Brown v. Coleman Investments, Inc.,

• Decision Date: 23 January 1998
• Docket Number: No. Civ.A. 96-3297-B-M2.,Civ.A. 96-3297-B-M2.
• Citation: 993 F.Supp. 439
• Parties: Lillie D. BROWN and Lois N. Gomes, et al. v. COLEMAN INVESTMENTS, INC., et al.
• Court: U.S. District Court — Middle District of Louisiana

993 F.Supp. 439

Lillie D. BROWN and Lois N. Gomes, et al. v. COLEMAN INVESTMENTS, INC., et al.

No. Civ.A. 96-3297-B-M2.

United States District Court, M.D. Louisiana.

January 23, 1998.

Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, Edelman & Combs, Chicago, IL, Garth Jonathan Ridge, Baton Rouge, LA, for Lillie D Brown, plaintiff.

Garth Jonathan Ridge, Baton Rouge, LA, for Lois N. Gomes, for plaintiffs Marilyn Greene, Stephanie Greene, Willie Greene.

Allen J. Myles, Plaquemine, LA, Garth Jonathan Ridge, Baton Rouge, LA, for plaintiff Barbie Darnell Harris.

Allen J. Myles, Plaquemine, LA, for plaintiffs Marilyn Greene, Stephanie Greene, Willie Greene.

Kirk A. Patrick, III, McGlinchey Stafford Lang, Baton Rouge, LA, John Joseph Price, John O. Shirley & Associates, Baton Rouge, LA, for defendants Coleman Investments, Inc., Robert Coleman.

Paul S. West, McGlinchey Stafford Lang, Baton Rouge, LA, Anthony Joseph Rollo, Jr., Michael H. Rubin, Lauren L. Zimmermann, McGlinchey Stafford Lang, New Orleans, LA, David S. Willenzik, McGlinchey Stafford Lang, New Orleans, LA, for defendant Toyota Motor Credit Corporation.

Lloyd Eades Hogue, David Felicien Waguespack, Lemle, Kelleher, Kohlmeyer, Dennery, Hunley, Moss & Frilot, Orleans, LA, Patrick Johnson, Jr., Lemle & Kelleher, New Orleans, LA, for defendant Hibernia National Bank.

Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, Edelman & Combs, Chicago, IL, Garth Jonathan Ridge, Baton Rouge, LA, for Lillie D. Brown.

RULING ON COLEMAN INVESTMENT, INC.'S AND ROBERT COLEMAN'S MOTION FOR SUMMARY JUDGMENT AND JUDGMENT ON THE PLEADINGS

POLOZOLA, District Judge.

Coleman Investments, Inc. ("Coleman Toyota") and Robert Coleman ("Coleman") have filed a motion for summary judgment and for judgment on the pleadings. Because the Court has considered and relied on evidence outside of the pleadings, the Court will treat the motion as a motion for summary judgment. For reasons which follow, the motion for summary judgment filed by Coleman Toyota and Coleman is GRANTED.

FACTS & PROCEDURAL HISTORY

Lillie D. Brown ("Brown") and Lois N. Gomes ("Gomes") have filed separate claims against the various defendants¹ under the Truth in Lending Act² ("TILA"), the Racketeer Influenced and Corrupt Organizations Act³ ("RICO") and a state law claim for "equitable restitution."⁴ Plaintiffs have asserted claims under TILA and for "equitable restitution" against Coleman Toyota. The plaintiffs have also filed a RICO claim for a violation of 18 U.S.C. § 1962(c) against Coleman. The Court now turns to a brief discussion of the facts of this case.

On or about July 22, 1995, Brown executed a retail installment contract with Coleman Toyota for the purchase of a 1994 Toyota Tercel. The Truth in Lending Disclosure statement prepared by Coleman Toyota disclosed an "amount financed"⁵ of $13,157.52, a "finance charge"⁶ of $3,487.08 and an "annual percentage rate"⁷ of 9.50%. Included in the $13,157.52 "amount financed" was a $40 charge for a "license fee." The parties agree that the actual amount of the "license fee" charged by the State of Louisiana was $22.92. In addition, Coleman Toyota charged Brown the $25 cost of ad valorem taxes owed by Coleman Toyota as a result of the sale. Brown's retail installment contract was assigned to TMCC which financed the vehicle.

On or about September 20, 1995, Gomes executed a retail installment contract with Coleman Toyota for the purchase of a 1995 Toyota Tercel. The Truth in Lending Disclosure statement prepared by Coleman Toyota disclosed an "amount financed" of $12,212.42, a "finance charge" of $4,357.18 and an "annual percentage rate" of 12.50%. Included in the $12,212.42 "amount financed" was a $97 charge for a "license fee." The actual amount of the "license fee" charged by the State of Louisiana was $25. In addition, Coleman Toyota also assessed Gomes the $21 cost of ad valorem taxes owed by Coleman Toyota. Gomes's retail installment contract was assigned to Hibernia which provided the financing for the vehicle.

