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AZIMI v. FORD MOTOR CO.

August 15, 1997

SIAMAK AZIMI, Plaintiff,
v.
FORD MOTOR COMPANY, a Michigan corporation, Defendant.



The opinion of the court was delivered by: BUCKLO

 The plaintiff, Siamak Azimi, purchased a 1997 Ford F-150 Lariat ("Lariat"), a vehicle manufactured by the Ford Motor Company ("Ford"), from Ron Hopkins Suburban Ford, Inc. ("Ron Hopkins"). The Lariat turned out to be defective and repeated repairs did not correct the problems. The plaintiff sued Ford for violations of the Magnuson-Moss Warranty Act ("Warranty Act") (Counts I and II), 15 U.S.C. § 2301 et. seq., and the Illinois Consumer Fraud and Deceptive Business Practices Act ("Illinois Consumer Fraud Act") (Count III), 815 ILCS 505/1 et seq. (West 1993 & Supp. 1997), and for common law fraud (Count IV). Ford moved to dismiss for a variety of reasons. For the following reasons, the motion is denied.

 I.

 There are two federal law and two state law counts in this complaint. Although a federal statute, the Warranty Act does not automatically confer federal subject matter jurisdiction. A federal court has jurisdiction over a Warranty Act claim only "if the amount in controversy is . . . $ 50,000.00 (exclusive of interests and costs) computed on the basis of all [Warranty Act] claims." 15 U.S.C. § 2310(d)(3); Marchionna v. Ford Motor Co., 1995 U.S. Dist. LEXIS 11408, No. 94 C 275, 1995 WL 476591, at *7 (N.D. Ill. Aug. 10, 1995) ("state claims may not be counted toward Magnuson-Moss' jurisdictional threshold"). Mr. Azimi does not attempt to and I do not consider whether he can establish jurisdiction for Counts I and II under the Warranty Act.

 However, if Mr. Azimi can establish diversity jurisdiction, 28 U.S.C. § 1332(a), with respect to one of his state law counts, the court can assert supplemental jurisdiction, 28 U.S.C. § 1367(a), over the Warranty Act counts, Haslam v. Lefta, Inc., 1994 U.S. Dist. LEXIS 3623, No. 93 C 4311, 1994 WL 117463, at *2 (N.D. Ill. Mar. 25, 1994), and over the remaining state law count, even if it does not meet the amount-in-controversy. ITT Commercial Fin. Corp. v. Unlimited Automotive, Inc., 814 F. Supp. 664, 669 (N.D. Ill. 1992) (Aspen, J.) (exercising supplemental jurisdiction over two counts of four count diversity complaint, where two counts did not satisfy amount in controversy) (relied upon by Haslam, supra); see also Lloyd v. Kull, 329 F.2d 168, 170 (7th Cir. 1964) (where plaintiff's claim for negligence exceeded jurisdictional minimum, while claim for assault and battery was below minimum, court properly asserted jurisdiction over latter claim).

 Since Mr. Azimi is a citizen of Illinois, while the defendant is a citizen of Michigan, the parties are diverse. Ford challenges Mr. Azimi's ability to meet the $ 75,001.00 amount in controversy. *fn1" Where a complaint invokes diversity jurisdiction, "the amount in controversy claimed by a plaintiff in good faith will be determinative on the issue of jurisdictional amount." NLFC, Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 237 (7th Cir. 1995). However, if the defendant challenges the plaintiff's amount allegation, the plaintiff bears the burden of establishing jurisdiction by competent proof, i.e., "proof to a reasonable probability that jurisdiction exists." Id. (quotation omitted). "This burden . . . is not exacting[, as] the plaintiff is entitled to considerable latitude in supporting his allegations; he must be given the benefit of any facts he could conceivably prove in support of his allegations." ITT Commercial Fin. Corp., 814 F. Supp. at 667 (quotation omitted). Ford will prevail only if it appears "to a legal certainty that the claim is really for less than the jurisdictional amount." Id. (quotation omitted).

  In each of his four counts, Mr. Azimi seeks to recover the Lariat's purchase price of $ 27,203.50. This leaves a deficit of $ 47,797.50, which Mr. Azimi seeks to make up by aggregating attorneys' fees, incidental damages, and punitive damages. All of these count towards the amount in controversy and are recoverable under the Illinois Consumer Fraud Act. Gent v. Collinsville Volkswagen, Inc., 116 Ill. App. 3d 496, 451 N.E.2d 1385, 1389-91, 72 Ill. Dec. 62 (1983); see also Sarnoff v. American Home Prods. Corp., 798 F.2d 1075, 1078 (7th Cir. 1986) (attorneys' fees may be included in amount in controversy if provided for by statute); 815 ILCS 505/10a(c) (West Supp. 1997) (court may award reasonable attorneys' fees under Illinois Consumer Fraud Act). Thus, since the Illinois Consumer Fraud Act Count will serve as the jurisdictional anchor for this suit, the issues become (1) whether the Illinois Consumer Fraud Act Count survives a motion to dismiss, and, if so, (2) whether Mr. Azimi can show his entitlement to the attorneys' fees, incidental damages, and punitive damages under the Act to a reasonable probability. *fn2"

 II.

