Jager v. Boston Road Auto Mall Inc., No. 1:2014cv00614 - Document 27 (S.D.N.Y. 2015)
Court Description: OPINION AND ORDER #105149. Plaintiff Peter Jager's motion for partial summary Judgment on the TILA claim (count I of the complaint) (Dkt. No. 12) is granted to the extent of $2,000 and attorneys' fees. Defendant Boston Road Auto Mall, Inc.'s cross-motion for partial summary judgment (Dkt. No. 22) is granted to the extent that the Magnuson-Moss claims (counts II, III, and IV of the complaint) and the remaining state Lemon Law and common law claims (counts V, VI, and VII of the complaint) are dismissed without prejudice for lack of subject-matter jurisdiction. The clerk is requested to enter judgment accordingly with costs and disbursements according to law. Jager may move separately for attorneys' fees under Federal Rule of Civil Procedure 54(d)(2). re: 12 MOTION for Partial Summary Judgment filed by Peter Jager, 22 CROSS MOTION for Partial Summary Judgment filed by Boston Road Auto Mall Inc. (Signed by Judge Louis L. Stanton on 1/15/2015) (rjm) Modified on 1/16/2015 (soh).
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, - Jager v. Boston Road Auto Mall Inc. "' ' Do .. "' . ,USDCSD t~• UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK PETER JAGER, Plaintiff, 14 Civ. 614 - against - BOSTON ROAD AUTO MALL, INC., Defendant. Plaintiff Peter Jager sued defendant Boston Road Au o Mall, Inc. ( "BRAM") for violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., the Magnuson-Moss Wa ranty Act, 15 U.S.C. § 2301 et seq., and the New York Lemon La , NY. Gen. Bus. Law§ 198-b; for deceptive business practices, NY. Gen. Bus. Law § 349; and for fraud. Jager moves for summary judgment in his favor on th TILA claim. BRAM moves for summary judgment dismissing the TI Magnuson-Moss claims and declining to exercise supplemen al jurisdiction over the state law claims. For the reasons hat follow, Jager's motion is granted, the Magnuson-Moss cla'ms are dismissed for lack of subject-matter jurisdiction, and I decline to exercise supplemental jurisdiction over the state law claims. Plaintiff has by error filed most of his papers in this action cit ng the wrong year as docket number 13 Civ. 614. 1 -1- Dockets.Justia FACTS According to Jager's uncontradicted statement of fa BRAM sells used cars and arranges financing for those sa es. Pl.'s Local Rule 56.1 Statement of Facts~~ 2-3, Dkt. No. 14. On November 21, 2013, Jager purchased a 2007 Chrysler Pacif'ca from BRAM. Id. ~ 4. The purchase was financed by BRAM, and th ("pricing recap"). See id. ~ only 5. The financial terms are listed in two columns on th bottom half of the pricing recap (spacing and underlining in or ginal; the text in brackets is circled in original): Sales Price: 8.8750% Sales Tax: Government Fees: Tracking Device: Dealer Fee: Service Charge: $9,300.00 825.38 400.00 495.00 395.00 495.00 TOTAL: Down Payment: Pick-Up Note: 0.00 0.00 Amount Financed: Financing at 20.00% APR: 0.38 0.36 $11,910.38 Balance Due: 1 Pick-Up Note payment of Due on 12/21/13 $350.00 [83] payments of [$150 .] 00 e ch Payable Semi-Monthly beginning 11/30/13 Plus one final payment of $140.74 Final payment will be due on /15/17 The actual document is attached to this Opinion as Exhibit A. DISCUSSION Under Federal Rule of Civil Procedure 56(a), "the shall grant summary judgment if the movant shows that t -2- no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Truth in Lending Act Jager seeks summary judgment in his favor on the TI and an award of statutory damages. BRAM acknowledges tha transaction is a closed end consumer credit transaction the nd that it is a creditor subject to the TILA disclosure requirem nts of 15 U.S.C. § 1638(a). See Westphal Affirm. ~ 12, Nov. 20, 2014, Dkt. No. 23. Accordingly, Jager must show that BRAM viol ted one of the TILA disclosure requirements that gives rise to s atutory damages. "It is the purpose of [the Truth in Lending Act] to assure a meaningful disclosure of credit terms so that the cons mer will be able to compare more readily the various credit erms available to him and avoid the uninformed use of credit 15 U.S.C. § 1601(a). "TILA endeavors to enable consumers to evaluate credit offers separately from the purchase of merchandise, and thereby to create an active market prov'ding more efficient credit prices." Poulin v. Balise Auto Sal s, Inc., 647 F.3d 36, 39 (2d Cir. 2011) (quoting Cornist v. B.J.T. Auto Sales, Inc., 272 F.3d 322, 326 (6th Cir. 2001)). "The Act is remedial in nature, designed to remedy what Congressional hearings revealed to be unscrupulous and predatory creditor -3- " practices throughout the nation. Since the statute is re the in nature, its terms must be construed in liberal fashio