United States District Court, W.D. Arkansas, Fayetteville Division
DOUGLAS A. NIXON AND PIAOWAKA C. WINDWOLF PLAINTIFFS
BRENT MANNING'S QUALITY PREOWNED, Inc., d/b/a BRENT MANNING'S CREDIT CARS, Inc., BRENT MANNING, BRETT THARP, and TRUITY FEDERAL CREDIT UNION DEFENDANTS TRUITY FEDERAL CREDIT UNION COUNTER CLAIMANT
DOUGLAS A. NIXON AND PIAOWAKA C. WINDWOLF COUNTER DEFENDANTS
MEMORANDUM OPINION AND ORDER
TIMOTHY L. BROOKS, INITED STATES DISTRICT JUDGE.
before the Court are Defendant/Counter Claimant Truity
Federal Credit Union's ("Truity") Motion for
Summary Judgment as to its Counterclaim (Doc. 52);
Truity's Motion for Summary Judgment as to Plaintiffs
Douglas A. Nixon's and Piaowaka C. Windwolfs Claims (Doc.
55); and Defendants Brent Manning's Quality Preowned,
Inc.'s ("BMQP") and Brent Manning's Motion
to Dismiss (Doc. 70). For the reasons stated herein, the
Court rules as follows: Truity's Motion for Summary
Judgment as to Plaintiffs' Claims (Doc. 55) is GRANTED;
BMQP's and Brent Manning's Motion to Dismiss (Doc.
70) is GRANTED; and Truity's Motion for Summary Judgment
as to its Counterclaim (Doc. 52) is GRANTED.
case arises from the sale of a used vehicle allegedly gone
awry. On March 30, 2015, Plaintiffs Douglas A. Nixon and
Piaowaka C. Windwolf purchased a used 2007 Mini Cooper from
BMQP. To finance their purchase, Plaintiffs entered into a
"Retail Installment Contract and Security Agreement,
" (Doc. 52-2), with BMQP that was subsequently assigned
to Truity. That Agreement indicates a vehicle sale price of
$7, 990 plus GAP insurance in the amount of $900, for a total
of $8, 890. After making a down payment of $1, 500, the total
amount financed was $7, 390. Plaintiffs made payments to
Truity under the Agreement for six months. But, by the fall
of 2015, Plaintiffs allege that the vehicle was effectively
not road worthy, and so they stopped making their loan
payments. Truity repossessed the vehicle, and on November 20,
2015 sold it at private auction for $3, 300. After crediting
that amount, minus certain costs related to repossessing and
auctioning the vehicle, Truity lists a remaining principal of
$4, 214.87 on Plaintiffs' loan. (Doc. 52-3). Since the
initiation of this lawsuit, that figure has been revised down
to $3, 396.60 to account for a partial refund on
Plaintiffs' GAP insurance. (Doc. 74, p. 3).
pro se, Plaintiffs filed a Complaint (Doc. 1) in
this Court on January 5, 2016, and later filed an Amended
Complaint (Doc. 32) on March 21, 2016. The Amended Complaint
alleges that Defendants violated various provisions of the
Federal Trade Commission Act ("FTCA"); the
Magnuson-Moss Warranty Act; and the Federal Trade
Commission's "Used Car Rule, " which is found
at 16 C.F.R. § 455. Truity filed an Answer and
Counterclaim on March 29, 2016, denying the claims against it
and counterclaiming for the balance owed on Plaintiffs'
loan, plus interest, attorney's fees, and expenses. On
April 11, 2016, Plaintiffs filed an Answer to Truity's
Counterclaim, which the Court will interpret as a general
denial. BMQP filed its Answer to Plaintiffs' Amended
Complaint (Doc. 48) on April 19, 2016, denying the claims
against it. Also named in the Complaint and Amended
Complaint is Brett Tharp, a former salesman at BMQP who
Plaintiffs have not been able to locate to effect service of
filed two motions for summary judgment on June 30, 2016. The
first is a Motion for Summary Judgment as to Truity's
Counterclaims (Doc. 52), and the second is a Motion for
Summary Judgment as to Plaintiffs' Claims (Doc. 55). On
August 5, 2016, BMQP and Brent Manning filed a Motion to
Dismiss for Failure to State a Claim and for Lack of
Jurisdiction (Doc. 70). All three motions have been fully
briefed, and are ripe for decision. The Court will begin by
discussing Truity's Motion as to Plaintiffs' Claims,
then turn to BMQP's and Brent Manning's Motion to
Dismiss, and finally will discuss Truity's Motion as to
Truity's Motion for Summary Judgment as to
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). In deciding a motion for summary
judgment, the Court must view the facts in the light most
favorable to the non-moving party, and give the non-moving
party the benefit of any logical inferences that can be drawn
from the facts. Union Bee. Co., 135 F.3d at 1212-13.
The moving party bears the burden of proving the absence of
any material factual disputes. Fed.R.Civ.P. 56(c);
Matsushita Bee. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586-87 (1986); Nat'l Bank of Commerce
of El Dorado, Ark. v. Dow Chem. Co., 165 F.3d 602 (8th
Cir. 1999). If the moving party meets this burden, then the
non-moving party must "come forward with 'specific
facts showing that there is a genuine issue for
trial.'" Matsushita, 475 U.S. at 587
(quoting Fed.R.Civ.P. 56(c)). These facts must be "such
that a reasonable jury could return a verdict for the
nonmoving party." Allison v. Flexway Trucking,
Inc., 28 F.3d 64, 66 (8th Cir. 1994) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)). "The nonmoving party must do more than rely on
allegations or denials in the pleadings, and the court should
grant summary judgment if any essential element of the prima
facie case is not supported by specific facts sufficient to
raise a genuine issue for trial." Register v.
