Ohio Credit Repair Law
Article
30. Credit Repair Services Act
Baldwin's Ohio Revised Code Annotated Currentness
Title XLVII. Occupations--Professions
Chapter
4712.
4712.01 Definitions
As used in sections 4712.01 to 4712.14 of the Revised
Code:
(A) "Buyer" means an individual who is solicited to
purchase or who purchases the services of a credit services organization for
purposes other than obtaining a business loan as described in division (B)(6)
of section 1343.01 of the
Revised Code.
(B) "Consumer reporting agency" has the same meaning as
in the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A. 1681a,
as amended.
(C)(1) "Credit
services organization" means any person that, in return for the payment of
money or other valuable consideration readily convertible into money for the
following services, sells, provides, or performs, or represents that the person
can or will sell, provide, or perform, one or more of the following services:
(a) Improving a buyer's credit record, history, or rating;
(b) Obtaining an extension of credit by others for a buyer;
(c) Providing advice or
assistance to a buyer in connection with division (C)(1)(a) or (b) of this
section;
(d) Removing adverse
credit information that is accurate and not obsolete from the buyer's credit
record, history, or rating;
(e) Altering the buyer's
identification to prevent the display of the buyer's credit record, history, or
rating.
(2) "Credit services organization" does not include any
of the following:
(a) A person that makes
or collects loans, to the extent these activities are subject to licensure or
registration by this state;
(b) A mortgage broker,
as defined in section 1322.01 of the
Revised Code, that holds a valid certificate of registration under sections 1322.01 to 1322.12 of the Revised
Code;
(c) A lender approved by
the United States secretary of housing and urban development for participation
in a mortgage insurance program under the "National Housing Act," 48
Stat. 1246 (1934), 12 U.S.C.A. 1701,
as amended;
(d) A bank, savings
bank, or savings and loan association, or a subsidiary or an affiliate of a
bank, savings bank, or savings and loan association. For purposes of division
(C)(2)(d) of this section, "affiliate" has the same meaning as in
division (A) of section 1101.01 of the
Revised Code and "bank," as used in division (A) of section 1101.01 of the
Revised Code, is deemed to include a savings bank or savings and
loan association.
(e) A credit union
organized and qualified under Chapter 1733. of the Revised Code or the
"Federal Credit Union Act," 84 Stat. 994 (1970), 12 U.S.C.A. 1751,
as amended;
(f) A budget and debt
counseling service, as defined in division (D) of section 2716.03 of the
Revised Code, provided that the service is a nonprofit organization
exempt from taxation under section 501(c)(3) of the "Internal Revenue Code
of 1986," 100 Stat. 2085, 26 U.S.C.A. 501,
as amended, and that the service is in compliance with Chapter 4710. of the Revised Code;
(g) A consumer reporting
agency that is in substantial compliance with the "Fair Credit Reporting
Act," 84 Stat. 1128, 15 U.S.C.A. 1681a,
as amended.
(h) A mortgage banker;
(i) Any political
subdivision, or any governmental or other public entity, corporation, or
agency, in or of the United States or any state of the United States;
(j) A college or university,
or controlled entity of a college or university, as defined in section 1713.05 of the
Revised Code;
(k) A motor vehicle
dealer licensed pursuant to Chapter 4517. of the Revised Code
acting within the scope and authority of that license or a motor vehicle
auction owner licensed pursuant to Chapters 4517. and 4707. of the Revised Code
acting within the scope and authority of that license.
(D) "Extension of credit" means the right to defer
payment of debt, or to incur debt and defer its payment, offered or granted
primarily for personal, family, or household purposes. "Extension of
credit" does not include a mortgage.
(E) "Mortgage" means any indebtedness secured by a deed
of trust, security deed, or other lien on real property.
(F) "Mortgage banker" means any person that makes,
services, or buys and sells mortgage loans and is approved by the United States
department of housing and urban development, the United States department of
veterans affairs, the federal national mortgage association, or the federal
home loan mortgage corporation.
(G) "Superintendent of financial institutions" includes
the deputy superintendent for consumer finance as provided in section 1181.21 of the
Revised Code.
4712.02 Certificates of
registration
(A) A credit services organization shall file a registration
application with, and receive a certificate of registration from, the division
of financial institutions before conducting business in this state. The
registration application shall be accompanied by a one-hundred-dollar fee and
shall contain all of the following information:
(1) The name and address of the credit services organization;
(2) The name and address of any person that directly or indirectly
owns or controls ten per cent or more of the outstanding shares of stock in the
organization;
(3) Either of the following:
(a) A full and complete
disclosure of any litigation commenced against the organization or unresolved
complaint that relates to the operation of the organization and that is filed
with the attorney general, the secretary of state, or any other governmental
authority of the United States, this state, or any other state of the United
States;
(b) A notarized
statement stating that no litigation has been commenced and no unresolved
complaint relating to the operation of the organization has been filed with the
attorney general, the secretary of state, or any other governmental authority
of the United States, this state, or any other state of the United States.
(4) Any other information required at any time by the division.
(B)(1) Except as otherwise provided in division (B)(2) of this
section, each credit services organization shall notify
the division in writing within thirty days after the date of a change in the
information required by division (A) of this section.
(2) Each organization shall notify the division in writing no
later than thirty days prior to any change in the information required by
division (A)(1) or (2) of this section and shall receive approval from the
division before making any such change.
(C)(1) A credit services organization shall attach both of the
following to the registration application submitted pursuant to division (A) of
this section:
(a) A copy of the
contract that the organization intends to execute with its customers;
(b) Evidence of the bond
required under section 4712.06 of the
Revised Code.
(2) Any modification made to the contract described in division
(C)(1)(a) of this section shall be filed with the division prior to its use by
the organization.
(D) Each credit services organization registering under this
section shall maintain a copy of the registration application in its files. The
organization shall allow a buyer to inspect the registration application upon
request.
(E) Each nonresident credit services organization registering
under this section shall designate and maintain a resident of this state as the
organization's statutory agent for purposes of receipt of service of process.
(F) If, in order to issue a certificate of registration to a
credit services organization, investigation by the division outside this state
is necessary, the division may require the organization to advance sufficient
funds to pay the actual expenses of the investigation.
(G) Each credit services organization registering under this
section shall use no more than one fictitious or trade name.
(H)(1) A certificate of
registration issued by the division pursuant to this section shall expire
annually on the thirtieth day of April.
(2) A credit services
organization may renew its certificate of registration by filing with the
division a renewal application accompanied by a one-hundred-dollar renewal fee.
(I) All money collected by the division pursuant to this section
shall be deposited by it in the state treasury to the credit of the consumer
finance fund.
(J)(1) No credit services organization shall fail to comply with
division (A) of this section.
(2) No credit services organization shall fail to comply with division
(B), (D), (E), (F), or (G) of this section.
4712.03 Suspension,
revocation, or refusal of certificate of registration
After notice and a hearing conducted in accordance with Chapter
119. of the Revised Code, the superintendent of financial institutions may
suspend, revoke, or refuse to issue or renew a certificate of registration if
any of the following conditions applies to the applicant for registration or
registrant:
(A) The applicant or registrant obtained a certificate of
registration through any false or fraudulent representation or made any
substantial misrepresentation in any registration application.
(B) The applicant or registrant made false promises through
advertising or other means or engaged in a continued course of
misrepresentations.
(C) The applicant or registrant violated any provision of Chapter
1345. or sections 4712.01 to 4712.14 of the Revised
Code or the rules adopted thereunder.
(D) The applicant or registrant was convicted, in a court of
competent jurisdiction of this state or any other state, of a felony or any
criminal offense involving fraud, or failed to notify the division of financial
institutions of any such conviction.
(E) The applicant or registrant engaged in conduct that constituted
improper, fraudulent, or dishonest dealings.
4712.04 Written
statements
(A) Before executing a contract or agreement with a buyer or
receiving money or other valuable consideration, a credit services organization
shall provide the buyer with a written statement containing all of the
following information:
(1) A complete and detailed description of the services to be
performed by the organization for the buyer and the total cost of the services;
(2) A statement explaining the buyer's rights against the surety
bond required pursuant to section 4712.06 of the
Revised Code;
(3) The name and address of the surety company that issued the
surety bond;
(4) A complete and
accurate statement of the availability of nonprofit budget and debt counseling
services.
(B) The written statement required under division (A) of this
section shall be printed in at least ten-point boldface type and shall include
the following statement or any alternative statement prescribed by the division
of financial institutions:
"Credit Reporting Practices
Rights
of Consumers Under
Under the federal Fair Credit Reporting Act, you have all of the
following legal rights:
You have a right to obtain a copy of your credit report from a
consumer reporting agency. You may be charged a reasonable fee. However, there
is no fee if you have been turned down within the
preceding sixty days for credit, employment, insurance, or a rental dwelling
because of information in your credit report. The consumer reporting agency
must provide someone to help you interpret the information in your credit file.
