Gasbi, LLC v. Sanders

120 N.E.3d 614

GASBI, LLC d/b/a Michiana Chrysler Dodge Jeep Ram Fiat, Appellant-Defendant,

v.Tatiyana SANDERS, et al., Appellees-Plaintiffs.

Court of Appeals Case No. 18A-PL-1865

Court of Appeals of Indiana.

FILED March 6, 2019

Attorneys for Appellant: James P. Buchholz, Dana K. Carlson, Tourkow, Crell, Rosenblatt & Johnston, LLP, Fort Wayne, Indiana

Attorneys for Appellees: Robert E. Duff, Indiana Consumer Law Group, The Law Office of Robert E. Duff, Fishers, Indiana, Ryan R. Frasher, The Frasher Law Firm, P.C., Greenwood, Indiana

Bailey, Judge.

Case Summary

[1] In this interlocutory appeal, Gasbi, LLC d/b/a Michiana Chrysler Jeep Dodge Ram Fiat ("Michiana") challenges an order denying Michiana's motion to dismiss a class action complaint alleging deceptive acts,¹ brought by Tatiyana Sanders ("Sanders"), Shalonda Vida ("Vida"), and Robert Sheppard ("Sheppard"), on behalf of themselves and others similarly situated (hereinafter, "Consumers"). Michiana presents the restated and consolidated issue of whether Michiana was entitled to dismissal pursuant to Indiana Trial Rule 12(B)(6) because Consumers failed to state a claim that Michiana committed a deceptive act within the meaning of the Indiana Deceptive Consumer Sales Act, Indiana Code Section 24-5-0.5-1 et seq. (the "Consumer Act"). We affirm.

Facts and Procedural History

[2] On July 14, 2017, Consumers filed their First Amended Class Action Complaint, seeking relief under the Consumer Act and alleging the following. On April 25, 2016, Vida purchased a vehicle from Michiana, a for-profit Indiana corporation located in Mishawaka. On August 12, 2016, Sheppard purchased a vehicle from Michiana. On January 28, 2017, Sanders purchased a vehicle from Michiana. In each instance, the consumer was charged a document preparation fee ("Doc Fee") that had not been "affirmatively disclosed" and "was not negotiated." (App. Vol. II, pg. 10.) The amount of the Doc Fee exceeded actual expenses incurred for preparation of the documents. The Complaint further alleged that all persons purchasing a vehicle from Michiana in the prior two years had been charged a Doc Fee.

[3] The Complaint alleged that Michiana's charging of Doc Fees was an "unfair, abusive, or deceptive act, omission, or practice in connection with a consumer transaction." I. C. § 24-5-0.5-3(a). Although Consumers alleged a violation of the Consumer Act, the Complaint described the alleged unfair practice by quoting a statutory provision from the Indiana Motor Vehicle Dealer Services Act, Indiana Code Section 9-32-13-7. That statute, which may be enforced by the Indiana Secretary of State, provides:

It is an unfair practice for a dealer to require a purchaser of a motor vehicle as a condition of the sale and delivery of the motor vehicle to pay a document preparation fee, unless the fee:

(1) reflects expenses actually incurred for the preparation of documents;

(2) was affirmatively disclosed by the dealer;

(3) was negotiated by the dealer and the purchaser;

(4) is not for the preparation, handling, or service of documents that are incidental to the extension of credit; and

(5) is set forth on a buyer's order or similar agreement by a means other than preprinting.

[4] On September 7, 2017, Michiana filed a motion to dismiss the Complaint, asserting that Consumers had no private right of action under Indiana Code Section 9-32-13-7, and had failed to state a claim for relief pursuant to the Consumer Act, with its thirty-seven enumerated categories of deceptive acts. The trial court conducted a hearing on October 31, 2017, at which argument of counsel was heard. Consumers conceded that they had no private cause of action under Indiana Code Section 9-32-13-7 but argued that the reference to that statute was merely descriptive of an unfair consumer practice prohibited by the Consumer Act. The trial court concluded that a "catch-all" provision embodied in I.C. 24-5-0.5-3(a) permitted the claim of non-disclosure, denied Michiana's motion to dismiss and certified the order for interlocutory appeal. Appealed Order at 3. This Court accepted jurisdiction.

Discussion and Decision

Standard of Review

[5] A Trial Rule 12(B)(6) motion to dismiss for failure to state a claim upon which relief can be granted tests the legal sufficiency of a claim, not the supporting facts. Kitchell v. Franklin , 997 N.E.2d 1020, 1025 (Ind. 2013). Accordingly, we view the complaint in the light most favorable to the non-moving party and draw every reasonable inference in favor of that party. Thornton v. State , 43 N.E.3d 585, 587 (Ind. 2015). We stand in the shoes of the trial court and must determine if the trial court erred in its application of the law. Godby v. Whitehead , 837 N.E.2d 146, 149 (Ind. Ct. App. 2005), trans. denied . A motion to dismiss is proper if "it is apparent that the facts alleged in the challenged pleading are incapable of supporting relief under any set of circumstances." City of E. Chicago, Indiana v. E. Chicago Second Century, Inc. , 908 N.E.2d 611, 617 (Ind. 2009). In making this determination, we look only to the complaint and may not resort to any other evidence in the record. Godby , 837 N.E.2d at 149.

