Perry v. Household Retail Services, Inc.

• Decision Date: 05 August 1996
• Docket Number: Civil Action No. 95-D-45-N.
• Citation: 953 F.Supp. 1370
• Parties: Shelly PERRY, etc., Plaintiff, v. HOUSEHOLD RETAIL SERVICES, INC., et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

953 F.Supp. 1370

Shelly PERRY, etc., Plaintiff, v. HOUSEHOLD RETAIL SERVICES, INC., et al., Defendants.

Civil Action No. 95-D-45-N.

United States District Court, M.D. Alabama, Northern Division.

August 5, 1996.

C. Knox McLaney, III, Angela L. Kimbrough, McLaney & Associates, Montgomery, AL, James O. Latturner, Edelman & Combs, Chicago, IL, Lynn W. Jinks, III, Jinks, Smithart, Jackson & Daniel, L.L.C., Union Springs, AL, Cathleen M. Combs, Daniel A. Edelman, Charles E. Petit, Edelman & Combs, Chicago, IL, for plaintiff.

John E. Goodman, Norman Jetmundsen, Jr., Charles Keith Hamilton, Julie Scharfenberg Elmer, Andrew J. Noble, III, Bradley, Arant, Rose & White, Birmingham, AL, for Household Retail Services, Inc., Household Intern., Inc.

Edward P. Turner, Jr., Halron W. Turner, Turner, Onderdonk, Kimbrough & Howell, P.A., Chatom, AL, for Best Reception Systems, Inc.

Home Video Electronics, Inc., Douglasville, GA, pro se.

Norman Jetmundsen, Jr., Charles Keith Hamilton, Bradley, Arant, Rose & White, Birmingham, AL, for Household Bank (Illinois), N.A.

MEMORANDUM OPINION AND ORDER

DE MENT, District Judge.

Before the court is defendant Household Retail Services, Inc.'s motion for summary judgment filed November 3, 1995.¹ Also before the court is the plaintiff's motion to strike, filed December 7, 1995, and Household Retail Services, Inc.'s motion to strike, filed February 23, 1996. In ruling on said motions, the court has considered the parties' respective briefs, as well as the replies and responses thereto. After careful consideration of the arguments of counsel, the relevant case law and the record as a whole, the court finds that the defendant's motion for summary judgment is due to be denied. The court also finds that the parties' respective motions to strike are due to be denied as moot.

JURISDICTION

Jurisdiction is proper under 28 U.S.C. § 1331 because the amended complaint alleges violations of the Federal Truth-in-Lending Act, 15 U.S.C. § 1601, et seq. ("TILA") and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq. ("RICO"). The plaintiff also alleges violations of Alabama and Illinois statutory and common law. These purported violations transpired during the same transaction and occurrence as the alleged constitutional deprivations; therefore, the court may assert supplemental jurisdiction over the plaintiff's state law claims. See 28 U.S.C. § 1367(a).² Personal jurisdiction and venue are not contested.

SUMMARY JUDGMENT STANDARD

On a motion for summary judgment, the court is to construe the evidence and factual inferences arising therefrom in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). Summary judgment can be entered on a claim only if it is shown "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). As the Supreme Court has explained the summary judgment standard:

[T]he plain language of Rule 56(c) mandates 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. In such a situation, there can be no genuine issue as to any material fact, since a complete failure of proof concerning an essential element of the non-moving party's case necessarily renders all other facts immaterial.

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The trial court's function at this juncture is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986) (citations omitted). A dispute about a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510; see also Barfield v. Brierton, 883 F.2d 923, 933 (11th Cir.1989).

The party seeking summary judgment has the initial burden of informing the court of the basis for the motion and of establishing, based on relevant "portions of `the pleadings, depositions, answers to interrogatories, and admissions in the file, together with affidavits, if any,'" that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 323, 106 S.Ct. at 2552-53. Once this initial demonstration under Rule 56(c) is made, the burden of production, not persuasion, shifts to the nonmoving party. The nonmoving party must "go beyond the pleadings and by [his] own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex, 477 U.S. at 324, 106 S.Ct. at 2553; see also Fed.R.Civ.P. 56(e).

