Opinion
Case No. C2-01-1254
October 18, 2002
OPINION AND ORDER
This matter is before the Court on various motions of the panics relating to particular claims raised in the Plaintiffs' Amended Class Action Complaint. For the reasons that follow, Defendants' Motion to Dismiss is denied as moot; Defendant P.A. Days' Motion for Summary Judgment on Spot-Delivery Agreement is denied; and Defendants' Motion for Severance is denied. The Court declines to rule on the parties' pending Motions for Summary Judgment, instead deferring such decisions until after a determination has been made with respect to class certitication.
I.
In November, 2001, Plaintiff, Robert Violette, purchased a vehicle from Defendant P.A. Days, Inc., d.b.a. "Paydays South" ("P.A. Days"). (Violette, R. Aff., at ¶ 4.) P.A. Days is a corporation licensed to do business in Ohio and is a used motor vehicle dealer. As part of the financing of the vehicle, P.A. Days completed and presented to Violette a Retail Installment Contract and Security Agreement. ( Id., at ¶ 5, Exh. A.) Violette also executed a Spot Delivery Agreement in conjunction with the sale and financing of the vehicle. That Agreement provides in pertinent part:
Customer and Dealer intend that financing will be obtained for the Customer's purchase of the vehicle listed in the Retail Buyer's Order by assigning the Retail Installment Contract signed by Dealer and Customer to a third party. In the event Dealer is unable to obtain approval from a third party who is willing to accept the assignment of the retail installment contract as executed withing 6 days of the date hereof, Customer shall immediately upon notice from Dealer, return the vehicle or pay to Dealer the balance due as reflected in the Retailer Buyer's Order. If customer returns the vehicle, Dealer shall refund all deposits made by Customer, and Customer shall pay to Dealer the cost of repairing any damage occurring to the vehicle while in Customer's possession.
(Spot Del. Agmt., DeWitt Aff.)
Following execution of these documents, over the next two weeks, an employee from P.A. Days called Violette several times to tell him that the company could not find financing for him. (Violette, R. Aff., at ¶ 6.) Each time P.A. Days called during this period, an employee instructed Violette to return the vehicle. Within a clay of each such call, however, an employee of P.A. Days called Violette back to advise him that financing might still be found and that Violette should keep the car. ( Id.)
On or about November 29, 2001, Violette received another phone call from a P.A. Days employee instructing him to return the vehicle because financing could not be found. Violette agreed and requested that all of his deposit monies be returned to him when he arrived. ( Id. at ¶ 7.) Plaintiff alleges that the employee advised him that a check for the deposit monies would be ready the next day and that Violette should then return the car. Viotette's wife, Melanie, called P.A. Days the next morning and received instructions to return the car after lunchtime. (Violette M. Aff., ¶ 4.)
When Violette arrived at P.A. Days to return his vehicle on November 30, 2001, an employee informed him that he would not receive the deposit money for ten (10) days. (Violette R. Aff., ¶ 10.) Violette demanded his deposit back and called the police when P.A. Days refused. ( Id.) After waiting over an hour, Violette called the police department and learned that someone from P.A. Days had previously called the police to advise that the dispute had been resolved. ( Id., at ¶ 11.) Violette went to the office of the dealership for an explanation and was told that P.A. Days had by then found financing for the car. Violette objected, indicating that he no longer wanted the car or to do further business with the dealership. ( Id. at ¶ 13.) P.A. Days, however, refused to return the deposit moneys and instructed Violette to leave the dealership. ( Id. at ¶ 14.) At P.A. Days' demand, Violette took the car from the dealership. Id. By December 18, 2001, over thirty days from the date of the sale of the car, Defendant had failed to provide Plaintiff Violette with a copy of the title to the vehicle. (Am. Compl., ¶ 79.)
II.
