Chrysler Credit cannot be held liable under TILA. Chrysler
Credit's motion to dismiss is therefore granted.
PENDENT CLAIM JURISDICTION — MARCANO
Also to be decided is whether this Court should assume
jurisdiction of Marcano's and Provencio's state common law
claims. United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct.
1130, 16 L.Ed.2d 218 (1966), prescribes a two-tiered analysis
for determining the propriety of pendent jurisdiction.*fn7
First, the Court must have the power to exercise jurisdiction
over the state law claims. Second, assuming judicial power
exists, the Court may exercise pendent jurisdiction if in the
Court's discretion factors of judicial economy, convenience,
and fairness to the litigants make it wise to do so.
A federal court has the power to hear state claims provided
that: (1) there is a substantial federal question; (2) the
federal and state claims derive from a common nucleus of
operative fact; and (3) the plaintiff would ordinarily "be
expected to try" the state and federal claims in one
proceeding.*fn8 383 U.S. at 725, 86 S.Ct. at 1138. In this
case it already has been decided that the plaintiff's federal
TILA claim states a cause of action and that it is
"substantial." A deeper probe must be made into the existence
of the second and third elements of the power inquiry.
What constitutes a "common nucleus of operative fact" does
not lend itself to a precise bright-line determination. Some
courts have construed the common nucleus of operative fact
test as satisfied by substantial transactional identity,
see, e.g., Kimbrough v. O'Neill, 523 F.2d 1057, 1062-63 (7th
Cir. 1975) (Stevens, J., concurring), aff'd, 545 F.2d 1059
(1976) (en banc); Hobby v. Bradley, 388 F. Supp. 1338 (N.D.Ill.
1975) (same chain of events); while other courts require
varying degrees of evidentiary overlap. See, e.g., Scovill Mfg.
Co. v. Dateline Elec. Co., 319 F. Supp. 772, 776 (N.D.Ill.
1970), rev'd on other grounds, 461 F.2d 897 (7th Cir. 1972).
Under any view, however, the test is satisfied in the case at
The thrust of the defendant's argument is that there is no
common nucleus of fact because the federal and state causes of
action are quite different and the facts pertinent to proving
each are dissimilar. It must be remembered, however, that
Gibbs viewed the requirement that the causes of action must be
virtually identical as "unnecessarily grudging," and replaced
it with a broader, more common sense approach to pendent
jurisdiction. In this case, the common root from which the
legal branches of Marcano's complaint spring was her attempt to
purchase and finance an automobile. All the branches share a
common feature, the side loan, which is involved in each link
in the chain of the alleged events that ensued. This Court
views this chain of events, from the initial agreement, the
side loan and the alleged repossession for failure to make a
payment on the loan, to the final agreement, as arising from a
common nucleus of operative fact. See Ford Motor Co. v.
Wallenius Lines, 476 F. Supp. 1362, 1369 (E.D.Va. 1979)
(sequence of events); Hobby v. Bradley, supra (same). With
judicial power to entertain both the state and federal
claims established, this Court, in its discretion, shall
exercise that power.
PENDENT CLAIMS — MARCANO
In Count II of her complaint, plaintiff Marcano sets out a
claim for fraud against defendant Northwestern. Northwestern
has moved to dismiss this count for failure to state a claim.
The allegations relating to the fraud claim set out the
following facts: defendant's President, Mr. Greene,
represented to Marcano that he would not repossess the
automobile if she made the $100 payment due on the side loan.
While plaintiff then made the payment, notwithstanding his
representations, Greene proceeded to repossess the car. It is
alleged that Marcano relied on Greene's representation in
making her payment and that this course of events placed the
plaintiff under duress and caused her to sign the third
installment agreement as required to regain possession of her
Defendant's motion first asserts that the plaintiff's
allegations are insufficient under Fed.R.Civ.P. 9(b) which
requires that allegations involving fraud be pleaded with
specificity. The Court fails to see how plaintiff's
allegations could be more specific in this regard as it
appears that all relevant conduct of the parties relating to
the alleged fraud is clearly set out. When it is considered
that Rule 9(b) must be reconciled with the requirements of
Rule 8, Fed.R. Civ.P. 8, which requires a short and concise
statement of the claim, Felton v. Walston & Co., Inc.,
508 F.2d 577 (2d Cir. 1974), the allegations as set out in the amended
complaint in the instant case are sufficiently specific to
state a claim for fraud.
Defendant also contends that plaintiff's amended complaint
is fatally flawed in that it relies upon a representation of
future conduct as the basis for the charge. As a general rule,
recovery is denied where the allegations of fraud are based on
a false representation of future conduct. Polivka v. Worth
Dairy, Inc., 26 Ill. App.3d 961, 328 N.E.2d 350 (1st Dist.