underlying Congressional purpose is to be effectuated," Freed Co. v. Bd. of Governors of Fed. Reserve Sys., 473 1210, 1214 (2d Cir. 1973) v. (footnote omitted); Imperial Motors, 539 F.2d 506, 510 (5th Cir. 1976) (" [O] the court finds a violation, no matter how technical, it has no discretion with respect to the imposition of liability."). TILA Liability Jager argues that BRAM violated TILA by failing to omply with certain requirements of 15 U.S.C. § 1638(a): For each consumer credit transaction other tha under an open end credit plan, the creditor shall disclose each of the following items, to the extent applicable: (3) The "finance charge," not itemized, using that term. (5) The sum of the amount financed and the finance charge, which shall be termed the "total of payments." (7) In a sale of property or services in which the seller is the creditor required to disclose pursuant to section 1631(b) of this title, the "tot 1 sale price," using that term, which shall be the to al of the cash price of the property or services, additional charges, and the finance charge. (8) Descriptive explanations of the terms "amo nt financed," "finance charge," "annual percentage rat " "total of payments," and "total sale price" as -4- specified by the [Consumer Financial Protection] Bureau. Jager also contends that BRAM violated TILA by not complying with the requirement that "[t]he terms 'annual percentage rate' and 'finance charge' shall be disclosed more conspicuously than other terms." 15 U.S.C. § 1632(a). Here, the pricing recap, which is the only financin disclosure, never uses the required terms "total of paym nts" or "total sale price." Rather the pricing recap uses the te m "TOTAL" for the cash price of the car before the calcula ion of an additional $3,530.36 finance charge. The sum of the a ount financed and the finance charge, which should be the "to al of payments," is termed the "Balance Due." That does not co ply with§ 1638(a) (5). The "total of the cash price of the property or services, additional charges, and the finance charge," which is the the "total sale price" defined in the statute (a d which can be computed as $15,440.74), is not disclosed in the pricing recap anywhere. That does not comply with§ 1638(a) (7). The pricing recap also does not comply with TILA b cause it does not disclose the finance charge "using that term," as required by§ 1638(a) (3), and the annual percentage rat and finance charge are not disclosed more conspicuously tha other terms, as required by§ 1632(a). Instead, those terms a e combined on one line as "Financing at 20.00% APR: 3,530 36." By -5- combining those terms, the pricing recap discloses them ess conspicuously than other terms, each of which appear on heir own line. Finally, § 1638 (a) (8) requires that certain terms b accompanied by descriptive explanations specified by the Consumer Financial Protection Bureau. The terms and expl nations are: • amount financed: "the amount of credit provided you or on your behalf" (12 C.F.R. § 1026.18(b)) • finance charge: "the dollar amount the credit wi 1 cost you" ( id. subsec. (d) ) annual percentage rate: "the cost of your credit as a yearly rate" (id. subsec. (e)) total of payments: "the amount you will have pai when you have made all scheduled payments" (id. subs e c . (h) ) total sale price: "the total price of your purch se on credit, including your downpayment of $ " (i subs e c . ( j ) ) . • • • o The pricing recap does not comply with those requiremen includes no descriptive explanation for any of those te TILA Damages Jager seeks only statutory damages. 2 TILA § 1640(a) provides that "The Court should award Jager his statutory damages Memorandum of Law 12, Oct. 17, 2014, Dkt. No. 13. 2 -6- "Pl.'s any creditor who fails to comply with any requireme imposed under this part . . with respect to any person is liable to such person in an amount equal o the sum of-( 2) (A) ( i) in the case of an individual action twice the amount of any finance charge in connectio with the transaction However not all, but only certain, TILA violations give ise to statutory damages. For those disclosures required by Sec ion 1638(a) (as in this cases) statutory damages are only gi en for violations of paragraphs (2) ("insofar as it requires a disclosure of the 'amount financed'"), u.s.c. (3)-(6), and (9). 15 § 1640 (a). Of BRAM's violations of§ 1638(a), 3 the provisions concerning the definition of the finance charge and the payments, § 1638 (a) ( 3) , otal of ( 5), give rise to statutory damages. Those violations may be formal in nature, but they go to a core purpose of TILA. By mandating the use of standard terms, TILA enables the consumer "to compare more readily the vario s credit terms available to him." 15 U.S.C. § 1601(a) When a cr ditor Violations of§ 1632(a) do not give rise to statutory damages unless they also violate the "closed list" of§ 1638(a) subsections that give ise to statutory damages. In re Ferrell, 539 F.3d 1186, 1191-92 (9th Cir. 2008) (alterations in original) (citations omitted); accord Kelen v. Word Fin. Network Nat. Bank, 763 F. Supp. 2d 391, 393 (S.D.N.Y. 2011). 