You have a right to dispute inaccurate information by contacting
the consumer reporting agency directly. However, neither you nor any credit
services organization has the right to have accurate, current, and verifiable
information removed from your consumer reporting agency report. The consumer
reporting agency must remove accurate, negative information from your report
only if it is more than seven years old. Bankruptcy information can be reported
for ten years. Accurate information cannot be permanently removed from the
files of a consumer reporting agency. Credit reporting agencies are required to
follow reasonable procedures to ensure that creditors report information
accurately. However, mistakes may occur.
You may, on your own, notify a consumer reporting agency in
writing that you dispute the accuracy of information in your credit file. The
consumer reporting agency then must reinvestigate and
modify or remove inaccurate information. The consumer reporting agency must not
charge any fee for this service. Any pertinent information and copies of all
documents you have concerning an error should be given to the consumer
reporting agency.
If reinvestigation does not resolve the dispute to your
satisfaction, you may send a brief statement to the consumer reporting agency
to keep in your file, explaining why you think the record is inaccurate. The
consumer reporting agency must include your statement about disputed
information in any reports it issues about you.
Under
(C) The credit services
organization shall maintain a copy of the statement, signed by the buyer,
acknowledging receipt of the statement. The copy shall be maintained in the
organization's files for at least two years after the date on which the
statement is provided to the buyer.
(D) The credit services organization, in a timely manner, shall
notify each buyer of all substantive changes in the "Fair Credit Reporting
Act," 84 Stat. 1128, 15 U.S.C.A. 1681a,
and shall provide each buyer with copies of those changes.
(E) No credit services organization shall fail to comply with this
section.
4712.05 Contracts
(A) Each contract between the buyer and a credit services
organization for the purchase of the services of the organization shall be in
writing, dated and signed by the buyer, and shall include all of the following:
(1) A statement, in type that is boldfaced, capitalized,
underlined, or otherwise conspicuously set out from surrounding written
material and that is in immediate proximity to the space reserved for the
signature of the buyer, as follows:
"If you, the buyer, have been denied credit within the last
sixty days, you may obtain a free copy of the consumer credit report from the
consumer reporting agency. You also have the right to dispute inaccurate
information in a report.
You may cancel this
contract at any time before midnight of the third business day after the date
you signed it. See the attached notice of cancellation form for an explanation
of this right."
(2) The terms and conditions of payment, including the total of
all payments to be made by the buyer, whether to the credit services
organization or to another person;
(3) A full and detailed description of the services to be
performed for the buyer by the credit services organization, including all
guarantees and all promises of full or partial refunds, and the estimated
length of time, not exceeding sixty days or any shorter time period prescribed
by the superintendent of financial institutions, for performing the services;
(4) The address of the credit services organization's principal
place of business and the name and address of its agent in this state
authorized to receive service of process;
(5) With respect to the
previous calendar year or the time period during which the credit services
organization has been in business, whichever is shorter, the percentage of the
organization's customers for whom the organization has fully and completely
performed the services the organization agreed to perform for the buyer.
(B) The contract shall have attached two easily detachable copies
of a notice of cancellation. The notice shall be in boldface type and in the
following form:
"Notice of Cancellation
You may cancel this contract, without any penalty or obligation,
within three business days after the date the contract is signed.
To cancel this contract, mail or deliver a signed, dated copy of
this cancellation notice, or other written notice, to:
______________________________ at __________________________________________
(Name of Seller) (Address of Seller) (Place of Business)
Not later than midnight ______________________________________________________
(Date)
I hereby cancel this transaction.
Dated: ___________________________ __________________________________________
(Buyer's signature)"
(C) The credit services organization, at the time of signing,
shall give to the buyer a copy of the completed contract and all other
documents the organization requires the buyer to sign.
(D) No credit services organization shall breach a contract
described in this section or fail to comply with any
obligation arising from such a contract.
(E) No credit services organization shall fail to comply with
division (A), (B), or (C) of this section.
4712.06 Surety bonds
(A) No credit services organization shall conduct business in this
state unless the organization has obtained a surety bond issued by a surety
company authorized to do business in this state and all of the following conditions
are met:
(1) A copy of the bond is filed with the division of financial
institutions.
(2) The bond is in favor of any person, and of the state for the
benefit of any person, that is injured by any violation of sections 4712.01 to 4712.14 of the Revised
Code.
(3) The bond is in the amount of fifty thousand dollars.
(4) The bond is maintained and in effect for at least two years
after the date on which the credit services organization ceases to conduct
business in this state.
(B) Any person claiming against the bond for a violation of sections 4712.01 to 4712.14 of the Revised
Code may maintain an action at law against the credit services
organization and against the surety company. However, the surety company is
liable only for damages awarded under division (A)(2) of section 4712.10 of the
Revised Code and not for punitive damages awarded under division
(A)(3) of section 4712.10 of the
Revised Code. The aggregate liability of the surety company to all
persons injured by a credit services organization's violation of sections 4712.01 to 4712.14 of the Revised
Code shall not exceed the amount of the bond.
4712.07 Prohibitions
No credit services organization, salesperson, agent, or representative
of a credit services organization, or independent contractor that sells or
attempts to sell the services of a credit services organization shall do any of
the following:
(A) Charge or receive directly or indirectly from a buyer money or
other consideration readily convertible into money until all services the
organization has agreed to perform for the buyer are completed within the time
periods described in division (A)(3) of section 4712.05 of the
Revised Code.
(B) Charge or receive directly or indirectly from a buyer money or
other consideration readily convertible into money for the referral of the
buyer to a person that makes an extension of credit or to a consumer reporting
agency, except when credit has actually been extended as a result of that
referral;
(C) Make or use a false or misleading representation in the offer
or sale of the services of the organization, including either of the following:
(1) Guarantying or
otherwise stating that the organization is able to delete an adverse credit
history, unless the representation clearly discloses that this can be done only
if the credit history is inaccurate or obsolete;
(2) Guarantying or
otherwise stating that the organization is able to obtain an extension of
credit regardless of the buyer's previous credit problems or credit history,
unless the representation clearly discloses the eligibility requirements for
obtaining an extension of credit.
(D) Engage, directly or indirectly, in an unconscionable, unfair,
or deceptive act or practice, as those terms are used and defined in Chapter
1345. of the Revised Code, in connection with the offer or sale of the services
of a credit services organization;
(E)(1) Make or advise a
buyer to make a false or misleading statement concerning the buyer's
creditworthiness, identification, credit standing, or credit capacity to any of
the following:
(a) A consumer reporting
agency;
(b) A person that has
made an extension of credit to the buyer;
(c) A person to which
the buyer is applying for an extension of credit.
(2) Division (E)(1) of
this section applies to any statement that the organization, salesperson,
agent, representative, or independent contractor knows or should know to be
false or misleading through the exercise of reasonable care.
(F) Advertise or cause to be advertised, in any manner, the
services of a credit services organization without being registered with the
division of financial institutions;
(G) Fail to maintain a statutory agent as required under division
(E) of section 4712.02 of the
Revised Code;
(H) Transfer or assign a certificate of registration issued by the
division pursuant to section 4712.02 of the
Revised Code;
(I) Submit the buyer's disputes to a consumer reporting agency
without the buyer's knowledge as evidenced by positive identification,
including the buyer's correct current residence address, and written
authorization personally signed by the buyer;
(J) Fail to maintain, for a period of time as determined by the
superintendent of financial institutions, all of the following:
(1) A log of all
contracts;
(2) Copies of each
contract;
(3) Documentation that
substantiates the validity of the representation made pursuant to division
(A)(5) of section 4712.05 of the
Revised Code;
(4) Any other record
specified by the superintendent.
(K) Contact a consumer reporting agency, by telephone or
otherwise, for the purpose of submitting or obtaining
information relative to any buyer, and state or imply that he or she is the
buyer or the buyer's attorney, guardian, or other legal representative;
(L) Engage, directly or indirectly, in any fraudulent or deceptive
act, practice, or course of business in connection with the offer or sale of
the services of a credit services organization.
4712.08 Fraudulent
practices
No credit services organization shall do any of the following:
(A) Obtain a certificate of registration through any false or
fraudulent representation or make any substantial misrepresentation in any registration
application;
(B) Make false promises through advertising or other means in the
conduct of its business or engage in a continued course of misrepresentations
in the conduct of its business;
(C) Engage in conduct that constitutes improper, fraudulent, or
dishonest dealings in the conduct of its business;
(D) Fail to notify the division of financial institutions if the
credit services organization is convicted, in a court of competent jurisdiction
of this state or any other state, of a felony or any criminal offense involving
fraud.
