gardiner's responsibility. Plaintiffs Ex. 14.

It is out of this hodge-podge of evidence that the Court is expected to give meaning to paragraph 18 of the Complaint. While perhaps not totally consistent with the precise language of the Complaint, the Court is satisfied of four individual violations where it seems fair to impose a penalty for a "willful violation." To be particular, to the extent the violations may have been inadequately pled, the Court is satisfied there was fair notice and the issues were in fact tried with both sides participating. This modest conclusion should not suggest the rest of the business was run properly. It is simply the Court's conclusion as to what is justified on this record with these allegations.

The evidence shows that Milford Motors did not submit the required paperwork on certain warranties to Dimension to have the warranties instituted. For example, it appears that James Smith's warranty, which he received from Dimension, was for fewer years and less mileage than he bargained for. He complained, but never received any paperwork to confirm that he had a 7 year 70,000 mile warranty. Dkt. No. 77, at 9, 40. While making a mistake in the initial coverage was perhaps mere negligence, the failure to respond adequately to his phone call and correct the problem with dispatch makes the violation willful.

Ms. DeChicchis suffered a similar experience. It does not appear from the testimony that any one from Milford Motors ever called Dimension on Mrs. DeChicchis' behalf. All of her claims were simply "zeroed out" by the dealership. The inference certainly is that her information was not submitted to Dimension. Similarly, Mynra Vonthenen never got any paperwork for the warranty for which she was charged. And it does not appear that Milford Motors disclosed that the warranty was part of the purchase price when Ms. Vonthenen purchased her vehicle. In these three instances, the State satisfied its limited burden in this case of proving statutory fraud in that Milford Motors failed to disclose to customers either that: 1) coverage was part of the sales contract, or 2) that the policies were not being appropriately submitted to Dimension. It further appears that this conduct was a willful effort by Milford Motors to minimize expenditures. The Court holds that the Act was willfully violated in these three instances because it was fraudulent for the dealership to sell an individual a warranty and not appropriately submit the required paperwork to Dimension, while keeping the profit.

The fourth violation comes from the service failures, perhaps illustrative of many that one surmises occurred. I am satisfied that Ms. DeChicchis suffered from a willful deception when Milford Motors refused to honor her warranty contract. While she suffered more than one rejection before service was finally rendered, I will restrict the finding to a single violation by deceitful refusal to honor the contract.

Because Mr. Gardiner was effectively the human embodiment of Milford Motors and the true operator of the company, and further because Milford Motors is out of business, the State asks this Court to hold Mr. Gardiner personally liable for the consumer fraud violations. The State has satisfied its burden of proving that Mr. Gardiner: should be held personally liable on the consumer fraud claims. State v. 3-D Auto World, Del. Super., C.A. No. 98C-02-075, Quillen, J. (Jan. 19, 2000), Slip Op. at 8-9. Mr. Gardiner had a joint and common interest with the dealership and the evidence shows that he actively participated in the day-today management and operations of the dealership. Mr. Gardiner owned, operated, and financed the dealership. Furthermore, many of the consumers testified that they were sold the warranties by Mr. Gardiner. Gardiner was certainly intimately involved in all aspects of the business. He set the tone for how the business was run. He was Milford Motors and he is responsible whether he served a particular customer or not. The consumer testimony satisfies the Court that Mr. Gardiner had a common interest with the dealership ( 6 Del. C. § 2511 (5)) and was a constant presence as the active manager of the business.

The question then becomes what damages should be awarded? As noted, the State in this case appears to be seeking civil penalty in an amount in excess of Two Million Dollars. The State seems to ask this Court to grant $10,000 per violation for all consumers who purchased extended warranty contracts during the relevant time periods. The State also claims that all of the consumers who may have been defrauded do not have to testify in order for the State to prove a case of consumer fraud in all of the sales during the period alleged. In this case, however, the State did not prove its ultimate allegation that the trust fund amounts currently with Dimension would not fulfill all of the future warranty claims. The State has only proved that three individuals, not all 212 individuals, did not have their policies adequately submitted to Dimension from Milford Motors and that one individual was the victim of a willful refusal to handle a valid claim. The State certainly has not provided an evidentiary basis for an award in excess of Two Million Dollars.

Remedies under the Act are set forth in 6 Del. C. § 2522 (b), which provides that if a person willfully violates the Act, the person shall pay to the State a civil penalty of not more than $10,000 per violation. A willful violation is when a person committing the violation knew or should have known that the conduct was of the nature prohibited by the Act. Id. This statute is punitive in nature because the penalties are paid not to compensate the victims to remedy the harm, but are instead paid directly to the State.

Because the State has asked for such an extreme penalty and did not prove that the trust fund would be insufficient to cover future warranty claims, the Court must look solely to its findings on the record to determine damages. Here, it appears that State has proved that there are three individuals who did not have their insurance paperwork submitted to Dimension in a timely fashion (Smith, Vonthenen, and DeChicchis), and one individual (DeChicchis) whose valid claim was not properly serviced under the contract. Because it appears that Milford Motors' representative profit from the sale of the extended warranty contracts was $500, and because the overall situation is aggravated by a partial disregard of consumers, the Court awards a civil penalty of $7,500 to the State for each of the four proved violations of the Act, or a total of $30,000.

The Court feels under all the circumstances it can fix a relatively high penalty for each violation. There is little doubt that other instances of statutory fraud occurred and there is no doubt that the State was justified in pursuing this action against Milford Motors and Mr. Gardiner. This Court herein has been demanding concerning what it expects of the State. The Defendants here are fortunate, and I suspect, if the Court is correct in its approach, that the State, with this learning block, will do a better job of ferreting out consumer fraud and presenting a specific case in the future. We all need to learn.

The State also seeks attorneys' fees and costs of prosecution for the violations committed by Milford Motors and Gardiner under the Act. Under 29 Del. C. § 2517 (c)(2), the State may now seek and recover attorneys' fees for claims brought under 6 Del. C. § 2513. The Court also may award costs to the Attorney General. 6 Del. C. § 2526. Neither of these provisions are mandatory. The Court retains discretion to award the costs and attorneys' fees. Given the dimension of the case, the Court is satisfied that any specific application by the Attorney General for costs and attorneys' fees would necessarily be a very high figure. In light of the limited recovery, the Court awards $10,000 for costs and attorneys' fees, which is clearly only a fraction of the total expense.

For the foregoing reasons, the Court enters judgment for the Plaintiff and imposes a statutory penalty against both Defendants, jointly and severally, in the amount of $30,000 plus an additional amount for costs and attorneys' fees of $10,000. IT IS SO ORDERED. I suggest that the parties formally agree with Dimension that the trust fund balance, if any, after contracts have expired, will secure or partially secure this judgment.