3 -7- uses non-standard terms, it frustrates the consumer's ab'lity to compare different offers of credit. On the basis of the undisputed facts, BRAM violated TILA by not correctly complying with the requirement of defining the finance charge and total of payments. Accordingly, Jager is granted summary judgment on the TILA claim, and because hose violations give rise to statutory damages, he is awarded statutory damages. The amount of statutory damages depends on the type of transaction. For an individual action concerning a close end consumer credit transaction not secured by real property, statutory damages are "twice the amount of any finance c arge in connection with the transaction." 15 U.S.C. § 1640 (a) (2) (A) (i). However, statutory damages for such transactions are capped at $2,000. See Koons Buick Pontiac GMC, Inc. v. Nigh, 543 .S. 50, 62-63, 125 S. Ct. 460, 468-69 (2004). Here, the finance charge, as listed in the pricing recap, is $3,530.36. Twice that is $7,060.72, so Jager is awar ed the maximum statutory damages of $2,000. Magnuson-Moss Warranty Act BRAM moves for summary judgment on the Magnuson-Mo s Warranty Act claims on the ground that Jager's claim do s not -8- meet the $50,000 amount in controversy requirement forM gnusonMoss claims brought in federal court. Magnuson-Moss provides that: . a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to compl with any obligation under this chapter, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other lega and equitable relief-(A) in any court of competent jurisdiction in ny State or the District of Columbia; or (B) in an appropriate district court of the United States, subject to paragraph (3) of this subsection. 15 U.S.C. § 2310 (d) (1). But it also limits the subject-m tter jurisdiction of federal courts to hear Magnuson-Moss cla'ms, directing that no such "claim shall be cognizable" in a fedetal court-(A) if the amount in controversy of any individual claim is less than the sum or value of $25; (B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests an costs) computed on the basis of all claims to be determined in this suit; or (C) if the action is brought as a class actio , and the number of named plaintiffs is less than on hundred. 15 u.s.c. § 2310 (d) (3). "Jager does not dispute that his claim is for less than $50,000." Pl.'s Reply Memorandum 9, Dkt. No. 26. Accord ngly, there is no independent subject-matter jurisdiction und r -9- Magnuson-Moss. However, as there is independent subject-natte jurisdiction over the TILA claim, Jager urges this Court to exercise supplemental jurisdiction over the Magnuson-Mos' claims. 28 U.S.C. 1367(a) states that, [except] as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district cou ts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form pa~t of the same case or controversy under Article III oF the United States Constitution. Despite some different views in other circuits, see Voelker v. Porsche Cars N. Am., Inc., 353 F.3d 516, 522 Cir. 2003); Barnes v. West, e.c ., (7th Inc., 249 F. Supp. 2d 737, 739-41 (E.D. Va. 2003), the better reading of Congress's command in the Magnuson-Moss Warranty Act that no claim "shall be cognizablf in a suit brought" in federal court "if the amount in controver~y is less than the sum or value of $50,000," 15 U.S.C. § 2310(d) (3), is that, by enacting the specific jurisdictionj3.l limitations for Magnuson-Moss claims in federal court, < ongr~ss foreclosed the exercise of supplemental jurisdiction OVEr Magnuson-Moss claims for less than $50,000. See Ebin v. Kangadis Food Inc., No. 13 Civ. 2311 (S.D.N.Y. July 26, 2013) (JSR), 2013 WL 3936193, at 1 (The contention that the Class Action -10- Fairness Act creates an alternative basis for federal jurisdiction over Magnuson-Moss claims "is incorrect. In eed, it is flatly contradicted by the plain text of the MMWA. As stat d above, the MMWA provides that '[n]o claim shall be cogni able ln a suit brought under paragraph ( 1) (B) of this subsection --i.e., a suit brought under the MMWA in federal district court- unless the MMWA's independent jurisdictional requirements are m t. Since plaintiffs concededly cannot meet the MMWA's jurisdictional prerequisites, their MMWA is dismissed.") ('In v. Am. Motors Corp., 538 F. Supp. 127, 140 (S.D.N.Y. 198 enacting Magnuson-Moss, Congress implicitly negated pend nt jurisdiction of claims made under the statute that amoun to less than $50,000."). Accordingly, the Magnuson-Moss claims are dismisse for lack of subject-matter jurisdiction. State Law Claims Jager and BRAM are both citizens of New York. See ~~ 1-2. Accordingly, ompl. there is no diversity jurisdiction over the state law claims. See 28 U.S.C. § 1332(a). BRAM urges t urt to decline to exercise supplement jurisdiction over the law claims. "The district courts may decline to exercise suppl mental jurisdiction over a claim . if -11- the claim subs ant'ally predominates over the claim or claims over which the district court has original jurisdiction . ." 