4712.09 Waiver of
buyers' rights
(A) No credit services organization shall cause or attempt to
cause a buyer to waive a right under sections 4712.01 to 4712.14 of the Revised
Code.
(B) Any waiver by a buyer of a right under sections 4712.01 to 4712.14 of the Revised
Code is void.
4712.10 Civil actions;
injunctive relief; criminal prosecutions
(A)(1) A buyer injured
by a violation of sections 4712.01 to 4712.14 of the Revised
Code may bring an action for recovery of damages.
(2) Damages awarded
under division (A)(1) of this section shall not be less than the amount paid by
the buyer to the credit services organization, plus reasonable attorney's fees
and court costs.
(3) The buyer may be
awarded punitive damages.
(4) No action shall be
brought under division (A)(1) of this section after four years after the date
of the execution of the contract for services to which the action relates.
(B)(1) The division of
financial institutions, the attorney general, or a buyer may bring an action to
enjoin a violation of sections 4712.01 to 4712.14 of the Revised
Code.
(2) The division may
initiate criminal proceedings under sections 4712.01 to 4712.14 of the Revised
Code by presenting any evidence of criminal violations to the
prosecuting attorney of the county in which the offense may be prosecuted. If
the prosecuting attorney does not prosecute the violations, or at the request
of the prosecuting attorney, the division shall present any evidence of
criminal violations to the attorney general, who may proceed in the prosecution
with all the rights, privileges, and powers conferred by law on prosecuting
attorneys, including the power to appear before grand juries and to interrogate
witnesses before such grand juries. These powers of the attorney general shall
be in addition to any other applicable powers of the attorney general.
(C) The remedies provided by this section are in addition to any
other remedy provided by law.
(D) In any proceeding or action brought under sections 4712.01 to 4712.14 of the Revised
Code, the burden of proving an exemption under those sections is on
the person claiming the benefit of the exemption.
(E) No person shall be deemed to violate sections 4712.01 to 4712.14 of the Revised
Code with respect to any act taken or omission made in reliance on a
written notice, written interpretation, or written report from the
superintendent of financial institutions, unless there is a subsequent
amendment to those sections, or the rules promulgated thereunder, that affects
the superintendent's notice, interpretation, or report.
4712.11 Unfair or
deceptive acts or practices
(A) A violation of division (J) of section 4712.02, division (E)
of section 4712.04, division (D) or (E) of section 4712.05, division (A) of
section 4712.06, section 4712.07 or 4712.08, or division (A) of section 4712.09 of the
Revised Code is deemed to be an unfair or deceptive act or practice
in violation of section 1345.02 of the
Revised Code.
4712.12 Investigations;
cease and desist orders
(A) The division of financial institutions may investigate alleged
violations of sections 4712.01 to 4712.14 of the Revised
Code, or the rules adopted thereunder, or complaints concerning any
such violation. The division may make application to the court of common pleas
for an order enjoining any such violation and, upon a showing by the division
that a person has committed, or is about to commit, such a violation, the court
shall grant an injunction, restraining order, or other appropriate relief.
(B) In conducting any investigation pursuant to this section, the
division may compel, by subpoena, witnesses to testify in relation to any
matter over which it has jurisdiction, and may require the production of any
book, record, or other document pertaining to such matter. If a person fails to
file any statement or report, obey any subpoena, give testimony, produce any
book, record, or other document as required by such a subpoena, or permit
photocopying of any book, record, or other document subpoenaed, the court of common pleas of any county in this state, upon application
made to it by the division, shall compel obedience by attachment proceedings
for contempt, as in the case of disobedience of the requirements of a subpoena
issued from the court or a refusal to testify therein.
(C) If the division determines that a person is engaged in, or is
believed to be engaged in, activities that may constitute a violation of sections 4712.01 to 4712.14 of the Revised
Code, the division may, after notice and a hearing conducted in
accordance with Chapter 119. of the Revised Code, issue a cease and desist
order. Such an order shall be enforceable in the court of common pleas.
4712.13 Disclosure of
numbers
A credit services organization shall disclose in any printed or
published advertisement relating to the credit services organization's
services, the number designated on the certificate of registration that is
issued to the credit services organization by the division of financial
institutions under sections 4712.01 to 4712.14 of the Revised
Code. No credit services organization shall fail to comply with this
section.
4712.14 Rulemaking
powers
The superintendent of financial institutions may adopt, in
accordance with Chapter 119. of the Revised Code, reasonable rules to carry out
the purposes of sections 4712.01 to 4712.14 of the Revised Code.
4712.99 Penalties
Whoever violates division (J)
of section 4712.02, division (E) of section 4712.04, division (D) or (E) of
section 4712.05, division (A) of section 4712.06, section 4712.07 or 4712.08,
or division (A) of section 4712.09 of the
Revised Code is guilty of a felony of the fifth degree.
Case Law
Denying request to certify a
class action against car dealership for violations of the Credit Services Organization Act. Hall v. Jack
There is a split of authority in
Automobile buyers brought suit against a car dealer alleging that
the dealer’s conduct in helping to obtain credit for the car purchase, as an
inducement to sale, was regulated under the Credit Services Organization Act
and that the buyer was entitled to rescind within three days. The court ruled that even if the dealers were
engaged in a credit services business, the car buyers were not “buyers” within
the meaning of the act because they did not pay the car dealer for that
service. Snook v. Ford Motor Co.,
142
Plaintiffs who made payments to automobile dealership by check and
trade-in equity as part of "mixed transaction" of credit services,
which resulted in a lease agreement with lender and ultimately acquisition of
motor vehicle pursuant to lease with lender, were "buyers" of
services of dealership, which was a "credit services organization,"
for purposes of Credit Services Organization Act (CSOA). Sannes v. Jeff
Wyler Chevrolet, Inc., 107
In an unpublished decision, the
Ohio Court of Appeals has ruled that the Credit Services Organization Act is a
strict liability statute pursuant to which a violator could be enforced without
demonstrating mens rea. State v. Schlosser, Not Reported in
N.E.2d, 1996 WL 280038 (
Hall v. Jack Walker Pontiac Toyota, Inc.
143
December 01, 2000
143
Court of
Appeals of
Second
District,
HALL et al., Appellants,
v.
JACK WALKER PONTIAC TOYOTA, INC. et al., Appellees.
Automobile
purchasers and lessors brought actions against automobile dealerships alleging
that dealerships violated Credit Services Organization Act. The
Affirmed.
[1] KeyCite Notes
30 Appeal and
Error
30XVI Review
30XVI(H) Discretion of Lower Court
30k949 k.
Allowance of Remedy and Matters of Procedure in General. Most Cited Cases
In reviewing the trial court's judgment in a class action, the
Court of Appeals may only reverse the judgment upon a finding of an abuse of
discretion by the trial court, as a trial judge has broad discretion in
determining whether a class action may be maintained.
[2] KeyCite Notes
106 Courts
106I Nature,
Extent, and Exercise of Jurisdiction in General
106k26 k. Scope
and Extent of Jurisdiction in General. Most Cited Cases
An abuse of discretion is more than a mere error of law or
judgment but must demonstrate an unreasonable, arbitrary, or unconscionable
attitude.
[3] KeyCite Notes
287 Parties
287III Representative and Class Actions
287III(C) Particular Classes Represented
287k35.71 k.
Consumers, Purchasers, Borrowers, or Debtors. Most Cited Cases
Proposed class composed of people who bought or leased cars from
defendant car dealerships, who acted as credit services organization under
Credit Services Organization Act and provided assistance to buyer in improving
buyer's credit record, or in obtaining credit for buyer, was circular and
ambiguous, where class members could not be identified through dealerships'
business records, and court could not determine class members from definition,
but would first have to examine facts of cases to determine whether dealerships
acted as credit services organization. R.C. 4712.01(C)(1)(a-e); Rules Civ.Proc., Rule
23(B).
[4] KeyCite Notes
287 Parties
287III Representative and Class Actions
287III(A) In
General
287k35.5 k.
Factors, Grounds, Objections, and Considerations in General. Most Cited Cases
Before an action may be certified as a class action, the following
seven requirements must be met: (1) an identifiable class must exist and the
definition of the class must be unambiguous, (2) the named representatives must
be members of the class, (3) the class must be so numerous that joinder of all
the members is impracticable, (4) there must be questions of law or fact common
to the class, (5) the claims or defenses of the representative parties must be
typical of the claims or defenses of the class, (6) the representative parties
must fairly and adequately protect the interests of the class, and (7) one of
the three requirements of the rule for maintaining class actions must be met. Rules Civ.Proc., Rule
23(B).
