Campbell v. Asbury Auto., Inc.

Decision Date19 May 2011
Docket NumberNo. 10–575.,10–575.
Citation381 S.W.3d 21,2011 Ark. 157
PartiesOtis CAMPBELL, on behalf of himself and all others similarly situated, Appellant v. ASBURY AUTOMOTIVE, INC.; Asbury Automotive Arkansas, L.L.C.; North Point Auto Group; North Point Ford, Inc.; NP FLM, L.L.C.; Prestige Toy, L.L.C.; Prestige Bay, L.L.C.; Premier NSN, L.L.C.; NP VKW, L.L.C.; Premier Pon, L.L.C.; and NP MZD, L.L.C., Appellees.
CourtArkansas Supreme Court

OPINION TEXT STARTS HERE

Nichols & Campbell, P.A., by: H. Gregory Campbell; Roberts Law Firm, P.A., Little Rock, by: Michael L. Roberts and Richard Quintus; and Varnell & Warwick, P.A., by: Brian W. Warwick, for appellants.

Watts, Donovan & Tilley, P.A., by: David M. Donocan and Staci Dumas Carson; and Williams & Anderson, PLC, Little Rock, by: Philip E. Kaplan and Bonnie J. Johnson, for appellees.

Mitchell, Blackstone, Barnes & Sneddon, P.L.L.C., Little Rock, by: Michael W. Mitchell and Emily Sneddon, for amicus curiae Arkansas Automobile Dealers Association.

PAUL E. DANIELSON, Justice.

Appellant Otis Campbell, on behalf of himself and all others similarly situated, appeals from several orders of the circuit court in a class-action suit against appellees Asbury Automotive Group, Inc.; Asbury Automotive Arkansas, L.L.C.; North Point Auto Group; North Point Ford, Inc.; NP FLM, L.L.C.; Prestige Toy, L.L.C.; Prestige Bay, L.L.C.; Premier NSN, L.L.C.; NP VKW, L.L.C.; Premier PON, L.L.C.; and NP MZD, L.L.C. (collectively, Asbury). This court previously affirmed the circuit court's grant of class certificationin relation to a documentary fee charged by Asbury to purchasers of its vehicles. See Asbury Auto. Grp., Inc. v. Palasack, 366 Ark. 601, 237 S.W.3d 462 (2006). In this appeal, Campbell asserts four points: (1) that the circuit court erred in granting summary judgment to Asbury on the class's documentary-fee claim based on the Arkansas Deceptive Trade Practices Act (“ADTPA”); (2) that the circuit court erred in denying the class's motion to amend his complaint and motion for class certification to add a breach-of-fiduciary-duty claim relating to the documentary fee; (3) that the circuit court erred in denying class certification relating to the class's financing-fee claim against Asbury; and (4) that the circuit court erred in dismissing the class's unjust-enrichment claim relating to the documentary fee. Asbury cross-appeals, asserting three points: (1) that the circuit court erred in granting summary judgment to Campbell on the class's claim that the assessment of a documentary fee constituted the unauthorized practice of law; (2) that the circuit court erred in ruling that Asbury had a fiduciary relationship with its customers; and (3) that the circuit court erred in ruling that it was not entitled to the defense of good-faith reliance on Act 1600 of 2001. We affirm in part and reverse and remand in part on direct appeal, and we affirm on cross-appeal.

On December 31, 2002, Charles and Carol Palasack filed a class-action complaint against Asbury, in which they alleged that Asbury “charged Plaintiffs and other similarly situated members of the Plaintiff class, an illegal document preparation fee for preparing the vehicle installment contract (a legal instrument) for the purchase of a vehicle.” The Palasacks asserted that the fee itself was illegal, constituting the unauthorized practice of law, and that the retention of the fee violated the ADTPA, codified at Arkansas Code Annotated §§ 4–88–101 to –804 (Repl.2001 & Supp.2009), resulting in unjust enrichment. The circuit court granted class certification and defined the class as follows:

All persons that paid Defendants in Arkansas a documentary fee or administrative fee since December 31, 1997. Excluded from this class are: (1) present and former employees, officers, and directors of Defendants, and (2) any class member who timely elects to be excluded from the class pending further orders of the Court.

Asbury appealed, and this court affirmed, as already noted.1See Palasack, supra.

