Evans v. Rudy-Luther Toyota, Inc.

• Decision Date: 15 January 1999
• Docket Number: No. Civ.98-1180 (JRT/RLE).,Civ.98-1180 (JRT/RLE).
• Citation: 39 F.Supp.2d 1177
• Parties: Oneika EVANS, Plaintiff, v. RUDY-LUTHER TOYOTA, INC., a Minnesota Corporation, Defendant.
• Court: U.S. District Court — District of Minnesota

Page 1177

39 F.Supp.2d 1177

Oneika EVANS, Plaintiff, v. RUDY-LUTHER TOYOTA, INC., a Minnesota Corporation, Defendant.

No. Civ.98-1180 (JRT/RLE).

United States District Court, D. Minnesota.

January 15, 1999.

COPYRIGHT MATERIAL OMITTED

Thomas J. Lyons, St. Paul, MN, for Plaintiff.

Gregory J. Johnson, St. Paul, MN, for Defendant.

ORDER

TUNEHIM, District Judge.

Based upon the Report and Recommendation of United States Magistrate Judge Raymond L. Erickson, and after an independent review of the files, records and proceedings in the above-titled matter, it is —

ORDERED:

1. That the Defendant's Motion for Summary Judgment [Docket No. 8] is granted.

2. That Count I of the Plaintiff's Complaint is dismissed with prejudice; and Counts III, IV, and V are dismissed without prejudice.

3. That Judgment is entered accordingly.

REPORT AND RECOMMENDATION

ERICKSON, United States Magistrate Judge.

I. Introduction

This matter came before the undersigned United States Magistrate Judge pursuant to a general assignment, made in accordance with the provisions of Title 28 U.S.C. § 636(b)(1)(B), upon the Defendant's Motion for Summary Judgment. A Hearing on the Motion was conducted on October 28, 1998, at which time the Plaintiff appeared by Thomas J. Lyons, Jr., Esq., and the Defendant appeared by Gregory J. Johnson, Esq.

For reasons which follow, we recommend that the Defendant's Motion be granted, and that the Plaintiff's claim pursuant to the Federal Truth in Lending Act ("TILA"), Title 15 U.S.C. § 1601, et seq., be dismissed with prejudice, as barred by the TILA's one-year limitations period, and that the Court decline to exercise supplemental jurisdiction over the Plaintiff's remaining State law claims.

II. Factual and Procedural History

This is an action brought by a consumer to remedy claimed TILA and related State law violations. These asserted violations are alleged to have occurred when the Defendant sold a vehicle to the Plaintiff without accurately disclosing the finance charges that, the Plaintiff claims, concealed yield spread premiums, or kickbacks, that the Defendant retained from its brokered credit transaction. The Defendant has moved for Summary Judgment, arguing that the action was not commenced within the one-year limitations period for bringing actions pursuant to TILA. See, Title 15 U.S.C. § 1640(e).

On April 26, 1996, the Plaintiff, Oneika Evans ("Evans") purchased a 1990 Plymouth Laser from the Defendant, with a down payment of $1500. Her mother, Bettye Jo Evans, co-signed for the purchase. As part of the sale, Evans bought an extended service contract, to be administered by Wester Diversified Services, Inc., for an additional $900, and she bought credit life and disability insurance for a premium of $847.23.

In order to finance their purchase, Evans and her mother entered an installment contract with the Defendant, financing a total of $8354.73 for the sale price, service contract, and other fees. As financed, at an annual percentage rate of 23.25%, Evans and her mother had agreed to pay a total of $12,398.40 over a period of 42 months. None of these facts are in dispute.

Evans entered an employment relationship with Arcadia Financial on October 15, 1997. After she learned more about warranty and insurance contracts in her new position, Evans "became suspicious that [she] had received a bad deal on the Credit Life Insurance, Credit Disability Insurance and the Extended Warranty contracts." Affidavit of Oneika Evans ¶ 12. She then went to the Defendant's office, and told one of its representatives that she wanted to cancel her insurance and warranty contracts. Id. ¶ 14. The representative wrote her name on a sheet of typing paper, listed the contracts she wanted to cancel, and wrote the word "CANCEL" on the paper. Evans signed it.

In January of 1998, Evans contacted Primus Automotive Financial Services ("Primus"), the agency that had handled the financing of the Plaintiff's vehicle, and asked if, in fact, those contracts had been terminated. The Primus representative responded that the contracts had not been rescinded. Thereafter, on March 21, 1998, Primus repossessed the Evans' Plymouth Laser.

