Renner v. Derin Acquisition Corp.

• Citation: 676 N.E.2d 151,111 Ohio App.3d 326
• Decision Date: 13 May 1996
• Docket Number: No. 69181,69181
• Parties: RENNER, Appellant, v. DERIN ACQUISITION CORPORATION et al.; Royal Chevrolet GEO et al., Appellees. *
• Court: Ohio Court of Appeals

Page 326

111 Ohio App.3d 326

676 N.E.2d 151

RENNER, Appellant, v. DERIN ACQUISITION CORPORATION et al.; Royal Chevrolet GEO et al., Appellees. ^*

No. 69181.

Court of Appeals of Ohio,

Eighth District, Cuyahoga County.

Decided May 13, 1996.

Philip D. Althouse, Cleveland; Tate & Renner and Richard R. Renner, Dover, for appellant.

Joseph W. Diemert, Jr., & Associates Co., L.P.A., and Laura J. Gentilcore, Cleveland, for appellee Royal Chevrolet GEO.

PORTER, Judge.

Plaintiff-appellant Carol B. Renner appeals from a judgment following a jury trial rendered against her for $737 plus interest in favor of defendant-appellee Derin Acquisition Corporation arising out of her purchase of a GEO Prizm automobile with a General Motors ("GM") employee discount purchase certificate. Plaintiff also appeals from a $6,000 award of attorney fees to defendant pursuant to R.C. 1345.09(F)(1) of the Consumers Sales Practices Act. Plaintiff contends that the trial court erred in denying her motion for summary judgment on her CSPA claims and granting summary judgment to defendants thereon, in failing to submit certain interrogatories to the jury, in failing to direct a verdict, grant j.n.o.v. or a new trial in plaintiff's favor on defendant's fraud counterclaim, and in awarding attorney fees to defendant without a hearing. We find merit to the appeal. For the reasons hereinafter stated, we affirm in part, reverse in part and remand the cause for further proceedings.

The events leading to this action began on October 9, 1993 when plaintiff went to Royal Chevrolet GEO in Aurora, Ohio to purchase a 1994 GEO Prizm automobile. Royal is the trade name of Derin Acquisition, which is a franchised dealer of Chevrolet Division of GM. Plaintiff had with her a GM employee discount certificate which she received from her son who was a former employee of GM.

GM provides employee discount certificates as a benefit to its employees. The certificate entitles the employee to a specified discount depending on the make of the car and a different discount percentage for various options. The employee discount is extended to family members of the employee including parents. As part of its franchise agreement with its dealers, GM requires dealers to accept the employee discount certificate which are redeemed by GM for the amount of the discount when presented by the dealer.

The certificate issued to plaintiff's son did not contain any time limit for validity. It included an 800 number directed to the employee inviting any questions. Plaintiff believed the certificate was valid for one year from date of issuance, as her son told her this when he gave the certificate to her in February 1993. Her son resigned from GM in March 1993, six months before she presented the certificate.

On October 9, 1993, plaintiff took the discount certificate to Royal. Between twenty and thirty percent of Royal's sales involve GM employee discounts. Before plaintiff's transaction, Royal had never had a certificate rejected by GM as invalid. The employees at Royal assumed that eligibility is determined by GM before the certificate is issued. Royal had no practice of verifying the validity of the certificates before consummating the sale. Neither Royal nor plaintiff had a copy of GM's discount certificate policy, which indicated that ex-employees and their relatives were not eligible for the discount. Royal viewed employee discount certificates as an agreement between GM and the employee. Royal has no policy requiring its employees to integrate all terms of a vehicle purchase into the sales agreement.

When plaintiff entered Royal's showroom, she met a sales representative, Chris Nielsen. Plaintiff presented the employee discount certificate she received from her son. Nielsen made a copy of the certificate. Plaintiff had various questions about how Royal would handle the certificate and Nielsen answered those questions. She testified that she asked Royal employees if her certificate was still valid if her son had stopped working for GM. Although she testified that no one told her the certificate was valid, she stated that they "seemed" to think it was all right.

Nielsen also testified that he believed that the certificate was valid when plaintiff presented it. He stated that plaintiff told him that her son was a GM employee and that she was entitled to a GM discount. He testified that he did not recall plaintiff asking if the certificate was valid and that if she had asked, he would not have been able to give her an answer and would have directed her to someone who could.