In the ensuing litigation, both parties filed motions for summary judgment, and on November 30, 2006, the circuit court granted summary judgment to Campbell, ruling that the documentary fee charged by Asbury “includes compensation for time spent preparing or filling in the blanks on legal documents and therefore constitutes the unauthorized practice of law and is illegal.” In addition, it found that [t]o the extent Ark.Code Ann. § 23–112–315 and § 23–112–612 authorize car dealers to prepare documents affecting the legal rights of others for a fee, it is unconstitutional because it violates the separation of powers doctrine.” Accordingly, the circuit court also granted Campbell's motion for summary judgment

on the issue of whether the Documentary Fee compensates Defendants for time spent preparing or filling in the blanks of legal documents, constitutes the unauthorized practice of law and therefore violates the Arkansas Deceptive Trade Practices Act ... as to the time periods prior to the effective dates of the challenged statutes (August 2001) and dates subsequent to November 21, 2006 should Defendants continue collecting the Document Preparation Fee.

With respect to Asbury, the circuit court granted its motion for summary judgment for immunity from liability, based on the defense of good-faith reliance, “as to the protected time periods between the effective date of the statute until November 21, 2006.” It also granted Asbury's motion on Campbell's claim for unjust enrichment.

On September 28, 2007, Campbell moved to certify a subclass of the litigation. In the motion, Campbell asserted his previous allegation that Asbury “engaged in a deceptive business practice of receiving hidden fees pursuant to Defendants' agreements with third-party lenders.” Campbell's motion asserted that

[t]he undisputed evidence is that Defendants arrange the financing for the customer on the sale or lease of a motor vehicle through third-party lenders. These lenders approve the customer for financing based upon the customer's credit history and establish the interest rate and other terms upon which the customer is approved. Defendants then mark up the approved customer rate and insert a higher rate into the retail installment contract which Defendants prepare for pay. The difference between the customer approved rate and the actual rate Defendants use in the retail installment contract is the Finance Fee that is kicked back to the dealership from the lender.

He averred that the subclass had a “claim for damages for the difference between the customer approved rate and the actual rate the Defendants insert in the retail installment contract they are paid to prepare” and that each of the required elements of Arkansas Rule of Civil Procedure 23 was satisfied. However, on February 12, 2008, the circuit court denied the motion to certify the subclass, finding a lack of typicality, predominance, and superiority. In addition, by order of March 6, 2008, the circuit court rescinded its prior ruling finding Asbury immune from liability, based on the defense of good-faith reliance, from the effective date of the document-fee statutes until November 21, 2006, based on this court's decision in Arkansas Board of Collection Agencies v. McGhee, 372 Ark. 136, 271 S.W.3d 512 (2008).

On July 25, 2008, Asbury filed another motion for summary judgment, asserting that it was entitled to summary judgment on Campbell's ADTPA/documentary-fee claim based on a recent decision by this court, Preston v. Stoops, 373 Ark. 591, 285 S.W.3d 606 (2008). It contended that in Stoops this court held that the ADTPA did not apply to the practice of law, “and, thus, does not apply to claims grounded in the unauthorized practice of law.” The circuit court agreed, and, on October 28, 2008, in a letter opinion, reversed its prior rulings and granted Asbury's motion.2

On November 4, 2008, Campbell filed a third amended complaint, incorporating amended and second amended complaints that had been filed and asserting that Asbury “breached the fiduciary duties the law imposes upon Defendants.” The circuit court, in its order of April 6, 2009, granted a motion by Campbell requesting the circuit court to determine questions of law regarding the legal duty imposed on nonlawyers engaged in the unauthorized practice of law. Campbell subsequently filed a motion for class certification on his breach-of-fiduciary-duty claim relating to the documentary fee. However, in its order of February 21, 2010, the circuit court denied class certification, finding that, while the requirements of Rule 23 were met, the doctrine of one-way intervention precluded certification or the addition of a claim to an existing class after ruling on the merits.

On March 11, 2010, the circuit court issued a Rule 54(b) final order and judgment with certification, in which it made the requisite findings of Ark. R. Civ. P. 54(b). The same day, Campbell filed his notice of appeal. On March 18, 2010, Asbury moved the circuit court to modify its final order and judgment, and the circuit court did so, stating,

Based on all of the Court's rulings in this case to date, summary judgment is granted to Defendants on all claims of the class. All claims of the class are hereby dismissed with prejudice. Pursuant to Rule 54(b)(1), based on all of the Court's rulings to date, the Court directs the entry of Final Judgment on all claims of the class. The Court's Final Order and Judgment was not intended to limit the appeal rights of any party, including Defendants, as to any of the Court's previous rulings on the claims of the class. Furthermore it is not the Court's intent to reverse or set aside any ruling made as of March 11, 2010 as addressed in Plaintiffs' response to the Defendants' Rule 60 motion.

Asbury then filed its notice of cross-appeal, both parties subsequently filed amended notices, and both parties now appeal.

I. Direct Appeal
A. Arkansas Deceptive...

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