28 U.S.C. § 136 (c) (D). The "substantially predominates" standard of § 1367 (c) (2) creates a "limited exception" to the exercise of supplemental jurisdiction that should bE invoked only when "permitting litigation of all cla ms in the district court can accurately be described a allowing a federal tail to wag what is in substance a state dog." Luongo v. Nationwide Mut. Ins. Co., No. 95 Civ. 3190 (MB0), 1996 WL 445365, at *5 (S.D.N.Y. Aug. 7, 1996) (quoting Borouqtl of W. Mifflin v. Lancaster, 45 F. 3d 780, 789 (3d Cir. 1995)). Here, Jager's claims for deceptive business practic~s, fraud, and violation of the New York State Lemon Law invplve factual and legal issues wholly distinct from the TILA claim The TILA claim was determined, without factual dispute and solely as a matter of law, with reference to the single page pricing recap, and is limited to $2,000 in damages. Adjtdica ion of the state claims implies determining conflicting factual accounts concerning representations made by BRAM to JagEr an~ the actions of the parties following the sale, which "a e mo~e COmplex(,] require more judicial reSOUrCeS tO adjudicatE(, ardJ are more salient in the case as a whole than the federa law claims." Ibid (quoting Diven v. Amalgamated Transit Uni:tm Irt'l & Local 689, 38 F. 3d 598, 601 (D.C. Cir. 1994)). Furthe morE, they involve no issue of federal interest; Congressiona -12- policies exclude small Magnuson-Moss claims and diversit sui s involving less than $75,000 from occupying federal court and juries. Nor is there any need for federal resources and 'ury time to be expended on the (so far, unexamined) state la iss es over the purchase of a used private automobile. If the parties are unable to settle the amount of attorneys' fees to which Jager is entitled under TILA, I wil determine it. As to the state law claims, I decline to supplemental jurisdiction. CONCLUSION Plaintiff Peter Jager's motion for partial summary 'udg ent on the TILA claim (count I of the complaint) (Dkt. No. granted to the extent of $2,000 and attorneys' fees. Defendant Boston Road Auto Mall, Inc.'s cross-moti partial summary judgment (Dkt. No. 22) is granted to th ext nt that the Magnuson-Moss claims (counts II, III, and IV o the complaint) and the remaining state Lemon Law and common claims (counts V, VI, and VII of the complaint) are dis without prejudice for lack of subject-matter jurisdicti The clerk is requested to enter judgment according costs and disbursements according to law. Jager may move separately for attorneys' fees unde Rule of Civil Procedure 54 (d) (2). -13- h So ordered. Dated: New York, New York January 15, 2015 ~L..~ LOUIS L. STANTON U.S.D.J. -14- EXHIBIT A Case 1:14-cv-00614-LLS Document 1-2 Filed 01/3t/14 Page 1 of :teport: !.,.;-J..-L-.1:'-£ "•"""'""•'""' · - - - I ------------Sale Date: 11/21,/13 -:::~t:=~-~- -----------------------------------------stock i: 263 Name and address: PE'!!ER P JAGER SRQNX, 10469 718-708 5868 754 MACE AVE BRONX, NY 10467 County: BRONX Co-Buy~: None HICLE ------- ------------------- --~~--- C7 Ctm.Y LER PACIFICA; 40R VIN; 2A GF48X17R.2l390 nome l:?hone.: Work Phone: Color(s : BLUE Cell Phone: 347-504-2717 M.ileaqe • 95, 671 1 Drivers License: 406521454 NY Vohiclllll FeaturE~:>: /C; A/C: Driver Air Bag; Passenger Air Bag; Front Be-sd Air Bag: Rear Head Security SyatQ&; 1>M/FM Stereo; CD PlaYElr; M.S; Cruise Control; 1 Wheel Drive; Locks; J?ower Dr:i.ver Seat; PoWlliltr Passenger Soat: Cloth Seata; Bu et Seata; Powe Adjustable Steer:i.ng Wheel; Traction Control; Al.um.nwa Wheels; Po r Windows; A/ Sound SystG!&; Air Suspension; &ngine Immobl..lizer; CO Changer; ther Seats ,., ----- - -------- - Sues; Pr::l.ce:: 8.8750' Sales Tax: Government Fees: TracJti.nq Device: Deal.~ Fee: SQrvico Chargtliil: - 1 .00 .00 ~9,300.00 825.38 . 400.00 495.00 395.00 4!}5.00 Am.oW'lt Fi~ced: Financing at 20.0'% APR: .74 I pat-Qnt 1 P:i.ck-Up Nota :Jue on 12/21/13 ( ~t;.$ of of ~0 each ~yable s.ai-Mon~~innintJ 3 ?lus one final. ~ent of $14 .74 !tl.nal payment wilfl be duo on ~ 15/17 ';'}//
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