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Wiley v A & K Auto Sales et al.: US District Court : USED CAR - counsel allowed to withdraw; judgment against defendant's; attorney fees question reserved

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Tomeka Wiley, Civil No. 06-4611 DWF/AJB)
Plaintiff,
v. MEMORANDUM
OPINION AND ORDER
A & K Auto Sales; Jamal A. Al-Awamie;
Scott and Gloria Marina Englund
d/b/a Twin City Environments, an
assumed name; and Scott Englund,
individually,
Defendants.
________________________________________________________________________
Nicholas P. Slade, Esq., Barry & Slade, LLC, counsel for Tomeka Wiley.
Benjamin Myers, Esq., Dejvongsa, Myers & Associates, LLC, counsel for A & K Auto
Sales, and Jamal A. Al-Awamie.
Geoffrey R. Colosi, Esq., Colosi & Associates LLC, counsel for Scott and Gloria Marina
Englund.
_______________________________________________________________________
INTRODUCTION
This matter is before the Court on a Motion for Summary Judgment brought by
Tomeka Wiley against Defendants Scott Englund and Gloria Englund, and a separate
Motion for Summary Judgment brought by Wiley against Defendants A & K Auto Sales
and Jamal A. Al-Awamie. For the reasons stated below, the Court grants Wileys
motions and awards damages in the amount of ,400.
2
BACKGROUND
On or about January 10, 2006, Wiley contacted Scott Englund about purchasing a
vehicle. On that same day, Wiley purchased a 1991 Oldsmobile Cutlass for ,995 plus
taxes and license fees, for a subtotal of ,144.50. Wiley made an initial down payment
of 0 and entered into a payment agreement with Scott Englund.1 The agreement also
included a separate 0 set up charge. (Aff. of Nicholas Slade in Supp. of Mot. for
Summ. J. (Slade Aff.) 2, Ex. 1 (Dep. of Scott Englund (S. Englund Dep.) at 35.)
Wiley returned the Cutlass to Englund because there were problems with the heater. The
Cutlass had additional problems, which Scott Englund could not fix. Wiley made her
first planned payment in the amount of 0 on February 10, 2006. On or around
February 13, 2006, Wiley and Scott Englund reached an agreement for the purchase of a
Ford Escort for ,995 plus taxes and license fees. Wiley then entered into a second
retail installment contract, which included a 0 payment set up charge. Wiley made
monthly payments on this vehicle from March 2006 through July 2006. Wiley made
partial payments of 0 each in August, September, and October 2006. On or about
November 15, 2006, Wiley sent Scott Englund a letter stating that she was withholding
all further payments based on a breach of contract for failure to transfer title. Scott
Englund repossessed Wileys vehicle on or around November 20, 2006.
Scott Englund was not licensed by the State of Minnesota as a dealer in used
automobiles prior to the commencement of this action. In addition, Twin City
1 Wiley entered into a Retail Installment Contract with Twin City Environments
(also referred to as TCE), the name under which Scott Englund was doing business.
3
Environments is not licensed by the State of Minnesota as a dealer in used automobiles or
to operate as a Sales Finance Company. A & K Auto Sales is a dealer of used
automobiles and is licensed to operate a used car sales lot in Anoka, Minnesota, but not in
Hennepin or Scott Counties. Wiley asserts that Al-Awamie held the dealers license for
A & K Auto Sales.
DISCUSSION
I. Legal Standard
Summary judgment is proper if there are no disputed issues of material fact and
the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The
Court must view the evidence and the inferences that may be reasonably drawn from the
evidence in the light most favorable to the nonmoving party. Enter. Bank v. Magna Bank
of Mo., 92 F.3d 743, 747 (8th Cir. 1996). However, as the Supreme Court has stated,
[s]ummary judgment procedure is properly regarded not as a disfavored procedural
shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed
to secure the just, speedy and inexpensive determination of every action. Celotex
Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1).
The moving party bears the burden of showing that there is no genuine issue of
material fact and that it is entitled to judgment as a matter of law. Enter. Bank, 92 F.3d at
747. The nonmoving party must demonstrate the existence of specific facts in the record
that create a genuine issue for trial. Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th
Cir. 1995). A party opposing a properly supported motion for summary judgment may
not rest upon mere allegations or denials but must set forth specific facts showing that
4
there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986).
