The opinion
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
MELISSA GILVIN, et al., :
: Case No. 1:18-cv-00107
Plaintiffs, :
: Judge McFarland
v. :
: Magistrate Judge Bowman
FCA US LLC, et al., :
:
Defendants. :
REPORT AND RECOMMENDATION
This civil action is now before the Court on Defendant FCA US LLC (“FCA”) and
Defendant Impartial Services Group a/k/a Stericycle Expert Solutions (“ISG”) separate
motions for summary judgment (Docs. 79, 71) and the parties’ responsive memoranda.
(Docs. 85, 88, 75, 87). Based on the pleadings and arguments contained within the
memoranda, the undersigned finds that neither motion is well-taken.
I. Background & Facts
Plaintiffs reside in Clermont County, Ohio. Defendant FCA distributes, markets,
and sells FCA motor vehicles to persons in Ohio. (Doc. 3). Defendant ISG is an agent of
FCA US LLC.
On or about May 4, 2016, Plaintiffs entered into a written lease agreement with the
Jeff Wyler Eastgate dealership for a model-year 2016 Ram 1500 truck (“the Lease
Agreement”). (Doc. 46, Ex. E, Lease Agreement, PageID ##483-84; see also Doc. 4).
The 2016 Ram truck was sold, manufactured or distributed by Defendant FCA US LCC.
(Doc. 4). In the Retail Lease Order they signed, Plaintiffs’ acknowledged that they
understood Jeff Wyler Eastgate was “in no respect the agent of the Manufacturer,” and
that Plaintiffs’ and the dealership were “the sole parties” to the Agreement. (Doc. 46, Ex.
3).
The vehicle was out of service by reason of repair for a cumulative total of 30 or
more calendar days. (Doc. 4). The vehicle had battery and transmission issues and often
would not start. (Doc. 46, Ex. 5). Additionally, the digital dashboard screens had problems
and the check engine light was on. (Id.). Plaintiffs have submitted a lengthy service record
from Jeff Wyler. (Doc. 48, Exs. 7-12).
FCA, their agents and/or their authorized dealer, were unable to conform Plaintiffs
motor vehicle to any applicable express warranty by repairing or correcting the
nonconformity after a reasonable number of repair attempts. (Doc. 4, at ¶ 18). In January
2017, Plaintiff returned the vehicle to Jeff Wyler. (Doc. 46, Ex. 5, Interrogatory No. 1).
Thereafter, Plaintiffs were forwarded to Defendant FCA’s agent, ISG, to facilitate an
informal dispute resolution regarding the refund process. (Doc. 48, Ex. 4).
On April 27, 2017, ISG sent Plaintiffs an offer for compensation for the return of
their vehicle. (Doc. 48, Ex. 3). ISG was authorized by FCA to offer Plaintiffs $4,106.05.
(Id.). At the time of this offer, Plaintiffs were current on their lease payments, having paid
$5,046.69 ($458.79 x 11 months). (Doc. 46, Exs. 2, 5). Plaintiffs understood that they
were responsible for minor damage to the bumper, estimated at $465.64. (Doc. 48, Exs.
3, 6).
On May 2, 2017, ISG told Plaintiffs that they were “only entitled to the monthly
payments less the damages to the vehicle which they provided the estimate for in the
amount of $465.64.” (Doc. 48, Ex. 15). Under this evaluation, Plaintiffs contend that the
amount refunded to them for their nonconforming vehicle should have been $4,581.05
($5,046.69 - $465.64).
On May 12, 2017, ISG altered their explanation of the offer, and told Plaintiffs that
they were “only entitled to his monthly payments less the damages to the vehicle and the
fees covered to outside sources in the matter of the security deposit, title/registration and
sales tax. (Doc. 48, Ex. 16). Plaintiffs were told that since FCA had paid the costs of taxes,
title fees, and security deposits (or had simply waived these costs), they were not included
in the offer being made. (Doc. 48, Ex. 15, 16). ISG gave Plaintiffs a few days to accept
the settlement offer, otherwise ISG would close the case. (Doc. 48, Ex. 15). Plaintiffs did
not accept the settlement offer from ISG. (Doc. 48, Ex. 17). This action followed.
Plaintiffs originally filed this action in the Court of Common Pleas for Clermont
County, Ohio in January 2018. Plaintiffs seek relief for, inter alia, “damages in excess of
$25,000 … for the refund of the full purchase price of their nonconforming motor vehicle.”
