Opinion
No. A03-1148.
Filed May 20, 2004.
Appeal from the Hennepin County, District Court, File No. Ct 01-001519.
Thomas J. Lyons, Jr., John H. Goolsby, Consumer Justice Center, and Thomas J. Lyons, Thomas J. Lyons Associates, P.A., Canada, Mn, (for appellants).
Gregory J. Johnson, Klay C. Ahrens, Johnson Provo-Petersen, Llp, St. Paul, Mn, (for respondents).
Considered and decided by Willis, Presiding Judge; Schumacher, Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellants challenge the district court's grant of summary judgment to respondent auto dealership after the district court found that appellants had failed to claim any legally cognizable damages in their suit brought under the Minnesota Prevention of Consumer Fraud Act. Because the district court did not err by granting respondents' summary-judgment motion, we affirm.
FACTS
In September 1997, appellants Thomas and Kelly Reinke purchased a Suzuki Sidekick automobile from respondents Harold Chevrolet-Geo, Inc. (Harold Chevrolet). The Reinkes also purchased an AmeriCare service contract, which was sold by Harold Chevrolet and administered by North American Warranty Services, Inc. (NAWS). The Reinkes financed the service contract as part of the installment purchase of the automobile, and they agreed to a price of $841 for the service contract before they signed the purchase agreement or retail installment contract (RIC) setting forth the terms of the purchases. The RIC showed that Harold Chevrolet would pay $841 to NAWS on the Reinkes' behalf for the service contract; in fact, Harold Chevrolet retained $200 of the purchase price.
In January 2001, the Reinkes sued Harold Chevrolet, claiming breach of contract, unjust enrichment, and violations of the Minnesota Uniform Deceptive Trade Practices Act (Minn. Stat. §§ 325D.43-325D.48 (2002)) and the Minnesota Prevention of Consumer Fraud Act (Minn. Stat. §§ 325F.68-325F.70 (2002)) (the CFA). The claims were based on Harold Chevrolet's retention of $200 of the payment for the service contract after the dealership had represented to the Reinkes that the entire $841 would be paid to NAWS. The district court set a deadline of October 1, 2001, for the parties to file dispositive motions, and on August 24, Harold Chevrolet moved for summary judgment on all of the Reinkes' claims. The Reinkes opposed summary judgment only on the CFA claim, and on September 26, the district court granted summary judgment to Harold Chevrolet on all of the Reinkes' claims except the CFA claim.
The Reinkes' class-action complaint named as defendants Harold Chevrolet "and all Related Dealerships" that were "legally responsible in some manner for the unlawful acts referred to herein." The complaint stated that the Reinkes would seek leave to amend the complaint to reflect the identifies of those dealerships when they became known. At the time this appeal was filed, the Reinkes had not yet sought leave to amend the complaint to identify any other such dealerships.
In October 2001, the Reinkes moved for class certification and for leave to amend their complaint to claim punitive damages. The proposed class was persons who had purchased service contracts from Harold Chevrolet and who had executed RICs showing that Harold Chevrolet would pay all of the price of the service contract to a third party when, in fact, Harold Chevrolet retained a portion of the purchase price. The Reinkes based their class-action claim solely on the misrepresentation in the RIC and not on any alleged oral misrepresentations made by Harold Chevrolet employees regarding the disposition of money paid for a service contract. The district court granted both of the Reinkes' motions.
In March 2002, the district court judge assigned to the case retired, and in January 2003, the successor judge issued a new scheduling order that authorized the submission of further dispositive motions by May 15, 2003. In April, Harold Chevrolet moved again for summary judgment, arguing that there was no evidence that the statement in the RIC concerning amounts paid on the buyer's behalf was made with the intent that customers would rely on it; that the plaintiffs could not establish any legally cognizable damages under the CFA; and that even if the plaintiffs could prove legally cognizable damages, they could not establish a causal nexus between the statement in the RIC and the damages.