II. Claims Against Scott Englund2
Wiley asserts various claims against Scott Englund, including violations of the
Truth in Lending Act (15 U.S.C. 1601, et seq.) (TILA), violations of the Minnesota
Motor Vehicle Retail Installment Sales Act (Minn. Stat 53C.01, et seq.)
(MMVRISA), violations of the Consumer Fraud Act (Minn. Stat. 325.69), wrongful
repossession, and conversion. Wiley asserts that Defendants are liable for damages
totaling ,739.50 plus costs and reasonable attorney fees. Wileys claimed damages
break down as follows:
1. ,000 for two separate violations of the Truth in Lending Act
(15 U.S.C. 1640);
2. ,094 under Minn. Stat. 53C.12, subd. 2, related to the sale of the
Cutlass; or in the alternative 9.50 under Minn. Stat. 53C.12,
subd. 3;
3. ,893.50 under Minn. Stat. 53C.12, subd. 2, related to the sale of
the Ford Escort; or in the alternative 0.50 under Minn. Stat.
53C.12, subd 3;
4. ,000 in actual damages under the Consumer Fraud Act (Minn.
Stat. 325F.69 and Minn. Stat. 8.31);
5. 4.50 for the wrongful repossession; and
6. ,787 for conversion.
2 The parties focus their arguments on the liability of Scott Englund. Therefore, this
order does not address any liability on the part of Gloria Marina Englund.
5
At the hearing regarding the present motions, Scott Englund indicated that he does
not contest liability with respect to Wileys claims. Therefore, the Court grants Wileys
motion for summary judgment on liability. The only remaining issue before the Court is
the proper measure of damages. At the hearing, Scott Englund indicated that the issue of
damages was properly before the Court, asserted that Wileys damage claim is
unreasonable, and made a plea for proportionality.
Wiley asserts that she is entitled to ,000 under the private attorney general
statute (Minn. Stat. 8.31, subd. 3a) for the violation of the Minnesota Consumer Fraud
Act, which prohibits fraud and misrepresentations related to the sale of merchandise. See
Minn. Stat. 325F.68-.69. Specifically, Minnesota Statute section 325F.69, subd. 1,
provides:
The act, use, or employment by any person 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, is enjoinable as provided herein.
Minnesota Statute section 8.31, subd. 3a, allows private plaintiffs to seek damages if they
are injured by violations of the Consumer Fraud Act:
In addition to the remedies otherwise provided by law, any person injured
by a violation of any of the laws referred to in subdivision 1 [which
includes the Prevention of Consumer Fraud Act (sections 325F.68 to
325F.70)] may bring a civil action and recover damages, together with
costs and disbursements, including costs of investigation and reasonable
attorneys fees, and receive other equitable relief as determined by the
court.
Wiley asserts that Scott Englund received ,000 in consideration for the sale of
the two vehicles. The record demonstrates that Wiley paid 0 in a down payment for
6
the Cutlass, made an additional 0 payment on that vehicle, and made ,300 in
payments on the Ford Escort. In total, Wiley paid ,000 out-of-pocket to Scott Englund.
The Court finds that Wiley is entitled to, and Scott Englund is liable for, Wileys out-ofpocket
damages in the amount of ,000.
Wiley also asserts that she is also entitled to damages under the TILA. Generally,
the TILA requires that a creditor make certain disclosures to borrowers. With respect to
her damages claim under the TILA, Wiley points to 15 U.S.C. 1640, which provides in
relevant part:
(a) Individual or class action for damages; amount of award;
factors determining amount of award
Except as otherwise provided in this section, any creditor who
fails to comply with any requirement imposed under this part . . .
with respect to any person is liable to such person in any amount
equal to the sum of
(1) any actual damage sustained by such person as a
result of the failure;
(2)(A)(i) in the case of an individual action twice the amount
of any finance charge in connection with the transaction.
15 U.S.C. 1640(a)(1) and (a)(2)(A)(i). Here, Wiley has made no showing of any actual
damages incurred as a result of a violation of the TILA. Accordingly, she is not entitled
to damages under 15 U.S.C. 1640(a)(1). With respect to section 1640(a)(2)(A)(i),
Wiley asserts that the payment set up fees totaling ,200, constitute finance charges.
