Opinion
Case No. C2-02-CV-901.
September 1, 2004
OPINION AND ORDER
This matter is before the Court on Named Class Plaintiffs', Roberta Hook and Latasha McLaugin, Motion for Prejudgment Attachment, or in the alternative, Motion to Prevent Defendant from Transferring or Disposing of Business Assets (Doc. # 67). Defendant, Del Baker, d.b.a. Del's Auto Sales filed a Reply in Opposition (Doc. # 73). For the following reasons, the Court DENIES Plaintiff's Motion.
I. BACKGROUND
This action is the result of Plaintiff, Roberta Hook ("Hook"), buying a used car from Defendant, Del Baker, d.b.a. Del's Auto Sales ("defendant"). Defendant owns and operates a used car lot located in Newark, Ohio. On or about September 21, 2001 Hook and defendant entered into a consumer credit transaction in the form of a retail installment sales contract and security agreement whereby defendant sold and then financed for Hook a 1990 Oldsmobile Cutlass automobile. (Baker Dep. Vol. II at 20). In connection with the financing of the vehicle, defendant provided class plaintiff with a truth-in-lending disclosure statement and security interest ("disclosure document") as required by the Truth In Lending Act, ("TILA") 15 U.S.C. 1601, et. seq. (Baker Dep. Vol. II Ex. A).
Listed on defendant's disclosure document is a charge of $200.00 labeled "non-taxable charges." (Baker Dep. Vol. II Ex. A). Absent from defendant's disclosure document are any finance charges imposed upon plaintiff as an incident to the extension of credit and the disclosure of the APR of any such finance charges. Also noticeably absent from the disclosure document is the total sales price of the transaction, the total number of payments in the transaction, and the number of payments she had to make in order to repay her indebtedness. (Baker Dep. Vol. II Ex. A).
Defendant repossessed Hook's car on June 5, 2002. (Pls.' Second Am. Compl. ¶ 63). Thereafter, Hook filed suit on September 16, 2002, alleging claims under the TILA, Ohio Retail Installment Sales Act, R.C. § 1317.01, et seq ("ORISA") and the Ohio Consumer Sales Practices Act, R.C. § 1345.01 et seq ("OCSPA"). Id. at ¶¶ 1-78. Additionally, Hook asserted claims for common law theft and conversion. Id. at ¶¶ 79-91. Specifically, Hook alleged that defendant failed to disclose the: (1) number of payments scheduled to repay any indebtedness to defendant; (2) finance charge; (3) Annual Percentage Rate ("APR"); (4) total of payments, or the total sales price in connection with any consumer transaction. Hook also asserted that defendant assessed or contracted for a documentary service charge in excess of $50.00 in connection with financing retail installment sales transactions.
On December 26, 2002, Hook filed an amended complaint. (Doc. # 5). The amended complaint added class allegations for violations of the TILA, ORISA and OCSPA, while retaining Hook's individual claims for violations of the ORISA, OCSPA and for theft and conversion. (Pls.' First Am. Compl. ¶¶ 1-86). Thereafter, Hook sought, and obtained, leave to amend her complaint a second time to add Latasha McLaugin ("McLaugin") as a plaintiff. (Doc. # 15). McLaugin, like Hook, had purchased and financed an automobile through defendant. (Pls.' Second Am. Compl. ¶ 4). The second amended complaint retained the class allegations for violations of the TILA, ORISA and OCSPA, while asserting McLaugin's and Hook's individual claims for violations of the ORISA, OCSPA and for theft and conversion. Subsequently, the Court granted Hook's and McLaugin's (the "named plaintiffs") Motion to Certify Two Classes (Doc. # 45) only as to the TILA and ORISA claims. One proposed class dealt with the TILA claims, while the other addressed the ORISA claims. The Court granted the motion, and certified the classes as follows:
Interestingly, the named plaintiffs did not move to certify their OSCPA class claim. Hook and McLaugin's individual claims under the OSCPA and ORISA, and their claims for theft and conversion, remain.
1. TILA Class:
All persons to whom defendant extended credit between December 26, 2001 and the present date in connection with the sale of any automobile where defendant failed to either disclose the number of payments scheduled to repay the indebtedness, to accurately disclose the finance charge, to accurately disclose the Annual Percentage Rate, to accurately disclose the total of payments or to accurately disclose the total sales price in connection with any consumer transaction.
2. RISA Class:
All persons to whom defendant extended credit between December 26, 1996 and the present date in connection with the sale of any automobile under a retail installment sales contract where defendant either contracted for and or assessed a documentary service charge, or a delivery and handling charge, in excess of $50.
(Doc. # 45, 9-10).
On May 4, 2004, the named plaintiffs moved for summary judgment on the issue of defendant's liability under the TILA and ORISA. (Doc. # 51). The Court granted the motion on June 29, 2004. (Doc. # 60). The Court also approved the named plaintiffs' proposed class notice. (Doc. # 61). Thus, as it stands now, plaintiffs' class is certified, defendant is liable to plaintiffs for violating the TILA and ORISA and the class notice is approved. Damages have yet to be determined as to those two claims. The case is set for a jury trial on November 15, 2004 on the issue of damages under the TILA and ORISA, as well as on the issues of liability and damages, if any, on the remaining claims. The named plaintiffs now ask the Court for an order attaching all of defendant's assets, including those outside of the Court's jurisdiction. Alternatively, the named plaintiffs request the Court issue an order prohibiting defendant from transferring, disposing, or concealing his assets in any manner. Defendant opposes both requests of the named plaintiffs.
