Barnette v. Brook Road, Inc.

• Decision Date: 03 May 2006
• Docket Number: Civil Action No. 3:05CV590.
• Citation: 429 F.Supp.2d 741
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Kamesha BARNETTE, Plaintiff, v. BROOK ROAD, INC., t/a Car America, et al., Defendants.

429 F.Supp.2d 741

Kamesha BARNETTE, Plaintiff, v. BROOK ROAD, INC., t/a Car America, et al., Defendants.

Civil Action No. 3:05CV590.

United States District Court, E.D. Virginia, Richmond Division.

May 3, 2006.

COPYRIGHT MATERIAL OMITTED

John Cole Gayle, Jr., The Consumer Law Group PC, Richmond, VA, Leonard Anthony Bennett, Consumer Litigation Assoc. PC, Newport News, VA, for Plaintiff.

Raymond James Sinnott, III, Kenneth Francis Hardt, Mark Charles Nanavati, Sinnott, Nuckols & Logan PC, Midlothian, VA, for Defendants.

MEMORANDUM OPINION

LAUCK, United States Magistrate Judge.

The Plaintiff, Kamesha Barnette, brought claims against the Defendant, Brook Road, Inc., which trades as Car America ("Car America"), following a failed purchase of a car and repossession of that car after financing fell through. Barnette asserts claims under the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. §§ 1691-1691f, the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681-1681x the Virginia Consumer Protection Act ("VCPA"), Va.Code Ann. §§ 59.1-196-207 (Michie 2001 & Supp.2005), and the Uniform Commercial Code, as well as common law actions of fraud, conversion, and breach of contract. The Defendant has moved for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure on the FCRA, fraud, conversion, and the damages portion of the VCPA claims.¹ The parties have briefed the issues, presented oral argument at a hearing, and filed supplemental briefing. Thus, the Motions for Judgment are ripe for disposition.

I. Standard of Review

A court shall grant a motion for judgment on the pleadings under Rule 12(c) where "it appears to a certainty that the nonmoving party cannot prove any set of facts in support of its claim that would entitle it to relief." Shooting Point, L.L.C. v. W.M. Cumming, 238 F.Supp.2d 729, 735 (E.D.Va.2002). This standard of review is identical to that applied to a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Burbach Broad. Co. v. Elkins Radio Corp., 278 F.3d 401, 406 (4th Cir.2002); Dauster v. Household Credit Servs., Inc., 396 F.Supp.2d 663, 665 (E.D.Va.2005). Accordingly, the Court will view the allegations and all reasonable inferences drawn therefrom in the plaintiff's favor. Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir.1999).

II. Facts

This case involves an alleged so-called "yo-yo" car sale. On May 12, 2004, Barnette received a letter from Car America indicating she was "pre-approved" to purchase a vehicle. (Compl.¶ 8.) When she arrived at Car America, a salesperson informed her that she qualified for certain vehicles, including a Mitsubishi Galant. (Id. ¶ 11.) The salesperson stated that if Barnette purchased the Galant, Car America would provide insurance in the event that the car were totaled, an extended warranty, and roadside assistance. (Id. ¶¶ 11, 14.) After negotiations, the Plaintiff agreed to purchase the Galant and pay a $500.00 down payment, of which she paid $200.00 on May 13, 2004. (Id. ¶¶ 14-15.)

On May 13, 2004, Barnette completed a Buyer's Order. (Id. ¶ 16, Ex. 1.) The Buyer's Order indicated that for sales involving dealer-arranged financing, the sale was contingent upon approval of a Retail Installment Sales Contract ("RISC"). (Id. Ex. 1.) Car America also accepted the Plaintiff's completed application for credit, informed her that she was approved for financing, and stated that to complete the sale she merely needed to sign some paperwork. (Id. ¶ 16.) When Barnette completed the paperwork, Car America indicated that she was approved for the loan and provided details about her car payment schedule. (Id. ¶ 17.) She was not provided a copy of the RISC. (Id. ¶ 18.) Barnette also signed a Temporary Certificate of Ownership (Id. Ex. 2), agreed to purchase insurance for the Galant, and signed the title of her previous car over to Car America as a trade-in. (Id. ¶¶ 19-20.) Car America did not provide Barnette with the title for the Galant. (Id. ¶¶ 45, 55.)

On May 17, 2004, Barnette submitted proof of insurance and obtained temporary tags from Car America. (Id. ¶ 22.) On May 28, 2004, Barnette paid the remaining $300.00 of the down payment, and Car America gave her a free car wash certificate. (Id. 1123.) During this period, Car America submitted Barnette's application for financing to one or more lenders. (Id. ¶ 21.) When Barnette returned to Car America for the car wash, she was informed that her loan was refused based on her insufficient income and that she must obtain a co-signer or the deal would be cancelled. (Id. ¶¶ 24-25.)

