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Mendoza v. Lithia Motors, Inc.

United States District Court, D. Oregon, Eugene Division

March 30, 2019

JOSEPH FRANK MENDOZA, CAROL JOCKS, DAWN CAVEYE and GINA and DANA DALTON, individually and on behalf of all others similarly situated, Plaintiff,
v.
LITHIA MOTORS, INC., LITHIA FINANCIAL CORPORATION, SALEM-V, LLC d/b/a VOLKSWAGEN OF SALEM, LITHIA KLAMATH, INC. d/b/a LITHIA KLAMATH FALLS AUTO CENTER, and LITHIA MEDFORD HON, INC. Defendants.

          OPINION AND ORDER

          Ann Aiken United States District Judge

         Plaintiffs bring this putative class action suit against Lithia Motors, Inc., et al. ("Lithia"), asserting various claims including violations of Oregon's Unlawful Trade Practices Act ("UTPA"), and Oregon's financial elder abuse statute. The named plaintiffs all purchased vehicles and other goods or services from one or more of the named defendants. In the process of those sales, the Plaintiffs allege that Lithia did not appropriately disclose its specific fees associated with the arrangement of financing or the profit margins related to the sale of third-party products and services. Defendants now move for summary judgement (doc. 74) in their favor on plaintiffs' remaining claims. For the reasons set forth herein, defendants Motion for Summary Judgment is GRANTED.

         BACKGROUND

         The factual background of this case has been thoroughly outlined in the two previous orders by this court dealing with defendants' previous motions to dismiss pursuant to Fed. R. Civ. Pro. 12(b)(6). (docs. 21 and 68) Briefly:

[o]n or about June 6, 2016, plaintiff Joseph Frank Mendoza purchased a vehicle from Lithia at its Volkswagen of Salem dealership. The dealership arranged for vehicle financing with an interest rate of 3.94%, a higher rate than provided by the lender. In doing so, Lithia retained what plaintiffs termed a kickback in connection with the arrangement of financing. Lithia also sold Mr. Mendoza products and services obtained through third parties. Specifically, Mr. Mendoza paid Lithia $2, 495.00 for a vehicle service contract and $695.00 for gap insurance; both amounts exceeded Lithia's actual purchase price. Lithia purchased the service contract for $995 and the gap insurance for $278 and retained the difference as profit. Lithia did not disclose its specific fees associated with the arrangement of financing or the profit margins related to the sale of third-party products and services.
In February 2013, plaintiffs Carol and Martin Jocks purchased a vehicle from a Lithia dealership in Klamath Falls, Oregon. Then, in August 2013, the Jocks purchased another vehicle from the same dealership. Carol Jocks was over the age of sixty-five at the time of the purchases. Because the facts surrounding both transactions are identical or substantially similar, I will limit discussion to the latter of the two. In August 2013, Lithia arranged for vehicle financing at an interest rate of 3.99%, a higher rate than provided by the lender. In doing so, Lithia retained a fee in connection with the arrangement of financing. Lithia also sold the Jocks products and services obtained through third parties. For example, the Jocks purchased a lifetime oil service for $899, credit life insurance for $2, 644.05, and gap insurance for $435; each charge exceeds Lithia's actual purchase price. Lithia purchased the lifetime oil service for $449.50, credit life insurance for $1, 718.63, and gap insurance for $285; Lithia then sold these products to the Jocks and retained the difference as profit. Lithia did not disclose its specific fees associated with the arrangement of financing or the profit margins related to the sale of third-party products and services.
Plaintiffs Caveye and Dalton also purchased vehicles from Lithia, in November 2014 and May 2016 respectively. The circumstances surrounding these purchases are largely similar to those mentioned above. In both instances, Lithia arranged for financing and sold third-party products/services to plaintiffs. In both instances, Lithia retained and did not disclose fees associated with the arrangement of financing or profits related to the sale of third-party products and services.

Mendoza v. Lithia Motors, Inc., 2018 WL 1513650, at *l-2 (D. Or. Mar. 27, 2018)

         Procedurally, on June 24, 2016, plaintiffs filed this class action suit, subsequently filed an amended complaint on September 1, 2016. On January 11, 2017, the Court granted in part defendants' first Motion to Dismiss (doc. 15) certain claims pursuant to Fed. R. Civ. Proc. 12(b)(6). (doc. 21) Plaintiffs were granted leave to amend on the remaining claims. Plaintiffs filed a second Amended Complaint on February 10, 2017, and the Court then granted plaintiffs leave to file a Third Amended Complaint, which was entered on the docket on June 23, 2017. (doc. 41) On March 27, 2018, the Court granted in part and denied in part defendants' second Motion to Dismiss (doc, 48), dismissing plaintiffs claims relating to federal Truth in Lending Act and certain claims brought under Oregon's UPTA. Defendants subsequently filed the present Motion for Summary Judgment (doc. 74) on plaintiffs' three remaining claims, STANDARD OF REVIEW

         Summary judgment is appropriate if "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). The moving party has the burden of establishing the absence of a genuine issue of material fact. Id.; Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324. "Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor." Diaz v. Eagle Produce Ltd. Partnership, 521 F.3d 1201, 1207 (9th Cir. 2008).

         Special rules of construction apply when evaluating a summary judgment motion: (1) all reasonable doubts as to the existence of genuine issues of material fact should be resolved against the moving party; and (2) all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. T. W. Elec, 809 F.2d at 630. "Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving patty, could return a verdict in the nonmoving party's favor." Diaz v. Eagle Produce Ltd. P'ship, 521F.3d1201, 1207 (9th Cir. 2008).

         DISCUSSION

         Plaintiffs remaining claims involve allegations that defendants violated the UPTA and Oregon's Financial elder abuse statute. Specifically, plaintiffs allege that defendants failed to comply with the disclosure requirements of the UPTA, and that in failing to make those disclosures, defendants wrongfully appropriated money from elderly persons. I address each claim in turn.

         I. Oregon UPTA Claims

         A. Claim Under OAR ...


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