Plaintiff placed an order with Royal that day for a GEO Prizm. The order price for the vehicle was $13,026. Charles Steward, the sales manager, testified that this amount was $737 less than Royal expected to receive for the vehicle since Royal anticipated that GM would honor the employee discount. Royal's GEO Order Worksheet, dated October 9, 1993, notified GM of plaintiff's employee certificate number, 2316641. The invoice from GM to the dealer identified plaintiff as the GM employee who was purchasing the car and specified $737 as the discount. The discount was presented to plaintiff as thirteen percent of the base price, plus eighteen percent of the options. Plaintiff paid a deposit of $1,500 on the purchase with a credit card charge that was honored.

On December 10, 1993, plaintiff returned to Royal to pick up the car. On that date, she signed a contract for the purchase of the vehicle. At the time of signing the contract, no one at Royal told plaintiff about the requirements for the GM employee discount certificate program. Royal had taken no action to determine the validity of the certificate. Plaintiff at this time also signed a GM form acknowledging delivery of the car pursuant to the program. This same form had a place for the dealer to certify that "these Eligibility Rules applicable to a dealer have been complied with."

The December 10 purchase agreement contains no provision allowing Royal to increase the purchase price, nor did the agreement state that the price was contingent upon meeting the requirements of GM's employee discount policy. Plaintiff paid the balance due on the contract, partly in cash and partly by a credit card charge.

Only after plaintiff had driven away with the car did Royal learn that GM would not honor her certificate. Steward testified that after plaintiff had purchased the car, Royal then applied to GM to receive the payment of the discount. It was then that GM told Royal that the certificate was no longer valid and that GM would not reimburse Royal for the $737 discount.

On December 17, 1993, Nielsen telephoned plaintiff to inform her that GM would not honor the certificate and requested that she pay an additional $737. Plaintiff refused, but offered to return the car. Nielsen said he did not know if she should return the car.

In December 1993 or January 1994, a GM representative called plaintiff to tell her that the certificate was invalid and asked her to tell her son that the other three certificates issued to him were no longer valid.

On January 8, 1994, plaintiff called Royal to ask about her certificate of title. A Royal employee told her that the paper work for her title would be done soon and she could use her old license plates in the meantime. The Ohio Certificate of Title registered with the Clerk of Courts on January 11, 1994, but never delivered to plaintiff, listed a price of $13,121.85, which was identical with the total selling price listed on the December 10 agreement. However, Royal's owner, Steven Derin, decided not to deliver plaintiff's vehicle title to her because of her refusal to pay the additional $737.

On January 19, 1994, Royal's attorney, Laura Gentilcore, sent a certified letter to plaintiff demanding payment of the $737. It advised that unless payment was made within ten days, legal action would be taken against her. It also stated that plaintiff had misrepresented to Royal the validity of the discount certificate. The letter did not contain any notice to plaintiff that the letter was an attempt to collect a debt, nor did it inform her of her right to dispute the alleged debt.

After receiving the letter, plaintiff called Nielsen's supervisor, Charles Steward. Plaintiff said that she was very upset, and Steward agreed to check into the matter. Steward later called plaintiff and told her that it was out of his hands. He could not do anything for her. Plaintiff called Royal's title office and learned that the dealership was holding her title and would not deliver it to her. Plaintiff sought legal advice.

Plaintiff filed the instant action on March 23, 1994, seeking relief under the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. 1692, and the Ohio Consumer Sales Practices Act ("CSPA"), R.C. Chapter 1345. She named as defendants Derin Acquisition Corporation ("Derin"), Chris Nielsen, and their attorney Laura Gentilcore.

On April 21, 1994, defendant Gentilcore served a motion to dismiss herself from the action under Civ.R. 12(B)(6). Plaintiff opposed the motion. On July 12, 1994, the trial court treated the motion as one for summary judgment and granted the dismissal. Plaintiff filed a motion to disqualify Gentilcore as counsel for Royal, which was denied.

Defendants Derin, Chris Nielsen and Laura Gentilcore filed answers and counterclaims. They claimed that plaintiff owed $737 for damages based on her fraud in tendering an invalid discount certificate and sought attorney fees for her filing of a groundless complaint in bad faith under R.C. 1345.09(F)(1) of the CSPA.

After discovery, the parties filed cross-motions for summary judgment, supported by affidavits and discovery materials. On April 7, 1995, the trial court overruled plaintiff's motion for summary judgment, but granted summary judgment to defendants, dismissing all of plaintiff's claims without explanation or opinion. The trial court set the matter...