Pierre v. Planet Auto., Inc., 13–CV–675 (MKB) (JO)

• Citation: 193 F.Supp.3d 157
• Decision Date: 21 June 2016
• Docket Number: 13–CV–675 (MKB) (JO)
• Parties: Ghislaine PIERRE, Plaintiff, v. PLANET AUTOMOTIVE, INC. and American Suzuki Financial Services, Defendants.
• Court: U.S. District Court — Eastern District of New York

193 F.Supp.3d 157

Ghislaine PIERRE, Plaintiff,

v.PLANET AUTOMOTIVE, INC. and American Suzuki Financial Services, Defendants.

13–CV–675 (MKB) (JO)

United States District Court, E.D. New York.

Signed June 21, 2016

Daniel Adam Schlanger, Schlanger & Schlanger, LLP, Pleasantville, NY, Elizabeth A. Shollenberger, Schlanger & Schlanger, LLP, New York, NY, for Plaintiff.

Richard Simon, Law Firm of Richard Simon, Kings Park, NY, for Defendants.

MEMORANDUM & ORDER

MARGO K. BRODIE, United States District Judge

Plaintiff Ghislaine Pierre filed the above-captioned action against Defendants Planet Automotive, Inc. ("Planet") and American Suzuki Financial Services ("Suzuki") on February 6, 2013, alleging violations of the Truth in Lending Act ("TILA") and the Magnuson–Moss Consumer Warranty Act ("MMWA"), and asserting claims of common law fraud and false advertising under New York state law. (Compl. ¶¶ 49–86, Docket Entry No. 1.) Plaintiff's claims arise from her purchase of a vehicle from Planet, a car dealership, and from Suzuki's financing of that purchase. On December 18, 2014, Suzuki moved for summary judgment.¹ (Suzuki Mot. for Summ. J. ("Suziki Mot"), Docket Entry No. 41.) On February 4, 2015, the Court referred Suzuki's motion to Magistrate Judge James Orenstein for a report and recommendation. (Order dated Feb. 4, 2015.) By report and recommendation dated September 11, 2015 ("R&R"), Judge Orenstein recommended that the Court dismiss Plaintiff's TILA and MMWA claims against Suzuki and decline to exercise supplemental jurisdiction over Plaintiff's common law fraud and false advertising claims. (R&R 1, Docket Entry No. 67.) Plaintiff timely filed objections to the R&R. (Pl. Objs. to R&R ("Pl. Objs."), Docket Entry No. 69.) By Memorandum and Order dated September 30, 2015 (the "September 2015 Order"), the Court declined to adopt the R&R as to the Court's exercise of supplemental jurisdiction and reserved decision as to whether to adopt the R&R regarding the merits of Plaintiff's TILA and MMWA claims against Suzuki. Pierre v. Planet Auto., Inc. , No. 13–CV–675, 2015 WL 5793319, at *1 (E.D.N.Y. Sept. 30, 2015). For the reasons discussed below, the Court denies Suzuki's motion for summary judgment as to Plaintiff's TILA claim and state law claims. The Court grants Suzuki's motion for summary judgment as to Plaintiff's MMWA claim.

I. Background

On or about May 5, 2012, Plaintiff purchased a vehicle from Planet. (Compl. ¶ 11; Pl. Revised Rule 56.1 Counter-Statement of Material Facts in Controversy ("Pl. 56.1") ¶ 1,² Docket Entry No. 64; Suzuki Revised Rule 56.1 Statement in Support of Mot. ("Suzuki 56.1") ¶ 1, Docket Entry No. 63.) Plaintiff and Planet agreed on a price of $25,629.00. (Pl. 56.1 ¶ 1; Decl. of Kinney Galani ("Galani Decl.") ¶ 2(d), Docket Entry Nos. 43-1–43-4; Purchase Order 1, annexed to Suzuki 56.1 as Ex. A.) Plaintiff signed a Retail Installment Contract ("RIC"), which lists the vehicle's cash price as $33,877.89, or $31,123.25 without sales tax, and includes various disclosures required by TILA. (RIC 1, annexed to Suzuki Mot. as Ex A.) Plaintiff contends that in order to secure financing for the purchase, she was required to "buy down" the interest rate of her loan by purchasing additional products for the car, which unlawfully increased the price of the car. (Pl. 56.1 ¶ 1.) According to Plaintiff, the cost of the items she was required to purchase as a condition of her financing were included in the cash price listed on the RIC rather than disclosed separately as finance charges. (Pl. 56.1 ¶ 2.)

Plaintiff's loan was subsequently assigned to Suzuki. (Pl. 56.1 ¶ 3; Suzuki 56.1 ¶ 3.) Plaintiff contends that six specific documents that were part of the assignment of the loan to Suzuki reflect Planet's illegal increase in the price of the car and also reflect inaccurate TILA disclosures. (Pl. 56.1 ¶¶ 3–8.) Plaintiff identifies these documents as: (1) a purchase order with a sales price of $25,629, a subtotal of $31,038.25 with certain fees and extra features, and a total price of $34,129.39, including sales tax and more fees, (Purchase Order 1); (2) a sales invoice with a sales price of $31,038.25 and a total price with taxes and fees of $34,129.39, (Sales Invoice 1, annexed to Decl. of Daniel Schlanger ("Schlanger Decl.") as Ex. A, Docket Entry No. 42); (3) a theft deterrent product certificate with a vehicle purchase price of $25,629 (the "Theft Deterrent Certificate"), (Theft Deterrent Cert. 1, annexed to Schlanger Decl. as Ex. E); (4) a "GWC Warranty" contract application with a vehicle price of $25,629 (the "Warranty Application"), (Warranty Appl. 1, annexed to Schlanger Decl. as Ex. F); (5) a manufacturer's invoice with a retail amount of $27,549 and a total retail amount with various upgrades totaling $29,069, (Mfr. Invoice 1, annexed to Schlanger Decl. as Ex. C); and (6) the RIC, listing a cash price of $33,877.89 or $31,123.25 pre-sales tax, (RIC 1).

