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Streater v. Sarchione Chevrolet, Inc.

United States District Court, N.D. Ohio, Eastern Division

July 5, 2019

JOSEPH STREATER, PLAINTIFF,
v.
SARCHIONE CHEVROLET, INC., DEFENDANT.

          MEMORANDUM OPINION AND ORDER

          HONORABLE SARA LIOI UNITED STATES DISTRICT JUDGE.

         Before the Court is the motion for class certification filed by plaintiff Joseph Streater (“Streater”). (Doc. No. 38, Motion [“Mot.”]; Doc. No. 39, Memorandum in Support [“Memo.”].) Defendant Sarchione Chevrolet, Inc. (“Sarchione”) filed a brief in opposition (Doc. No. 44 [“Opp'n”]), and Streater filed a reply (Doc. No. 46 [“Reply”]). For the reasons set forth herein, Streater's motion is denied.

         I. BACKGROUND[1]

         On March 20, 2018, Streater filed a class action complaint against Sarchione seeking relief under the Truth in Lending Act, 15 U.S.C. § 1601, et seq. (“TILA”) and the Ohio Consumer Sales Practices Act, Ohio Rev. Code § 1345.01, et seq. (“OCSPA”). (Doc. No. 1.) On April 14, 2018, Streater filed his first amended class action complaint (Doc. No. 7), adding several individual state-law claims. On August 1, 2018, the Court granted Streater's motion for leave to file a second amended complaint to add another class claim under the Equal Credit Opportunity Act, 15 U.S.C. § 1691, et seq. (“ECOA”). The second amended complaint was filed on August 3, 2018. (Doc. No. 29 [“SAC”].) Streater alleges that Sarchione violated federal and state consumer protection statutes in connection with the sale of new and used motor vehicles.

         II. DISCUSSION

         A. Factual Background

         Streater, who was and is a resident of New Jersey, wanted to purchase a 2014 (or newer) Chevrolet Camaro ZL1. In or around August of 2017, Streater searched the Internet and located several such vehicles for sale by various dealers, including Sarchione, which does business in Randolph, Ohio. Although Streater negotiated purchases with at least three other dealers, he was unable to obtain financing because he had a credit problem. (SAC ¶ 13; Doc. No. 45, Deposition of Joseph Streater [“Streater Dep.”] at 646; 677-82.[2])

         Streater eventually negotiated a purchase remotely with a Sarchione salesperson, Todd Bollman (“Bollman”). (SAC ¶¶ 14-15; Streater Dep. at 695.) Streater claims he disclosed his credit problems immediately (Streater Dep. at 698), but Sarchione assured him that it could obtain credit for him, if not through a bank, then through a subprime lender (such as Santander[3] or Westlake, both of whom were familiar to Streater). (Id. at 702-03; see also SAC ¶ 14.) Streater testified that he was advised by Bollman that preapproval for his financing had been obtained from Santander, provided he make a down payment of $10, 000 or $12, 000, which he was willing to do. (Streater Dep. at 708; SAC ¶ 18.)

         Streater entered into a retail installment sale contract (“RISC”) with Sarchione on October 28, 2017, for the purchase of a used 2017 Chevrolet Camaro. On the same day, he executed a Spot Delivery Agreement (“SDA”), which provided, inter alia, that Streater could take delivery of the vehicle before financing was approved.[4] (SAC ¶ 19.) Ultimately, Sarchione was unable to obtain financing from Santander, or from anyone else, on the original terms and the deal fell through. (Doc. No. 37, Deposition of Dane Wise [“Wise Dep.”] at 364; Streater Dep. at 752.)

         Streater never took possession of the Camaro and, apparently, forfeited at least $1, 000 of the down payment. (Streater Dep. at 760.) In addition, Streater alleges that, while he was trying to figure out how to retrieve from Sarchione the vehicle he had traded in, Sarchione contacted the lienholder and misrepresented that Streater had abandoned the vehicle, whereupon the lienholder repossessed the vehicle (even though Streater was allegedly still making the payments on it) and wrongfully sold it at auction. (SAC ¶ 23.)