A. Motion to Dismiss and Motion for Summary Judgment on Theft-Guard Claims
Defendants originally submitted a Motion to Dismiss relative to Plaintiff's Theft-Gard claims on January 28, 2002. Later, Defendants filed their Motion for Summary Judgment "[b]ased upon additional information and evidence," noting that the summary judgment motion is "co-extensive with Defendants' motion to dismiss and is not intended to supplant the motion to dismiss." (Defs' Mot. Summ. Jgmt on Theft-Guard Claims., at p. 4.) Notwithstanding this assertion, the arguments raised in Defendants' Motion for Summary Judgment have addressed and subsumed the issues raised by the earlier Motion to Dismiss. Moreover, it is clear that the parties have submitted materials outside of the pleadings relating to Plaintiff's Theft-Gard claims making the procedural mechanism of a motion to dismiss particularly inappropriate at this juncture. Fed.R.Civ.P. 12(b) and 56. Accordingly, the Court has reviewed and considered the parties' legal arguments in their briefing on the Motion to Dismiss but treats the matter as one for summary judgment. On that basis, the Motion to Dismiss will be denied as moot.
Defendants moved concurrently with their Motion to Dismiss to stay discovery. By Order dated April 16, 2002, Magistrate Judge Kemp denied the second portion of Defendants' Motion relating to a stay of discovery.
B. Merit-Based Decisions Prior to Class Certification
The Court declines at this juncture to rule on the parties' pending Motions for Summary Judgment relating to class claims based on the fact that the parties' motions with respect to certification are pending. Rule 23 provides that "[a]s soon as practical after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained." Fed.R.Civ.P. 23(c). Neither Fed.R.Civ.P. 23 nor due process necessarily requires that the district court rule on class certification before granting or denying a motion for summary judgment. Rule 23, however, clearly favors early determination of the class issue. Only where considerations of fairness and economy dictate otherwise, and where the defendant consents to the procedure, it is within the discretion of the district court to decide the motion for summary judgment first. Thompson v. County of Medina, 29 F.3d 238, 241 (6th Cir. 1994) ( citing Wright v. Schock, 742 F.2d 541, 545-46 (9th Cir. 1994); see also Bieneman v. City of Chicago, 838 F.2d 962, 963 (7th Cir. 1988) (explaining why class certification decisions should be made before any merit based motions are decided). The Court concludes that fairness and economy dictate that the merit-based decisions affecting the putative class should be deferred until the Court first decides whether a class will be certified.
Moreover, with respect to Plaintiffs' pending Motion for Summary Judgment, the Court notes in particular that granting or denying summary judgment in favor of Plaintiffs and an uncertified class would be inappropriate. In essence, the class does not yet exist and therefore none of the putative members is a party to this action. In this context, resolution of the legal question presented by Plaintiffs' Motion would compromise the interest of unnamed, future parties.
These rationales, however, do not apply to ruling on the Defendant P.A. Day's pending Motion for Summary Judgment on Plaintiff Violette's individual claim for breach of contract. In this instance, no prejudice will befall either the other named Plaintiffs or the absent putative class members from this course of action.
C. Standard of Review for Summary Judgment
The procedure for considering whether summary judgment is appropriate is set forth in Federal Rule of Civil Procedure 56(c), which provides:
The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show 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.
The evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. Kress Co., 398 U.S. 144, 158-59 (1970). Summary judgment will not lie if the dispute about a material fact is genuine; "that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986). Summary judgment is appropriate however, if the opposing party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Matsushita Electronic Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986).
The Sixth Circuit Court of Appeals has recognized that Liberty Lobby, Celotex, and Matsushita have effected "a decided change in summary judgment practice," ushering in "new era" in summary judgments. Street v. J.C. Bradford Co., 886 F.2d 1472, 1476 (6th Cir. 1989). The court in Street identifies a number of important principles in new era summary judgment practice. For example, complex cases and cases involving state of mind issues are not necessarily inappropriate for summary judgment. Id. at 1479.
In addition, in responding to a summary judgment motion, the nonmoving party "cannot rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, but must `present affirmative evidence in order to defeat a properly supported motion for summary judgment.'" Id. (quoting Liberty Lobby, 477 U.S. at 257). The nonmoving party must adduce more than a mere scintilla of evidence in order to overcome the summary judgment motion. Id. It is not sufficient for the nonmoving party to merely "`show that there is some metaphysical doubt as to the material facts.'" Id. (quoting Matsushita, 475 U.S. at 586). Moreover, "[t]he trial court no longer has the duty to search the entire record to establish that it is bereft of a genuine issue of material fact." Id. That is, the nonmoving party has an affirmative duty to direct the court's attention to those specific portions of the record upon which it seeks to rely to create a genuine issue of material fact.