[5] KeyCite Notes
287 Parties
287III Representative and Class Actions
287III(C) Particular Classes Represented
287k35.61 k. In
General. Most Cited Cases
Classes such as “all poor people,” “all people who have been or
may be harassed by the police,” and “all people who have ever worked within
five miles of a specific site” are too ambiguous to permit identification with
reasonable effort and therefore these classes may not be certified.
[6] KeyCite Notes
287 Parties
287III Representative and Class Actions
287III(C) Particular Classes Represented
287k35.71 k.
Consumers, Purchasers, Borrowers, or Debtors. Most Cited Cases
Separate actions by automobile buyers and lessors alleging that
dealerships violated Credit Services Organization Act would not lead to
incompatible standards of conduct, and thus class certification was not
appropriate, where only variance among cases would be based on individual facts
of each case. R.C. 4712.01(C)(1)(a-e); Rules Civ.Proc., Rule
23(B)(1)(a).
[7] KeyCite Notes
287 Parties
287III Representative and Class Actions
287III(A) In
General
287k35.5 k.
Factors, Grounds, Objections, and Considerations in General. Most Cited Cases
Merely demonstrating that there is a risk of inconsistent or
varying adjudication is insufficient to justify certification as class action;
one must show that the defendant will have to adhere to differing standards of
conduct. Rules Civ.Proc., Rule
23(B).
[8] KeyCite Notes
287 Parties
287III Representative and Class Actions
287III(C) Particular Classes Represented
287k35.71 k.
Consumers, Purchasers, Borrowers, or Debtors. Most Cited Cases
Automobile buyers and lessors were not entitled to injunctive or
declaratory relief in action alleging that automobile dealerships violated
Credit Services Organization Act, and thus class certification was not
appropriate under rule allowing for certification when party opposing
certification has acted on grounds generally applicable to class and injunctive
or declaratory relief is appropriate, where statute had been changed to exclude
automobile dealers, and declaratory relief had already essentially been
granted. R.C. 4712.01(C)(1)(a-e); Rules Civ.Proc., Rule
23(B)(2).
[9] KeyCite Notes
287 Parties
287III Representative and Class Actions
287III(C) Particular Classes Represented
287k35.71 k.
Consumers, Purchasers, Borrowers, or Debtors. Most Cited Cases
Individual facts of each case would predominate over common issues
in action by automobile purchasers alleging that dealerships violated Credit
Services Organization Act (CSOA), and thus certification as class action was
not justified, where individual facts of each case would have to be examined to
determine whether dealerships' behavior towards buyers made dealers credit
services organizations. Rules Civ.Proc., Rule
23(B)(3).
[10] KeyCite Notes
287 Parties
287III Representative and Class Actions
287III(A) In
General
287k35.17 k.
Community of Interest; Commonality. Most Cited Cases
For purposes of determining whether class certification is
warranted, questions of law or fact common to class members predominate over
individual questions when (1) common issues are a significant aspect of the
case, and (2) common issues are capable of resolution in a single adjudication. Rules Civ.Proc., Rule
23(B)(3).
[11] KeyCite Notes
287 Parties
287III Representative and Class Actions
287III(A) In
General
287k35.17 k.
Community of Interest; Commonality. Most Cited Cases
In determining whether class certification is warranted, it is not
sufficient for common questions of law and fact to simply exist; if each cause
of action requires individualized proof, then common questions do not
predominate. Rules Civ.Proc., Rule
23(B)(3).
**1152 *680 Ronald L. Burdge and Randal S. Knight,
Dayton, for appellants.
Stephen D. Brandt and Erin B. Moore,
Jay R. Langenbahn,
FREDERICK N. YOUNG,
Judge.
Appellants, Prataung Hall et al., are appealing from a
judgment of the
Appellants purchased or leased automobiles
from the appellees, Joseph Oldsmobile GMC Truck/Nissan, Inc., Joseph Toyota,
Inc., and Jack Walker Pontiac Toyota, Inc., within the last three years. Allegedly,
rather than obtaining independent financing, the appellants received assistance
from the appellees in gaining financing **1153 during the sale or lease transaction. Appellants allege that
appellees failed to register as credit services organizations and, in the
process, violated the Ohio Credit Services Organization Act (“CSOA”) and the
Ohio Consumer Sales Practices Act (“CSPA”). Specifically, appellants allege
that *681 appellees' assistance
constitutes an unfair or deceptive act or practice under the CSPA.
Several cases throughout
Appellants raise two assignments of error:
“1. The trial court erred when it held that
a class had not been unambiguously defined.
“2. The trial court erred when it found
that individualized issues predominate over common issues in this case and that
none of the three alternative requirements of Civ.R. 23(B) had been met.”
Appellants argue that
the trial court committed an abuse of discretion in denying appellants' motion
to certify a class action by holding that appellants' proposed class was
defined ambiguously and by finding that appellants had failed to meet any of
the three alternative requirements of Civ.R. 23(B).
We disagree.
[1]
[2]
In reviewing the trial
court's judgment, this court may only reverse the judgment upon a finding of an
abuse of discretion by the trial court, as a trial judge has broad discretion
in determining whether a class action may be maintained. Marks v. C.P. Chem. Co., Inc. (1987), 31 Ohio St.3d 200, 31 OBR 398, 509 N.E.2d 1249. An abuse of discretion is more than a mere error of law or
judgment but must demonstrate an unreasonable, arbitrary, or unconscionable
attitude. Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 5 OBR 481, 482, 450 N.E.2d 1140, 1142. The Ohio Supreme Court has held that “[i]t is at the trial level
that decisions as to class definition and the scope of questions to be treated *682 as class issues should be made.” Marks, 31
Ohio St.3d at 201, 31 OBR at 399, 509 N.E.2d at 1252.
Appellants'
first assignment of error
[3]
[4]
Appellants argue that
the trial court incorrectly found that appellants' class definition was
ambiguous because each member of the class could be determined from the
appellees' own records and that the trial court's reasoning for finding the
definition ambiguous contradicts its finding of facts. Before an action may be **1154
certified
as a class action, the following seven requirements must be met:
(1)
An identifiable class must exist and the definition of the class must be
unambiguous;
(2)
The named representatives must be members of the class;
(3)
The class must be so numerous that joinder of all the members is impracticable;
(4)
There must be questions of law or fact common to the class;
(5)
The claims or defenses of the representative parties must be typical of the
claims or defenses of the class;
(6)
The representative parties must fairly and adequately protect the interests of
the class; and
(7)
One of the three Civ.R. 23(B) requirements must be met. Hamilton v. Ohio Sav. Bank (1998), 82 Ohio St.3d 67, 71, 694 N.E.2d 442, 448, citing Civ.R. 23(A) and (B); Warner v. Waste Mgt., Inc. (1988), 36 Ohio St.3d 91, 521 N.E.2d 1091.
[5]
As for the first
requirement, Civ.R. 23 requires that the means be “specified at the time of
certification to determine whether a particular individual is a member of the
class.” Planned Parenthood Assn. of
Cincinnati, Inc. v. Project Jericho (1990), 52 Ohio St.3d 56, 63, 556 N.E.2d 157, 165. Classes such as “all poor people,” “all people who have been or
may be harassed by the police,” and “all people who have ever worked within
five miles of a specific site” are too ambiguous to permit identification with
reasonable effort and therefore these classes may not be certified. Warner, 36
Ohio St.3d at 96, 521 N.E.2d at 1096.
In
the instant case, appellants proposed as their class definition people who:
(a)
entered into a consumer transaction with defendant,
(b)
involving the sale or lease of a motor vehicle,
(c)
between four years prior to the filing of this case and the present date,
*683 d) where the sale or
lease was provided with the defendant's advice or assistance to the buyer in
connection with
(1)
improving a buyer's credit record, history, or rating, or,
(2) obtaining an extension of credit for the buyer, and
(e) where the defendant's
activities constituted those of a “credit services organization” under the
Credit Services Organization Act.
In
determining that the class was not unambiguously defined, the trial court
focused on part (e) of the appellants' class definition. The trial court held
in its decision granting appellants' motion for summary judgment that in each
case the appellants would have to prove on the facts of the individual cases
that the appellees met the definition of a credit services organization by (1)
charging or receiving, directly from the buyer, money, or valuable
consideration, and (2) selling, providing, or performing or representing “that
the company could or would sell, provide or perform any of the credit services
specified in R.C. 4712.01(C)(1)(a) [through] (e).” Therefore, the trial court reasoned that one
could not determine the class members from the definition since in order to
determine whether one is in the class, the court would first have to examine
the facts of the individual case to determine if the appellee acted as a credit
services organization; yet, if you do not know which individuals are in the
class, one cannot determine if the appellee acted as a credit services
organization towards that individual. Since one cannot determine until the
facts of the individual claim are examined **1155 whether an appellee is a credit services organization, which
appellants' class definition depends upon, the appellants' class definition is
circular and ambiguous.
