Pettye v. Santander Consumer, United States, Inc.
| Decision Date | 23 February 2016 |
| Docket Number | Case No. 15 C 7669 |
| Parties | JOYCE PETTYE, Plaintiff, v. SANTANDER CONSUMER, USA, INC., an Illinois Corporation, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
AMY J. ST. EVE, District Court Judge:
On November 24, 2015, Plaintiff Joyce Pettye, individually and on behalf of a class, filed a three-count First Amended Complaint against Defendant Santander Consumer, USA, Inc. ("Santander") alleging violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq. (Count I), the Illinois Motor Vehicle Retail Installment Sales Act ("IMVRISA"), 815 ILCS 375/1, et seq. (Count II), and the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691, et seq. (Count III). Before the Court is Defendant's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Court grants in part and denies in part Defendant Santander's motion.
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted." Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014). Under Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (citation omitted). Under the federal notice pleading standards, a plaintiff's "factual allegations must be enough to raise a right to relief above the speculative level." Id. Put differently, a "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. In determining the sufficiently of a complaint under the plausibility standard, courts "accept the complaint's well-pleaded facts as true and construe the allegations in the light most favorable to the plaintiff." Thulin v. Shopko Stores Operating Co., LLC, 771 F.3d 994, 997 (7th Cir. 2014). When ruling on motions to dismiss, federal courts may consider documents attached to the pleadings without converting the motion to dismiss into a motion summary judgment, as long as the documents are referred to in the complaint and central to the plaintiff's claims. See Adams v. City of Indianapolis, 742 F.3d 720, 729 (7th Cir. 2014); Fed.R.Civ.P. 10(c).
In her First Amended Complaint, Plaintiff, an African-American woman, alleges that Defendant Santander engages in the business of financing sub-prime automobile installment contracts in a discriminatory manner. .) Plaintiff further alleges that on March 5, 2015, she went to Al Piemonte Super Car Outlet, a car dealership located in Northlake, Illinois, to purchase a car for her personal use. (Id. ¶ 69.) After conferringwith members of the dealership's sales staff, Plaintiff decided to purchase a used 2012 Ford Focus for $13,000.00. (Id. ¶ 70.) In conjunction with this purchase, Plaintiff executed a Retail Installment Contract ("RIC"). (Id. ¶ 71.) Plaintiff maintains that Santander is the holder of the RIC and that she has made payments toward the vehicle that is subject of the RIC, and that Santander has collected finance charges pursuant to the RIC. (Id. ¶¶ 72-74.) In addition, Plaintiff alleges that under the terms of the RIC, she is required to make 72 monthly payments of $385.90 at an annual percentage rate of 27.06%. (Id. ¶ 75.) She also alleges that the "amount financed" disclosed in the RIC is $13,537.00, which includes the cash purchase price of the vehicle and other charges. (Id. ¶¶ 76, 77.) The "finance charge" disclosed on the RIC is $14,247.00, therefore, the total sale price listed on the RIC is $29,784.80. (Id. ¶¶ 78, 79.)
Plaintiff further alleges that before signing the RIC, the dealership did not give her any information regarding the "GAP" debt-cancellation addendum, including the amount charged.1 (Id. ¶¶ 81, 104.) She also maintains that the dealership's sales staff provided very little information about the indirect financing arrangement involving Defendant Santander. (Id. ¶ 82.) She states that after soliciting her credit application, the dealership's sales agents represented that they would attempt to obtain financing for her that she would be unable to obtain without their assistance. (Id. ¶ 83.) Plaintiff alleges that after the dealership's representative found out that she was going to put cash down on the vehicle, he stated that "we are going to try to get youapproved - we can do that." (Id. ¶ 84.) According to Plaintiff, at one point the dealership's representative told her that she had been turned down for financing, but that the dealership would obtain the necessary financing for her. (Id. ¶ 85.) Plaintiff alleges that she was at the dealership for approximately three hours, and that, eventually, the dealership's sales staff told her that they had obtained financing for her and then presented her with the RIC. (Id. ¶¶ 86, 87.) Plaintiff contends that this occurred only after she advised the dealership's representative that she was tired and would leave taking her cash down payment with her. (Id. ¶ 88.)