Scott Englund does not dispute that these were finance charges per se, but asserts that
the fees are exempt from the statute because they were not labeled as such. He does not,
however, provide any authority for this assertion. Therefore, the Court treats the
payment set up fees as finance charges. The record establishes that Wiley was
7
charged these fees in two separate transactions in the amounts of 0 and 0, totaling
,200. The Court finds that Scott Englund is liable to Wiley in the amount of ,400
(twice the amount of the finance charges) under 15 U.S.C. 1640(a)(2)(A)(i).
Wiley also asserts that she is entitled to damages under the MMVRISA, which
provides in part:
In case of a fraudulent violation of any provision of sections 53C.01 to
53C.14, the buyer shall have a right to recover from the person committing
such violation, to set off or counterclaim in any action by such person to
enforce such contract an amount as liquidated damages, the whole of the
contract due and payable, plus reasonable attorneys fees.
Minn. Stat. 53C.12, subd. 2. In addition, the MMVRISA provides:
In case of a failure to comply with any provision of sections 53C.01 to
53C.14, other than a fraudulent violation, the buyer shall have a right to
recover from the person committing such violation, to set off or
counterclaim in any action by such person to enforce such contract an
amount as liquidated damages equal to three times the amount of any time
price differential charged in excess of the amount authorized by sections
53C.01 to 53C.14 or , whichever is greater, plus reasonable attorneys
fees.
Minn. Stat. 53C.12, subd. 3. Wiley asserts that she is entitled to an award of ,988
under this statute, which she claims represents that amount of the whole of the contract
due and payable under Minnesota Statute section 53C.12, subd. 2. Alternatively, Wiley
seeks 9.50 and 0.50 under Minnesota Statute section 53C.12, subd. 3. The Court
concludes that Wiley has failed to demonstrate that she is entitled to damages under this
statute. First, there has been no showing that there is a contract amount that is due and
payable. The record indicates that Scott Englund repossessed the Ford Escort and there
is no indication that Scott Englund is asserting that Wiley is still liable under the contract.
8
Moreover, Wiley has not demonstrated how, without such a contract due and payable, she
is entitled to damages under Minnesota Statute section 53C.12, subd. 2. The Court also
finds that Wiley has failed to demonstrate that she is entitled to damages under Minnesota
Statute section 53C.12, subd. 3. That section allows for an award of liquidated damages
equal to three times the amount of any time price differential charged in excess of the
amount authorized by sections 53C.01 to 53C.14. Wiley simply states in a conclusory
manner, and without affidavit support or any explanation, that the amount under this
provision would total ,330. The Court declines to award the requested damages under
this statute for lack of support.
Finally, Wiley asserts that she is entitled to 4.50 and ,787 for wrongful
repossession and conversion, respectively. The Court declines to award such damages.
The Court has already awarded Wiley damages for her out-of-pocket expenses for
payments made on the contract. Wiley did not pay the contract in full and to award her
additional damages over the amount she paid for the vehicle would be inappropriate here,
particularly because Wiley has not demonstrated that she suffered any actual damages
other than her out-of-pocket expenses.
III. Claims Against A & K Auto Sales and Al-Awamie
Wiley also moves for summary judgment against A & K Auto Sales and
Al-Awamie. Wileys claims against A & K Auto Sales and Al-Awamie include claims
for violations of the Minnesota State Odometer Act, Minn. Stat. 325.13, et seq.,
violations of the Consumer Fraud Act, fraudulent misrepresentation, and breach of
9
express warranty. Wiley seeks actual damages, damages pursuant to Minnesota Statute
section 325E.16, and further relief the Court deems just and appropriate.
A & K Auto Sales is a dealer of used automobiles and is licensed to operate a used
car sales lot in Anoka, Minnesota. Wiley asserts that Al-Awamie held the dealers
license for A & K Auto Sales. Wiley bases her motion for summary judgment against
these two defendants primarily on their failure to respond to certain Requests for
Admission. In particular, pursuant to A & K Auto Sales and Al-Awamies failure to
respond to Requests for Admissions, they are deemed to have admitted that A & K Auto
Sales was not licensed to sell used cars in Hennepin or Scott Counties; that Scott Englund
was an agent for A & K Auto Sales at the time Wiley purchased the two vehicles from
Scott Englund; and that A & K Auto Sales permitted Scott Englund to operate as its agent
from a non-licensed location.
