United States District Court, N.D. Illinois, Eastern Division
September 19, 2005.
APRIL MILLER, Plaintiff,
RIVER OAKS LINCOLN-MERCURY, INC., Defendant.
The opinion of the court was delivered by: CHARLES KOCORAS, District Judge
This matter comes before the court on the motion of Defendant
River Oaks Lincoln-Mercury, Inc. ("River Oaks") for summary
judgment in its favor on the complaint of Plaintiff April Miller.
For the reasons set forth below, the motion is denied.
River Oaks is a Lincoln-Mercury dealership that sells both new
and used cars to consumers. In September 2003, Miller went to
River Oaks in response to a coupon she received in the mail. It
stated that she was approved to purchase a car if she presented
documents such as a driver's license, proof of residency, and a
utility bill. Once at River Oaks, Miller spoke with a saleswoman named
Bridget Powell. After looking at several different models, Miller
settled on a 1997 Ford Taurus. She provided information for a
credit application and signed a retail installment contract for
the car. The contract specified that Miller would trade in her
current car, a Saturn, for a $500 credit toward the purchase
price. She also signed a contract rider, which stated that "[t]he
parties intend that this contract will be assigned by [River
Oaks] to a sales finance agency of [River Oaks'] choice."
According to Miller, before she left the dealership, she asked
Powell if she had financing for the car. Powell responded that
Miller would not be able to leave the lot in the Taurus if she
wasn't financed. Miller left her Saturn at River Oaks and
departed in the Taurus.
River Oaks then submitted Miller's application to several
potential creditors. Each notified River Oaks that they would not
extend credit to Miller, but apparently only one notified Miller
herself. About one month after Miller's first visit to the
dealership, she was contacted by River Oaks and informed that her
financing had not gone through. She returned to the dealership,
and the parties executed another sales contract. For this one,
River Oaks increased the trade-in allowance to $1000 but now
required Miller to pay a $600 down payment. Because Miller did
not have $600 to pay, she provided River Oaks with two postdated checks for the amount.
By October 24, Miller returned with a combination of cash and
money orders totaling $600.
Over the ensuing three weeks, Miller had some phone contact
with River Oaks employees. On November 10, 2003, River Oaks sent
Miller a letter at her home address stating that she would be
reported as having stolen the car if she did not return it to the
dealership within 48 hours of receiving the letter. It also
stated that Miller had been informed that she could not receive
financing for the car. When she received the letter, Miller
forwarded it to her counsel and informed River Oaks that any
further attempts to communicate with her would need to be
directed to her attorney.
Despite the breakdown in the parties' relations, River Oaks
continued to seek financing on Miller's behalf and ultimately
succeeded in doing so in May 2004, seven months after the
execution of the second sales contract. At this time, Miller
still retained possession of the Taurus. On September 17, 2004,
Miller filed the instant suit, alleging violations of the Equal
Credit Opportunity Act ("ECOA") and the Illinois Consumer Fraud
Act ("ICFA") as well as common-law fraud.
River Oaks apparently had made good on its threat to report the
Taurus as stolen, because Miller was arrested for possession of a
stolen vehicle during a traffic stop shortly after the complaint
was filed. The police returned the Taurus to River Oaks,
whereupon River Oaks returned Miller's Saturn and $600 down
payment to her. The parties have completed discovery, and River Oaks now moves
for summary judgment on all counts of the complaint.*fn1
Summary judgment is appropriate when the record, viewed in the
light most favorable to the nonmoving party, reveals that there
is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law. Fed.R.Civ.P.
56(c). The moving party bears the initial burden of showing that
no genuine issue of material fact exists. Celotex Corp. v.
Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548 (1986). The burden
then shifts to the nonmoving party to show through specific
evidence that a triable issue of fact remains on issues on which
the nonmovant bears the burden of proof at trial. Id. The
nonmovant may not rest upon mere allegations in the pleadings or
upon conclusory statements in affidavits; it must go beyond the
pleadings and support its contentions with proper documentary
evidence. Id. The court considers the record as a whole and draws
all reasonable inferences in the light most favorable to the
party opposing the motion. Bay v. Cassens Transport Co.,
212 F.3d 969, 972 (7th Cir. 2000). A genuine issue of material fact
exists when "the evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Insolia v. Philip Morris, Inc., 216 F.3d 596,
599 (7th Cir. 2000); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). With these principles in mind, we consider the
A. ECOA Claim
The ECOA places certain obligations on creditors, a group
defined to include persons who regularly arrange for the
extension, renewal, or continuation of credit.