         B. Legal Standards

         The class action is “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Califano v. Yamasaki, 442 U.S. 682, 700-01, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). To justify a departure from that rule, “a class representative must be part of the class and ‘possess the same interest and suffer the same injury' as the class members.” E. Tex. Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403, 97 S.Ct. 1891, 52 L.Ed.2d 453 (1977) (quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 216, 94 S.Ct. 2925, 41 L.Ed.2d 706 (1974)).

         Rule 23(a) sets out four requirements-numerosity, commonality, typicality, and adequate representation-that “effectively limit the class claims to those fairly encompassed by the named plaintiff's claims.” Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 156, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982) (quotation marks and citation omitted). This is not “a mere pleading standard.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011). Rather, “certification is proper only if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied[.]” Id. at 350-51 (quotation marks and citation omitted). “No class that fails to satisfy all four of the prerequisites of Rule 23(a) may be certified, and each class meeting those prerequisites must also pass at least one of the tests set forth in Rule 23(b).” Sprague v. Gen. Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998) (en banc).

         “Rule 23(b)(3) classes must also meet an implied ascertainability requirement.” Sandusky Wellness Ctr., LLC v. ASD Specialty Healthcare, Inc., 863 F.3d 460, 466 (6th Cir. 2017) (citing Cole v. City of Memphis, 839 F.3d 530, 541 (6th Cir. 2016)). “It is the party seeking class certification-here, [Streater]-that bears the burden of ‘affirmatively demonstrat[ing]' compliance with Rule 23.” Id. at 466-67 (quoting Wal-Mart, 564 U.S. at 350).

         C. Analysis

Streater seeks to certify the following class under Fed.R.Civ.P. 23(b)(3):[5]
All persons who have signed a retail installment sale contract (RISC) prepared by [d]efendant and whose signatures were also obtained by [d]efendant on a form entitled “Limited Right to Cancel-Purchase (Spot Delivery)” or similar document purporting to give [d]efendant the ability to revoke the RISC under certain circumstances within one year of the filing of plaintiff's complaint [same as or more specifically defined as all persons who signed a retail installment sales contracts ([RISC]) similar or identical to exhibit “A” attached which contained a limited right to cancel provision where the box was not checked as being applicable and who were also required to sign a spot delivery agreement similar or identical to exhibit “B” from March 20, 2017 through the filing of [p]laintiff's initial complaint].

(Mot. at 477.) Streater alleges, in support of his class allegations, that Sarchione “surreptitiously” obtains buyers' signatures on documents and delivers vehicles to customers “with no intention to honor any contract term or provision.” (SAC ¶ 2.) Streater alleges that the RISC provided that Sarchione was the “seller-creditor” who was extending credit to Streater, whereas the SDA provided that Sarchione could void or change the terms of the RISC if Sarchione was unable to sell the deal to a third party. (Id. ¶ 19.) Streater argues that, whereas the RISC contained material credit disclosures required by TILA, the language in the SDA purported to relieve Sarchione of its “creditor” status. (Memo. at 532.)

         1. Ascertainability

         Sarchione asserts that the class proposed by Streater does not meet the ascertainability requirement. (Opp'n at 579-83.) “[T]he touchstone of ascertainability is whether the class is objectively defined, so that it does not implicate the merits of the case or call for individualized assessments to determine class membership.” Stewart v. Cheek & Zeehandelar, LLP, 252 F.R.D. 387, 391 (S.D. Ohio 2008). “[A] class should not be certified where extensive factual inquir[i]es are required to determine whether individuals are members of a proposed class[.]” Napier v. Laurel Cty., No. 6:06-368-DCR, 2008 WL 544468, at *6 (E.D. Ky. Feb. 26, 2008).

         Streater's proposed class would include any customer of Sarchione who, between March 20, 2017 and March 20, 2018, signed both a RISC similar to the one Streater signed and any form of an SDA (or its equivalent) purporting to give Sarchione the ability to revoke the RISC under certain circumstances.

         In Givens v. Van Devere, Inc., No. 5:11CV666, 2012 WL 4092738 (N.D. Ohio Sept. 17, 2012), on facts similar to the instant case, this Court rejected a motion seeking class certification, concluding that there were ‚Äúsignificant differences in the forms signed by the various putative class members . . . [that would require] a person-by-person analysis to simply determine which ...


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