On June 18, 2003, the district court granted Harold Chevrolet's motion for summary judgment, concluding that, while there was a question of fact as to whether Harold Chevrolet intended for customers to rely on the statement in the RIC regarding the disposition of the purchase price of the service contract, the Reinkes' CFA claim failed because they were unable to establish any legally cognizable damages. The district court determined that the Reinkes could not show any out-of-pocket damages because they had agreed that $841 was the fair market value of the service contract. The court also concluded that any damages based on a lost opportunity to negotiate the price or to refuse purchase of the contract were "pure speculation" because the Reinkes' deposition testimony did not establish that they would have done anything differently if they had known that Harold Chevrolet was retaining a portion of the purchase price and it was impossible to predict what price might have been negotiated if the Reinkes had known that Harold Chevrolet was retaining a portion of the purchase price. The court also concluded that it was impossible to place a value on any lost opportunity to bargain.
The Reinkes appealed, and Harold Chevrolet filed a notice of review, asking this court to review (1) the district court's September 26, 2001 order denying its motion for summary judgment on the CFA claim; (2) the district court's February 8, 2002 order granting the Reinkes' motion for class certification and granting them leave to amend their complaint to plead punitive damages; and (3) the portion of the district court's June 18, 2003 order concluding that a question of fact existed regarding whether Harold Chevrolet intended for customers to rely on the statements in the RIC regarding the disposition of the purchase price of the service contract.
DECISION I.
The Reinkes first argue that the district court abused its discretion by entertaining Harold Chevrolet's second motion for summary judgment on the CFA claim after the predecessor judge had denied the first such motion. They argue that the motion was an improper motion for reconsideration because there were no intervening legal developments, such as the enactment of an applicable statute or the issuance of a dispositive court decision, and the predecessor judge's decision was not "palpably wrong."
But Harold Chevrolet's second motion for summary judgment is not properly characterized as a motion for reconsideration because Harold Chevrolet did not ask the district court to reconsider the first motion on the CFA claim based on the same record that existed when the first motion was made. Instead, Harold Chevrolet filed a new motion based on new evidence acquired through discovery after the submission and denial of the first motion. Consideration of a second motion for summary judgment is not precluded by the fact that the district court considered a similar motion earlier. Invest Cast, Inc. v. City of Blaine, 471 N.W.2d 368, 370 (Minn. App. 1991), review denied (Minn. Aug. 1, 1991). Minnesota Rule of Civil Procedure 56.02 permits a summary-judgment motion "at any time" and does not prohibit a second such motion. We conclude that the district court did not abuse its discretion by considering Harold Chevrolet's second motion for summary judgment.
Citing Kornberg v. Kornberg, the Reinkes also argue that the district court abused its discretion by considering Harold Chevrolet's second summary-judgment motion because, under the law-of-the-case doctrine, a court should not reconsider a prior decision unless there has been a substantial change in the essential facts, the evidence, or the applicable law, or the court believes that the decision was clearly erroneous or unjust. 525 N.W.2d 14, 18 (Minn. App. 1994). But generally, the doctrine of law of the case is not applied by a district court to its own decisions. Loo v. Loo, 520 N.W.2d 740, 744 n. 1 (Minn. 1994). Even if we apply the doctrine here, as the Reinkes advocate, we conclude that the district court did not abuse its discretion in considering Harold Chevrolet's second motion because the evidence changed substantially between the first and second motions.
First, there was additional evidence available when the second motion was made, including the affidavit and deposition testimony of Harold Chevrolet's finance manager in which she stated that the Reinkes agreed to the $841 purchase price before seeing the RIC. Moreover, the denial of Harold Chevrolet's first motion for summary judgment was based in part on the Reinkes' allegations of oral misrepresentations made by Harold Chevrolet's finance manager before the Reinkes made their purchase decision. But the Reinkes subsequently decided to proceed with their claim based solely on the misrepresentations in the RIC. Because the evidence had substantially changed by the time of the second summary-judgment motion, the district court's consideration of the motion was not an abuse of discretion under the law-of-the-case doctrine.
