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Todd v. Midwest Motors Sales & Service Inc.

United States District Court, W.D. Michigan, Southern Division

October 24, 2016




         Plaintiff Mark Allen Todd brings this action against Defendants Midwest Motor Sales & Service, Inc. (“Midwest”), Donald J. Miller, and Eric R. Rittenhouse, alleging violations of federal and state law, including: (1) the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq.; (2) the Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691a et seq.; (3) the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq.; (4) the Odometer Act, 49 U.S.C. § 32701 et seq.; (5) Michigan's Motor Vehicle Sales Finance Act (MVSFA), Mich. Comp. Laws § 492.101 et seq.; (6) breach of contract; (7) Article Nine of Michigan's Uniform Commercial Code (UCC), Mich. Comp. Laws § 440.9101 et seq.; and (8) conversion.

         At the initial scheduling conference on June 20, 2016, Plaintiff indicated that the Michigan Secretary of State had investigated Defendants' conduct and that documents in its possession would likely aid Plaintiff's case. The Court indicated that a settlement conference would be appropriate in this matter and permitted discovery “limited to records of the Secretary of State.” (First Case Management Order, ECF No. 14.) The parties attended a settlement conference and the case did not settle. Before the Court is Defendants' motion for partial summary judgment on Counts I, II, III, IV, V, VII, and VIII of the complaint (ECF No. 16), Plaintiff's motion for partial summary judgment on his conversion claim in Count VIII (ECF No. 17), and Plaintiff's motion for additional discovery (ECF No. 24).


         Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is proper if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. In evaluating a motion for summary judgment the Court must look beyond the pleadings and assess the proof to determine whether there is a genuine need for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). If the moving party carries its burden of showing there is an absence of evidence to support a claim, then the nonmoving party must demonstrate by affidavits, depositions, answers to interrogatories, and admissions on file that there is a genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324-25 (1986). Where the moving party bears the ultimate burden of persuasion at trial, “the moving party's initial summary judgment burden is higher in that it must show that the record contains evidence satisfying the burden of persuasion and that the evidence is so powerful that no reasonable jury would be free to disbelieve it.” Cockrel v. Shelby County School Dist., 270 F.3d 1036, 1056 (6th Cir. 2001) (internal quotation marks and citation omitted). “Summary judgment in favor of the party with the burden of persuasion . . . is inappropriate when the evidence is susceptible of different interpretations or inferences by the trier of fact.” Hunt v. Cromartie, 526 U.S. 541, 553 (1999).

         In reviewing a motion for summary judgment, this Court cannot weigh the evidence, make credibility determinations, or resolve material factual disputes. Alman v. Reed, 703 F.3d 887, 895 (6th Cir. 2013); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (stating that on a motion for summary judgment “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge”). “Instead, the evidence must be viewed, and all reasonable inferences drawn, in the light most favorable to the non-moving party.” Ohio Citizen Action v. City of Englewood, 671 F.3d 564, 569-70 (6th Cir. 2012) (citing Matsushita, 475 U.S. at 587; Biegas v. Quickway Carriers, Inc., 573 F.3d 365, 374 (6th Cir. 2009)). Nevertheless, the mere existence of a scintilla of evidence is not sufficient to create a genuine issue of material fact. Liberty Lobby, 477 U.S. at 252. The proper inquiry is whether the evidence is such that a reasonable jury could return a verdict for the plaintiff. Id.; see generally Street v. J.C. Bradford & Co., 886 F.2d 1472, 1476-80 (6th Cir. 1989).

         Plaintiff opposes Defendants' motion under Rule 56(d), which provides that the nonmoving party can oppose a motion for summary judgment by providing an affidavit or declaration that, “for specified reasons, it cannot present facts essential to justify its opposition[.]” Fed.R.Civ.P. 56(d). In such circumstances, the Court may “(1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.” Id. Plaintiff contends that it cannot respond to the factual assertions in Defendants' motion for summary judgment without further discovery. Rule 56 contemplates entry of summary judgment after “adequate time for discovery.” Celotex, 477 U.S. at 322. “Typically, when the parties have no opportunity for discovery, denying [a Rule 56(d)] motion and ruling on a summary judgment motion is likely to be an abuse of discretion.” CenTra, Inc. v. Estrin, 538 F.3d 402, 420 (6th Cir. 2008). In response, Defendants contend that discovery is not necessary because Plaintiff's claims fail as a matter of law or on the record as presented to the Court.


         The following facts are not disputed. On February 27, 2016, Plaintiff visited Defendant Midwest Motors to purchase a vehicle. He selected a 2013 Kia Optima, and agreed to purchase it by trading in his 2002 Jeep Liberty, making a downpayment of $1, 000, [1]and then paying off the remainder of the purchase price in monthly installments at an interest rate of 6.25%. Before signing the sales contract, he and his mother submitted a credit application to Kalsee Credit Union (“Kalsee”). As a condition for approval by Kalsee, Plaintiff and his mother were required to apply for a new account with Kalsee, and they did so. Plaintiff's credit application was initially approved.[2] Plaintiff signed the sales contract, made the downpayment, signed an application to transfer title to the Kia from Midwest to himself, transferred the license plate from his Jeep to the Kia Optima, turned over the Jeep to Midwest, and then left the dealership with his new vehicle. After Plaintiff left the dealership, Defendants attempted to finalize Kalsee's approval, but Kalsee declined to provide financing. Defendants then attempted to recover the Kia from Plaintiff.[3]

