General Motors, LLC v. Thornhill, 020714 OHCP, CV 12 786776
|Docket Nº:||CV 12 786776|
|Opinion Judge:||John P. O'Donnell, J|
|Party Name:||GENERAL MOTORS, LLC, Plaintiff v. DUANE THORNHILL, Sr., Defendant|
|Case Date:||February 07, 2014|
|Court:||Court of Common Pleas of Ohio|
JOURNAL ENTRY GRANTING THE PLAINTIFFS' MOTION TO DISMISS THE COUNTERCLAIM AND GRANTING AND DENYING IN PART THE DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS
STATEMENT OF THE CASE
This lawsuit began with a complaint by plaintiff General Motors alleging that the defendant Duane Thornhill, Sr., a GM employee, misused GM's employee discount program by giving the discount to people who did not qualify for it. Thornhill then asserted counterclaims for fraud, negligent misrepresentation, defamation and declaratory judgment. Each counterclaim includes a request for class action certification. The proposed class essentially encompasses all defendants in similar lawsuits by GM.1
Thornhill has now filed a motion for judgment on the pleadings and GM has filed a motion to dismiss the counterclaims. Both motions are fully briefed and this entry follows.
THE COMPLAINT AND COUNTERCLAIM
General Motors manufactures cars. The defendant is an employee of GM. As one of the defendant's employee benefits he is entitled to participate in the General Motors Vehicle Purchase Program, which allows him and his relatives2 to get discounts when buying a General Motors vehicle. The terms of the purchase program are described in a document captioned " General Motors Vehicle Purchase Programs Rules and Guidelines, " attached as Exhibit 1 to the complaint.
To participate in the program, an eligible employee gets an authorization number from GM and then provides it to a GM dealer, who applies the discount on a sale to a " sponsored purchaser, " i.e. the employee's relative or friend.3 The complaint alleges that Thornhill " violated the program rules by providing the discount to individuals who do not qualify for the program." 4 According to GM, Thornhill obtained discounts for seven vehicles from 2006 to 2007, but five of those buyers were people who did not qualify as sponsored purchasers. These violations were not uncovered until a 2009 audit revealed them. Before filing the lawsuit GM sought additional information from Thornhill to substantiate the purchasers' eligibility for the discount. Thornhill did not respond and the lawsuit was filed.
The complaint includes three causes of action: fraud or negligent misrepresentation, conversion and breach of contract. For the fraud claim GM asserts that the defendant knew his buyers were not eligible for the discount but represented that they were. GM then relied on those representations and gave the discounts, to their detriment. GM alleges that the representations were intentional or made with reckless disregard of their truth or falsity.
For conversion, the plaintiff claims that Thornhill obtained " discounts for five separate vehicles, which, based upon information and belief, he converted for his own benefit and financial gain." 5 As damages, GM claims the difference between the manufacturer's suggested retail price and the discounted price.
Finally, for the breach of contract claim, GM asserts that Thornhill broke the terms of the program by getting the discount for people who did not qualify and then refused to honor the contractual obligation that he reimburse GM for any discount extended to an unqualified purchaser.
Thornhill counterclaimed with four causes of action. He alleges that he was " victimized by unscrupulous dealers who used the GMS authorization numbers to extend discounts to illegible ( sic ) consumers without" 6 his knowledge. According to Thornhill, GM knew its dealers were improperly using the authorization numbers for ineligible buyers but, instead of stopping that abuse and seeking restitution from the dealers, GM hounded him. Additionally, Thornhill denies ever signing a contract with the discount program's terms and conditions.
Thornhill's first counterclaim alleges fraud, claiming, in essence, that GM knows he did nothing wrong because the underlying sales were either made to eligible buyers or were procured through the dealers' fraud, but is persisting " through its collection and legal efforts . . . to extort additional profits from its present and former employees." 7
The defendant's second counterclaim alleges negligent misrepresentation. Here, Thornhill says GM did not exercise due care in investigating the transactions that its audit revealed might be fraudulent, and because of that failure GM has asserted " false claims" 8 against him for excessive damages.