(Doc. 1, Ex. B at p. 25). In addition to compensatory damages, Plaintiffs also seek punitive
damages, attorneys’ fees, and injunctive and declaratory relief. Id. at ¶ 92 (averring that
for their fraud claim Plaintiffs are “seeking damages, plus punitive damages, interest, and
attorneys’ fees”); (Id. at ¶¶ 105-06)(requesting injunctive relief and declaratory relief); See
also id. at ¶¶ 107-08)(seeking recovery of attorneys’ fees). Plaintiffs filed this action on
behalf of themselves as well as two classes of persons.
Defendants filed a notice of removal with this court on February 14, 2018. (Doc.
1). Defendants’ notice of removal asserted jurisdiction under 28 U.S.C. § 1332(d)(2),
which is commonly referred to as the Class Action Fairness Act (“CAFA”), as well as
diversity jurisdiction pursuant to 28 U.S.C. §1332(a). Following removal, Plaintiffs sought
to remand this matter back to state court (Doc. 15) and Defendants Ally and FCA filed
separate motions to dismiss (Docs. 16, 17). The undersigned addressed all three motions
in a single Report & Recommendation. (Doc. 27, adopted by the Court in Doc. 30).
Plaintiffs motion to remand was denied. (Id.). FCA’s motion was granted in part,
dismissing paragraphs 45, 57, and 94 of Plaintiffs’ Amended Complaint containing class
allegations relating to a “fail-safe” class. (Docs. 27, 29). Ally’s motion was granted,
dismissing them from the action. (Id.).
Defendant FCA has previously filed a motion for summary judgment (Doc. 47),
which the undersigned has recommended be denied. (Doc. 77). The Court has not yet
issued an order adopting or rejecting this R&R. Defendant FCA now moves again for
summary judgment, and Defendant ISG moves for the first time for summary judgment
on Plaintiff’s claims against them. These motions will be addressed in turn.
II. Legal Standard
In a motion for summary judgment, “a court must view the facts and any inferences
that can be drawn from those facts … in the light most favorable to the nonmoving party.”
Keweenaw Bay Indian Comm. v. Rising, 477 F.3d 881, 886 (6th Cir. 2007) (internal
quotation marks omitted). “Summary judgment is only appropriate ‘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 a judgment as a matter of law.’” Id. (quoting Fed. R. Civ. P.
56(c)) (internal quotation marks omitted). “Weighing of the evidence or making credibility
determinations are prohibited at summary judgment – rather, all facts must be viewed in
the light most favorable to the non-moving party.” Id.
The requirement that facts be construed in the light most favorable to the Plaintiff,
however, does not mean that the court must find a factual dispute where record evidence
contradicts Plaintiff’s unsupported allegations. After a moving party has carried its initial
burden of showing that no genuine issues of material fact remain in dispute, the burden
shifts to the non-moving party to present specific facts demonstrating a genuine issue for
trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
“The ‘mere possibility’ of a factual dispute is not enough.” Mitchell v. Toledo Hosp., 964
F.2d 577, 582 (6th Cir. 1992) (citing Gregg v. Allen-Bradley Co., 801 F.2d 859, 863 (6th
Cir. 1986)). In order to defeat the motion for summary judgment, the non-moving party
must present probative evidence that supports its complaint. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249-50 (1986). The non-moving party’s evidence “is to be believed,
and all justifiable inferences are to be drawn in his favor.” Id. at 255. The court determines
whether the evidence requires submission to a jury or whether one party must prevail as
a matter of law because the issue is so one-sided. Id. at 251-52.
To demonstrate a genuine issue of fact, the opposing party “must do more than
simply show that there is some metaphysical doubt as to the material facts … Where the
record taken as a whole could not lead a rational trier of fact to find for the nonmoving
party, there is no ‘genuine issue for trial.’” Matsushita, 475 U.S. at 587 (citation omitted).
III. Plaintiffs have a legitimate claim against FCA under Ohio’s Lemon Law
Defendant FCA supports its motion for summary judgment by arguing that Plaintiffs
would be given a “windfall” if FCA were required to pay more than their initial settlement
offer of $4,106.05. (See Doc. 79, PageID ##790-791). They argue that their offer removes
the taxes, title fees and security deposit on Plaintiffs’ vehicle, which Plaintiffs admits they
did not pay for, so in turn Plaintiffs are not entitled to a return of the value of those items.