Furthermore, Plaintiff alleges that before dealership staff asked her to sign the RIC, they did not advise her of the required TILA disclosures, orally or in writing, other than being told the amount of the monthly payments she would be obligated to make under the RIC, and the total number of such payments. (Id. ¶ 89.) Instead, when Plaintiff decided to purchase the vehicle, the dealership representatives presented her with a stack of documents containing signature lines marked by the letter X. (Id. ¶ 90.) When they provided Plaintiff with these documents, the dealership's sales staff informed her that they were "her contract," and that she should "sign every signature line marked with an 'X.'" (Id. ¶ 91.) The stack of papers contained not only Plaintiff's RIC, but also a document entitled "GAP ADDENDUM," that purported to sell Plaintiff a debt-cancellation agreement to absolve her of liability for the unpaid balance of the RIC in the event of a total loss of the collateral under certain circumstances. (Id. ¶¶ 92, 93.) The "GAP ADDENDUM" cost Plaintiff an additional charge of $895.00. (Id. ¶ 94.) Plaintiff alleges that the dealership's sales staff did not provide her with a disclosure of the GAP charge and that it was included in the "amount financed," instead of under "finance charges" on her RIC. (Id. ¶¶ 95, 96.) Moreover, Plaintiff contends that the "GAP ADDENDUM" imposed "Program Limits,"including a "Maximum APR" of 24.00% and that the APR on the RIC exceeded the Program Limit, thus rendering the GAP ADDENDUM void and worthless. (Id. ¶¶ 97, 98.) Additionally, Plaintiff alleges that the dealership's sales staff did not inform her before she signed the RIC that she would be presented the opportunity to purchase a GAP ADDENDUM or that any such purchase was not required and would not be a factor in the decision to extend credit. (Id. ¶ 103.) As such, Plaintiff maintains that had she known the GAP ADDENDUM was voluntary, she would not have purchased this coverage. (Id. ¶ 106.) Plaintiff further asserts that the dealership staff imposed the worthless GAP ADDENDUM on her as a result of Santander's discriminatory practice of encouraging dealers to aggressively market such add-ons and interest rate markups after approving the deal at the buy rate when selling vehicles to African-American women. (Id. ¶¶ 108, 111.)2
In Count I of the First Amended Complaint, Plaintiff alleges that Defendant Santander failed to make the required TILA disclosures by including the GAP insurance fee of $895 as a "finance charge." TILA and its implementing Regulation Z "ensure that consumers are given 'meaningful disclosure of credit terms' and to protect consumers from unfair credit practices." Marr v. Bank of Am., N.A., 662 F.3d 963, 966 (7th Cir. 2011) (quoting 15 U.S.C. § 1601(a)). Relevant to Plaintiff's claims, "TILA requires creditors to disclose any finance charges that a consumer will pay under a given credit transaction." Rivera v. Grossinger Autoplex, Inc., 274F.3d 1118, 1121 (7th Cir. 2001) (citing 15 U.S.C. § 1638(a)(3)); see also Walker v. Wallace Auto Sales, Inc., 155 F.3d 927, 930 (7th Cir. 1998) (). Moreover, "disclosures made in compliance with these requirements must be clear and conspicuous as well as in writing." Rivera, 274 F.3d at 1121 (citing 12 C.F.R. § 226.17(a)(1)). "Conspicuousness is a question of law under TILA that, like clarity, is governed by an objective, reasonable person approach." Id. at 1122.
The parties agree that Defendant Santander was not the originator of the RIC, but is the assignee. An assignee is liable only where the TILA violation appears on the face of the disclosure statement. See 15 U.S.C. § 1641(a) (). A violation is "apparent" under § 1641(a) if it is "(1) a disclosure which can be determined to be incomplete or inaccurate from the face of the disclosure statement or other documents...
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