Appellants
argue that the appellees' business records would show to which individuals the
appellees behaved as a credit services organization. However, if an individual
purchased a vehicle from an appellee who represented that the company could
perform a credit service specified in R.C. 4712.01(C)(1)(a) through (e), but, instead, the individual paid in cash for the vehicle, the
appellee would meet the definition of a credit services organization and the
individual would meet appellants' class definition but not be identified
through appellees' business records. The appellees' records would not offer any
evidence that would identify for a class action this type of individual or any
other individual who simply received advice or information on the credit
services available but chose not to utilize them. As one could not determine
whether an individual is part of the class and no other means of identifying
these individuals was proposed, no abuse of discretion appears in this
rationale of the trial court finding the definition ambiguous.
*684 Appellants also argue
that the trial court issued inconsistent statements in its decision. In the
statement of facts the trial court stated, “[E]ach of the plaintiffs received
assistance in obtaining financing during the course of the sale or lease transactions
and none of the plaintiffs independently obtained financing.” Appellees argue
that this was not a finding of fact but simply a statement of the appellants'
allegations, as demonstrated by the trial court's conclusion that in order for
the appellees to be credit services organizations, the appellants must prove
(1) that the appellees charged or received a fee and (2) that they provided or
represented that they could provide credit services. In its decision, the trial
court in a definite and precise manner concluded that appellants must prove in
each individual case that the appellees provided, performed, or represented
that they could provide credit services. The apparent contradiction in the
trial court's statement of facts clearly amounts to no more than a
misstatement. The trial court derived its statement of facts from the findings
of fact of the magistrate, who recommended class certification. Apparently, the
trial court transferred the facts from the magistrate and did not notice the
contradiction in her failure to use the term “allegedly.” However, this amounts
only to a simple misstatement and does not demonstrate an unreasonable,
arbitrary, or unconscionable attitude on the part of the court. Thus, we find
no abuse of discretion on the part of the trial court in determining that the
class definition was ambiguous and, for that reason, denying class
certification. The appellants' first assignment of error is without merit and
is, therefore, overruled.
Appellants' second assignment of error
Appellants argue that the trial
court erred in finding that none of the three alternatives under Civ.R. 23(B) applies. In order to be certified as a class action, the parties
must meet one of the three alternative requirements of Civ.R. 23(B), which are as follows:
“(1)
the prosecution of separate actions by or against individual members of the
class would create a risk of
“(a)
inconsistent or varying adjudications with respect to individual members of the
class which would establish incompatible standards of conduct for the party
opposing the class; or
“(b)
adjudications with respect to individual members of the class which would as a
practical matter be dispositive of the **1156 interests of the other members not parties to the adjudications
or substantially impair or impede their ability to protect their interests; or
“(2)
the party opposing the class has acted or refused to act on grounds generally
applicable to the class, thereby making appropriate final injunctive relief or
corresponding declaratory relief with respect to the class as a whole; or
*685 “(3) the court finds
that the questions of law or fact common to the members of the class
predominate over any questions affecting only individual members, and that a
class action is superior to other available methods for the fair and efficient
adjudication of the controversy.” Civ.R. 23(B); Warner, supra.
The
trial court found that the appellants failed to meet any of the three
alternatives under Civ.R. 23(B). We will examine each of the three alternatives for any possible
abuse of discretion by the trial court.
[6]
[7]
First, we will address
the alternatives listed in Civ.R. 23(B)(1). As for Civ.R. 23(B)(1)(a), one may only be certified under this prong when the evidence
proves that “separate actions could lead to incompatible standards of conduct”
(emphasis deleted) for the defendants. Warner, 36
Ohio St.3d at 95, 521 N.E.2d at 1095. Thus, merely demonstrating that there is a risk of inconsistent
or varying adjudication is insufficient as one must show that the defendant
will have to adhere to differing standards of conduct.
Here, the trial court found little risk that trying the cases
separately would lead to incompatible standards of conduct. Arguing this was an
abuse of discretion by the trial court, appellants point to several actions in
Regarding Civ.R. 23(B)(1)(b), the Ohio Supreme Court has found this provision to be similar to
interpleader suits where the amount of money available is limited and a risk is
posed that the funds could become depleted before all of the parties have made
a claim. Warner, supra. See, also, Shaver v. Standard Oil Co. (1990),
68 Ohio App.3d 783, 589 N.E.2d 1348; Marks, 31
Ohio St.3d at 203, 31 OBR at 400-401, 509 N.E.2d at 1253 (determining that class certification is inappropriate if
plaintiffs fail to offer evidence of the probable insolvency of the
defendants). Appellants have not argued that a limited amount of funds is
available, nor demonstrated that the interests of other parties would be
impaired by separate actions. The trial court reasoned that no detriment would
come to the ability of other plaintiffs to pursue their claims, but rather that
these plaintiffs may benefit from the trial court's ruling that the CSOA can be
applied *686 to these appellees. We
find no abuse of discretion by the trial court in finding that Civ.R. 23(B)(1)(b) does not apply to the appellants.
[8]
Next, we will address
the alternative for certification listed in Civ.R. 23(B)(2), which provides for class certification**1157 when the party opposing class certification has acted on grounds generally
applicable to the class and injunctive or declaratory relief is appropriate.
The Ohio Supreme Court has stated that “Civ.R. 23(B)(2) has, as its primary application, a suit seeking injunctive
relief.” Warner, 36
Ohio St.3d at 95, 521 N.E.2d at 1095. If the primary relief requested is damages, Civ.R. 23(B)(2) is inapplicable. Marks, 31
Ohio St.3d at 204, 31 OBR at 401, 509 N.E.2d at 1254.
Appellants argue that the trial court committed an abuse of
discretion in finding that since the CSOA had been changed to exclude
automobile dealers from the statute, then injunctive or declaratory relief is
inappropriate. Appellants argue that an automobile dealership may still be
found liable if it exceeds the scope of its license or if the amendment to the
statute is found unconstitutional. However, the CSOA has been amended to
provide that one may be found to be a credit services organization only if consideration
is given in exchange for credit services. Thus, even if the automobile
dealership exceeds the scope of its license, the statute excludes the dealer
from being a credit services organization. Furthermore, although appellants
argue that the amended CSOA is unconstitutional, they do not have standing to
raise this argument, as all of the appellants are bringing claims under the
unamended CSOA. Therefore, the trial court correctly concluded that injunctive
relief is inappropriate. As for declaratory relief, the trial court determined
that this relief has essentially already been granted through the grant of the
appellants' motion for summary judgment so that now the appellants need only
demonstrate that, based on the individual facts of each case, the appellees (1)
charged or received from the buyer valuable consideration and (2) sold,
provided, or represented that the company could sell or provide any of the
credit services listed in R.C. 4712.01(C)(1)(a)
through (e). Therefore, declaratory judgment would also be
inappropriate. We find no evidence of an arbitrary, unreasonable, or
unconscionable attitude on the part of the trial court as to this alternative
either.
[9]
[10]
[11]
Finally, we address the
last alternative, Civ.R. 23(B)(3), which provides for class certification if questions of law or
fact common to the class members predominate over questions for individual
members, and a class action is a superior method to other available methods to
adjudicate the controversy. Focusing on the first prong of this alternative,
questions of law or fact common to class members predominate over individual
questions when (a) common issues are a significant aspect of the case and (b)
common issues are capable of resolution in a single adjudication. Marks, 31
Ohio St.3d at 204, 31 OBR at 401, 509 N.E.2d at 1254. Therefore, it is not sufficient for common questions of law and
fact to *687 simply exist.
Appellants
argue that the trial court erred in finding that individual issues predominate
over common questions of law and fact, such as, whether the appellees'
contracts, advertising, and loan agreements violate the CSOA. The trial court
focused on the reality that the next step in the claims would be to examine the
individual facts of each case to determine if the **1158 behavior
of an appellee towards an individual appellant made the appellee a credit
services organization. Thus, the trial court reasoned that the individual facts
of each case would predominate over the common issues of the CSOA for the
remainder of the trial. Since each claim requires individualized proof and the
trial court was in the best position to analyze the difficulties of proceeding
as individual cases versus a class action, we see no evidence of an
unreasonable, arbitrary, or unconscionable attitude. We find no abuse of
discretion, and the second assignment of error is without merit and overruled.
The
judgment of the trial court is affirmed.
Judgment affirmed.
BROGAN and WOLFF, JJ.,
concur.
Hall v. Jack
143
Snook v. Ford Motor Co.
