Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Rajapakse v. Credit Acceptance Corp.

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

April 19, 2018

CREDIT ACCEPTANCE CORP, et al, Defendants.

          Matthew F. Leitman United States District Judge




         Plaintiff filed this complaint against Credit Acceptance Corporation (CAC) and a number of individual defendants on September 8, 2017 relating to a car loan. (Dkt. 1). Plaintiff filed an amended complaint on March 5, 2018. (Dkt. 40).[1] The amended complaint alleges claims under the Fair Credit Reporting Act (FCRA), the Truth in Lending Act (TILA), the Fair Credit Billing Act (which is an amendment to TILA), the Fair Debt Collection Practices Act (FDCPA), and the Magnuson-Moss Warranty Act (MMWA), along with a common-law fraud claim. (Dkt. 40, Amended Complaint). District Judge Matthew F. Leitman referred this matter to the undersigned for all pretrial proceedings. (Dkt. 8).

         Plaintiff filed a number of motions before service of the summons and complaint, including nine motions for “injunctive relief.” (Dkts. 13, 14, 16-18, 25-28).[2] Some, though not all, of the motions include certificates of service, indicating that the particular motions in which they appear were sent to counsel for CAC via email, U.S. mail or both. (Dkts. 13, 14, 25-28).[3] On February 13, 2018, the Court held a telephone conference with plaintiff and defense counsel for the CAC defendants addressing, amongst other things, the briefing schedule for plaintiff's motions for injunctive relief and setting a hearing date. With the Court's permission, plaintiff filed exhibits in support of her motions prior to the hearing. (Dkts. 30, 31). CAC and the individual CAC employee defendants filed a combined response to these motions on February 21, 2018. (Dkt. 32). Plaintiff also filed two motions for summary judgment (Dkts. 9, 12), which she subsequently indicated she would like to withdraw. (Dkt. 16).[4] On February 23, 2018, pursuant to notice, the Court conducted a telephonic hearing on plaintiff's various motions for injunctive relief referenced above. (Dkt. 29). These matters are now ready for report and recommendation.

         For the reasons set forth below, the undersigned RECOMMENDS denying plaintiff's motions for injunctive relief and that plaintiff be required to withdraw two of her motions for summary judgment or withdraw one and seek leave to file the additional motion for summary judgment that she seeks to have heard. (See Dkt. 16 and note 4, supra).


         On January 7, 2014, plaintiff entered into a Retail Installment Contract (RIC) with 1 Stop Auto Sales (the Dealership) for the purchase of a 2007 Chevrolet Trailblazer, which included a service warranty. (Dkt. 32, Ex. 1-A). The RIC provided that plaintiff was to make 48 monthly installment payments of $361.13 each. Id. The RIC explicitly designated CAC as “Assignee” on the contract. Id. Plaintiff says that both the Dealership and CAC told her that she could use the service warranty at any dealership or repair shop. Id. However, she alleges that she repeatedly tried to use the service warranty without success. (Dkt. 40, p. 3). Plaintiff says she told CAC that the warranty was not honored at multiple locations, but CAC refused to remove the warranty from the installment loan. She also sought assistance from the Better Business Bureau, before finally, in July 2016, CAC cancelled the warranty and stated that it would adjust the loan accordingly. (Dkt. 40, p. 4). Plaintiff states that she continued to pay the loan until January 2017. Id. In the meantime, according to the amended complaint, CAC never sent plaintiff any other statements relating to her loan. Id. At some point however, plaintiff reviewed her credit report and noticed that it showed the original balance on her RIC was $10, 889.24 with a past due amount reported by CAC of $5, 624.24. Id. Plaintiff maintains that payments from February 2014 to August 2014 were not reported on her credit report, an omission that caused her credit report (presumably referring to the rating) to be low. Id. The amended complaint also details plaintiff's claim that that her vehicle was wrongfully repossessed on February 4, 2018. (Dkt. 40, p. 4).

         Plaintiff asserts that CAC's actions in this matter violate the TILA. (Dkt. 40, p. 5). She alleges that CAC provides dealers with an incentive to sell warranties on vehicles that have been previously damaged, but the warranties are not honored and later cannot be located. Id. Further, plaintiff complains that CAC continued to demand payment for the warranty, while at the same time disclaiming any responsibility for performing on the warranty. Plaintiff contends that CAC also violated TILA and the MMWA in applying the pro-rated rebate amount of $157.36 because their calculation is wrong. Id. She avers that CAC's actions constitute common law fraud. Id.[5]

         Plaintiff previously filed a similar lawsuit against CAC in 2016 arising out of the same RIC, which was dismissed without prejudice based on the parties' arbitration agreement. (See No. 16-13144, Dkts. 26, 27). As explained in the Report and Recommendation issued by the undersigned in the 2016 case, the RIC contains an agreement to arbitrate, which the undersigned concluded encompassed all claims asserted by plaintiff in that lawsuit. (No. 16-13144, Dkt. 24). The Report and Recommendation was adopted by the District Court and plaintiff's 2016 complaint was dismissed in favor of the arbitration agreement. (No. 16- 13144, Dkts. 26, 27). Plaintiff's motion for reconsideration of the dismissal was denied. (Dkt. 31).

