Morales v. Walker Motors Sales, Inc.

• Decision Date: 22 September 2000
• Docket Number: No. C-3-98-002.,C-3-98-002.
• Citation: 162 F.Supp.2d 786
• Parties: Catalina MORALES, et al., Plaintiffs, v. WALKER MOTORS SALES, INC, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

162 F.Supp.2d 786

Catalina MORALES, et al., Plaintiffs, v. WALKER MOTORS SALES, INC, et al., Defendants.

No. C-3-98-002.

United States District Court, S.D. Ohio, Western Division.

September 22, 2000.

Ronald Burdge, Dayton, OH, for plaintiffs.

Michael Sandner, Dayton, OH, James Ball, Columbus, OH, Daniel Buckley, Cincinnati, OH, for defendants.

DECISION AND ENTRY SUSTAINING MOTION FOR SUMMARY JUDGMENT OF DEFENDANT WALKER MOTORS SALES, INC. (DOC. # 25); JUDGMENT TO BE ENTERED IN FAVOR OF DEFENDANTS AND AGAINST PLAINTIFFS; TERMINATION ENTRY.

RICE, Chief Judge.

On or about June 19, 1997, Plaintiffs Catalina Morales ("Morales") and Raphael Ruiz ("Ruiz") contracted to purchase a 1993 Chevrolet Lumina from Defendant Walker Motors Sales, Inc. ("Walker").¹ As part of that transaction, the Plaintiffs entered into a financing arrangement, whereby they borrowed the purchase price of that automobile from Defendant National City Bank ("NCB"). To accomplish that end, the Plaintiffs, while at the car dealership, filed out a loan agreement using a blank form supplied by NCB.

In this litigation, the Plaintiffs claim that the Defendants violated the Ohio Consumer Sales Practices Act ("OCSPA"), Chapter 1345 of the Ohio Revised Code, and a rule adopted by the Federal Trade Commission ("FTC"), relating to holder-in-due-course status ("FTC Holder Rule" or "Rule"), 16 C.F.R. § 433, et seq. Under that Rule, it is an unfair or deceptive act or practice for a seller of consumer goods to take or to receive a consumer credit contract which fails to contain the following provision in at least ten-point, bold face, type:

NOTICE

ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.

16 C.F.R. § 433.2(a). Although the requisite notice appears in bold on the back side of the Plaintiffs' loan agreement with NCB, they contend that the notice is printed in less than ten-point type.² The Plaintiffs contend that this shortcoming violated the FTC Holder Rule and the OCSPA. Although the Plaintiffs have brought this litigation as a class action, they have not requested that this Court certify it as such.

This case is now before the Court on Walker's Motion for Summary Judgment (Doc. # 25).³ As a means of analysis, the Court will initially set forth the standards which are applicable to all such motions, following which it will turn to the parties' arguments in support of and in opposition to the instant such motion.

Summary judgment must be entered "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." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Of course, the moving party:

always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact.

Id. at 323, 106 S.Ct. 2548. See also Boretti v. Wiscomb, 930 F.2d 1150, 1156 (6th Cir. 1991) (The moving party has the "burden of showing that the pleadings, depositions, answers to interrogatories, admissions and affidavits in the record, construed favorably to the nonmoving party, do not raise a genuine issue of material fact for trial.") (quoting Gutierrez v. Lynch, 826 F.2d 1534, 1536 (6th Cir.1987)). The burden then shifts to the nonmoving party who "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quoting Fed.R.Civ.P. 56(e)). Thus, "[o]nce the moving party has met its initial burden, the nonmoving party must present evidence that creates a genuine issue of material fact making it necessary to resolve the difference at trial." Talley v. Bravo Pitino Restaurant, Ltd., 61 F.3d 1241, 1245 (6th Cir.1995). Read together, Liberty Lobby and Celotex stand for the proposition that a party may move for summary judgment by demonstrating that the opposing party will not be able to produce sufficient evidence at trial to withstand a directed verdict motion (now known as a motion for judgment as a matter of law. Fed.R.Civ.P. 50). Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir.1989).