II.
The Reinkes next argue that the district court erred by concluding that they had failed to establish any legally cognizable damages. "On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the [district court] erred in [its] application of the law." State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). "A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted." Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citation omitted). No genuine issue of material fact exists "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party." DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997) (alteration in original) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356 (1986)). In response to a motion for summary judgment, a plaintiff must produce sufficient evidence to show a genuine issue of material fact as to each element of a claim. Rouse v. Dunkley Bennett, P.A., 520 N.W.2d 406, 410-11 (Minn. 1994). Damages are a necessary element of an action under the CFA. D.A.B. v. Brown, 570 N.W.2d 168, 172 (Minn. App. 1997).
Minnesota Statutes section 8.31, subdivision 3a (2002), authorizes any person injured by a violation of the CFA to sue for damages. The CFA prohibits "[t]he act, use, or employment . . . of any fraud, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby." Minn. Stat. § 325F.69, subd. 1 (2002). A claim under Minn. Stat. § 8.31, subd. 3a, alleging a violation of Minn. Stat. § 325F.69, subd. 1, has two elements: (1) an intentional misrepresentation relating to the sale of merchandise, and (2) damages to the plaintiff caused by the misrepresentation. Group Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2, 12-13 (Minn. 2001).
Minnesota generally follows the out-of-pocket rule in measuring fraud damages. Yost v. Millhouse, 373 N.W.2d 826, 830 (Minn. App. 1985). Under this rule, the measure of damages is the difference between the amount that the defrauded person paid for merchandise and the actual value of the merchandise, and any other damages proximately caused by the fraud. Id. at 830-31. Nothing in the record shows that the value of the service contract that the Reinkes purchased was less than they paid for it. In fact, Thomas Reinke testified at his deposition that the cost of the service contract did not exceed its fair market value. Therefore, by Thomas Reinke's own admission, the Reinkes suffered no out-of-pocket damages by purchasing the service contract.
But the Reinkes argue that they do not need to show out-of-pocket damages because, under the CFA, a plaintiff can prove damages by showing merely that a misrepresentation deprived him of the opportunity to bargain intelligently with the seller regarding the price of merchandise or of the opportunity to refuse to purchase the merchandise if the seller refuses to bargain. This court has recognized that a lost opportunity to negotiate is a cognizable injury under the CFA. See Sutton v. Viking Oldsmobile Nissan, Inc., No. C2-99-1843, 2001 WL 856250, at *2 (Minn. App. July 31, 2001), review denied (Minn. Oct. 24, 2001). Sutton was similar to this case in that the plaintiff there signed an RIC showing that defendant automobile dealership paid the entire purchase price for an automobile service contract to a third party when, in fact, the dealership retained a portion of the purchase price. Id., at *1. This court recognized that Sutton's lost opportunity to negotiate a better price for or to refuse purchase of the contract was a legally cognizable injury but found that a fact issue existed regarding causation of the injury. Id., at *2.
The Reinkes argue that, as was the case in Sutton, they have claimed legally cognizable damages and a fact issue remains as to whether the damages were caused by the misrepresentation on the RIC. But in Sutton, the plaintiff testified at deposition that, if he had known that the dealership was profiting from the sale of the service contract, he would have attempted to negotiate a better price or would have refused to purchase the contract if the dealership refused to bargain. Id. By contrast, both Thomas and Kelly Reinke testified at deposition only that they might have done things differently if they had known that Harold Chevrolet was retaining a portion of the service contract's purchase price, making any damages that they might have suffered speculative. A plaintiff cannot recover damages that are merely speculative. Jackson v. Reiling, 311 Minn. 562, 563, 249 N.W.2d 896, 897 (1977). Because the Reinkes cannot prove that they suffered any actual damages, they cannot prove a claim under the CFA. The district court did not err by granting Harold Chevrolet's summary-judgment motion.
Because we affirm the granting of summary judgment, we do not address the issues that Harold Chevrolet raises in its petition for review.