II. Discussion

a. Standards of review

i. Report and recommendation

A district court reviewing a magistrate judge's recommended ruling "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1)(C). When a party submits a timely objection to a report and recommendation, the district court reviews the parts of the report and recommendation to which the party objected under a de novo standard of review. Id. ; see also United States v. Romano , 794 F.3d 317, 340 (2d Cir.2015). The district court may adopt those portions of the recommended ruling to which no timely objections have been made, provided no clear error is apparent from the face of the record. John Hancock Life Ins. Co. v. Neuman , No. 15–CV–1358, 2015 WL 7459920, at *1 (E.D.N.Y. Nov. 24, 2015).

ii. Summary judgment

Summary judgment is proper only when, construing the evidence in the light most favorable to the non-movant, "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see also Cortes v. MTA New York City Transit , 802 F.3d 226, 230 (2d Cir.2015) ; Tolbert v. Smith , 790 F.3d 427, 434 (2d Cir.2015) ; Zann Kwan v. Andalex Grp. LLC , 737 F.3d 834, 843 (2d Cir.2013). The role of the court "is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists." Rogoz v. City of Hartford , 796 F.3d 236, 245 (2d Cir.2015) (first quoting Kaytor v. Elec. Boat Corp. , 609 F.3d 537, 545 (2d Cir.2010) ; and then citing Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 249–50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). A genuine issue of fact exists when there is sufficient "evidence on which the jury could reasonably find for the plaintiff." Anderson , 477 U.S. at 252, 106 S.Ct. 2505. The "mere existence of a scintilla of evidence" is not sufficient to defeat summary judgment. Id. The court's function is to decide "whether, after resolving all ambiguities and drawing all inferences in favor of the non-moving party, a rational juror could find in favor of that party." Pinto v. Allstate Ins. Co. , 221 F.3d 394, 398 (2d Cir.2000).

b. TILA claim

Judge Orenstein recommended that the Court dismiss Plaintiff's TILA claim against Suzuki. (R&R 8.) He determined that, as an assignee, Suzuki was not liable under TILA because there was no TILA violation apparent on the face of the RIC. (Id. ) Plaintiff argues in opposition to the adoption of the R&R that there is a genuine dispute of material fact regarding whether Suzuki should have known, by comparing the RIC to the other assigned documents, that there was a TILA violation because "the amount financed, APR and/or finance charge listed on [the] RIC [were] not clear, conspicuous and materially accurate." (Pl. Objs. 3.)

"TILA seeks to ‘protect ... consumer[s] against inaccurate and unfair credit billing and credit card practices' and promote ‘the informed use of credit’ by ‘assur[ing] a meaningful disclosure’ of credit terms." Vincent v. The Money Store , 736 F.3d 88, 105 (2d Cir.2013) (alterations in original) (quoting 15 U.S.C. § 1601(a) ). "Together with its implementing Regulation Z, and under specified circumstances, TILA requires disclosure by the ‘creditor’ of, inter alia , the ‘amount financed,’ the ‘finance charge,’ and the ‘number, amount, and due dates or period of payments scheduled to repay the total of payments,’ as well as rescission rights." Crawford v. Franklin Credit Mgmt. Corp. , 758 F.3d 473, 491 (2d Cir.2014) (internal quotation marks omitted) (first quoting 15 U.S.C. § 1638(a) ; then citing 15 U.S.C. § 1635 ; and then citing 12 C.F.R. § 226.23(b)(1) ); see also Midouin v. Downey Sav. & Loan Ass'n, F.A. , 834 F.Supp.2d 95, 102 (E.D.N.Y.2011) ("In general, TILA requires creditors to provide borrowers clear, conspicuous, and accurate disclosures of the loan terms and other material information." (citing 15 U.S.C. § 1632 )). "In order to be considered a finance charge, a charge must be incident to, or a condition of, the extension of credit." Pechinski v. Astoria Fed. Sav. & Loan Ass'n , 345 F.3d 78, 80 (2d Cir.2003) (citing 15 U.S.C. § 1605(a) ); see also Poulin v. Balise Auto Sales, Inc. , 647 F.3d 36, 39 (2d Cir.2011) ("Based on the language of 15 U.S.C. § 1605(a), Regulation Z, and the official staff interpretation, courts have concluded that a creditor is obligated under § 1638(a)(3) to disclose as a finance charge any costs charged to customers buying on credit, but not charged to customers buying with cash, in comparable transactions.").

TILA also requires a "lender or creditor to provide ‘a written itemization of the amount financed,’ including ‘each amount that is or will be paid to third persons by the creditor on the consumer's behalf, together with an identification of or reference to the third person.’ " Gibson v. Bob Watson Chevrolet – Geo, Inc. , 112 F.3d 283, 285 (7th Cir.1997) (alteration omitted) (quoting 15 U.S.C. § 1638(a)...