In meeting this burden the nonmoving party "must do more than simply show that there is a metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). That party must demonstrate that there is a "genuine issue for trial." Fed.R.Civ.P. 56(c); Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356. An action is void of a material issue for trial "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356; see also Anderson, 477 U.S. at 249, 106 S.Ct. at 2510-11.

FINDINGS OF FACT

This action seeks relief from the practices of Household Retail Services, Inc. ("HRSI"), Household Bank (Illinois), N.A. ("HBI"), Household International, Inc. ("HI"), Best Reception Systems, Inc. ("Best") and Home Video Electronics, Inc. ("Home Video") concerning the financing of satellite television dishes. As a result of these practices, consumers allegedly were deprived of critical information to which they were entitled under TILA.

The plaintiff, Shelly Perry, purchased a satellite dish system from defendant Home Video in August, 1994. Pl.'s Amend.Compl. at ¶¶ 11-13 & Exh. A thereto. The plaintiff entered into an agreement with defendant Best, a distributor of satellite dish equipment for whom Home Video is one of its dealers, to finance the purchase of the satellite dish, a warranty and a subscription to a magazine for satellite dish owners. Id. at ¶¶ 11-14 & Exhs. A & C thereto.

The dishes were financed through private label credit cards issued by a joint venture between HRSI and HBI, subsidiaries of HI. Essentially, HRSI has purchased accounts from various Best dealers and purchased the plaintiff's account from Home Video. This private label credit card, entitled a "Powerline Card," purports to be a "credit card" for purchases of products and services only from Best distributors.

In connection with the transaction, Home Video, as the retail dealer, had the plaintiff execute a standardized credit application form, a document entitled "Retail Installment Credit Agreement." The Retail Installment Credit Agreement classified the transaction as an "open end credit arrangement." Id. at 14-23 & Exhs. A & C thereto. However, the plaintiff contends that his account with Home Video was, in fact, a closed-end credit arrangement and that the defendants did not provide him all disclosures required for such loans. Id. at ¶¶ 23 & 49. Specifically, the plaintiff contends that he was not provided with the following material items of information which are required to be disclosed in closed-end credit transactions: (1) the number of payments; (2) the amount of each monthly payment; (3) the amount financed; (4) the total finance charge; (5) the total of payments; and (6) the total sales price.

In Count II, the plaintiff seeks to establish a claim under TILA, based upon alleged nondisclosure of certain information required in a closed-end credit arrangement. The plaintiff asserts that "[b]y employing open end credit disclosures with respect to transactions not legitimately classifiable as open end, the defendants violated TILA § 128, 15 U.S.C. § 1638 and the implementing regulations, 12 C.F.R. § 226.17-18."

In Count II, the plaintiff seeks to establish a claim under RICO, by asserting that HRSI and co-defendants HI and HBI constitute an "enterprise," the affairs of which they conduct through a pattern of mail fraud. The plaintiff specifically alleges that the constituents of this alleged enterprise "fraudulently concealed material information regarding finance charge, total of payments, term of financing agreement, number of payments, amount of each monthly payment, total sale price" from purchasers of satellite systems. The plaintiff further states that the mails were used for (1) sending documents necessary for the origination and servicing of "Retail Installment Credit Agreements" to hundreds of debtors; (2) sending monthly statements to debtors; and (3) receive money from debtors. The plaintiff argues that he "was injured in [his] business and property by being "obligated to pay improperly disclosed finance charges" as a result of this alleged RICO violation.

The plaintiff argues in Count III that the defendants "engaged in unfair and deceptive acts and practices by failing to furnish ... the additional information that would have been furnished had defendants made closed end credit disclosures instead of open end credit disclosures." According to the plaintiff, this failure amounts to a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. ("Illinois Consumer Fraud Act").

Finally, the plaintiff contends in Count IV that the "[d]efendants, through their agents, concealed and...