Scott v. Nuvell Financial Serv. Llc

• Decision Date: 07 June 2011
• Docket Number: JFM–10–1094.,Civil Case Nos. JFM–09–3110
• Citation: 789 F.Supp.2d 637
• Parties: Randolph SCOTT, Plaintiff,v.NUVELL FINANCIAL SERVICES LLC, et al., Defendants.Gladys Gardner, Plaintiff,v.GMAC, Inc., Defendant.
• Court: U.S. District Court — District of Massachusetts

789 F.Supp.2d 637

Randolph SCOTT, Plaintiff,

v.NUVELL FINANCIAL SERVICES LLC, et al., Defendants.Gladys Gardner, Plaintiff,

v.GMAC, Inc., Defendant.

Civil Case Nos. JFM–09–3110

JFM–10–1094.

United States District Court, D. Maryland.

June 7, 2011.

Martin Eugene Wolf, Benjamin Howard Carney, Quinn Gordon and Wolf Chtd., Towson, MD, Elizabeth A. Ryan, John J. Roddy, Roddy Klein and Ryan, Boston, MA, Mark Harris Steinbach, O. Toole Rothwell Nassau and Steinbach, Washington, DC, for Plaintiff.Kimberly A. Manuelides, Geoffrey M. Gamble, Saul Ewing LLP, Baltimore, MD, for Defendants.

MEMORANDUM

J. FREDERICK MOTZ, District Judge.

Plaintiffs Randolph Scott and Gladys Gardner (“Plaintiffs”) bring these related actions individually and on behalf of a putative class of similarly situated individuals against Nuvell Financial Services LLC, Nuvell National Auto Finance LLC, and GMAC, Inc. (collectively, “Defendants”). Plaintiffs' complaints, which are substantially similar in all material aspects, each allege five counts of statutory and contractual claims, all of which arise from Defendants' alleged misrepresentation that repossessed vehicles would be sold at “public sales.” Because I find that the repossessed vehicles were, in fact, sold at public sales, I will enter summary judgment in favor of Defendants on all counts.

FACTUAL AND PROCEDURAL BACKGROUND

The following facts are uncontroverted or set forth in the light most favorable to the plaintiffs. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587–88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Defendant GMAC is a Delaware financial services corporation headquartered in Detroit. (Gardner Compl. ¶ 9.) Nuvell Financial and Nuvell National are both wholly-owned subsidiaries of GMAC. (Scott Am. Compl. ¶¶ 8–9.) Defendants provide secured automobile financing for prospective car buyers. If a borrower subsequently defaults on a car loan, GMAC is entitled to exercise its contractual right to repossess and sell the borrower's vehicle, with the sale proceeds being applied toward the borrower's remaining balance. Many of GMAC's sales are accomplished through automobile auctions, such as the one run by Manheim Baltimore–Washington (“Manheim”) in this case. Although Manheim's auctions are generally “closed” or “licensed dealer only” auctions, it also conducts sales every other Tuesday which it describes as “public.” These so-called “Tuesday Auctions” are open to the public, but any person who is not a licensed automobile dealer must provide a refundable $1,000 cash deposit in order to attend the auction.¹ The Tuesday Auctions are advertised in the Baltimore Sun—specifically, in the Sunday Classified section relating to the promotion of public auctions. Aside from providing the time and place of the sale, the advertisements also specify certain conditions of the sale, including the $1,000 refundable deposit requirement for members of the public. ( See Defs.' Exs. 1 and 2.)

In November 2007, Plaintiff Scott purchased a Mitsubishi Galant through a retail installment sales contract. (Scott Am. Compl. ¶ 42.) Scott's contract was assigned to Nuvell National and serviced by Nuvell Financial. ( Id. ¶ 15.) Scott subsequently defaulted on his loan, and on February 22, 2009, Nuvell Financial repossessed his vehicle. ( Id. ¶ 16.) On March 17, 2009, Nuvell Financial notified Scott that the vehicle would be sold on March 31, 2009 as part of a public sale at Manheim's so-called “Tuesday auction.” ( Id. ¶ 17.) On April 7, 2009, Nuvell Financial sent Scott a form notice indicating that his car had been sold, detailing the application of the proceeds, and reporting that a deficiency balance of approximately $16,541 remained. ( Id. ¶ 26.)