15 U.S.C. § 1691a(e). Under the ECOA, an adverse action occurs with respect
to a credit applicant when credit is denied or revoked, when the
terms of an existing credit arrangement change, or when a
creditor refuses to grant credit in substantially the amount or
according to the terms requested by the credit applicant.
15 U.S.C. § 1691(d)(6). When adverse action is taken against a
credit applicant, the creditor must provide the applicant with a
statement of reasons why the action occurred.
15 U.S.C. § 1691(d)(2). Unless the creditor acts on fewer than 150 credit
applications per year, the statement must be in writing.
15 U.S.C. § 1691(d)(2), (5). Failure to comply with these
requirements exposes the creditor to liability for actual as well
as punitive damages. 15 U.S.C. § 1691e(a), (b). It is undisputed in this case that Miller was twice denied
credit with respect to her purchase of the Taurus. It is
similarly undisputed that River Oaks did not provide her with a
written statement of reasons why she was denied credit. River
Oaks contends that, because it forwarded Miller's credit request
to other parties, it was not a creditor within the meaning of the
ECOA. As a result, it argues, it had no legal duty to supply
Miller with the reasons for the denials. River Oaks concedes that
it may have participated in the credit decision made with respect
to the second sales contract, thus bringing it within the scope
of the ECOA's definition of "creditor." See Treadway v.
Gateway Chevrolet Oldsmobile, Inc., 362 F.3d 971, 979-80 (7th
Cir. 2004); 12 C.F.R. § 202.2(l). However, they insist that the
eventual extension of credit to Miller in May 2004 precludes
Miller from asserting that she experienced an adverse action in
connection with that contract.
The arguments River Oaks advances ignores the fact that the
ECOA defines status as a "creditor" by what a party does in the
ordinary course of its business, not whether it participated in
an isolated transaction or not. 12 C.F.R. § 202.2(l). River Oaks
has supplied the court with information only as to how it handled
Miller's situation, but the scope of inquiry we must undertake to
determine its legal obligations under the ECOA must be broader
than that. As a result, River Oaks may very well have been a
creditor for purposes of the ECOA during the operative time
period. As a result, we cannot say that as a matter of law that River Oaks
had no duty to inform Miller of the specific reasons why her
credit application was denied, and summary judgment is thus not
B. Common Law Fraud and Illinois Consumer Fraud Act Claims
To make out a claim for common law fraud in Illinois, a
plaintiff must show that a defendant made a false statement of
material fact that the defendant knew or believed to be false;
that the plaintiff had a right to, and did, rely on the
statement; that the defendant made the statement to induce the
plaintiff to act; and that the plaintiff's reliance on the
statement led to injury. See Siegel v. Levy Organization
Development Co., Inc., 607 N.E.2d 194, 198 (Ill. 1992). Miller
has alleged and provided evidence of each of these elements. As
the Illinois Supreme Court noted in Siegel, the nature of the
statutory cause of action is such that conduct establishing a
common law cause of action will also allow relief under the
statute as long as it was done in the course of trade or
commerce. See id. Clearly, a purchase of a car is squarely
within the realm of commerce. As a result, Miller's evidence
applies just as much to her ICFA claim.
River Oaks contends that Miller's claims must fail because she
has not provided evidence that anyone at River Oaks represented
to her that she had obtained or would receive financing for the
purchase of the Taurus. In response, Miller points to the
statement she alleges Powell made during her September 2003 visit
to the car lot. River Oaks argues that we cannot consider Powell's words because
they are hearsay and therefore inadmissible, but their objection
is not well taken. Fed.R.Evid. 801(d)(2)(D) specifically states
that a statement made by a party's servant concerning a matter
within the scope of the employment made during the existence of
the relationship is not hearsay. Thus, Powell's alleged statement
is not inadmissible on grounds of hearsay, and Miller's testimony
that it was made is sufficient to create a material issue of fact
with respect to her fraud claims. While we express no opinion as
to whether Miller's account will ultimately carry the day, it is
sufficient to preclude summary judgment in favor of River Oaks.
Based on the foregoing, the motion of River Oaks for summary
judgment in its favor is denied.
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