1975). However, a recognized exception exists where the element
of knowledge of falsehood or scienter is present. Steinberg v.
Chicago Medical School, 69 Ill.2d 320, 13 Ill.Dec. 699,
371 N.E.2d 634 (1977). See, also, Polivka, 26 Ill. App.3d at 966,
328 N.E.2d 350.
Plaintiff's complaint specifically alleged facts
constituting the elements which give rise to a claim of fraud.
According to the Illinois Supreme Court:
A misrepresentation in order to constitute a
fraud must consist of a statement of material
fact, false and known to be so by the party
making it, made to induce the party to act, and,
in acting, the other party must rely on the truth
of the statement.
Steinberg v. Chicago Medical School, 69 Ill.2d at 633, 13
Ill.Dec. 699, 371 N.E.2d 634.
Each of the required factors is well pleaded in plaintiff's
amended complaint. It appears clear that defendant's
statements were false and were made knowing that they were
false and that such material statements induced the
plaintiff's actions in making the payment and in eventually
signing the third financing agreement. As the elements of
fraud are thus sufficiently well pleaded, the defendant's
motion to dismiss Count II of the amended complaint is denied.
Among her pendent claims, plaintiff Marcano alleges that
defendant's repossession of her automobile caused her to be
falsely imprisoned. Defendant has moved to dismiss this claim
for failure to state a claim and argues that no such
confinement in fact existed as plaintiff was free to leave
Northwestern's premises at any time. The Court agrees with the
assertions of defendant.
While it is clear that the modern concept of false
imprisonment does not require that the confinement be by iron
bars and stone walls, Prosser, Handbook of the Law of Torts
§ 11 at 42 (4th ed. 1971), it does require the "unlawful
restraint of individual liberty or freedom of locomotion
against a person's will." Marcus v. Liebman
59 Ill. App.3d 337, 339, 16 Ill.Dec. 613, 59 Ill. App.3d 337
(1st Dist. 1978). In order for a false imprisonment to be
present, there must be an actual or legal intent to restrain.
Campbell v. Kaczmarek, 39 Ill. App.3d 465, 350 N.E.2d 97 (1st
Dist. 1976). Additionally, while actual force is not a
requisite to an action for false imprisonment, Marcus v.
Liebman, as Prosser notes, not every inducement to remain can
rise to the level of false imprisonment.
In the view of this Court, the tort of false imprisonment
contemplates an actual or perceived restraint on the freedom
of the individual allegedly confined. Such a confinement must
be "involuntary." Fort v. Smith, 85 Ill. App.3d 479, 40
Ill.Dec. 886, 407 N.E.2d 117 (5th Dist. 1980). While the facts
as alleged in the instant case appear to show that plaintiff
Marcano may have been justified in choosing to remain with the
automobile and the personal belongings allegedly contained
therein, such a choice does not raise the conduct of defendant
to the level of a false imprisonment. Indeed, when plaintiffs
Marcano and Provencio chose to leave the premises, they were
clearly allowed to do so without interference.
Furthermore, the element of intent required to constitute a
false imprisonment, Campbell v. Kaczmarek, 39 Ill. App.3d 465,
350 N.E.2d 97 (1st Dist. 1976), appears to be lacking from the
instant case. While plaintiff's amended complaint reaches the
conclusion that defendant's actions were taken "with the intent
of restraining plaintiffs," the allegation is without basis in
fact. No assertion of fact as to such an allegation is made nor
is any allegation made as to the rationale or motivation behind
such an asserted intent. The facts as alleged appear to reveal
that defendant's intent was not to confine plaintiff
personally, but only the automobile and its contents.
It is not and cannot be alleged that plaintiff was at any
time restrained from leaving the premises or was even under
the impression that any such confinement applied. As in
Martin v. Lincoln Park West Corp., 219 F.2d 622 (7th Cir.
1955), where it was held that no false imprisonment was present
where an individual subject to no real or perceived restraints
chose to remain with his personal belongings which had been
locked up against his will, the plaintiff in the instant case
was not subject to any false imprisonment and cannot therefore
make such a claim. Count III of plaintiff's amended complaint
is therefore dismissed.
Count IV of plaintiff's amended complaint alleges wrongful
conversion on the part of defendant Northwestern. Defendants'
sole argument as to this count is that it fails to meet the
particularity requirements of Fed.R.Civ.P. 9(b).