In July 2006, Plaintiff Gardner purchased a Chevrolet Impala through a retail installment sales contract. (Gardner Compl. ¶ 12.) The sales contract and a security interest in Gardner's vehicle were assigned to GMAC. ( Id. ¶ 15.) When Gardner subsequently failed to make scheduled payments on the vehicle, GMAC exercised its contractual right and repossessed the vehicle. ( Id. ¶ 16.) On December 8, 2009, GMAC sent a notice to Gardner stating that the vehicle would be sold at a “public sale” on Tuesday, January 5, 2010 as part of an auction conducted by Manheim. ( Id. ¶ 17.) The notice further advised Gardner that “you can attend the sale and bring bidders if you want.” ( Id.) The notice did not mention, however, that members of the public would need to provide a refundable $1,000 cash deposit in order to attend the auction. When Gardner attempted to attend the auction, she was denied admission because she could not provide a $1,000 deposit. ( Id. ¶ 26.) After Gardner's vehicle was sold at the auction, GMAC notified Gardner of the sale, detailed the application of the proceeds from the sale, and informed her of the balance remaining due. Specifically, GMAC reported that Gardner's vehicle had sold for $7,700 and that a deficiency balance of approximately $12,196 remained. ( Id. ¶ 28.)

On September 22, 2009, Scott filed a lawsuit against Nuvell National and Nuvell Financial in the Circuit Court for Baltimore County. This suit was removed to federal court on November 20, 2009, and Scott filed an amended complaint on December 22, 2009.² Meanwhile, Gardner filed suit against GMAC on April 30, 2010. Scott and Gardner's suits are nearly identical in all material respects. In addition to involving similar facts, both suits are styled as putative class actions on behalf of Plaintiffs and all others similarly situated, and both allege the same five counts: violation of Maryland's Credit Grantor Closed End Credit Provisions, Md.Code Ann., Com. Law § § 12–1001 et seq. (“CLEC”) (Count I); breach of contract (Count II); declaratory and injunctive relief (Count III); restitution and unjust enrichment (Count IV); and violation of the Maryland Consumer Protection Act, Md.Code Ann., Com. Law §§ 13–101 et seq. (“CPA”) (Count V). Significantly, both suits are also predicated on the factual premise that the Tuesday Auctions were private sales subject to more stringent notice and accounting requirements.

After discovery had begun on the class certification issue, I raised sua sponte the question of whether the Tuesday Auctions were public sales, and I invited Defendants in both cases to file motion for judgment on the pleadings so that, if Defendants' arguments proved meritorious, the cost of discovery, class action briefing, and summary judgment briefing might be avoided.³ Defendants did file a dispositive motion, albeit a motion for summary judgment pursuant to Rule 56, and explained that a Rule 56 motion was appropriate because resolving the legal issue of whether the auctions were public or private “requires the Court to examine publicly available evidence outside the pleadings—advertisements contained ... in the Baltimore Sun—to determine whether and how the auctions in question were advertised.” (Correspondence from Defs., Doc. 55 at 1–2.) Defendants' motions will be granted.

ANALYSIS

I. Standard of Review

Defendants' Motion for Summary Judgment is properly titled, as the newspaper classified advertisements attached to their motion could not be considered in a motion for judgment on the pleadings under Rule 12(c). ⁴ A motion for summary judgment should be granted only if there is no genuine dispute as to a material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A material fact is one that “might affect the outcome of the suit.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine dispute about a material fact exists only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. Although a district court should “draw all justifiable inferences in favor of the nonmoving party,” Masson v. New Yorker Magazine, 501 U.S. 496, 520, 111 S.Ct. 2419, 115 L.Ed.2d 447 (1991), “[t]he party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of its pleadings, but rather must set forth specific facts showing that there is a genuine issue for trial,” Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 525 (4th Cir.2003).

II. Plaintiffs' Request for Discovery

Plaintiffs contend that a summary judgment motion is premature at this stage of the litigation because the parties have yet to complete discovery. Rule 56(d), formerly Rule 56(f), states that “[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may ... defer considering the motion or deny it.” Fed.R.Civ.P. 56(d). Thus, as a general rule, “summary judgment may be refused where the nonmoving party has not had the opportunity to discover information that is essential to his opposition.” Nguyen v. CNA Corp., 44 F.3d 234, 242 (4th Cir.1995) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n. 5, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). Nonetheless, “Rule 56(d) affidavits cannot simply demand discovery for the sake of discovery.” Young v. UPS, Civil No. DKC–08–2586, 2011 WL 665321, 2011 U.S. Dist. LEXIS 14266 (D.Md. Feb. 14, 2011). Rather, to justify a denial of summary judgment on the grounds that additional discovery is necessary, the facts identified in a Rule 56 affidavit must be “essential to [the] opposition.” Id. Accordingly, a nonmoving party's request to permit further discovery is properly denied “where the additional evidence sought for discovery would not have by itself created a genuine issue of material fact sufficient to defeat summary judgment.” Strag v. Bd. of Trs., Craven Cmty. Coll., 55 F.3d 943, 953 (4th Cir.1995); see also Young, 2011 WL 665321, 2011 U.S. Dist. LEXIS 14266 (holding that plaintiff's Rule 56(d) request for further discovery “must be denied, as the additional requested discovery would not...