142
Apr 06, 2001
142
Court of
Appeals of
Second
District,
SNOOK et
al., Appellees,
v.
FORD
MOTOR COMPANY et al.; Beau Townsend Ford, Appellant. [FN*]
FN* Reporter's Note: A discretionary appeal to the Supreme Court of Ohio was not allowed in (2001), 93 Ohio St.3d 1416, 754 N.E.2d 262.
No. 18483.
Decided
April 6, 2001.
Car purchasers brought action against automobile dealership and
others, alleging a violation of the Credit Services Organization Act (CSOA).
The trial court rendered summary judgment in favor of car purchasers.
Automobile dealership appealed. The Court of Appeals, Montgomery County, Frederick N. Young, J., held that purchaser's affidavit was insufficient to
establish that she was a "buyer" under the CSOA.
Reversed and remanded.
Wolff, P.J., filed a dissenting opinion.
[1] KeyCite Notes
30 Appeal and Error
30XVI Review
30XVI(F) Trial De Novo
30k892 Trial De Novo
30k893 Cases Triable in Appellate
Court
30k893(1) k. In General. Most Cited Cases
"De novo review" of a summary judgment order means that
the Court of Appeals uses the same standard that the trial court should have
used, and it examines the evidence to determine whether as a matter of law no genuine
issues exist for trial.
[2] KeyCite Notes
30 Appeal and Error
30XVI Review
30XVI(A) Scope, Standards, and
Extent, in General
30k862 Extent of Review Dependent
on Nature of Decision Appealed from
30k863 k. In General. Most Cited Cases
Trial court's decision on a summary judgment motion is not granted
any deference by the reviewing appellate court.
[3] KeyCite Notes
92B Consumer Credit
92BI In General
92Bk3 License and Regulation in
General
92Bk4 k. Particular Businesses or
Transactions. Most Cited Cases
In order for a plaintiff to assert a successful claim against a
defendant under the Credit Services Organization Act (CSOA), the plaintiff must
qualify as a "buyer" and the defendant as a "credit services
organization." R.C. § 4712.01(A), (C)(1)
(1999).
[4] KeyCite Notes
92B Consumer Credit
92BI In General
92Bk3 License and Regulation in
General
92Bk4 k. Particular Businesses or
Transactions. Most Cited Cases
In actions under the Credit Services Organization Act (CSOA), even
if defendant meets the criteria set forth in the statute for classification as
a "credit services organization," plaintiff must still demonstrate
that he is a "buyer," and thus a member of the class that the CSOA
seeks to protect. R.C. § 4712.01(A), (C)(1)
(1999).
[5] KeyCite Notes
92B Consumer Credit
92BI In General
92Bk3 License and Regulation in
General
92Bk4 k. Particular Businesses or
Transactions. Most Cited Cases
In order to qualify as a "buyer" under the Credit
Services Organization Act (CSOA), an individual must obtain the services of a
credit services organization in exchange for money or its equivalent. R.C. § 4712.01(A), (C)(1)
(1999).
[6] KeyCite Notes
228 Judgment
228V On Motion or Summary
Proceeding
228k182 Motion or Other Application
228k185.3 Evidence and Affidavits
in Particular Cases
228k185.3(1) k. In General. Most Cited Cases
Car purchaser's summary judgment affidavit stating that she would
not have transferred $500, traded in her vehicle, or purchased a used car were
it not for automobile dealership's obtaining her an extension of credit was
insufficient to establish that she "purchased" dealership's credit
services, as required for her to maintain an action against dealership under
the Credit Services Organization Act (CSOA) as a "buyer." R.C. § 4712.01(A)
(1999).
**381 *214
Ronald L. Burdge, Dayton, for appellees.
Patrick K. Dunphy,
Dayton, for appellant.
FREDERICK N. YOUNG,
Judge.
Beau
Townsend Ford is appealing the judgment of the trial court finding that it was
a credit services organization in its conduct towards Cynthia and Randy Snook
and was thus liable to the Snooks under the Ohio Credit Services Organization
Act.
On
August 27, 1997, Cynthia and Randy Snook, the appellees, purchased a used 1994
Ford Bronco from Beau Townsend Ford ("appellant"). The Snooks
transferred possession and title of a 1995 Ford F-150 truck as well as $500 at
the time of purchase. Appellant represented that it could and did, in fact,
assist the Snooks in obtaining an extension of credit and financing from Ford
Motor Credit Company. Appellant was never licensed as a credit services
organization under the law.
On
June 23, 1999, the Snooks filed their complaint against the appellant, Ford
Motor Credit Company, and Ford Motor Company. On October 4, 1999, the Snooks
filed a motion for partial summary judgment on the fourth claim of the
complaint, which alleged a violation of the Credit Services Organization Act
("CSOA"). The Snooks complained that the appellant failed to register
under the CSOA and failed to provide the Snooks with a notice of a right to
cancel the agreement within three days. The appellant opposed the motion, but
on January 6, 2000, the trial court sustained the Snooks' motion for partial
summary judgment on their fourth claim. All of the Snooks' remaining claims
against the appellant were later dismissed in a grant of summary judgment to
the appellant. On August 1, 2000, the trial court issued a judgment entry on
the fourth claim in the Snooks' favor against appellant, which then filed this
timely appeal.
Appellant's
sole assignment of error is:
"The
trial court committed prejudicial error by granting summary judgment against
appellant on the claim of appellees under the Ohio Credit Services Organization
Act, Ohio
Revised Code 4712.01 et seq."
[1]
[2]
When reviewing a trial court's grant of summary judgment, an
appellate court conducts a de novo review. Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, 671 N.E.2d 241, 244-245. "De novo review means that this court *215 uses the same standard
that the trial court should have used, and we examine the evidence to determine
whether as a matter of law no genuine issues exist for trial." Brewer v. Cleveland City Schools Bd.
of Edn. (1997), 122 Ohio
App.3d 378, 383, 701 N.E.2d 1023, 1026, citing Dupler v. Mansfield Journal Co. (1980), 64 Ohio St.2d 116, 119-120, 18 O.O.3d 354, 356-357, 413 N.E.2d 1187,
1190-1191. Thus, the trial
court's decision is not granted any deference by the reviewing appellate court. Brown v. Scioto Cty. Bd. of Commrs. (1993), 87 Ohio App.3d 704, 711, 622 N.E.2d 1153, 1157- 1158.
Summary
judgment can be appropriately granted where (1) "there is no genuine issue
as to any material fact; (2) * * * the moving party is entitled to judgment as
a matter of law; and (3) * * * reasonable minds can come to but one conclusion,
and that conclusion is adverse to the party against whom the motion for summary **382 judgment is made, who
is entitled to have the evidence construed most strongly in his favor." Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, 8 O.O.3d 73, 74, 375 N.E.2d 46, 47; see, also, Civ.R. 56(C). The movant has the burden to prove that no genuine issues of
material fact exist by specifically pointing to evidence in the pleadings,
depositions, answers to interrogatories, written admissions, affidavits, etc.,
which show that the nonmovant has no evidence to support its claims. Harless,
supra; Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d 264, 273-274; Civ.R. 56(C).
Prior
to June 29, 1999, the CSOA defined, a "credit services organization"
("CSO") as:
"any
person that charges or receives, directly from the buyer, money or other
valuable consideration readily convertible into money, and that sells, provides, or performs, or represents that the person can or will sell, provide, or
perform, any of the following services:
"(a)
Improving a buyer's credit record, history, or rating;
"(b) Obtaining an extension of credit for a buyer;
"(c) Providing advice or assistance to a buyer in connection with division
(C)(1)(a) or (b) of this section;
"(d)
Removing adverse credit information that is accurate and not obsolete from the
buyer's credit record, history, or rating;
"(e)
Altering the buyer's identification to prevent the display of the buyer's
credit record, history, or rating." (Emphasis added.) R.C. 4712.01(C)(1). [FN1]
FN1. The statute has been amended to define a CSO as "any person that, in return for the payment of money or other valuable consideration readily convertible into money for the following services, sells, provides, or performs, or represents that the person can or will sell, provide, or perform, one or more of the following services: * * *." (Emphasis added.) R.C. 4712.01(C)(1).
*216 [3]
[4]
The CSOA goes on to define a "buyer" as "an
individual who is solicited to purchase or who purchases the services of a
[CSO] for purposes other than obtaining a business loan as described in
division (B)(6) of section 1343.01 of the Revised Code." R.C. 4712.01(A). In order for a
plaintiff to assert a successful claim against a defendant under the CSOA, the
plaintiff must qualify as a buyer and the defendant qualify as a CSO. Tran
v. Ricart Jeep Eagle, Inc. (Jan. 26, 2000), Franklin C.P. No. 98CVH03-2533,
unreported. "[E]ven if defendant meets the criteria set forth in the
statute for classification as a ['CSO'], plaintiff must still demonstrate that
he is a 'buyer,' and thus a member of the class that the CSOA seeks to
protect." Blinkoff v. Ricart Ford, Inc. (Jan. 18, 2000), Franklin
C.P. No. 98CVH03-2280, unreported.
