Kotoch v. Grossinger City Toyota

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JOSEPH KOTOCH, Plaintiff, v. GROSSINGER CITY TOYOTA, et al., Defendants.

No. 20-cv-2538

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

August 23, 2022

William H. Baughman, Magistrate Judge.

OPINION AND ORDER

J Philip Calabrese, United States District Judge Northern District of Ohio.

In 2018, Plaintiff Joseph Kotoch, an Ohio resident unsuccessfully tried to lease a Mercedes-Benz. Unbeknownst to him, he had several derogatory remarks on his credit report for late payments on a lease for a Toyota Camry that his son, Joseph Kotoch, Jr. executed in 2016 in Illinois. Though Plaintiff had no part in the lease between his son and the Illinois Toyota dealership, his name was on the lease and reported on his credit report. Seeking to fix this error, Plaintiff sued Defendant Grossinger City Toyota, Acia TC Auto LLC, and Toyota Motor Credit Corp. for violations of the Fair Credit Reporting Act and the Ohio Consumer Sales Practices Act, as well as fraud. Acia moves to dismiss the case against it for lack of personal jurisdiction (ECF No. 66) and Toyota Motor Credit moves to dismiss the CSPA and fraud claims for failure to state a claim (ECF No. 63). For the reasons that follow, the Court GRANTS both motions.

STATEMENT OF FACTS

Taking the facts alleged in the second amended complaint as true and construing them in Plaintiff's favor, as the Court must on the motion before it, Plaintiff base his claims on the following facts.

On March 19, 2016, Plaintiff's son, Joseph Kotoch, Jr., leased a 2016 Toyota Camry from Defendant Grossinger City Toyota-which Defendant Acia TC Auto LLC purchased in 2018-and was financed through Defendant Toyota Motor Credit Corp. (ECF No. 57, ¶ 14, PageID #540.) As part of the lease, Plaintiff's son executed a written lease agreement and credit application with Grossinger City Toyota using his own date of birth and social security number. (Id., ¶¶ 18-19, PageID #541.) However, Defendants used Plaintiff's name, date of birth, and social security number to obtain credit for the lease instead and began incorrectly reporting the lease on Plaintiff's credit report, even though Plaintiff never signed, executed, or agreed to the lease or credit application. (Id., ¶¶ 20-27, PageID #541.)

Since then, the lease has been reported on Plaintiff's credit report, and Plaintiff and his son have tried to correct the alleged reporting error. On December 12, 2017, Plaintiff's son called Toyota Motor Credit, informing them of the error. Four days later, Plaintiff's son called again, “stating that he cannot drive the vehicle because he cannot get new tags from the BMV due to the issue and he feels that he should not have to pay for the car until the issue is fixed.” (Id., ¶¶ 30-31, PageID #541-42.) As a result, Plaintiff's son did not make payments for the lease for six months because he was unable to register the vehicle. (Id., ¶ 32 PageID #541; Id., ¶ 52, PageID #544.)

In April 2018, Plaintiff attempted to lease a vehicle at Mercedes-Benz of Bedford, but his application was denied due to the derogatory history on his credit report, which he discovered was a result of his son's lease. (Id., ¶¶ 34-35, PageID #542.) In May 2018, Plaintiff began contacting Acia including its Finance Director Zuhri Thahir, Vice President of Sales Brian Schnurr, General Manager Rick Angel, and Jeff Jackson. Acia provided Plaintiff with information about the lease and on May 14, 2018, informed him that he needed to refinance the contract and take other steps to resolve the reporting issues. (Id., ¶¶ 36-40, PageID #543.) Plaintiff, however, has been unable to resolve the credit reporting issues.

Next, Plaintiff secured counsel to request that Toyota Motor Credit remove the lease from his credit report. Toyota Motor Credit responded, stating that after their investigation the information reflected in their records is correct and that they report the account to the credit reporting agencies in a manner that is consistent with their records such that they will not remove the error. (Id., ¶ 44, PageID #543.) Then, Plaintiff disputed the lease with the major credit bureaus-Experian, Trans Union, and Equifax. (Id., ¶ 45, PageID #543.) In each case, the credit bureaus denied his request and informed him that the information that Toyota Motor Credit provided was valid and that the report listed six late payments. (Id., PageID #544-48.)

STATEMENT OF THE CASE

On October 21, 2020, Plaintiff sued in State court Defendants Toyota Motor Credit Corp. and Grossinger City Toyota, Equifax, Trans Union, and Experian for violating the Fair Debt Collection Practice Act. Defendants timely removed, and Plaintiff has since twice amended his complaint, dropping the FDCPA claim and adding claims for fraud and violations of Fair Credit Reporting Act and the Ohio Consumer Sales Practices Act. Since then, Plaintiff has dismissed Defendants Equifax, Trans Union, and Experian, leaving only Defendants Grossinger Toyota Motor Credit and Acia. (ECF Nos. 28, 39, 53.)