Defendant FCA relies on a case from California, Deleon v. Ford Motor Co. to make
the argument that lemon laws in Ohio are not designed to give a windfall to an injured
buyer. In Deleon, the Plaintiff car buyer had traded in an old vehicle as part of her down
payment on a new vehicle. Deleon v. Ford Motor Co., 2019 WL 7195325 at *9 (CD Cal.
2019). The old vehicle had negative equity, which was applied to the loan balance for the
new vehicle. Id. Upon returning the new vehicle under California’s lemon law, the Plaintiff
sought to recoup this negative equity. Id. The Central District of California determined that
the Defendant manufacturer was not required to refund the negative equity because the
state’s lemon law only required reimbursement of the actual price of the new motor
vehicle, not amounts owed on older vehicles. Id. at *11.
Deleon is not controlling law in this District, and it is not on point. Here, Plaintiffs
are not asking for a windfall, but instead are asking for reimbursement of the money they
actually spent on their leased vehicle. Additionally, the costs at issue here are costs that
are explicitly included in the reimbursement mandate within ORC §1345.72. It is
uncontested that Plaintiffs paid $5,046.69 on their vehicle lease. It is also uncontested
that this value did not include the taxes, title fees, and security deposit, due to the
dealership’s “no money down” offer on the leased vehicle. To remove those costs from
the actual money paid by Plaintiffs would require Plaintiffs to cover costs upon returning
a lemon vehicle that they otherwise would have been refunded, had they paid those fees
at signing. ORC §1345.71 explicitly includes the fees at issue in the definition of “full
purchase price,” and ORC §1354.72 explicitly requires the manufacturer of a lemon
vehicle to refund the “full purchase price” upon return of the vehicle.
Defendant FCA also argues that they were not required under Ohio’s Lemon Law
to offer the Plaintiffs the “full purchase price.” In making this argument, they rely on
Maitland v. Ford Motor Co., in which the Ohio Supreme Court found that Ohio’s Lemon
Law did not permit a car buyer to bring an action against the manufacturer of a lemon
vehicle after accepting a settlement offer for less than the full purchase price. Maitland v.
Ford Motor Co., 103 Ohio St. 3d 463. In other words, Ohio’s Lemon Law permits
settlements for less than the full purchase price, and a person who has accepted such a
settlement cannot later bring suit for the difference.
Defendant FCA argues that the Maitland holding applies not only to accepted
settlements, but settlement offers that are rejected by the buyer, as is the case here.
However, this proposed interpretation of Maitland perverts its holding and would
effectively bar any action under Ohio’s Lemon Law. The Maitland court analyzed the
requirements of bringing a suit under Ohio’s Lemon Law. Prior to initiating a civil suit, “the
consumer must … resort to an informal dispute-resolution process if one exists.” Maitland,
103 Ohio St. 3d at 466. This process may be performed by a manufacturer-established
dispute settlement board, though the creation of such a board is optional. Id. A settlement
offer is “binding on the manufacturer, but not on the consumer … The consumer may
reject the decision and pursue a civil action under R.C. 1345.75.” Id. If the consumer
accepts an offer, “the dispute is considered settled once the manufacturer performs.” Id.
Defendants do not allege that Plaintiffs failed to attempt informal dispute resolution
on this claim. Instead, they allege that Maitland’s holding means that “a defendant cannot
be held liable when it offers less than the ‘full purchase price’ during a settlement
negotiation.’” Doc. 79, PageID #792. However, Maitland allows for civil action where a
settlement offer is rejected by the buyer, as is the case here. Plaintiffs received a
settlement offer from Defendant ISG on behalf of Defendant FCA. They did not accept
the offer, and Defendant ISG closed the case on behalf of Defendant FCA. Plaintiffs are
therefore fully entitled to bring suit against Defendant FCA for the full purchase price of
their vehicle under Ohio’s Lemon Law.
FCA has failed to establish that they are entitled to judgment as a matter of law
with respect to Plaintiff’s lemon law claim.
IV. Plaintiffs have alleged sufficient facts to hold Defendant ISG liable for fraud
Defendant ISG offers several independent arguments for why Plaintiffs’ claims
against them fail.
ISG’s first argument is that it is not liable for fraud because Plaintiffs claims arise
from communications made at the time they signed their lease with Jeff Wyler, months
before ISG’s involvement in the situation. ISG quotes eight separate paragraphs of the
Amended Complaint, each which include allegations against FCA in regards to the “No
Money Down” offer on Plaintiffs’ lease. Noticeably, ISG does not quote any of the
paragraphs in which Plaintiffs allege fraud in the buyback process. Plaintiffs quote ISG’s
website in which they position themselves as experts on the lemon laws of various states
(Doc. 4, Amended Complaint at ¶ 23), and then include several allegations of fraud
against ISG specifically – namely that ISG misrepresented their knowledge of and
compliance with Ohio’s Lemon Law in order to induce Plaintiffs into accepting a
settlement offer for less than the full amount available to them under that law. Id. at ¶ 69.
