Tyson v. Sterling Rental, Inc.

Citations: 80 F. Supp. 3d 736; 2015 U.S. Dist. LEXIS 7114; 2015 WL 293841Docket: Case No. 13-CV-13490

Court: District Court, E.D. Michigan; January 19, 2015; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The court is addressing a motion for summary judgment filed by defendants Sterling Rental, Car Source, Al Chami, and Rami Kamil in a consumer credit case involving the plaintiff's vehicle purchase. On August 10, 2013, the plaintiff applied for a loan at Car Source, providing income documentation and a $1,200 check from the Family Independence Agency (FIA). After submitting her application, which was approved by Michigan Credit Acceptance Corporation (MCAC), the plaintiff purchased a 2006 Chevrolet Cobalt.

However, on August 12, 2013, Car Source informed the plaintiff that the deal fell through, alleging she had misrepresented her income. They requested her return to the dealership, where her car was taken, and she was asked to pay an additional $1,500 to retain it. The plaintiff contends that she was verbally abused and did not have the funds for this additional payment. Defendants claim they sought to restructure her contract due to the alleged misrepresentation. 

The plaintiff filed a lawsuit on August 14, 2013, and later amended her complaint, asserting numerous claims against the defendants, including violations of the Truth in Lending Act, the Equal Credit Opportunity Act, and various state laws. The defendants filed their motion for summary judgment on October 31, 2014, and the plaintiff responded on December 22, 2014, with no subsequent reply from the defendants. The court is now considering the motion.

Summary judgment is appropriate when the movant demonstrates that there is no genuine dispute regarding any material fact and is entitled to judgment as a matter of law, as per Fed. R. Civ. P. 56(a). The court will not grant summary judgment if reasonable evidence exists for a jury to favor the nonmoving party. When evaluating motions, the court must view all evidence and inferences in the light most favorable to the nonmoving party.

Defense counsel's conduct in this case has been problematic, as this is the third dispositive motion filed by the defendants and the second addressed by the court. The initial motion to dismiss was denied due to the counsel's inadequate legal argument structure, where he failed to provide a proper brief and instead submitted exhibits that largely copied content from the complaint without sufficient argumentation, violating Local Rules. For the current motion, defense counsel has adopted a conventional briefing format and claims to have obtained admissions from the plaintiff during her deposition. 

Depositions are intended to document testimony and gather facts relevant to the case, not to compel the deponent to demonstrate legal knowledge or directly link facts to legal claims. During the deposition, defense counsel engaged in exchanges that highlighted the plaintiff's confusion regarding the Equal Credit Opportunity Act, illustrating a failure to effectively communicate and clarify the legal basis of her claims.

Defense counsel's inquiry into the plaintiff's claims revealed a significant lack of understanding regarding the legal theory of common law conversion, as the plaintiff struggled to define it and articulate the damages suffered from the alleged conversion. The deposition process failed to adequately explore the factual basis of the lawsuit, limiting defense counsel's ability to support a motion for summary judgment. Moreover, defense counsel's frivolous motion to prevent the deposition of a named defendant indicated an abuse of the discovery process, leading the Court to caution that sanctions could be imposed if such conduct continues.

In relation to the Truth In Lending Act (TILA), the plaintiff described the transaction as a "spot delivery," wherein the buyer takes possession of a vehicle before the seller secures financing. The plaintiff alleged that Car Source did not properly disclose the vehicle's price and annual percentage rate, violating TILA. Car Source contended that spot delivery is permissible unless fraud or misrepresentation occurs, claiming that the Michigan Consumer Assistance Center (MCAC) was the actual creditor and that a TILA violation requires a finance charge and reliance on the lender’s representations. However, the plaintiff provided evidence of misrepresentation, asserting that Car Source misrepresented the purchase price, interest rate, and finance charges, and later demanded the return of the vehicle unless a new contract with altered terms was signed.

Car Source qualifies as a creditor under the Truth in Lending Act (TILA), allowing the plaintiff to maintain her TILA claim without having paid a finance charge, as outlined in 15 U.S.C. 1638. Liability for TILA violations is assessed under 15 U.S.C. 1640(a)(1)(3), and the court distinguishes this from the case cited by Car Source, Anderson v. Frederick Ford Mercury, which incorrectly applied a section pertaining to mortgage transactions requiring finance charges for statutory damages. The court clarifies that under 15 U.S.C. 1640(a)(2)(A)(iv), a claim can proceed for statutory damages without the need for detrimental reliance, while actual damages require proof of such reliance. The court thus denies summary judgment on the TILA claim.

Regarding the Equal Credit Opportunity Act (ECOA), Car Source's argument hinges on the plaintiff's inability to articulate the legal standard, but fails to provide substantive reasoning or evidence, resulting in the denial of their motion on this claim as well.

In the conversion claim, defendants contend it cannot proceed due to their offer to return the car and the economic loss doctrine. However, conversion is defined as wrongful dominion over personal property, which occurs when such dominion is asserted. The plaintiff asserts that she is not obligated to accept the car's return after conversion has been established. The defendants’ attempt to assert a right to charge for storage after retaining the vehicle does not mitigate the original wrongful act of conversion. Consequently, the court will not dismiss the conversion claims based on these arguments.

Plaintiff was initially induced to visit defendants' lot based on one set of circumstances, but the situation changed significantly thereafter. The defendants' invitation to retrieve the car was interpreted by the plaintiff as a tactic to collect additional money owed. According to Michigan law, the economic loss doctrine prevents recovery for conversion in cases governed by a contract, as established in Scarff Bros. v. Bischer Farms, Inc. This doctrine stipulates that when a purchaser's expectations in a contractual sale are unmet, recovery must be sought through contract law for economic losses, rather than tort claims. Although the plaintiff claims that conversion is an "independent claim" under Michigan law, she provided no legal support for this assertion, resulting in the dismissal of her conversion claims (Counts III through VI).

Regarding other claims, while defendants sought summary judgment based on the plaintiff's failure to articulate a legal basis for her claims during her deposition, the court noted it cannot dismiss a well-pled claim simply due to a plaintiff's lack of legal knowledge. The plaintiff is considered knowledgeable about the facts of her case, having engaged legal representation to interpret the law.

In conclusion, the court granted the defendants' motion for summary judgment as to Counts III through VI (common law and statutory conversion) but denied it concerning all other counts. Additionally, the court addressed Car Source's claim that the plaintiff misrepresented her income in the TILA section, noting that even if this were true, her TILA claim would still survive as per Purtle v. Eldridge Auto Sales, Inc. The court did not make a determination on the alleged misrepresentation.