Based upon the above facts, Brown and Gomes have asserted the various claims listed above against Coleman Toyota and Coleman. The Court now turns to a discussion of the legal principles the Court must follow in ruling on this motion for summary judgment.

SUMMARY JUDGMENT STANDARD

Summary judgment should be granted if the record, taken as a whole, "together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."⁸ The Supreme Court has interpreted the plain language of Rule 56(c) to mandate "the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."⁹ A party moving for summary judgment "must `demonstrate the absence of a genuine issue of material fact,' but need not negate the elements of the nonmovant's case."¹⁰ "If the moving party fails to meet this initial burden, the motion must be denied, regardless of the nonmovant's response."¹¹

If the moving party meets this burden, Rule 56(c) requires the nonmovant to go beyond the pleadings and show by affidavits, depositions, answers to interrogatories, admissions on file, or other admissible evidence that specific facts exist over which there is a genuine issue for trial.¹² The nonmovant's burden may not be satisfied by conclusory, allegations, unsubstantiated assertions, meta-physical doubt as to the facts, or a scintilla of evidence.¹³ Factual controversies are to be resolved in favor of the nonmovant, "but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts."¹⁴ The Court will not, "in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts."¹⁵ Unless there is sufficient evidence for a jury to return a verdict in the nonmovant's favor, there is no genuine issue for trial.¹⁶

When affidavits are used to support or oppose a motion for summary judgment, the affidavits "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein."¹⁷ Affidavits that are not based on personal knowledge or that are based merely on information and belief do not satisfy the requirements of Rule 56(e), and those portions of an affidavit that do not comply with Rule 56(e) are not entitled to any weight and cannot be considered in deciding a motion for summary judgment.¹⁸ Neither shall conclusory affidavits suffice to create or negate a genuine issue of fact.¹⁹

ANALYSIS

The Court will first address the various TILA claims filed against Coleman Toyota.

(1) TILA Claims

While each of the plaintiffs have alleged the same violations of TILA, each claim is based on a different set of facts. Brown has alleged the following violations of TILA by Coleman Toyota: (1) by charging $40 for a "license fee" that actually cost $22.92, Coleman Toyota understated the "finance charge" by $17.08, overstated the "amount financed" by $17.08 and understated the "annual percentage rate;" (2) Coleman Toyota failed to disclose the fact of or amount of the $17.08 upcharge in the "license fee;" and (3) Coleman Toyota assessed Brown $25 for ad valorem taxes which were legally owed by Coleman Toyota thereby understating the "finance charge." Gomes has alleged the following violations of TILA: (1) by charging $97 for a "license fee" that actually cost $25, Coleman Toyota understated the "finance charge" by $72, overstated the "amount financed" by $72 and understated the "annual percentage rate;" (2) Coleman Toyota failed to disclose the fact of or amount of the $72 upcharge in the "license fee;" and (3) Coleman Toyota assessed Gomes $21 for ad valorem taxes which were legally owed by Coleman Toyota thereby understating the "finance charge." The Court will discuss each of these claims separately.

(I)(A) Effects of the Alleged Understatement of the "Finance Charge"

These claims are based on the characterization of the "license fees" charged by Coleman Toyota to Brown and Gomes. Coleman Toyota charged Brown $40 for the "license fee" when the actual cost of the "license fee" was $22.92, amounting to an upcharge of $17.08. Coleman Toyota charged Gomes $97 for the "license fee" when the actual cost of the "license fee" was $25, amounting to an upcharge of $72. The plaintiffs contend Coleman Toyota violated TILA by including the amount of the upcharges in the "amount financed," instead of in the "finance charge." Thus, a summary of the violations of TILA which plaintiffs claim result from the alleged misclassification of the upcharges may be summarized as follows:

1. Coleman Toyota understated the "finance charge" disclosed to Brown and Gomes by $17.08 and $72, respectively, in violation of 15 U.S.C. § 1638(a)(3) and 12 C.F.R. § 226.18(d).

2. By understating the "finance charge," Coleman Toyota necessarily overstated the "amount financed" disclosed to Brown and Gomes by $17.08 and $72, respectively, in violation of 15 U.S.C. § 1638(a)(2) and 12 C.F.R. § 226.18(b).

3. Because the "finance charge" and the "amount financed" were understated and overstated, respectively, Coleman Toyota necessarily understated the "annual percentage rate" disclosed to Brown and Gomes in violation of 15 U.S.C. § 1638(a)(4) and 12 C.F.R. § 226.18(e).

Coleman Toyota argues the upcharges assessed to Brown and Gomes are not "finance charges" because the entire amount charged to Brown and Gomes for the "license fee" meets the comparable cash transaction exception to the definition of "finance charge."²⁰ The Court finds there are genuine issues of material fact in dispute which preclude summary judgment...