Once the burden of production has so shifted, the party opposing summary judgment cannot rest on its pleadings or merely reassert its previous allegations. It is not sufficient to "simply show that there is some metaphysical doubt as to the 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). See also Michigan Protection and Advocacy Service, Inc. v. Babin, 18 F.3d 337, 341 (6th Cir.1994) ("The plaintiff must present more than a scintilla of evidence in support of his position; the evidence must be such that a jury could reasonably find for the plaintiff."). Rather, Rule 56(e) "requires the nonmoving party to go beyond the [unverified] pleadings" and present some type of evidentiary material in support of its position. Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548. Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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). Summary judgment shall be denied "[i]f there are ... `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.'" Hancock v. Dodson, 958 F.2d 1367, 1374 (6th Cir.1992) (citation omitted). Of course, in determining whether a genuine issue of material fact exists, a court must assume as true the evidence of the nonmoving party and draw all reasonable inferences in the favor of that party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505 (emphasis added). If the parties present conflicting evidence, a court may not decide which evidence to believe, by determining which parties' affiants are more credible; rather, credibility determinations must be left to the fact-finder. 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure, § 2726. In ruling on a motion for summary judgment (in other words, in determining whether there is a genuine issue of material fact), "[a] district court is not ... obligated to wade through and search the entire record for some specific facts that might support the nonmoving party's claim." InterRoyal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir. 1989), cert. denied, 494 U.S. 1091, 110 S.Ct. 1839, 108 L.Ed.2d 967 (1990). See also L.S. Heath & Son, Inc. v. AT & T Information Systems, Inc., 9 F.3d 561 (7th Cir.1993); Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915 n. 7 (5th Cir.), cert. denied, 506 U.S. 832, 113 S.Ct. 98, 121 L.Ed.2d 59 (1992) ("Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment...."). Thus, a court is entitled to rely, in determining whether a genuine issue of material fact exists on a particular issue, only upon those portions of the verified pleadings, depositions, answers to interrogatories and admissions on file, together with any affidavits submitted, specifically called to its attention by the parties.

Walker contends that it is entitled to summary judgment on Plaintiffs' claims under both the FTC Holder Rule and the OCSPA. As a means of analysis, the Court will initially discuss the Plaintiffs' federal claim, following which it will turn to their state law claim.

I. FTC Holder Rule

Walker argues that it is entitled to summary judgment on the Plaintiff's claim under that Rule, because an implied private right of action to enforce it does not exist.⁴ This Court agrees. Although the Sixth Circuit has not addressed this precise issue, it has indicated that federal regulations themselves cannot create a private right of action, since that authority is within the exclusive province of Congress, and that, therefore, the issue of whether there is a private right of action under a particular regulation can be ascertained only by examining the congressional legislation under which it was promulgated. Smith v. Dearborn Financial Services, 982 F.2d 976, 979 (6th Cir.1993) (holding that there is not an implied private right of action under regulations adopted pursuant to the Federal Credit Union Act, 12 U.S.C. § 1751, et seq., since no such cause of action exists under that statute). The FTC Holder Rule was adopted pursuant to § 5 of the Federal Trade Commission Act ("FTCA"), 15 U.S.C. § 45, which outlaws unfair and deceptive acts and practices in or affecting commerce. See 16 C.F.R. § 433.2 (indicating that failure to include the requisite notice is a deceptive and unfair practice under § 5 of the FTCA). Courts have uniformly held that a private right of action does not exist under § 5 of the FTCA. See e.g., American Airlines v. Christensen, 967 F.2d 410 (10th Cir.1992); Fulton v. Hecht, 580 F.2d 1243 (5th Cir. 1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1789, 60 L.Ed.2d 241 (1979); Alfred Dunhill, Ltd. v. Interstate Cigar Co., 499 F.2d 232 (2nd Cir.1974); Holloway v. Bristol-Myers Corp., 485 F.2d 986 (D.C.Cir.1973); Carlson v. Coca-Cola Co., 483 F.2d 279 (9th Cir.1973); St. Martin v. KFC Corp., 935 F.Supp. 898 (W.D.Ky.1996); Child World, Inc. v. South Towne Centre, Ltd., 634 F.Supp. 1121 (S.D.Ohio 1986). In Holloway, the ...