The third counterclaim cause of action is defamation. Thornhill supports this tort claim as follows:
75. GM's claims that the vehicle transactions identified in its audits of Counterclaim Plaintiff and other similarly situated were fraudulent and in violation of the terms of the GMVPP's were either partly or completely false.
76. On the basis of these false claims of fraud on the part of Counterclaim Plaintiff and other class members, GM filed lawsuits in Ohio courts, which are publicly available documents, and are a matter of public record. 77. Records of lawsuits and any resulting judgments are routinely scanned by credit reporting agencies and other data base aggregators that furnish information to employers for background checks. 78. As the proximate result of the publication of GM's claims and their subsequent acquisition by information vendors, Counterclaim Plaintiff and the other class members' ability to obtain credit and employment has been damaged. (All spelling, punctuation and grammar sic .)9
The last of the counterclaims seeks three declaratory judgments: that GM and Thornhill had no written contract and therefore the breach of contract claim is barred by the statute of frauds; that the complaint's fraud cause of action is barred by the statute of limitations; and that GM is estopped from claiming the damages sought in this lawsuit because it did not include the prospective recovery here as an asset in its 2009 bankruptcy filing.
THE DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS
Judgment on the pleadings standard
Thornhill's motion is made under Rule 12(C) of the Ohio Rules of Civil Procedure, but it is considered under the same standard as a Civil Rule 12(B)(6) motion to dismiss for failure to state a claim: the trial court is required to accept as true all the material allegations in the complaint, and to draw all reasonable inferences from those allegations in favor of the nonmoving party. Peterson v. Teodosio , 34 Ohio St. 2d 161, 165-166, 297 N.E.2d 113 (1973). A complaint should not be dismissed on the pleadings unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Dottore v. Vorys, Sater, Seymour & Pease, L.L.P ., 8th Dist. No. 98861, 2014-Ohio-25, ¶ 95.
The fraud and misrepresentation claims
The defendant argues that GM's fraud and misrepresentation claims must be dismissed because the fraud claim has not been pled with the specificity required by Civil Rule 9 and unlawfully places the burden to negate the existence of fraud on Thornhill, and because the elements of negligent misrepresentation have not been alleged.
The elements of fraud are (a) a representation or, where there is a duty to disclose, concealment of a fact, (b) which is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (f) a resulting injury proximately caused by the reliance. Glazer v. Chase Home Fin. L.L.C ., 8th Dist. Nos. 99875 and 99736, 2013-Ohio-5589, ¶ 80.
According to Civil Rule 9(B), the circumstances constituting fraud shall be stated with particularity. Failure to do so subjects the complaint to dismissal. Here, Thornhill complains that GM hasn't alleged which purchasers did not qualify for the discount and when and where Thornhill made false representations to GM that certain purchasers qualified for the discount.
The complaint alleges that after its 2009 audit, GM sought more detailed information from Thornhill about five of the purchasers who used his authorization number. Although not specifically averred, it is reasonable to infer that the details of those purchases, including the buyer's name and the date sold, were made known to Thornhill at that time.10 The complaint also includes as an exhibit a list of the purchases which shows the date and dealership where the authorization number was used and the vehicle identification number of the car that was bought. The particularity requirement of Civil Rule 9(B) means that the pleading must contain allegations of fact which tend to show each and every element of a cause of action for fraud. CitiMortgage, Inc. v. Hoge , 196 Ohio App.3d 40, 2011-Ohio-3839, ¶ 23, 962 N.E.2d 327 (8th Dist.). It does not mean that every single detail of the fraud must be included. Indeed, since fraud by its nature is hidden it is rarely possible to include every detail at the pleading stage. GM alleged that Thornhill represented that certain purchasers...
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