Honeywell Fed. Mfg. & Techs., LLC, 397 F.3d 1130,
1136 (8th Cir. 2005) (citing Celotex Corp v.
Catrett, 477 U.S. 317, 324 (1986)).
first contends that it is entitled to summary judgment on
Plaintiffs' FTCA claim because the FTCA does not contain
a private right of action. To explain, not all of the laws in
the United States Code can be enforced by individuals
bringing private law suits. Instead, many are enforced
through regulatory agencies, such as the Federal Trade
Commission ("FTC"). Looking to the provisions of
the FTCA identified by Plaintiffs, it is clear that only the
FTC, and not individual litigants, can file suits to enforce
list 15 U.S.C. §§ 45(a)(1) and (m)(1)(a); 53(b),
and 57b as the provisions of the FTCA that Truity allegedly
violated. Section 45(a) prohibits "[u]nfair methods of
competition in or affecting commerce, and unfair or deceptive
acts or practices in or affecting commerce, " and
empowers "the Commission" to prevent persons and
entities from using such practices. 15 U.S.C. §
45(a)(1)-(2). Subsection (m)(1)(a) grants "the
Commission" power to "commence a civil action ...
in a district court of the United States against any person .
. . [who] violates any rule under this subchapter respecting
unfair or deceptive acts or practices . . . ." Section
53(b) gives "the Commission" power to "bring
suit in a district court of the United States to enjoin"
persons from violating provision of law enforced by the FTC.
Section 57b likewise permits "the Commission" to
bring civil actions, and details the forms of relief a court
may grant "to redress injury to consumers or other
persons . ..." 15 U.S.C. § 57b(a)-(b).
plain language of the FTCA-which repeatedly gives "the
Commission" enforcement authority-makes clear, it
contains no private right of action. The Eighth Circuit
recognized this in Morrison v. Back Yard Burgers,
Inc., 91 F.3d 1184 (8th Cir. 1996). Therein, the
franchisee plaintiffs sued the franchisor defendant for
common law fraud. Id. To support their allegation
that the franchisor had acted in bad faith, the plaintiffs
argued that the franchisor expressed an opinion about the
future profitability of the franchise in violation of an FTC
regulation. Id. The Morrison Court held
that a violation of an FTC regulation is not evidence of bad
faith for purposes of proving common law fraud. Id.
It noted that this holding "is consistent with other
circuit's [sic] holdings that there is no private cause
of action for violations of the Federal Trade Commission Act,
" id. (listing cases), reasoning that if
plaintiffs were "permitted to plead violation[s] of FTC
regulations as part of a state common law fraud case, "
then the Court would be "effectively extending a private
cause of action under the Federal Trade Commission Act."
Id. Other district courts within the Eighth Circuit
have recognized that the FTCA does not include a private
right of action as well. See Friend v. Fryberger,
Buchanan, Smith & Frederick, P.A., 2012 WL 503796,
at *4 (D. Minn. Feb. 14, 2012) (stating that "only the
FTC, and not private litigants such as [the plaintiff], may
enforce the FTCA"); Ventimiglia v. AT&T Yellow
Pages, 543 F.Supp.2d 1038, 1045 (E.D. Mo. 2008)
("As there is no private right of action under the FTCA,
Plaintiffs' claims cannot proceed."). Accordingly,
Truity's Motion for Summary Judgment is granted as to
Plaintiffs' FTCA claims.
next to Plaintiffs' claims under the "Used Car Rule,
" 16 C.F.R. § 455, that regulation prohibits a
"used vehicle dealer" from using certain deceptive
acts and practices. 16 C.F.R. § 455.1 (a)-(c). The
regulation's definition of a "dealer, "
however, explicitly excludes "a bank or financial
institution." Id. at (d)(3). As it is
undisputed that Truity is a financial institution,
e.g., Doc. 52-11, ¶ 3 (Tate affidavit), the
regulation does not apply to it. Moreover, the regulation was
promulgated by the FTC pursuant to the FTCA. Therefore, as
discussed above, it does not contain a private right of
action. For those reasons, Truity's Motion for Summary
Judgment is granted as to Plaintiffs' "Used Car
Plaintiffs' claim under the Magnuson-Moss Warranty Act
does not meet the Act's jurisdictional threshold amount
of $50, 000, and must be dismissed without prejudice on that
basis. The Act imposes several standards for warranties, and
explicitly provides that "a consumer who is damaged by
the failure of a supplier, warrantor, or service contractor
to comply with any obligation under this chapter. . . may
bring suit. . . in an appropriate district court of the
United States, subject to paragraph (3) of this
subsection." 15 U.S.C. § 2310(d)(1). Paragraph (3)
of the subsection in turn states that no claim brought in the
U.S. district courts "shall be cognizable" if
"the amount in controversy is less than . . . $50,
000." Id. at (d)(3)(B). In this case,
Plaintiffs have requested "[$]5, 060.65 for the total
costs of the car and the repairs and vehicle reports, "
$900.00 for the GAP insurance, $3, 995.00 "for having to
borrow to purchase another vehicle, " that Defendants
"pay off the balance of the" estimated "$6,
000" loan, and $1, 184.00 for insurance expenses. (Doc.
32, ¶¶ 30-32). Doing the arithmetic, these claims
total $17, 139.65, well short of the $50, 000 jurisdictional
threshold. Therefore, Truity is entitled to ...