[5]
The statutory definition of
"buyer" requires that the individual "purchase" the
services of the CSO. R.C. 4712.01(A). "Purchase" is defined as "[t]o obtain in exchange
for money or its equivalent: BUY." Webster's Second New College Dictionary
(1999) 899. Thus, in order to qualify as a "buyer" under the statute,
an individual must obtain the services of the CSO listed in R.C. 4712.01(C)(1) in exchange for money
or its equivalent.
The
trial court reasoned that the Snooks had purchased a "bundle" of
goods during the exchange with the appellant. The trial court found that the
Snooks transferred a vehicle, with a significant amount of equity, and $500 in
exchange for the used 1994 Bronco, the inseparable package of credit services,
and other concomitants. Thus, **383 the trial court concluded that the amount the Snooks transferred
purchased the entire bundle of goods, including the credit service of assisting
the Snooks in obtaining an extension of credit. We do not agree with this
reasoning.
In the instant case, even though the
trial court had before it evidence that the credit services and the vehicle were connected in a
bundle of goods, the trial court did not have any evidence that the appellant
was receiving compensation for the credit services it was performing. The Snooks presented no evidence to the trial court that the appellant was
being compensated for the credit services it performed in any manner. The trial
court had no evidence that the cost of the credit services were included in the
cost appellant charged for the vehicle or that a separate fee was charged for
the services. In order to qualify as a buyer, the Snooks must show a transfer
of money or its equivalent to appellant specifically for the credit services
performed.
*217 [6]
The only evidence offered before the trial court was the affidavit
of Ms. Snook, in which she swore that she would not have transferred $500,
traded in her vehicle, or purchased the Bronco were it not for the appellant
obtaining her an extension of credit. However, we find this to be self-serving
and insufficient evidence that she "purchased" appellant's credit
services. Ms. Snook would have us believe the doubtful concept that she gave
the appellant $500 and her trade-in vehicle solely for the appellant's
assistance in helping her obtain an extension of credit from Ford Motor Credit
Company. Although appellant had an opportunity to offer into evidence an
affidavit stating that the credit services it offered the Snooks were
gratuitous but failed to do so, the subjective belief of Ms. Snook that she
bought the credit services is insufficient on its own to prove that she
transferred money in exchange for the credit service. To find otherwise would
be to invite every individual who ever purchased or leased a vehicle at an auto
dealership, which even slightly assisted the individual in obtaining an
extension of credit, to reflect and in hindsight determine that were it not for
the auto dealer's slight assistance in obtaining credit the individual would
not have purchased the vehicle or transferred any money to the auto dealer. If
this hindsight, self-serving testimony were all that was necessary to make such
an auto dealer liable under the CSOA, then Ohio courts would be besieged with a
flood of litigation against auto dealers by past customers.
Therefore, in order for the Snooks to
be granted their motion for summary judgment, they must offer evidence that
they transferred money or its equivalent to the auto dealer specifically for
the services of a CSO which it offered. The Snooks must show that they either paid
a separate fee for the CSO services or that the cost of the credit services was
included in the cost of the vehicle in order to prove that the credit service
was "purchased" and not gratuitous. Without evidence of a transfer of
money or its equivalent to appellant specifically for the credit services
appellant performed, the Snooks could not prove that they had
"purchased" the services of appellant as a CSO. Therefore, the Snooks
could not demonstrate as a matter of law that they were "buyers"
under the statute.
Since
genuine issues of material fact remain as to whether the Snooks meet the
statutory definition of a "buyer," the trial court improperly granted
summary judgment in the Snooks' favor. Thus, we need not address whether the
appellant met the statutory definition of a CSO or if the amendment to the
statute could be applied **384 retroactively. The judgment of the trial court is reversed and
the case is remanded.
Judgment
reversed and cause remanded.
*218
BROGAN, J., concurs.
WOLFF, P.J., dissents.
WOLFF, Presiding Judge, dissenting.
I respectfully dissent. The majority has not addressed whether
Beau Townsend Ford is a CSO but has determined only that there are material
issues of fact on the question of whether the Snooks were "buyers"
within the meaning of R.C. 4712.01(A). In my opinion, the unrebutted affidavit of Cynthia Snook
is sufficient to establish the Snooks' "buyer" status under the
statute. Because the statutory definition of "buyer" requires the
purchase of certain defined services from a CSO--see R.C. 4712.01(C)(1)--I believe it is necessary to add that the unrebutted
affidavit of Mrs. Snook is, for me, sufficient to establish Beau Townsend
Ford's CSO status. Based on the statute in effect at the time the parties dealt
with each other and the record in this case, I would affirm.
Snook v. Ford Motor Co.
142
END OF DOCUMENT
Sannes v. Jeff Wyler Chevrolet, Inc.
107
Feb 11, 1999 (Approx. 3 pages)
107
Court of
Common Pleas of
SANNES
et al.
v.
JEFF
WYLER CHEVROLET, INC. [FN*]
FN* Reporter's Note: The defendant subsequently filed a motion for reconsideration. On July 1, 1999, the court denied that motion. See Sannes v. Jeff Wyler Chevrolet, Inc. (1999), 107 Ohio Misc.2d 11, 736 N.E.2d 116. Thereafter, the parties settled pursuant to an entry filed October 12, 1999. There was no further appeal.
No. 97CV0916.
Decided
Feb. 11, 1999.
Lessees who leased certain motor vehicle from creditor that
purchased such vehicle from automobile dealership filed complaint against
dealership, alleging that dealership violated Credit Services Organization Act
and Consumer Sales Practices Act. Dealership subsequently moved for summary
judgment, arguing that it was not a "credit services organization" as
defined by Credit Services Organization Act, and lessees cross-moved for
summary judgment. The Court of Common Pleas, Clermont County, Robert P. Ringland, J., held that: (1) dealership was a "credit services
organization," within context of statute requiring credit services
organization to allow a buyer to rescind a transaction within three days after
transaction was made, and (2) lessees were "buyers," within context
of statute.
Judgment accordingly.
[1] KeyCite Notes
228 Judgment
228V On Motion or Summary
Proceeding
228k181 Grounds for Summary
Judgment
228k181(2) k. Absence of Issue of
Fact. Most Cited Cases
228 Judgment KeyCite Notes
228V On Motion or Summary
Proceeding
228k182 Motion or Other Application
228k185 Evidence in General
228k185(2) k. Presumptions and
Burden of Proof. Most Cited Cases
Before summary judgment can be granted, a party must show that (1)
no genuine issue as to any material fact remains to be litigated; (2) the
moving party is entitled to judgment as a matter of law; and (3) reasonable
minds can come to but one conclusion, and viewing the evidence most strongly in
favor of the nonmoving party, that conclusion is adverse to the party against
whom the motion is made. Rules Civ.Proc., Rule 56.
[2] KeyCite Notes
228 Judgment
228V On Motion or Summary
Proceeding
228k182 Motion or Other Application
228k185 Evidence in General
228k185(2) k. Presumptions and
Burden of Proof. Most Cited Cases
When a properly supported motion for summary judgment is made, the
nonmoving party may not rest on mere denials in the pleading, but must respond
with specific facts showing that there is a genuine issue for trial. Rules Civ.Proc., Rule
56(E).
[3] KeyCite Notes
228 Judgment
228V On Motion or Summary
Proceeding
228k182 Motion or Other Application
228k185 Evidence in General
228k185(2) k. Presumptions and
Burden of Proof. Most Cited Cases
A motion for summary judgment forces the nonmoving party to
produce evidence on any issue for which that party bears the burden of
production at trial. Rules Civ.Proc., Rule 56.
[4] KeyCite Notes
92B Consumer Credit
92BI In General
92Bk3 License and Regulation in
General
92Bk4 k. Particular Businesses or
Transactions. Most Cited Cases
Automobile dealership that agreed to sell certain motor vehicle to
creditor, and creditor in turn agreed to lease such vehicle to lessees was a
"credit services organization," within context of statute requiring
credit services organization to allow a buyer to rescind a transaction within
three days after transaction was made; lessees gave dealership certain amount
of money and traded in their vehicle towards their lease of new vehicle, there
was no statutory requirement that money received from lessees be consideration
for services provided by credit services organization, and dealership assisted
lessees in obtaining an extension of credit from creditor. R.C. §§ 4712.01(A), 4712.05.