 Fed. R. Civ. P. 12(b)(6)

 Mr. Azimi alleges that the Ron Hopkins salesman made various misrepresentations. Ford argues that the salesman's statements cannot be attributed to it because an agency relationship does not exist between it and the dealership. I agree with the defendant that Ron Hopkins is not Ford's agent merely because it is an authorized Ford dealer or because, in the course of a sale, Ron Hopkins transferred to Mr. Azimi a Ford warranty. Washington v. Courtesy Motor Sales, Inc., 48 Ill. App. 2d 380, 199 N.E.2d 263, 264-65 (1964). However, a dealership may be an agent of the manufacturer. Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 675 N.E.2d 584, 593, 221 Ill. Dec. 389 (1997). An agency relationship exists when one "undertakes to manage some affairs to be transacted for [and] . . . on account of the . . . principal." Wargel v. First Nat'l Bank, 121 Ill. App. 3d 730, 460 N.E.2d 331, 334, 77 Ill. Dec. 275 (1984). "Apparent" agency exists where "a reasonably prudent [person], exercising diligence and discretion, in view of the principal's conduct, would naturally suppose the agent to possess" principal's authority. 460 N.E.2d at 335 (quotation omitted). The existence and scope of an agency relationship are questions of fact for the jury. 460 N.E.2d at 334.

 To plead the existence of an agency relationship, the plaintiff must "allege some factual predicate (even though generalized rather than evidentiary in nature) to create the inference" of agency. Rand Bond of N. Am., Inc. v. Saul Stone & Co., 726 F. Supp. 684, 687 (N.D. Ill. 1989) (Shadur, J.). Mr. Azimi's response *fn3" states that Ford's logo is displayed at Ron Hopkins and on the warranties the plaintiff received, that Ford issues technical bulletins to the dealerships detailing potential vehicle problems, that Ford trains the dealership personnel regarding its warranties, and that the only persons who may repair and maintain the vehicles under warranty are Ford-trained, dealership-based mechanics. These allegations are sufficient to assert the existence of "apparent" agency relationship between Ford and Ron Hopkins (and, therefore, the salesman who interacted with Mr. Azimi). *fn4" See Connick, 675 N.E.2d at 594 (where vehicle manufacturer requires dealers to display logos and trains dealership personnel, a trier of fact may find "apparent" agency relationship); see also Malmberg v. American Honda Motor Co., 644 So. 2d 888, 891 (Ala. 1994) (car manufacturer's logos on dealership's "signs, literature, products, brochures, and plaques," fact that manufacturer "instructs and trains its dealers" and mechanics who work on cars under warranty, and plaintiff's belief that dealership represented manufacturer created issue of material fact as to existence of agency relationship between dealership and manufacturer) (cited in Connick, supra).

 Ford also argues that, even assuming that the salesman's statements are attributable to Ford, they are not actionable under the Illinois Consumer Fraud Act. To state a claim under the Illinois Consumer Fraud Act, the plaintiff must allege "(1) a deceptive act or practice; (2) an intent by the defendant that the plaintiff rely on the deception; and (3) that the deception occurred in the course of conduct involving a trade or commerce." Thacker v. Menard, Inc., 105 F.3d 382, 386 (7th Cir. 1997) (quotation omitted).

 In Count III, Mr. Azimi complains that the salesman misrepresented that the Lariat had no internal defects and that, if any defects were found, they would be promptly and satisfactorily repaired or the vehicle replaced. Ford contends that these allegations concern its warranties and, as such, the claim is for breach of warranty, not fraud. Marchionna, 1995 U.S. Dist. LEXIS 11408, 1995 WL 476591, at *6 ("the Seventh Circuit has cautioned against allowing a plaintiff to turn a simple suit for breach of contract (or warranty) into a claim for fraud"); Golembiewski v. Hallberg Ins. Agency, Inc., 262 Ill. App. 3d 1082, 635 N.E.2d 452, 459-60, 200 Ill. Dec. 113 (1994) ("Every individual breach of contract between two parties . . . does not amount to a cause of action cognizable under the [Illinois Consumer Fraud] Act."). However, the defendant ignores plaintiff's allegation that the Ron Hopkins salesman made the representations knowing from the issuance of Technical Services Bulletins on the Lariat that the facts were otherwise.

 Ford also argues that the salesman's characterization of the Lariat as one of the top vehicles on the market was unactionable opinion or "puffing." Breckenridge v. Cambridge Homes, Inc., 246 Ill. App. 3d 810, 616 N.E.2d 615, 623, 186 Ill. Dec. 425 (1993). However, whether a statement is an opinion or fact depends upon the circumstances of the case, Thacker, 105 F.3d at 386, which are not yet developed at this stage of the litigation. "[A] single transaction is sufficient to establish a claim under the [Illinois] Consumer Fraud Act." Roche v. Fireside Chrysler-Plymouth, Mazda, Inc., 235 Ill. App. 3d 70, 600 N.E.2d 1218, 1227, 175 ...


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