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Price v. Berman's Automotive, Inc.

United States District Court, D. Maryland

July 5, 2016

ANTHONY PRICE, et al., Plaintiffs
v.
BERMAN'S AUTOMOTIVE, INC., Defendant.

          MEMORANDUM OPINION

          J. MARK COULSON UNITED STATES MAGISTRATE JUDGE.

         I. PROCEDURAL POSTURE

         This matter was originally filed on March 12, 2014 and stems from the Plaintiffs' purchase of an automobile from Defendant on February 25, 2014. The original Complaint included claims for violations of the Truth in Lending Act, 15 U.S.C. §1601-1667f ("TILA"), the Maryland Consumer Protection Act, Md. Code Ann., Com. Law §§ 13-101-13-501, and the Uniform Commercial Code ("UCC") § 2-608. (Compl., ECF No. 1.) Jurisdiction in this Court was premised on 15 U.S.C. § 1640 and 28 U.S.C. §§ 1331 and 1367.

         The Complaint was amended on May 7, 2014 to add counts for common law deceit by non-disclosure or concealment and negligent misrepresentation, violation of Code of Maryland Regulations ("COMAR") § 11.12.01.15(A), and violation of Maryland Code Annotated, Commercial Law § 12-694. The UCC count was dropped. (Am. Compl., ECF No. 6.)

         By order dated November 4, 2014, Chief Judge Blake of this Court granted, in part, Defendant's Motion to Dismiss. As a result of this order, the remaining counts consisted of: a violation of TILA's "timing" requirement regarding disclosures, [1] the common law deceit claim, better treated as a claim for fraud, the negligent misrepresentation claim, and part of the Maryland Consumer Protection Act claim.[2] (Mem., Nov. 4, 2014, ECF No. 10.)

         The parties consented to proceed before a United States Magistrate Judge on December 16 and 17, 2014. (ECF Nos. 20, 22.) Defendant moved for summary judgment on the remainder of the Amended Complaint on July 17, 2015. (ECF. No. 27.) This Court granted Defendant's motion in part on September 28, 2015. (ECF No. 33.) As a result of that order, Plaintiffs' claims were further narrowed. Plaintiffs' TILA claim was limited to their actual damages (the failure of Defendant to return their $1200 deposit), and their fraud/deceit, negligent misrepresentation, and Maryland Consumer Protect Act claims remained.

         On or about October 21, 2015, Defendant apparently tendered the $1200.00 plus interest to Plaintiffs and, on February 2, 2016, Defendant moved to dismiss based on lack of subject matter jurisdiction. (ECF No. 40.) By order dated March 21, 2016, this Court denied Defendant's motion without prejudice, instructing Defendant that if it submitted proof of delivery of a cashier's check in the amount of $1200.00 plus interest, the TILA claim, the negligent misrepresentation claim, and the Maryland Consumer Protection Act claim would be dismissed for mootness. (ECF No. 45.) The Court further indicated that it would retain jurisdiction over the remaining fraud claim to the extent it alleged punitive damages, under its supplemental jurisdiction.

         On May 4, 2016, Defendant filed another motion to dismiss for mootness, having followed the Court's instructions set forth in its March 21, 2016 order. (ECF No. 49.) By order dated May 27, 2016, this Court dismissed as moot all remaining claims except Plaintiffs' claim for punitive damages under their common law fraud theory.[3]

         A trial on this remaining theory was held on June 13, 2016. For the reasons stated below, the Court finds no liability for punitive damages for fraud and enters judgment on behalf of Defendant. Pursuant to Rule 52 of the Federal Rules of Civil Procedure, the Court's findings of fact, legal analysis and conclusions of law are set forth separately below.

         II. FINDINGS OF FACT

         1. Plaintiff Anthony Price is 26 years old. He did not finish high school and left in the 11th grade. He has been employed as a line cook since then. His partner, Virginia Aldrich, is 28 years old. She left high school in the 10th grade and has been employed as a bartender since then.

         2. On February 25, 2014, Mr. Price and Ms. Aldrich decided to try to purchase a vehicle. After being told by one dealership that their credit was not good enough, they were directed by that dealership to Berman's Automotive ("Berman's").

         3. Mr. Price and Ms. Aldrich arrived at Berman's at 6 or 7 p.m. on February 25, 2014. They told unknown Berman's personnel that they were looking for an SUV and were then introduced to an unknown Berman's salesman.

         4. Mr. Price and Ms. Aldrich looked at several vehicles on the lot with the Berman's salesman and told him that they had $1200.00 with them for a down payment and were looking to pay no more than $300.00/month for a vehicle. The Berman's salesman said that Berman's had vehicles within that range, and after a test drive, Mr. Price and Ms. Aldrich decided to purchase a 2003 Jeep Cherokee.

         5. Mr. Price and Ms. Aldrich agreed to purchase the Jeep and Berman's agreed to sell them the Jeep for a total price of $11, 318.76 (including tax, various fees and costs), consisting of a down payment of $2000.00, and $9, 318.76 to be financed at a payment of approximately $300.00/month for 36 months.

         6. Mr. Price and Ms. Aldrich could not pay the full $2000.00 down payment on February 25, 2014 because they only had $1200.00 with them. Mr. Price and Ms. Aldrich agreed with Berman's to pay the remaining $800.00 of the $2000.00 down payment by March 11, 2014.

         7. Mr. Price and Ms. Aldrich signed at least one unidentified document with the Berman's salesman. The salesman told them that he was going to get someone from the Berman's Finance Department to finish their paperwork.

         8. Mr. Price and Ms. Aldrich went to the office of Berman's Finance Manager, Ms. Nathlee Miales, to complete their paperwork for the purchase of the Jeep. Ms. Miales has worked for Berman's for five years and has been involved in automobile financing for various dealerships for 20 years.

         9. Ms. Miales understood that Mr. Price and Ms. Aldrich had only $1200.00 with them, had agreed to pay the remaining $800.00 of the down payment by March 11, 2014, and could only afford payments of around $300.00/month. Ms. Miales further understood that Mr. Price and Ms. Aldrich were going to take the Jeep home with them that day (February 25, 2014).

         10. Ms. Miales does not negotiate terms of sale nor does she obtain financing approval for buyers. That is done by Berman's General Manager before Ms. Miales generates a customer's paperwork. The terms are communicated to Ms. Miales through a "worksheet" from Berman's General Manager.

         11. Loan approval for financing at $300.00/month for 36 months with a $2000.00 down payment (the "36-month financing") had already been obtained from a third-party lender by the General Manager prior to Ms. Miales dealing with Mr. Price and Ms. Aldrich. She confirmed the terms of the 36-month financing with Mr. Price and Ms. Aldrich by going over the "worksheet" from the General Manager with them. Ms. Miales confirmed with Mr. Price and Ms. Aldrich that ...


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