On or about June 2, 2004, a Car America employee began calling Barnette in a harassing manner. (Id. ¶ 26.) The following day, Car America repossessed her car from her workplace. (Id. ¶ 27.) Not knowing it had been repossessed, Barnette reported to her employer that the car had been stolen. (Id. ¶ 27.) Through June 7, 2004, Car America continued to harass the Plaintiff by calling her and asking her to negotiate a suitable loan. (Id. ¶ 28.)

Barnette never received from Car America written notice of an adverse action. (Id. ¶ 30.) From the failed sale of the Galant, Barnette incurred damages arising from the down payment, insurance premium, lost wages, cost of obtaining substitute transportation, mental distress, and medical expenses for treatment resulting from anxiety.

III. Analysis

A. The Fair Credit Reporting Act (FCRA)

Barnette brought a claim for violation of 15 U.S.C. § 1681m(a) and (b) of FCRA alleging that the Defendant procured and used her credit report, rendered an adverse action based on that report, and failed to provide notice of the adverse action. To enforce these protections, she relies upon the private right of action found in 15 U.S.C. §§ 1681n and 1681o. The Defendant counters that the 2003 amendments to FCRA eliminated the private right of action for claims under § 1681m. Resolution of this dispute requires an examination of FCRA.

Congress enacted FCRA in 1970 to promote an efficient banking system through "fair and accurate credit reporting" and to protect consumer privacy by requiring consumer reporting agencies to "adopt reasonable procedures" as part of their "vital role in assembling and evaluating consumer credit and other information on consumers." 15 U.S.C. § 1681(a)-(b). In furtherance of these dual purposes, Congress authorized a private right of action to recover damages for willful, 15 U.S.C. § 1681n, and negligent, 15 U.S.C. § 1681o, noncompliance with the requirements of FCRA. See TRW Inc. v. Andrews, 534 U.S. 19, 24, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001); Austin v. J.C. Penney Co., 162 F.Supp.2d 495, 497 (E.D.Va.2001). Congress also provided for administrative enforcement of FCRA's protections. 15 U.S.C. § 1681s.

Congress amended the FCRA by the Fair and Accurate Credit Transactions Act of 2003 ("FACTA"), Pub.L. No. 108-159, 117 Stat. 1952 (codified as amended at 15 U.S.C. §§ 1681-1681x (2003)). Section 311(a) of FACTA added 15 U.S.C. § 1681m(h), which, according to the Plaintiff, closed the so-called "counter offer exception" by requiring that notice be given to a consumer when his or her credit report is used in "connection with an application for, or a grant, extension, or other provision of, credit on material terms that are materially less favorable than the most favorable terms available . . . ." 15 U.S.C. § 1681m(h)(1). At issue here is a portion of § 311 that provides as follows:

(8) Enforcement

(A) No civil actions

Sections 1681n and 16810 of this title shall not apply to any failure by any person to comply with this section.

(B) Administrative enforcement

This section shall be enforced exclusively under section 1681s of this title by the Federal agencies and officials identified in that section.

15 U.S.C. § 1681m(h)(8). According to the Defendant, in this provision, Congress stripped the private right of action for violations of this "section," meaning § 1681m. The Plaintiff argues instead that Congress intended to withhold a private right of action for enforcement of only the newly created requirements under § 1681m(h), which concern the "counter offer exception," but not for the entirety of § 1681m. Plaintiff contends that the word "section" is a scrivener's error and should read "subsection," meaning § 1681m(h). For guidance in interpreting § 1681m(h)(8), the Court turns to familiar canons of statutory construction.

Discerning congressional intent begins with an examination of the statutory text. Lamie v. United States Tr., 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004). "Statutory construction is a `holistic endeavor.'" Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50, 60, 125 S.Ct. 460, 160 L.Ed.2d 389 (2004) (quoting United Say. Assn. of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365, 371, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988)). Statutory language only has meaning within the context of the broader statute. See Graham County Soil & Water Conservation Dist. v. United States, 545 U.S. 409, ___, 125 S.Ct. 2444, 2449, 162 L.Ed.2d 390 (2005). It is axiomatic that "`in expounding a statute, [a court] must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.'" U.S. Nat'l Bank of Or. v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 455, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993) (quoting United States v. Heirs of Boisdore, 49 U.S. 113, 122, 8 How. 113, 12 L.Ed. 1009 (1850)). Thus, it requires, "at a minimum," examination of "a statute's full text, language as well as punctuation, structure, and subject matter." Id.; accord Exxon Mobil Corp. v. Allapattah Servs., Inc., ___ U.S. ___, ___, 125 S.Ct. 2611, 2620, 162 L.Ed.2d 502 (2005) ("[W]e must examine the statute's text in light of context, structure, and related statutory provisions.").

The Court begins its analysis with § 1681m(h)(8) and the word "section."...