II. DISCUSSION
The named plaintiffs assert that Ohio Rev. Code § 2715.01 permits the Court to attach all of defendant's "personal and physical assets of any kind and nature both within and outside the jurisdiction of the Court prior to the rendering of final judgment. . . ." (Pls.' Mem. in Supp. 1). Defendant responds that because the Court did not find that he acted criminally, and because the named plaintiffs failed to introduce any evidence that defendant is about to remove or dispose of property with the intent of defrauding creditors, the Court should deny the named plaintiffs' motion. (Def.'s Mem. in Opp'n 1-2). The Court finds the named plaintiffs' arguments unavailing.
The Court's analysis begins with Rule 64 of the Federal Rules of Civil Procedure. Nationwide Mut. Ins. Co. v. Whiteford Systems, Inc., 787 F. Supp. 766, 768 (S.D. OH 1992). That rule dictates that all remedies to secure the satisfaction of a judgment, including attachment, are available only under the circumstances and in the manner provided by the law, determined at the time the remedy is sought, of the forum state of the federal court. Fed.R.Civ.P. 64. This Court held that the rule:
excepts from its scope those situations in which federal law governs the availability of the remedy. Neither the parties' nor this Court's own research has revealed any applicable federal statutes that govern here. Therefore, the Court must look to the current laws of Ohio to determine if prejudgment attachment is now appropriate in this action.Nationwide, 787 F. Supp. at 768.
Ohio R.C. § 2715.01, entitled Grounds of Attachment, reads in relevant part:
(A) An attachment against the property, other than personal earnings, of a defendant may be had in a civil action for the recovery of money, at or after its commencement, upon any one of the following grounds:
(6) That the defendant is about to remove property, in whole or part, out of the jurisdiction of the court, with the intent to defraud creditors;
(7) That the defendant is about to convert property, in whole or part, into money, for the purpose of placing it beyond the reach of creditors;
(9) That the defendant has assigned, removed, disposed of, or is about to dispose of, property, in whole or part, with the intent to defraud creditors;
(10) That the defendant has fraudulently or criminally contracted the debt, or incurred the obligations for which suit is about to be or has been brought.
(D) An attachment against the property, other than personal earnings, of a defendant may be accomplished prior to the entry of judgment only pursuant to an attachment proceeding under this chapter.
Before the Court may consider plaintiffs' motion, the plaintiffs must satisfy several prerequisites. See R.C. § 2715.01(D). First, R.C. §§ 2715.03(C) (D) require plaintiffs to file an affidavit with their motion describing the property sought to be attached, its location and approximate value. See Peebles v. Clement, 408 N.E.2d 689, syllabus at 1 (1980). The affidavit must also state the use to which the defendant has put the property sought to be attached. R.C. § 2715.03(E). "Only upon determining that Plaintiff has satisfied these requirements may the Court consider the actual motion for attachment." Nationwide, 787 F. Supp. at 768. The named plaintiffs failed to attach an affidavit with the requisite information. Consequently, the Court DENIES the named plaintiffs' motion.
An alternative basis exists for the Court's holding. That is, the named plaintiffs failed to establish that any of the grounds cited above apply to the situation at hand. To begin, the first ground plaintiff relies on states that the defendant must be about to remove property, in whole or part, out of the jurisdiction of the court, with the intent to defraud creditors. R.C. § 2715.01(A)(6). However, plaintiff fails to provide the Court with any evidence that defendant is about to take any of his property out of this Court's jurisdiction, with the intent to defraud any creditors.
The next basis for prejudgment attachment under R.C. § 2715.01(A)(7) requires the defendant to be on the verge of converting property, in whole or part, into money, for the purpose of placing it beyond the reach of creditors. Again, the named plaintiffs fail to present the Court with any evidence that the defendant is about to sell any of his property for cash in order to place his assets beyond the reach of creditors.
The third basis for granting the named plaintiffs' motion requires that the defendant has assigned, removed, disposed of, or is about to dispose of, property, in whole or part, with the intent to defraud creditors. R.C. § 2715.01(A)(9). In his deposition, defendant Del Baker testified that he had not transferred any of his personal assets while the lawsuit was pending during the period of June, 2003 to January, 2004. (Baker Jan. 12, 2004 Dep. 87). Additionally, while admitting that he was going to turn over all control of Del's Auto Sales to his sister and brother so he could retire, the defendant stated the cars would remain titled in his name. Id. at 89-90. Nothing in the record indicates that defendant has, or is going to, dispose of property with the intent to defraud creditors.
Finally, the named plaintiffs once again fail to produce any evidence that the defendant has fraudulently or criminally contracted the debt, or incurred the obligations for which suit is about to be or has been brought. Consequently, because none of the provisions allowing for prejudgment attachment under R.C. § 2715.01 are present here, the Court DENIES the named plaintiffs' motion, and also declines to issue an order appointing a receiver to hold all of defendant's assets in a trust pending the conclusion of this case.