In the meantime, Evans had contacted her attorney in February of 1998, to represent her in the unfolding contractual dispute with Primus and the Defendant. On April 15, 1998 — nearly two years after the Evans and her mother negotiated the retail installment contract — and related agreements, with the Defendant, Evans filed a civil suit in Federal Court. In this suit, she alleges that the Defendant violated the TILA, "by failing to disclose the actual amount of the service contract that was actually paid to the service contract company," and by "fail[ing] to disclose the yield spread premiums." Compl. ¶ 24; see, Title 15 U.S.C. § 1638(a)(2)(B)(iii).¹ She also alleged that the Defendant violated various Minnesota consumer protection Statutes,² committed common law fraud, and breached its fiduciary duties to her.

The Defendant moves for Summary Judgment, emphasizing that the sole Federal claim — under TILA — was not commenced within the time permitted for the bringing of such actions, see, Title 15 U.S.C. § 1640(e), and urging that the Court not exercise supplemental jurisdiction over the remaining State law claims. See, Title 28 U.S.C. § 1367. Evans counters that the limitations period for her Federal claim should be equitably tolled due to the Defendant's assertedly fraudulent concealment of her Federal cause of action. However, she agrees with the Defendant that, if the Federal claim is dismissed, the remaining State law claims should be dismissed as well, in order that she may pursue them in State Court.

III. Discussion

A. Standard of Review. Summary Judgment is not an acceptable means of resolving triable issues, nor is it a disfavored procedural shortcut when there are no issues which require the unique proficiencies of a Jury in weighing the evidence, and in rendering credibility determinations. Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Summary Judgment is appropriate when we have viewed the facts, and the inferences drawn from those facts, in a light most favorable to the nonmoving party, and we have found no triable issue. Prudential Ins. Co. v. National Park Med. Center, Inc., 154 F.3d 812, 818 (8th Cir.1998); Lower Brule Sioux Tribe v. State of South Dakota, 104 F.3d 1017, 1021 (8th Cir.1997), cert. denied, ___ U.S. ___, 118 S.Ct. 64, 139 L.Ed.2d 26 (1997). For these purposes, a disputed fact is "material" if it must inevitably be resolved and the resolution will determine the outcome of the case, while a dispute is "genuine" if the evidence is such that a reasonable Jury could return a verdict for the nonmoving party. See, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Liebe v. Norton, 157 F.3d 574, 578 (8th Cir.1998); Dodd v. Runyon, 114 F.3d 726, 729 (8th Cir.1997).

As Rule 56(e) makes clear, once the moving party files a properly supported Motion, the burden shifts to the nonmoving party to demonstrate the existence of a genuine dispute. In sustaining that burden, "an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavit or as otherwise provided in this Rule, must set forth specific facts showing that there is a genuine issue for trial." Rule 56(e), Federal Rules of Civil Procedure; see also, Anderson v. Liberty Lobby, Inc., supra at 256, 106 S.Ct. 2505; Chism v. W.R. Grace & Co., 158 F.3d 988, 990 (8th Cir.1998). Moreover, the movant is entitled to Summary Judgment where the nonmoving party has failed "to establish the existence of an element essential to [its] case, and on which [they] will bear the burden of proof at trial." Celotex Corp. v. Catrett, supra at 322, 106 S.Ct. 2548; see also, Greer v. Shoop, 141 F.3d 824, 826 (8th Cir.1998); Mayard v. Hopwood, 105 F.3d 1226, 1228 (8th Cir.1997). No genuine issue of fact exists in such a case because "a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex Corp. v. Catrett, supra at 323, 106 S.Ct. 2548; see also, Bell Lumber and Pole Co. v. United States Fire Ins. Co., 60 F.3d 437, 441 (8th Cir.1995); McLaughlin v. Esselte Pendaflex Corp., 50 F.3d 507, 510 (8th Cir.1995); Settle v. Ross, 992 F.2d 162, 163 (8th Cir.1993).

B. Legal Analysis. The TILA provides a Federal cause of action by borrowers against creditors who fail to make the disclosures required by its provisions. See, Title 15 U.S.C. § 1640. Subsection (e) confers Federal and State Court jurisdiction over such claims and, in the same provision, imposes a one-year time limitation for bringing actions, as follows:

(e) Jurisdiction of courts; limitation on actions; State attorney general enforcement

Any action under this subsection may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation. This subsection does not bar a person from asserting a violation of this subchapter in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action, except as otherwise provided.

Title 15 U.S.C. § 1640(e).

Since the sale, and any alleged TILA violation, occurred on April 26, 1996, and because the Complaint was filed until April 15, 1998, this action was clearly not filed within the statutory limitations period. As a consequence, the Defendant's Motion, and the Plaintiff's opposition, present two core issues. The first issue arises from the Defendant's contention that Subsection (e) circumscribes the Court's subject matter jurisdiction, thereby precluding the possibility of any equitable tolling which...