Cannon v. Cherry Hill Toyota, Inc.

• Court: New Jersey Supreme Court
• Writing for the Court: Simandle
• Citation: Cannon v. Cherry Hill Toyota, Inc., 161 F.Supp.2d 362 (N.J. 2001)
• Decision Date: 29 August 2001
• Docket Number: No. CIV. 97-3722(JBS).,CIV. 97-3722(JBS).
• Parties: Loetta CANNON, on behalf of herself and all others similarly situated, Plaintiff, v. CHERRY HILL TOYOTA, INC., Defendant.

161 F.Supp.2d 362

Loetta CANNON, on behalf of herself and all others similarly situated, Plaintiff, v. CHERRY HILL TOYOTA, INC., Defendant.

No. CIV. 97-3722(JBS).

United States District Court, D. New Jersey.

August 29, 2001.

Lawrence Lindsay, Loughry & Lindsay, LLC, Camden, NJ, and Lisa Rodriguez, Donna Siegel Moffa, Rodriguez & Richards, LLC, Haddonfield, NJ, and Charles

Riley, Riley & Sandilos, Cherry Hill, NJ, Attorneys for Plaintiff.

Jeffrey Sotland, Mintzer, Sarowitz, Zeris & Ledva, Philadelphia, PA, and Michael Baldassare, George A. Kelman, McElroy, Deutsch & Mulvaney, Morristown, NJ, Attorneys for Defendant.

OPINION

SIMANDLE, District Judge:

This class action consumer fraud case is before the Court on the parties' cross-motions for partial summary judgment pursuant to Rule 56, Fed.R.Civ.P. Plaintiff Loetta Cannon ("Cannon"), on behalf of herself and all others similarly situated, has sued the defendant car dealership, Cherry Hill Toyota, Inc. ("Cherry Hill") alleging violations of the federal Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq. and the New Jersey Consumer Fraud Act ("NJCFA"), N.J.S.A. §§ 56:8-2 et seq. The gravamen of plaintiff's complaint is that Cherry Hill violated TILA and the NJCFA because it made material misrepresentations on form contracts used in connection with the sale of extended automobile warranties, stating that the entire charge for the warranty was paid to others when in fact Cherry Hill Toyota retained a substantial portion for itself as profit or commission.

Cherry Hill has filed the present motion for partial summary judgment seeking dismissal of Counts One and Two, or in the alternative striking plaintiff's demand for actual damages under TILA in Count One and treble damages under the NJCFA in Counts Two and Three of the Complaint. Plaintiff's motion for partial summary judgment conversely seeks judgment in her favor on Counts One and Two.

The main issue for decision in the present cross-motions is whether plaintiff must show detrimental reliance on the offending contract as a prerequisite to recovery under either TILA or NJCFA, or both. More specifically, now that all discovery in the case has concluded, the Court must determine whether there is any evidence of actual damages under TILA, or of "ascertainable loss" under NJCFA, caused by these violations. For reasons now discussed, this Court finds that the plaintiff must make a showing of detrimental reliance in order to obtain "actual damages" under TILA, and must make a similar showing of "ascertainable loss" in order to obtain any damages under NJCFA. As explained in further detail below, plaintiff fails to create a genuine dispute as to whether she suffered actual or ascertainable damages, and the Court will enter partial summary judgment in defendant's favor on Counts One and Two. However, although plaintiff is not entitled to actual or ascertainable damages in this case, defendant's conduct nonetheless violated TILA and NJCFA, and thus plaintiff is entitled to recover statutory damages under TILA and attorneys' fees, as explained below.

PROCEDURAL HISTORY

In order to set the present motions in context, a brief summary of the procedural history of this case follows. On July 29, 1997, Cannon filed a three-count class action complaint against Cherry Hill asserting violation of TILA (Count One), and the NJCFA (Counts Two and Three). On October 7, 1997 plaintiff amended her complaint to assert a new claim under TILA. On October 14, 1997, Cherry Hill filed a motion for partial summary judgment seeking dismissal of Counts One and Two. By Order dated May 11, 1998 the Court struck plaintiff's Amended Complaint and denied Cherry Hill's motion to dismiss Counts One and Two.

This Court certified the Cannon class by Order dated March 26, 1999. Cannon v. Cherry Hill Toyota, Inc., 184 F.R.D. 540 (D.N.J.1999). Defendant filed a motion for reconsideration on April 6, 1999, and the Court temporarily stayed its March 26 Order. On June 3, 1999 defendant filed an additional motion seeking a declaratory judgment that plaintiff's NJCFA claims are preempted by TILA. The Court denied the reconsideration and declaratory judgment motions on July 26, 1999.¹ Defendant appealed, and by Order dated September 1, 1999 this Court denied defendant's motion to stay the proceedings pending appeal. The Third Circuit subsequently dismissed defendant's appeal for lack of jurisdiction on January 19, 2000.