On May 20, 2022, Defendant Toyota Motor Credit moved to dismiss Plaintiff's State-law claims-Counts Three (fraud) and Four (violation of the Consumer Sales Practices Act)-for failure to state a claim. (ECF No. 63.) On June 13, 2022, Defendant Acia moved to dismiss for lack of personal jurisdiction. (ECF No. 66.)

ANALYSIS

I. Acia's Motion to Dismiss for Lack of Personal Jurisdiction

Defendant Acia moves to dismiss the claims against it under Rule 12(b)(2) of the Federal Rules of Civil Procedure, arguing that the Court lacks personal jurisdiction over it.

I.A. Governing Legal Standard

Jurisdiction is determined at the commencement of the action. See, e.g., Mollan v. Torrance, 22 U.S. (Wheat.) 537, 539-40 (1824) (“[T]he jurisdiction of the Court depends upon the state of things at the time of the action brought.”). No matter if “jurisdiction arises under 28 U.S.C. §§ 1331 or 1332, Plaintiff must satisfy the forum state's requirements for personal jurisdiction.” Georgalis v. Facebook, Inc., 324 F.Supp.3d 955, 958 (N.D. Ohio 2018). Where, as here, a defendant files a properly supported motion to dismiss for lack of personal jurisdiction, “a plaintiff must prove that jurisdiction is proper over each defendant individually.” Zobel v. Contech Enters., 170 F.Supp.3d 1041, 1044 (S.D. Ohio 2016) (quoting SFS Check, LLC v. First Bank of Del., 744 F.3d 351, 354-56 (6th Cir. 2014)).

The district court may “decide the motion on the materials submitted, permit discovery in order to aid in deciding the motion, and/or conduct an evidentiary hearing.” Georgalis, 324 F.Supp.3d at 958 (citing Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)). Based on the briefs and the record, the Court exercises its discretion to decide the motions without an evidentiary hearing. Therefore, the Court considers the pleadings and declarations in the light most favorable to Plaintiff. MAG IAS Holdings, Inc. v. Schmuckle, 854 F.3d 894, 899 (6th Cir. 2017); Dean v. Motel 6 Operating L.P., 134 F.3d 1269, 1272 (6th Cir. 1998) (quoting CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996)). And Plaintiff “need only make a prima facie case of jurisdiction.” Conn v. Zakharov, 667 F.3d 705, 711 (6th Cir. 2012). In this procedural posture, Plaintiff's burden is “relatively slight.” American Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988).

I.B. Personal Jurisdiction Over Acia

“Personal jurisdiction falls into two categories: general and specific.” Malone v. Stanley Black & Decker, Inc., 965 F.3d 499, 501 (6th Cir. 2020) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). Plaintiff makes no argument that Acia is subject to general jurisdiction, and the record would not support the exercise of general jurisdiction over Acia.

To establish specific personal jurisdiction over a defendant, the Court must find that (1) the defendant is amenable to service of process under the State's long-arm statute; and (2) the exercise of personal jurisdiction is proper under the federal Due Process Clause. Conn, 667 F.3d at 711. “Even if a defendant's contact with the State of Ohio satisfies Ohio's long-arm statute, personal jurisdiction fails unless exercising jurisdiction over the defendant comports with traditional notions of fair play and substantial justice.” J.M. Smucker Co. v. Hormel Food Corp., 526 F.Supp.3d 294, 300 (N.D. Ohio 2021).

In his second amended complaint and in his affidavit, Plaintiff alleges that Acia made “numerous false statements” to him on which he relied in an effort to discharge the lease in question and fix his credit report. (ECF No. 57, ¶ 118, PageID #554; ECF No. 71-1, ¶¶ 27 & 28, PageID #691-92.) He argues that Acia's conduct and alleged statements vest the Court with jurisdiction under six provisions of Ohio's long arm statue.

I.B.1. Long-Arm Statute

Ohio's long-arm statute confers specific personal jurisdiction over a defendant who engages in any of nine acts that occur “in this state.” Ohio Rev. Code § 2307.382(A)(1)-(9). The Ohio General Assembly extended the State's long-arm statute to the limits of the Constitution in April 2021. See Ohio Rev. Code § 2307.382(C) (“[A] court may exercise personal jurisdiction over a person on any basis consistent with . . . the United States Constitution.”). Because this dispute arose in 2016 and 2018, that amendment does not apply. See Ohio Rev. Code § 1.48 (“A statute is presumed to be prospective in its operation unless expressly made retrospective.”). Therefore, the Court considers whether the pre-amendment statute authorizes the exercise of jurisdiction over Acia. That statute provides, in relevant part:

(A) A court may exercise personal jurisdiction over a person who acts directly or by an

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