III.
A. Defendant P.A. Days, Inc.'s Motion for Summary Judgment on Plaintiff Violette's Breach of Spot Delivery Claim
Plaintiff Violette contends in Count Five of the Amended Complaint that Defendant P.A. Days breached its Spot Delivery Agreement. Plaintiff contends that he performed under the agreement when he attempted to return the vehicle to Pay Days South on November 30, 2001 but that Defendant P.A. Days breached the agreement when it failed to accept the vehicle and return Plaintiff's deposits, despite the fact that financing had not been assigned to a third-party within six days. (Amend. Compl., at ¶ 134-36; Violette R. Aff. ¶¶ 10-14.)
The fifth Cause of Action, Breach of Contract, relates exclusively to Plaintiff Violette and is not one of the class claims. Although Plaintiffs state in their Memorandum in Opposition to Defendant's Motion for Summary Judgment on Count Five that the cause of action relates to Violette and "all others similarly situated against P.A. Days," the claim at issue in the Amended Complaint makes no mention of other class members and quite clearly refers to and seeks relief for Violette only for facts that relate exclusively to him. (Am. Compl., ¶¶ 134-37.) Accordingly, the Court rules on this issue as it relates to Plaintiff Violette's individual claim prior to class certification as there can be no prejudice to the absent putative class members from this ruling.
Defendant P.A. Days contends that it is entitled to summary judgment because the Spot Delivery Agreement does not place any obligation on the dealer actually to obtain financing within six days. Defendant contends that the obligation to notify the customer is permissive and that the Agreement imposes no fixed time within which the dealer must notify the customer of acceptance of financing with a third-party. Moreover, Defendant contends that the Agreement does not give Violette the right to "back out" of his contract within six days by returning the vehicle nor does it provide that Violette has a right to a refund of deposits unless the dealer notifies the buyer to return the vehicle because financing was not approved. (Mot. Sum. Jgmt., at 4.)
Plaintiff maintains that he received several telephone calls over a period of two weeks from the date of the sale from Defendant advising him to return the vehicle. He was told that because third-party financing could not be located and that each time, he received instructions to return the car. (Violette, R. Aff., ¶¶ 6-8.) Ultimately, he received another phone call on November 29, 2001 with the same information and instructions. He was advised to return the car on November 30, 2001. (Violette, R. Aff. ¶ 7.) Violette drove to the Pay Days South dealership and returned his vehicle on that day. (Violette, R. Aff., ¶ 9.) Plaintiff claims that once Defendant cancelled under the terms of the Spot Delivery Agreement, gave notice to Plaintiff to return the vehicle, and Plaintiff complied with the request by returning the car, his duty had been performed and the Defendant's obligation to refund the deposit arose. Plaintiff contends that Defendant breached the Agreement by failing to return the deposits. Moreover, Plaintiff asserts that any attempt by Defendant to find financing for him after he had returned the car represents merely an offer to revive the Agreement, which, Plaintiff contends, he had no obligation to do. (Mem. in Opp., p. 3-4.)
Defendant objects to Plaintiff's attached sworn statements because they are not notarized and moves to strike them from the record. Defendant asserts that the sworn statements are not admissible for purposes of summary judgment. (Reply, at p. 3.) The statements are captioned as "affidavits" but are more appropriately identified as declarations under 28 U.S.C. § 1746. The purported affidavits are minimally adequate under the declarations statute given the existence of all of the critical elements including acknowledgment of penalties of perjury and statements that the information given is true. The purported affidavits provide sufficient information that the declarants will be subject to perjury prosecution for any materially false information. Accordingly, Defendant's request to strike the purported affidavits is denied. 28 U.S.C. § 1746; U.S. v. McNeal, 82 F. Supp.2d 945, 950 (S.D. Ind. 2000). Plaintiffs, however, are instructed that further purported affidavits filed in this matter should be appropriately executed or alternatively captioned and conformed to the declarations statute.