Plaintiffs allegations include communications they had directly with ISG, so ISG’s first
argument is not well taken.
Defendant ISG’s second argument in support of its motion is that it was operating
at all times as an agent of Defendant FCA, a fact which was disclosed to and known by
all parties. Citing Plain Dealer Publ. Co. v. Worrell, 178 Ohio App. 3d 485, 489 (9th Dist.
2008), ISG argues that, as an agent of a disclosed principal, they are not liable for any of
their actions taken on behalf of FCA. Plain Dealer summarizes the law accurately, but
only in regards to actions arising in contract. Here, Plaintiffs action for common law fraud
rises from tort. See Russ v. TRW, 59 Ohio St. 3d 42, 49 (1991). “[I]t is a generally
accepted proposition of agency and tort law that even a disclosed agent, acting on behalf
of his principal, is personally liable for his own torts – including negligence.” Adamo
Equipment Co. v. Alexander & Alexander, Inc., 1987 U.S. App. LEXIS 7978 at *6-7 (6th
Cir.). Agency immunity is not a defense for ISG in this case.
ISG also argues that Plaintiffs’ fraud claims fail because Plaintiffs cannot show
justifiable reliance, as is necessary when asserting a fraud claim. ISG claims that,
because Plaintiffs ultimately rejected the offer of settlement, that Plaintiffs could not have
relied on any communication from ISG. Reliance is one factor directly addressed by the
undersigned in a Report & Recommendation following Defendant FCA’s first motion for
summary judgment: “Plaintiffs relied on Defendant’s statements and were induced to
even take part in the buyback process by the misrepresentation of a return of the full
purchase price for their nonconforming vehicle. Plaintiffs’ contend that FCA’s conduct has
resulted in lasting negative consequences to Plaintiffs such as the financial loss, the
impact on Plaintiffs’ credit, and the extreme amount of time incurred and strain caused by
FCA’s actions.” (Doc. 77 at PageID #768). While the previous R&R addresses FCA’s
alleged actions with respect to Plaintiffs’ fraud claim, these actions are the same as those
taken by ISG, and so the same conclusion follows. Plaintiffs have alleged sufficient facts
that they relied upon ISG’s representations that they would receive a refund of their full
purchase price if they chose to return their vehicle, and suffered due to that reliance, in
order to survive Defendant ISG’s motion for summary judgment in their favor.
Finally, Defendant ISG argues that it is not liable due to the fact that it is not a
manufacturer, and Ohio’s Lemon Law only enforces a duty upon manufacturers of lemon
vehicles. However, Plaintiffs’ fraud claims against Defendants are independent of their
Lemon Law claim. See Doc. 77 (where the undersigned treated Plaintiffs’ Lemon Law
and fraud claims as separate causes of action against Defendant FCA). As discussed
above, Defendant ISG is liable for any acts of fraud it has committed, and Plaintiffs have
alleged sufficient facts to survive Defendant ISG’s motion for summary judgment.
V. Conclusion and Recommendation
For the reasons explained herein, IT IS RECOMMENDED THAT Defendant FCA’s
motion for summary judgment (Doc. 79) and Defendant ISG’s motion for summary
judgment (Doc. 71) be DENIED.
s/Stephanie K. Bowman
Stephanie K. Bowman
United States Magistrate Judge
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
MELISSA GILVIN, et al., :
: Case No. 1:18-cv-00107
Plaintiffs, :
: Judge McFarland
v. :
: Magistrate Judge Bowman
FCA US LLC, et al., :
:
Defendants. :
NOTICE
Pursuant to Fed. R. Civ. P. 72(b), any party may serve and file specific, written
objections to this Report & Recommendation (“R&R”) within FOURTEEN (14) DAYS after
being served with a copy thereof. That period may be extended further by the Court on
timely motion by either side for an extension of time. All objections shall specify the
portion(s) of the R&R objected to, and shall be accompanied by a memorandum of law in
support of the objections. A party shall respond to an opponent’s objections within
FOURTEEN DAYS after being served with a copy of those objections. Failure to make
objections in accordance with this procedure may forfeit rights on appeal. See Thomas
v. Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).