Baldwin v. Laurel Ford Lincoln-Mercury, Inc., Civil Action No. 2:97CV245GR.
| Decision Date | 28 May 1998 |
| Docket Number | Civil Action No. 2:97CV245GR. |
| Citation | 32 F.Supp.2d 894 |
| Parties | Shirlee Fager BALDWIN, Plaintiff, v. LAUREL FORD LINCOLN-MERCURY, INC.; Ford Motor Credit Company; and A-Z Automotive Dealers, Defendants. |
| Court | U.S. District Court — Southern District of Mississippi |
J. Andrew Phelps, Larry O. Norris, F. Marvin Morris, III, Anthony Sakalarios, Morris & Sakalarios, Hattiesburg, MS, for Shirlee Fager Baldwin.
Terry R. Levy, Eddie J. Abdeen, Daniel, Coker, Horton & Bell, Jackson, MS, for Laurel Ford-Lincoln Mercury, Inc.
Ross E. Henley, Henley, Lotterhos & Henley, Jackson, MS, Kristen Jones Indermark, Thomas M. Byrne, Sutherland, Asbill & Brennan, Atlanta, GA, for Ford Motor Credit Company.
This cause is before the Court on the motion to dismiss filed by the defendant, Ford Motor Credit Company [Ford Credit] [21-1], and the plaintiff's motion for leave to file a motion for partial summary judgment [33-1]. After due consideration of the evidence of record, the briefs of counsel, the applicable law, and being otherwise fully advised in the premises, the Court finds as follows:
Statement of Facts
The plaintiff, Shirlee Fager Baldwin, filed this putative class against Laurel Ford Lincoln-Mercury, Inc. [Laurel Ford] and Ford Credit, in connection with a retail installment contract she executed with Laurel Ford for the purchase of a 1994 Ford Crown Victoria on or about January 27, 1994. The terms of the retail installment contract are summarized in part as follows:
Cash Sale Price $ 18,988.00
(-) Down Payment $ 1,963.78
(=) Unpaid Balance $ 17,024.22
(+) Registration & Title $ 5.00
(+) Sales Taxes $ 465.79
(+) Extended Service Protection [ESP] $ 975.00
(+) Inspection $ 5.00
(=) Total Amount Financed $ 18,475.01
(+) Finance Charge (16% APR) $ 8,661.19
(=) monthly payments 60 × $452.2 $ 27,136.20
(+) Down Payment $ 1,963.78
(=) Total Sale Price $ 29,099.98
The contract further provided that the dealer, Laurel Ford, was Baldwin's creditor in the installment purchase, and the contract also expressly assigned the contract to Ford Credit. In her amended complaint, Baldwin alleges, inter alia, that Laurel Ford asked her if it could arrange financing through Ford Credit and that it, in fact, did arrange such financing. Baldwin does not allege that she was charged an interest rate, finance charge, or any other fee different from that disclosed in the contract. Baldwin alleges that Ford Credit and Laurel Ford had a secret agreement whereby Ford Credit would pay Laurel Ford part of the interest charged in the contract as a commission. Additionally, Baldwin alleges that Laurel Ford secretly received between 40-60% of the $975 ESP charge she agreed to pay in the contract. Based on the above, Baldwin alleges the following state and federal claims: breach of fiduciary duties (count 1); breach of implied covenant of good faith and fair dealing (count 2); fraudulent misrepresentation and/or omission (count 3); negligent misrepresentation and/or omission (count 4); anti-trust violations (count 5); civil conspiracy (count 6); negligence (count 7); violations of the federal Truth-in-Lending Act [TILA], 15 U.S.C. §§ 1601, et seq., and Regulation Z, 12 C.F.R. § 226.1, et seq. (count 8); and consumer fraud and deceptive business practices (count 9). Baldwin also seeks declaratory, injunctive, and equitable relief (count 10); punitive damages (count 11); and estoppel from pleading and tolling applicable statutes of limitations (count 12).
A complaint should not be dismissed under Rule 12(b)(6) "`unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [her] claim which would entitle [her] to relief.'" Lowrey v. Texas A & M Univ. Sys., 117 F.3d 242, 247 (5th Cir.1997) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). "`The question therefore is whether in the light most favorable to the plaintiff and with every doubt resolved in [her] behalf, the complaint states any valid claim for relief.'" Lowrey, 117 F.3d at 247 (citing 5A CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357, at p. 299 (1969)). In this case, the plaintiff bases her claims on the retail installment contract. In attacking the pleadings, Ford Credit may introduce the document without converting it to a motion for summary judgment. See Sheppard v. Texas Dept. of Transp., 158 F.R.D. 592, 595-96 (E.D.Tex.1994) ().