A& K Auto Sales and Al-Awamie concede that they failed to respond to Wileys
Requests for Admission. However, A & K Auto Sales and Al-Awamie maintain that they
did not at any time authorize or give permission to Scott Englund to use their name,
property, or corporate or personal resources. A & K Auto Sales and Al-Awamie also
maintain that the only basis for Wileys claims arises from their failure to respond to
Requests for Admission, but that the subsequent deposition of Scott Englund
demonstrates that he had no authorization to act on behalf of A & K Auto Sales. Based
on this representation, A & K Auto Sales and Al-Awamie assert that it would be unfair to
hold them accountable in this action.
10
The Court cannot ignore A & K Auto Sales and Al-Awamies failure to respond to
Wileys Requests for Admission. A matter is deemed admitted if a party fails to timely
respond to such a request. Fed. R. Civ. P. 36(c). Moreover, there is evidence in the
record that the Ford Escort that Wiley purchased from Scott Englund was bought from a
third-party by A & K Auto Sales on February 8, 2006. There is no evidence that
ownership of the Ford Escort changed after that date and before Wiley purchased the
vehicle from Scott Englund. Therefore, there is evidence of a connection between A & K
Auto Sales, Al Awamie, and Scott Englund.
Based on A & K Auto Sales and Al-Awamies deemed admissions and the record
evidence indicating that A & K Auto Sales owned the car sold to Wiley, the Court grants
Wileys motion as to liability with respect to A & K Auto Sales and Al-Awamie. Insofar
as Wiley seeks actual damages, the Court notes that it has already determined those
damages to be ,000. A & K Auto Sales and Al-Awamie will be jointly and severally
liable with Scott Englund for those damages. Wiley further seeks damages under
Minnesota Statute section 325E.16. In addition to actual damages, that statute allows the
Court, in its discretion, to increase the award of damages up to three times the actual
damages sustained. See Minn. Stat. 325E. 16, subd. 3.3 The Court declines to treble
the damages in this case.
3 Minn. Stat. section 325E. 16, subd. 3 reads:
Civil action. Any person injured by a violation of sections 325E.13 to
325E.16 shall recover the actual damages sustained together with costs and
disbursements, including a reasonable attorneys fee, provided that the
(Footnote Continued On Next Page)
11
IV. Motion to Withdraw
At the hearing on this matter, counsel for A & K Auto Sales and Al-Awamie
represented that he previously attempted to withdraw as counsel from his representation
in this case. Counsel represented to the Court that he has not had any significant contact
with his clients in over two years. Counsel reasserted his standing motion to be
discharged.
An attorney may be permitted to withdraw as counsel of record only by order of
the Court. D. Minn. LR 83.7(a). Withdrawal without substitution may be granted only
by a motion before the Court, for good cause shown. D. Minn. LR 83.7(c). Based on a
review of the file, the Court finds that good cause exists to allow Benjamin Myers, Esq.,
and the law firm of Dejvongsa, Myers & Associates, LLC, to withdraw from representing
A & K Auto Sales and Al-Awamie.
CONCLUSION
1. Wileys Motion for Summary Judgment (Doc. No. 32 ) is GRANTED.
2. Wileys Motion for Summary Judgment (Doc. No. 35 ) is GRANTED.
3. Scott Englund, A & K Auto Sales and Al-Awamie are liable to Wiley for
actual damages in the amount of ,000.
(Footnote Continued From Previous Page)
court in its discretion may increase the award of damages to an amount not
to exceed three times the actual damages sustained or ,500, whichever is
greater.
12
4. Scott Englund is liable to Wiley for damages under the Truth in Lending
Act in the amount of ,4000
5. The Motion to Withdraw as Counsel of Record for A & K Auto Sales and
Al-Awamie is GRANTED.
6. The Court will consider the propriety and any amount of attorney fees by a
separate motion.
Dated: December 15, 2008 s/Donovan W. Frank
DONOVAN W. FRANK
Judge of United States District Court
 

 
 
 

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