[5] KeyCite Notes
92B Consumer Credit
92BI In General
92Bk3 License and Regulation in
General
92Bk4 k. Particular Businesses or
Transactions. Most Cited Cases
Lessees who leased certain motor vehicle from creditor that had
purchased vehicle from automobile dealership were "buyers," within
context of statute requiring credit services organization to allow a buyer to
rescind a transaction within three days after transaction was made, despite
dealership's contention that lessees did not purchase any services from it, but
merely purchased a motor vehicle; if lessees left before purchasing vehicle,
services provided by dealership had no value, since it did not lead to an
extension of credit to lessees, and once dealership secured credit for
customers, those customers were not free to use that credit to purchase items
besides dealership's merchandise. R.C. §§ 4712.01(A), 4712.05.
**113 *7 Ronald L. Burdge,
Barron, Peck & Bennie and Michael S. Barron, Cincinnati; and Donald W. White, Batavia, for defendant.
ROBERT P. RINGLAND, Judge.
This matter came before the court on joint motions for summary
judgment filed by plaintiffs Michelle Sannes and Andrew Strasinger and
defendant Jeff Wyler Chevrolet, Inc.. Oral argument was presented after written
memoranda were submitted, and the matter was taken under advisement.
*8 Plaintiffs filed this complaint against defendant, alleging that defendant
violated the Ohio Credit Services Organization Act, R.C. 4712.01 et seq., and the Ohio Consumer Sales Practices Act, R.C. 1345.01 et
seq. The gist of
plaintiffs' complaint is that defendant advertised that it would help consumers
rebuild their credit by assisting them in getting a car loan with one of
Plaintiffs allege that on September 15, 1997, they entered into a
consumer transaction with defendant, in that defendant agreed to sell to Banc
One Acceptance Corporation ("Banc One"), and that Banc One
simultaneously agreed to lease, a certain motor vehicle, being a 1997 Chevrolet
truck, to plaintiffs. During the time in question, defendant and Banc One had an
agreement whereby defendant was authorized to obtain applications and assist
its **114 customers in completing lease agreements with Banc One in
connection with financing of leases of vehicles sold by defendant. At the
commencement of the lease agreement, plaintiffs paid $1,346.62 to defendant. Of
the $1,346.62, plaintiffs paid $446.62 in cash (a check) and the remaining $900
via trade-in equity. [FN1] Before entering into this
transaction, plaintiffs had read an advertisement from defendant in a local
newspaper that claimed defendant could help re-establish credit. Plaintiffs
attach several copies of advertisements from defendant, which state as follows:
FN1. At the time of the transaction in question, the equity in plaintiffs' trade-in vehicle was approximated to be $900. The actual equity at the time defendant paid off the existing loan was $1,068.48. Defendant then refunded the $168.48 difference to the plaintiffs.
"HAVE YOU WRECKED YOUR CREDIT? You cannot be refused due to
past credit history. WE UNDERSTAND YOUR CREDIT PROBLEMS! Putting your loan in
the hands of amateurs may hurt your chance of loan approval. Re-establish your
credit thru one of the largest banks in
The plaintiffs decided after they returned home that evening that
they wanted to rescind the transaction, but defendant refused to allow them to
do so. Under R.C. 4712.05, a
credit services organization must allow a buyer to rescind a transaction for
three business days after the transaction is made.
Defendant has moved for summary judgment, arguing that it is not a
credit services organization as that term is defined in R.C. 4712.01(C). Defendant further argues that plaintiffs are not
"buyers" as that term is used in R.C. 4712.01(A). Plaintiffs also have moved for summary judgment, alleging
that the terms "credit services organization" and "buyer"
apply to defendant and plaintiffs, *9 respectively, and that defendant has presented no evidence that
it is in compliance with the Credit Services Organization Act.
[1]
[2]
[3]
Before
summary judgment can be granted, a party must show that "(1) no genuine
issue as to any material fact remains to be litigated, (2) the moving party is
entitled to judgment as a matter of law, and (3) * * * reasonable minds can
come to but one conclusion, and viewing the evidence most strongly in favor of
the nonmoving party, that conclusion is adverse to the party against whom the
motion * * * is made." State ex rel. Spencer
v. E. Liverpool Planning Comm. (1997), 80 Ohio St.3d 297, 298, 685 N.E.2d 1251, 1252. When a
properly supported motion for summary judgment is made, the nonmoving party may
not rest on mere denials in the pleading, but must respond with specific facts
showing that there is a genuine issue for trial. Civ.R. 56(E); Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d
264, 274; St. Vincent Med. Ctr.
v. Sader (1995), 100 Ohio
App.3d 379, 383, 654 N.E.2d 144, 146. The motion "forces the
nonmoving party to produce evidence on any issue for which that party bears the
burden of production at trial." Wing v. Anchor Media,
Ltd. of Texas (1991), 59 Ohio
St.3d 108, 111, 570 N.E.2d 1095, 1099.
[4]
To
determine whether defendant meets the definition of "credit services
organization," the statute must be analyzed. According to R.C. 4712.01(C)(1), a credit services organization is defined as "any
person that charges or receives, directly from the buyer, money or other
valuable consideration readily convertible into money, and that sells,
provides, or performs, or represents that the person can or will sell, provide,
or perform, any of the following services:
"(a) Improving a buyer's credit record, history, or rating;
"(b) Obtaining an extension of credit for a buyer;
**115 "(c) Providing advice or assistance to a buyer in connection
with division (C)(1)(a) or (b) of this section;
"(d) Removing adverse credit information that is accurate and
not obsolete from the buyer's credit record, history, or rating;
"(e) Altering the buyer's identification to prevent the
display of the buyer's credit record, history, or rating." 146
In the case at bar, it is undisputed that plaintiffs gave
defendant approximately $1,346.62, of which $446.62 was cash and $900 was
trade-in equity. Defendant argues that this consideration was in exchange for
the Chevrolet truck, whereas plaintiffs argue that the consideration was in
exchange for a package of goods and services, including the assistance in
getting credit. The argument is moot. The statute merely requires that the
defendant "receives, directly from the buyer, money," which defendant
does not dispute that it did. Defendant must *10 also sell, provide, or
perform, or represent that it will sell, provide, or perform the services
listed in the statute. There is no requirement in the statute that the money
received from the buyer be consideration for services provided by the credit
services organization.
The question remains whether defendant sold, provided, or
performed a service obtaining an extension of credit for the buyer, or
represented such to the buyer. Again, defendant has not disputed that it
assisted plaintiffs in obtaining an extension of credit from Banc One.
Therefore, defendant is a "credit services organization" as that term
is defined in R.C. 4712.01(C).
[5]
Defendant
further argues that it cannot be held liable under the Ohio Credit Services
Organization Act because plaintiffs are not "buyers" as that term is
defined in the Act. Under R.C. 4712.01(A), "buyer" is defined as "an individual who is
solicited to purchase or who purchases the services of a credit services
organization." Defendant argues that plaintiffs did not purchase any
services from it, but merely purchased goods, namely, the Chevrolet truck.
"Purchase" is defined in Black's Law Dictionary as the
"[t]ransmission of property from one person to another by voluntary act
and agreement, founded on a valuable consideration." Black's Law
Dictionary (6 Ed.1990) 1234. "Consideration" is defined as "a
performance or a return promise [that is] bargained for." Restatement of
the Law 2d, Contracts (1981), Section 71(1).
Defendant argues that the money given by plaintiffs was
consideration for the truck only, and not consideration for any of the services
provided by defendant. However, it is difficult to separate the goods received
from the services. Nor does defendant's argument that the services were not
paid for because plaintiffs could have left without buying a vehicle have
merit. If plaintiffs left before purchasing a vehicle, the services provided by
defendant had no value, since it did not lead to an extension of credit to
plaintiffs. There has been no evidence that once defendant secured credit for
customers, those customers were free to use that credit to purchase items
besides defendant's merchandise.
Nor does the affidavit of Helen MacMurray, Assistant Ohio Attorney
General, submitted by defendant, lead to a different result. MacMurray affirms
that the Office of the Attorney General does not consider an automobile dealer
a credit services organization under R.C. 4712.01. However, the opinion of the Attorney General's office is
not binding on this court.
For the foregoing reasons, defendant's motion for summary judgment
must be denied. In addition, plaintiffs are entitled to summary judgment on the
issue of whether defendant violated the Ohio Credit Services Organization Act.
However, plaintiffs still have to prove damages to recover. Further, plaintiffs
have not pled **116 sufficient facts to allow them summary judgment on the issue of
the
Judgment accordingly.
Sannes v. Jeff Wyler Chevrolet, Inc.
107
State v. Schlosser
Not Reported in N.E.2d, 1996 WL 280038
May 24, 1996 (Approx. 14 pages)