         The following facts are alleged in the complaint (ECF No. 1) or stated in Plaintiff's affidavit (ECF No. 18-9). Before Plaintiff left the dealership, he did not receive copies of any of the documents that he signed. Instead, Defendants gave him a Post-it note with the VIN number for the Kia, which he used to obtain insurance. Approximately one week after the sale, someone from Midwest showed up at Plaintiff's residence and asked his mother to sign a new sales agreement. She refused to do so. A week later, Defendant Rittenhouse allegedly contacted Plaintiff and told him to bring the Kia back to Midwest because his “credit had been denied.” (Compl. ¶ 37, ECF No. 1.)[4] Defendants allegedly claimed that the sales contract contained a condition requiring Plaintiff to qualify for financing.[5] Plaintiff refused their request. Defendants Rittenhouse and Miller then threatened to call the police and to “prosecute” Plaintiff and his mother as “credit criminals, ” telling Plaintiff that he would never receive the title to the Kia, and that he and his mother's credit history would be damaged because Defendants were not going to pay off the loan on the Jeep. (Id. at ¶ 41.) Again, Plaintiff refused. He allegedly told Defendants that he wanted them to honor the sales contract that he had signed.

         Not to be thwarted, Defendants made good on their threats by calling the police and reporting that Defendant had stolen the Kia. But the police contacted Plaintiff and declined to take further action. At that point, Defendants decided to take the matter into their own hands. According to an investigation report by the Michigan Secretary of State, two Midwest employees went to Plaintiff's residence, entered the Kia using a spare key, and drove it back to the dealership. (ECF No. 24-2, PageID.336.) Defendants did not return Plaintiff's Jeep. Defendants sent two additional loan applications to Kalsee in Plaintiff's name. (Id.) They also submitted an application to the state for a “lost title” on the Kia. (Id. at PageID.337.) They did not make payments on the outstanding loan for Plaintiff's Jeep, which was overdue at the time of the state investigation. (Id.)


         The primary legal and factual dispute between the parties is whether or not Midwest's sale of the vehicle to Plaintiff was conditioned upon Kalsee's approval. Midwest claims that the sale to Plaintiff was not finalized because Kalsee refused to provide financing. Plaintiff, on the other hand, contends that he entered into a binding agreement with Midwest to purchase the car in monthly installments, and that Kalsee was involved only as a prospective purchaser of that agreement. Plaintiff contends that Midwest did not, and could not, condition the sale of the vehicle upon its ability to sell the agreement to Kalsee, and thus, Midwest could not revoke the sale after Kalsee decided not to finance the transaction. (Alternatively, Plaintiff contends that Midwest failed to inform him that the sale was conditional.) Several of Plaintiff's claims stand or fall depending upon whether the sale was finalized and binding or was conditioned upon Kalsee's approval. The surest way to resolve this dispute is to examine the terms of the sales contract between Plaintiff and Midwest. However, Plaintiff claims that he was not given a copy of this agreement to take with him when leaving the dealership. Moreover, due to the limited discovery allowed by the Court, he has not had an opportunity to obtain copies of all the relevant sales documents from Defendants. Consequently, for the reasons discussed in more detail below, Plaintiff's and Defendants' respective motions for summary judgment will be denied.

         Count VIII: Conversion

         Plaintiff and Defendants both move for summary judgment on Plaintiff's conversion claim under Michigan statutory and common law. Conversion under common law is “any distinct act of domain wrongfully exerted over another's personal property in denial of or inconsistent with the rights therein.” Foremost Ins. Co. v. Allstate Ins. Co., 486 N.W.2d 600, 606 (Mich. 1992). It is not disputed that Midwest exerted control over the Kia when its employees repossessed it. Moreover, some evidence indicates that Plaintiff had a right to the vehicle when Defendants took it from him. A purchase agreement and retail installment sales contract are attached to Defendants' motion for summary judgment. (Retail Installment Sales Contract, ECF No. 16-6; Purchase Agreement, ECF No. 16-7.) The retail installment sales contract indicates Plaintiff's agreement to purchase the Kia at a specified price, in exchange for his Jeep, a downpayment, and monthly payments of $373.93 to Midwest. (ECF No. 16-6, PageID.215.) It also contains an integration clause, stating that it “contains the entire agreement between [Plaintiff] and [Midwest] relating to this contract, ” and that “[a]ny change to this contract must be in writing” and signed by the parties. (Id. at PageID.216.) This contract contains no provision conditioning the sale of the vehicle on the approval of a financing arrangement with Kalsee or any other third party. Indeed, it refers to Midwest as the “seller - creditor” for the transaction, and it refers to Kalsee as an “assignee” from the seller. (Id. at PageID.215-16.)

         Similarly, the Purchase Agreement indicates Plaintiff's intent to purchase the Kia in exchange for a downpayment and his Jeep. The portion of the agreement provided by Defendants does not contain any language conditioning the sale on Kalsee's approval, but Defendants have not provided the full agreement to the Court, [6] and they apparently have not provided it to Plaintiff. Moreover, Defendants “deny that [the sales] contract contains no lawful provision conditioning the sale of the vehicle and Midwest's extension of credit upon Midwest's subsequent sale of the contract.” (Answer ¶ 4, ECF No. 7.) In addition, Defendants' attorney represented at the initial scheduling conference that “the sale was conditioned upon credit being issued by Kalsee Credit Union.” (Rule 16 Tr., ECF No. 23, PageID.310.) Defendants' statements in its answer and at the scheduling conference are not evidence, but they imply that somewhere in the agreement between Plaintiff and Midwest there is a condition that the sale depended upon approval by Kalsee. At this stage of the proceedings, before ...

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