FACTS

As the Court has noted in a published Opinion in this case, plaintiff's complaint stems from her on July 30, 1996 purchase of a used automobile from Cherry Hill Toyota. Cannon, 184 F.R.D. at 542. In addition to the vehicle, Cannon purchased, through defendant, an optional mechanical breakdown protection ("MBP") package from Interstate, Inc. Cannon financed the entire transaction through Cherry Hill Toyota. The transaction was memorialized in a retail sales installment contract, which reflects a charge of $1,167.21 for the MBP in a contract section entitled "Amounts Paid to Others on Your Behalf." Id.

On July 29, 1997, Cannon commenced this action by filing a putative Class Action Complaint. Cannon alleges that Cherry Hill's representation in the "Amounts Paid to Others" section was false and misleading because Cherry Hill retained a portion of that amount for itself without disclosing to Cannon that it was doing so. Cannon further alleges that Cherry Hill routinely makes false and misleading representations to consumers about the amount of money it pays to third parties for MBP on consumers' behalf because Cherry Hill consistently retains a portion of the price while affirmatively misrepresenting and failing to disclose the true distribution of those funds. Id.

Cannon maintains that Cherry Hill's failure to disclose that it was adding a mark-up or "upcharge" to the actual cost of the service warranty, and that defendant's affirmative misrepresentation of the amount actually paid to Interstate on the retail sales installment contract, as to which she financed the entire amount, violates the Truth in Lending Act ("TILA") (Count One), and the New Jersey Consumer Fraud Act ("NJCFA") (Count Two). Cannon also claims that Cherry Hill violated the NJCFA by affirmatively representing to her that the vehicle she bought had front wheel drive when it in fact had rear-wheel drive (Count Three). Id. (Count Three is not a subject of these motions.)

It is important to bear in mind that the present cross-motions pertain only to plaintiff Cannon's individual claims, but may have some bearing on her suitability to act as class representative for approximately 2,300 individuals with claims similar to hers. Within this scope the Court turns to consider the present cross-motions.

DISCUSSION

A. Summary Judgment Standard

The standard for granting summary judgment is a stringent one. A court may grant summary judgment only when the materials of record "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." Fed.R.Civ.P. 56(c). In deciding whether there is a disputed issue of material fact the court must view the evidence in favor of the nonmoving party by extending any reasonable favorable inference to that party. See Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1080-81 (3d Cir.1996); Kowalski v. L & F Prods., 82 F.3d 1283, 1288 (3d Cir.1996); Meyer v. Riegel Prods. Corp., 720 F.2d 303, 307 n. 2 (3d Cir.1983), cert. denied, 465 U.S. 1091, 104 S.Ct. 2144, 79 L.Ed.2d 910 (1984). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Supreme Court decisions mandate that "[w]hen the nonmoving party bears the burden of persuasion at trial, the moving party may meet its burden on summary judgment by showing that the nonmoving party's evidence is insufficient to carry its burden of persuasion at trial." Brewer v. Quaker State Oil Refining Corp., 72 F.3d 326, 329-330 (3d Cir.1995) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). However, "the nonmoving party creates a genuine issue of material fact if it provides sufficient evidence to allow a reasonable jury to find for him at trial." Brewer, 72 F.3d at 330 (citing Anderson, 477 U.S. at 248, 106 S.Ct. 2505). Once the moving party has carried its burden of establishing the absence of a genuine issue of material fact, "its opponent must do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Thus, if the nonmovant's evidence is merely "colorable" or is "not significantly probative," the court may grant summary judgment. Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505.

The standard by which the court decides a summary judgment motion does not change when the parties file cross-motions. Weissman v. United States Postal Service, 19 F.Supp.2d 254 (D.N.J.1998). When ruling on cross-motions for summary judgment, the court must consider the motions independently, Williams v. Philadelphia Hous. Auth., 834 F.Supp. 794, 797 (E.D.Pa.1993), aff'd, 27 F.3d 560 (3d Cir. 1994), and view the evidence on each motion in the light most favorable to the party opposing the motion, see Matsushita, 475 U.S. at 587, 106 S.Ct. 1348.

B. TILA Claim

Plaintiff's Count One states a claim under the federal Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"). TILA requires the lender or creditor, this case Cherry Hill Toyota, to provide "a written itemization of the amount financed," including "each amount that is or will be paid to third persons by the creditor [the dealer here] on the consumer's behalf, together with an identification of...