         The principle areas of contention in the instant case mirror those from the 2016 case. Defendants contend that plaintiff did not make all of her monthly installment payments and as a result, her vehicle was repossessed in February 2018. (Dkt. 32, p. 1). Plaintiff maintains that her vehicle should not have been repossessed. More particularly, she posits that had CAC properly credited her the full amount of the warranty ($1, 380), plus accrued interest, her vehicle loan would have been paid off. But instead, CAC only credited her account $157.67 as a partial rebate for the cost of the warranty. (Dkt. 32, Ex. 1-A, Pg ID 230; Dkt. 32, Ex. 1-B, Pg ID 237).

         On February 6, 2018, the undersigned recommended that plaintiff's ex parte motion for TRO be denied based on her failure to comply with Rule 65. (Dkt. 21). Plaintiff filed objections (Dkt. 22) and those objections were overruled by Judge Leitman, noting the following developments in this matter:

The procedural posture of this case has changed significantly in the two weeks since Rajapakse filed the Objections. First, on February 8, 2018, Rajapakse filed new motions seeking the return of her vehicle. (See ECF ## 25-27.) Second, counsel for CAC has appeared in this action. Third, on February 13, 2018, the Magistrate Judge held a telephonic status conference with Rajapakse and counsel for CAC. (See Dkt.) During that call, CAC's counsel “indicated that [Rajapakse's] vehicle will be held and will not be sold before [her] motions for injunctive relief are resolved.” (Id.) Finally, the Magistrate Judge entered a briefing schedule with respect to Rajapakse's motions. (See ECF #29.) CAC filed a response brief on February 21, 2018 (see ECF #32), and a telephonic hearing on Rajapakse's motions is scheduled for February 23, 2018.
The Magistrate Judge has established a fair and an appropriate process for hearing and resolving Rajapakse's motions. Given this new framework for resolving Rajapakse's motions, the Court concludes that it would not be appropriate to grant Rajapakse the extraordinary relief of a temporary restraining order based on the previous ex parte proceedings. Instead, the relief Rajapakse seeks should be granted, if at all, only after consideration of the full record currently before the Magistrate Judge.

(Dkt. 33, pp. 2-3).


         In her first motion for injunctive relief, the specific injunctive relief plaintiff is seeking is not entirely clear. She avers that CAC is retaliating against her for bringing attention to her lawsuit via social media and for her submission of a report by OnSite. Plaintiff says she is “seeking equal protection of this court to keep her from being under duress as she awaits for the court to review the complaint and evidence submitted and being submitted against CAC.” (Dkt. 13, p. 1). Plaintiff requests that an “immediate injunctive order be granted against Credit Acceptance Corporation in the dispute of the warranty.” Id. at 2. In the next motion for immediate injunctive relief against CAC, plaintiff repeats the same allegations, but attaches a memorandum with evidence for the court's consideration. (Dkt. 14). Plaintiff describes the attached evidence as follows:

• “The letter submitted by Sandy Pollack letter to the Michigan Attorney General stated that the previous case filed No. 16-13144 before this court was dismiss due to lack of merits. Ms. Rajapakse case was dismissed WITHOUT PREJUDICE due to Ms. Rajapakse and Credit Acceptance Corporation agreed to arbitrate[] the matter. Credit Acceptance Corporation refused to arbitrate and Ms. Rajapakse refiled her complaint (Evidence/ Exhibit (A-1). The next letter [sic]”
• “The second letter from the Attorney General cites they will keep the information Ms. Rajapakse submitted for any other customer who wanted to file a claim against Credit Acceptance Corporation to show a pattern of practice. (Exhibit/ Evidence A-2)”
• “The third documentation shows that after Ms. Rajapakse submitted the report again to Attorney General and he submitted the letter, Credit Acceptance Corporation sent Ms. Rajapakse a letter of payment for the amount of the allege vehicle which is the amount of the warranty. Ms. Rajapakse had requested on several time [sic] to cancel the warranty.”

(Dkt. 14).

         In her next motion for injunctive relief and to “show cause, ” plaintiff first discusses some service issues in her case, which appear unrelated to her request for injunctive relief. (Dkt. 16).[6] In this motion, she maintains that she does not owe any further money to CAC, and that CAC has refused to remove the warranty plus interest to reflect the true balance paid on the loan. Plaintiff also indicates that the vehicle was repossessed on February 4, 2018. (Dkt. 16). She asserts that CAC's conduct violated her rights under the Fourth and Fourteenth Amendments to the United States Constitution and the Fair Debt Collection Practices Act. She asks for an injunction returning the vehicle to her ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.