Defendant contends that it did not breach of the Spot Delivery Agreement. (Reply, p. 3.) P.A. Days asserts, without supporting affidavits, deposition testimony or other matters appropriate under Rule 56 that "[a] few days after purchase, Plaintiff attempted to return the vehicle to Paydays." (Reply, at 2.) Yet, P.A. Days does not refute with evidence Plaintiff's sworn statement of the facts relating to P.A. Days' demand to return the vehicle. Plaintiffs allegations that P.A. Days made a demand for the return of the vehicle and that Plaintiff in fact performed under that demand are undisputed. Further, the Court must view the evidence in the light most favorable to Plaintiff as the nonmoving party. Adickes v. Kress Co., 398 U.S. 144, 158-59 (1970). That being so, the Spot Delivery Agreement provides that in the event the Dealer is unable to find a third party to accept assignment of the retail installment contract that the "Customer shall immediately upon notice from Dealer, return the vehicle." And, "[i]f Customer returns the vehicle, Dealer shall refund all deposits made by the Customer . . ." (Spot Del. Agt., DeWitt Aff.) Plaintiff has adduced some evidence that P.A. Days made the demand; that he returned the car; and that P.A. Days did not refund the deposits in accordance with the Agreement. Plaintiff has made a sufficient showing to establish the existence of a breach which is an essential element to his case on which he will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Matsushita Electronic Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986). Accordingly, the Court cannot determine as a matter of law that P.A. Days did not breach the Agreement. On that basis, P.A. Days' Motion for Summary Judgment is DENIED.
B. Defendants' Order for Severance of Action
Defendants also move for an Order of Severance of the action under Federal Rule of Civil Procedure 21, Misjoinder and Non-Joinder of Parties. Defendants assert that the action involves unrelated transactions on different days, affecting different dealerships, vehicles and contracts Defendants assert that Plaintiffs have misjoined in this action in violation of Federal Rule of Civil Procedure 20. Moreover, Defendants contend that Plaintiffs are attempting to create a "bad actor" image by characterizing Defendants in an disparaging manner. Defendants request that "this action be severed and that the respective Plaintiffs proceed against the two Defendants in separate actions." (Mot. for Severance, at 4.)
Defendant's Motion for Severance is denied. Rule 20 permits joinder of multiple plaintiffs whose claims (1) "aris[e] out of the same transaction, occurrence, or series of transactions or occurrences" and (2) will present some "question of law or fact [in] common." Fed.R.Civ.P. 20. Joinder promotes economy by making final determinations of all claims in a single action. See Ohio ex rel., Fisher v. Louis Trauth Dairy, 856 F. Supp. 1229, 1239 (S.D. Ohio 1994). Here, the claims presented by the multiple-named Plaintiffs appear to arise from a series of transactions and involve at least some common questions of law or fact. Accordingly, joinder appears to be proper under Rule 20.
This ruling does not affect or apply to Plaintiffs' burden of demonstrating that there are questions of law or fact common to the class as a prerequisite to class certification under Federal Rule of Civil Procedure 23.
Rule 21, by its terms permits a court to sever "claims." The clause in Rule 21 allowing severance of claims is aimed at remedying a problem with party joinder or permitting a court to delete claims over which it lacks jurisdiction or venue. If, as in this instance, a severed claim is one of multiple claims asserted by plaintiff against a defendant, neither party is severed from the original action. Rather, both parties are involved in two separate actions. Henderson v. ATT Corp., 918 F. Supp. 1059, 1062 (S.D. Tex. 1996). Here, Defendants do not propose which claims or issues should be proceed separately or how severance would apply in the context of a potential class action. Instead, it appears that severance would create duplicative litigation and needlessly increase delays, inconvenience and expense in bringing this matter to a close. Accordingly, the Motion is denied, without prejudice and may be reasserted, if appropriate, after the Court rules on the Motion for Class Certification.
IV.
For the foregoing reasons, Defendants' Motion to Dismiss (Doc. #7) is DENIED as MOOT; Defendant P.A. Days, Inc.'s Motion for Summary Judgment on Breach of Spot Delivery Claim (Doc. # 23) is DENIED; and Defendants' Motion for an Order for Severance of Action (Doc. # 27) is DENIED.