Fed.R.Civ.P. 9(b) requires that all averments of fraud or
mistake be pleaded with specificity. Defendant argues that as
the alleged conversion was fraudulent, it falls under the Rule
9(b) requirements. However, the gravamen of the conversion
count does not lie in fraud but constitutes a distinct and
separate cause of action. Where the gist of a particular claim
lies not in fraud but in a totally separate cause of action,
the rules imposed by Fed.R.Civ.P. 9(b) relating to the
specificity of pleading a fraud claim are not applicable. See
Nuest v. Westinghouse Air Brake Company, 313 F. Supp. 1228
(S.D.Ill. 1970). This rule applies notwithstanding that another
aspect of the case, standing alone, may indeed involve fraud.
Thus, the fact that a particular act of conversion was
fraudulent subjects only the allegations specifically relating
to fraud and not the entire case to the Rule 9(b) particularity
requirements. Fraud and conversion are two separate torts and,
even though present in the same transaction, each is subject to
separate pleading rules.
The Court finds that the facts of the instant case relating
to conversion alone are sufficient to state a claim as
presently alleged. Therefore, the defendant's motion to
dismiss Count IV of plaintiff's amended complaint is denied.
PENDENT PARTY JURISDICTION — PROVENCIO
While plaintiff Marcano will be allowed to pursue her state
law claims in this Court, it is apparent that the Court cannot
assume pendent jurisdiction over plaintiff Provencio's state
common law claims. Provencio joins Marcano in two of the state
law claims but does not assert a federal claim on her own
behalf in the instant case. As plaintiff Provencio is
therefore merely a pendent party, federal pendent jurisdiction
must be denied.
While Gibbs v. United Mine Workers, supra, decided the issue
of pendent claim jurisdiction, post Gibbs courts are divided on
whether the Gibbs analysis would apply to pendent party
jurisdiction. It would appear that the Seventh Circuit Court of
Appeals is of the view that the Gibbs analysis does not apply
to pendent party jurisdiction.
In Wojtas v. Village of Niles, 334 F.2d 797 (7th Cir. 1964),
decided prior to Gibbs, the Court expressly held that it would
not recognize pendent party jurisdiction. In a post Gibbs
decision, Hampton v. City of Chicago, 484 F.2d 602 (7th Cir.
1973), cert. denied, 415 U.S. 917, 94 S.Ct. 1413, 39 L.Ed.2d
471 (1973), the Court of Appeals again broadly stated that
pendent party jurisdiction would not be recognized in this
Circuit. However, the Court did not discuss Gibbs, but instead
curtly concluded that Wojtas foreclosed the issue. In its most
recent decision on the subject, Hixon v. Sherwin-Williams Co.,
671 F.2d 1005 (7th Cir. 1982), the Seventh Circuit decided to
reconsider pendent party jurisdiction in light of Gibbs and its
progeny. The Court explained:
This court rejected the concept of pendent party
jurisdiction in [Hampton] But we hesitate to rest
our decision in this case solely on Hampton,
because Hampton based rejection of the pendent
party concept solely on an earlier Seventh Circuit
decision, [Wojtas], which antedated the Supreme
Court's decision in Gibbs. Before Gibbs, the
pendent jurisdiction of the federal courts had been
defined too narrowly to support pendent party
jurisdiction. . . . This court's decision in
Hampton did not address the possible bearing of
Gibbs on the continued authority of Wojtas.
Id. at 1008.
In Hixon, one plaintiff, American States Insurance Co.,
brought a state law claim against the defendant. Federal
jurisdiction was based on diversity, and American States' claim
met the amount in controversy requirement. The other plaintiff,
Hixon, brought a somewhat related state law claim against the
same defendant. However, although Hixon and the defendant were
of diverse citizenship, Hixon's claim fell far short of the
amount in controversy requirement. Hixon argued that he
nevertheless should be granted federal jurisdiction as a
pendent party to American States' diversity action. The court
relied on an analogous case, Zahn v. International Paper Co.,
414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973), in rejecting
this argument. In Zahn, the plaintiffs brought a class action
with federal jurisdiction based on diversity. The Supreme Court
ruled that the federal court could not assume jurisdiction over
the entire class because not all members' claims met the amount
in controversy requirement. The plaintiffs in Hixon were
situated similarly to those in Zahn. Two plaintiffs met the
requirement of diverse citizenship, but one of them failed the
amount in controversy requirement. Thus, the Seventh Circuit
Court read Zahn as calling for rejection of Hixon's pendent
party jurisdiction argument.
It is important to note that in denying pendent party
jurisdiction, the Court did not foreclose the possibility of
pendent party jurisdiction in other factual circumstances:
Pendent party jurisdiction may have other
applications . . ., but we are concerned in this
case only with its use in circumventing the amount
in controversy requirement of diversity
jurisdiction. We limit our holding accordingly.
671 F.2d at 1008. (emphasis added).