Baldwin alleges that Laurel Ford was acting as the agent of Ford Credit and thus owed her and the putative class members "a fiduciary duty to ... obtain the best possible financing ... and to obtain an extended warranty for the best possible price" and not to conceal the fact that Laurel Ford was retaining a portion of the ESP cost and finance as a commission. (Amend.Comp., ¶ 24). Under Mississippi law, "there is no presumption of a fiduciary relationship between a debtor and a creditor." Peoples Bank & Trust Co. v. Cermack, 658 So.2d 1352, 1358 (Miss.1995). To establish a fiduciary relationship between a debtor and creditor, the plaintiff must allege facts that demonstrate that (1) the activities of the parties have reciprocal benefit, (2) the activities impose a common interest and profit, (3) the parties repose trust in each other, and (4) one party has dominion and control over another. Hopewell Enters., Inc. v. Trustmark Nat'l Bank, 680 So.2d 812, 816-17 (Miss.1996) (citation omitted). In Hopewell, the Mississippi Supreme Court held that none of the above circumstances exist merely because the parties stand in a debtor-creditor relationship. See id. (). The court relied in part on precedent holding that "generally the relationship between a debtor and creditor is a contractual one, and `not a confidential or fiduciary one.'" Id. at 816 (citing First Am. Nat. Bank of Iuka v. Mitchell, 359 So.2d 1376, 1380 (Miss.1978), overruled on other grounds by, C & C Trucking Co. v. Smith, 612 So.2d 1092 (Miss.1992)). The same result holds true when a consumer enters into a purchasing agreement pursuant to an ordinary retail automobile sale. See, e.g, Blon v. Bank One, Akron, N.A., 35 Ohio St.3d 98, 519 N.E.2d 363, 367-68 (Ohio 1988) ().
The Court finds that the amended complaint alleges no facts that, if true, establish a fiduciary relationship between the defendants and Baldwin. The contract provided full disclosure of the amount she was required to pay for the vehicle, including financing, the extended warranty, and other costs. In considering whether to enter the contract, Baldwin was free to evaluate her bargain by appraising the total out-of-pocket expenditures required for the purchase. Baldwin's position allows her to vilify her lender merely because she has discovered that through greater diligence she might have obtained a better bargain from another lender. See Blon, 519 N.E.2d at 368. The connection between Laurel Ford and Ford Credit, standing alone, does not make the assignor-assignee relationship any different than a car dealer's ongoing relationship with a bank or credit union. Id. Further, the mere fact that Laurel Ford engaged in puffery or assisted in financing does not realign the defendants as fiduciaries acting on the behalf of their customers. As a consumer, Baldwin could not reasonably be expected to assume that the resulting deal would be "the best possible" arrangement without doing her homework. For the above reasons, the Court finds that Baldwin's claim that the defendants breached a fiduciary duty is subject to dismissal.
Mississippi law recognizes an implied covenant of good faith and fair dealing in every contract. See Cenac v. Murry, 609 So.2d 1257, 1272 (Miss.1992). A party which acts in accordance with the express terms of a contract generally cannot be found to have violated the covenant of good faith and fair dealing. In this case, Baldwin agreed to pay Laurel Ford or its assignee, Ford Credit, an interest rate of 16 per cent. Baldwin also expressly agreed to pay $975 for the ESP warranty. Although Baldwin alleges that she believed she would be receiving the best terms Ford Credit had for the interest rate and the ESP, such an expectation was unfounded. Ford Credit's act of purchasing Baldwin's contract from Laurel Ford on undisclosed terms or permitting Laurel Ford to retain a percentage of the ESP cost did not affect Baldwin's obligation or prevent her from obtaining the benefit of her bargain. The defendants were not required to do more than the contract required to escape liability for breach of the covenant of good faith and fair dealing. See 4-County Elec. Power Ass'n v. Tennessee Valley Auth., 930 F.Supp. 1132 (S.D.Miss.1996) (). More importantly, the Court further finds that, at the time she negotiated the contractual terms with Laurel Ford, Ford Credit was only an assignee of that agreement and could not be liable for express or implied obligations under the contract. Cf. Burley v. Homeowners Warranty Corp., 773 F.Supp. 844 (S.D.M...
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