[6] Michiana's asserted grounds for dismissal invoke statutory interpretation. If the language of a statute is clear and unambiguous, we need not apply rules of construction other than to require that words and phrases be given their plain, ordinary, and usual meaning. City of Carmel v. Steele , 865 N.E.2d 612, 618 (Ind. 2007). If a statute is open to more than one interpretation, it is deemed ambiguous and subject to judicial construction. Dobeski v. State , 64 N.E.3d 1257, 1259 (Ind. Ct. App. 2016). The purpose of statutory construction is to implement the legislature's intent.

Richardson v. Town of Worthington , 44 N.E.3d 42, 45 (Ind. Ct. App. 2015).

Analysis

[7] The Consumer Act is a "remedial statute." Kesling v. Hubler Nissan, Inc. , 997 N.E.2d 327, 332 (Ind. 2013). It "shall be liberally construed and applied to promote its purposes and policies." Id. (quoting I.C. § 24-5-0.5-1.) The stated purposes and policies are to:

(1) simplify, clarify, and modernize the law governing deceptive and unconscionable consumer sales practices;

(2) protect consumers from suppliers who commit deceptive and unconscionable sales acts; and

(3) encourage the development of fair consumer sales practices.

I.C. § 24-5-0.5-1(b).

[8] Indiana Code Section 24-5-0.5-3 concerns "deceptive acts." Subsection (a) provides:

A supplier may not commit an unfair, abusive, or deceptive act, omission, or practice in connection with a consumer transaction. Such an act, omission, or practice by a supplier is a violation of this chapter whether it occurs before, during, or after the transaction. An act, omission, or practice prohibited by this section includes both implicit and explicit misrepresentations.

Subsection (b), "without limiting the scope of subsection (a)," sets forth thirty-seven "deceptive acts." Some of those categories pertain to particular representations (such as "that replacement or repair .. is needed, if it is not" in category five). Several categories provide that a violation of a specified statutory scheme is a deceptive act (for example, category twenty-one, concerning health spa services, and category twenty-three, concerning home consumer transactions).

[9] A deceptive act is actionable only if it is "incurable" or "uncured." I.C. § 24-5-0.5-4(a). To "cure," as applied to a deceptive act, means to either "offer in writing to adjust or modify the consumer transaction to which the act relates to conform to the reasonable expectations of the consumer" or "to offer in writing to rescind such consumer transaction" and perform the offer if accepted. I.C. § 24-5-0.5-2(5).

[10] An incurable deceptive act is a deceptive act "done by a supplier as part of a scheme, artifice, or device with intent to defraud or mislead." I.C. § 24-5-0.5-2(8). An "uncured deceptive act" is a deceptive act "with respect to which a consumer who has been damaged by such act has given notice to the supplier" and either "no offer to cure has been made to such consumer within thirty days after such notice" or "the act has not been cured as to such consumer within a reasonable time after the consumer's acceptance of the offer to cure." I.C. § 24-5-0.5-2(7). The buyer must give timely notice that "state[s] fully the nature of the alleged deceptive act and the actual damage suffered therefrom." I.C. § 24-5-0.5-5(a). The "obvious reason" for the requirement of specific notice is "so that the supplier has an opportunity to correct the problem." A.B.C. Home & Real Estate Inspection, Inc. v. Plummer , 500 N.E.2d 1257, 1262 (Ind. Ct. App. 1986).

[11] Thus, to state a claim under the Consumer Act, Consumers must have alleged that Michiana, a seller, committed an uncured or incurable deceptive act. The Complaint factually described the transactions between Michiana and Consumers and described conduct defined as an unfair practice in Indiana Code Section 9-32-13-7. The Complaint rested upon the premise that conduct that would constitute a violation of Indiana Code Section 9-32-13-7 would also be a deceptive act within the meaning of the Consumer Act. Consumers asserted that Michiana had engaged in both uncured and incurable acts.

[12] At the hearing and in the memorandum of law in support of its motion to dismiss, Michiana argued that Consumers' complaint should be dismissed because Consumers failed to allege a deceptive act within the meaning of the statutory scheme and further argued that Consumers had alleged an incurable deceptive act without facts supporting the requisite "scheme, artifice, or device with intent to defraud or mislead." I.C. § 24-5-0.5-2(8). Michiana argued that the allegations of the Complaint did not fall into any of the thirty-seven enumerated categories of I.C. § 24-5-0.5-3(b) and further argued that Consumers were attempting to derive a private right of action from a...