Kenneth E. CORDER, Sr., Plaintiff-Appellant v. FORD MOTOR CO., Defendant-Appellee.
No. 07-5533.
United States Court of Appeals, Sixth Circuit.
July 9, 2008.
285 F. App‘x 226
The district court did not err or otherwise abuse its discretion in denying the motion. See Zirnhelt v. Mich. Consol. Gas Co., 526 F.3d 282, 288 (6th Cir.2008); Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327, 346 (6th Cir.2007). The third complaint would have prejudiced PNC: It was filed over seven years after the underlying fraud and only after the district court had dismissed Bariteau‘s amended-once-before complaint. Nor has Bariteau offered a legitimate explanation for failing to seek leave to amend prior to the entry of judgment. See Commercial Money Ctr., 508 F.3d at 347 (affirming the denial of a post-judgment motion to amend that the district court characterized as an attempt by the plaintiff “to reargue its failed theories and get a new ‘bite at the apple‘” and stating that, “in the post-judgment context, competing interests in finality of judgments and the expeditious termination of litigation require that courts be mindful of not only prejudice to the opposing party but also the reasons the movant failed to seek leave to amend earlier“) (internal quotation marks omitted).
The amendment to add the Military Channel as a plaintiff also would have been futile. The Military Channel had already sued PNC for its alleged failure to enforce the corporate resolution, and the parties voluntarily agreed to dismiss that action with prejudice, which would bar a subsequent action by the Military Channel against PNC. See Warfield, 267 F.3d at 542; Polk, 689 S.W.2d at 365.
III.
For these reasons, we affirm.
BEFORE: MOORE and MCKEAGUE, Circuit Judges; SCHWARZER,* District Judge.
WILLIAM W. SCHWARZER, District Judge.
Kenneth Corder, Sr., brought this action against Ford Motor Company on behalf of himself and others similarly situated seeking damages under the Kentucky Consumer Protection Act (“KCPA“),
After initial discovery, Ford moved for summary judgment. The district court granted the motion. It held that Ford‘s actions were not unfair, false, misleading or deceptive. The court reasoned that the changes implemented in the 2004 engine did not result in an engine substantially different from that installed in Corder‘s truck and that Ford‘s failure to disclose the engine‘s manufacturing history was not a material omission. It further held that Corder had failed to show that he had suffered “ascertainable loss of money or property” within the meaning of the KCPA. Finally, the court rejected the claim for equitable relief. Corder timely appealed.
ANALYSIS
We review a summary judgment de novo. Bennett v. City of Eastpointe, 410 F.3d 810, 817 (6th Cir.2005). Summary judgment is appropriate where “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.”
I.
The KCPA prohibits “[u]nfair, false, misleading, or deceptive acts or practices in the conduct of any trade or commerce.”
We agree with Corder that there is sufficient evidence to raise a genuine issue of material fact regarding whether Ford‘s sale of a 2004 model Super Duty truck with a 2003 6.0L V-8 Power Stroke diesel engine installed was an “unfair, false, misleading or deceptive” act. First, contrary to Ford‘s argument that its engines do not have model years, there is substantial evidence from which a jury could find that Ford distinguished between the 2003 model and the 2004 model of the 6.0L V-8 Power Stroke diesel engine. The engine in the 2003 F-250 truck was notorious for its deficiencies which were widely publicized, including “leaky fuel injectors, oil leaks, broken turbochargers, wiring harness troubles, faulty sensors, defective exhaust gas recirculation valves and bad computers.” (Joint Appendix (“JA“) 848, 795.) Ford identified that engine internally as the 2003 engine, (JA 638, 640), and distinguished it from the 2004 engine in its internal documents. For example, a “Program Direction Letter” distinguished the “2004 6.0L diesel Engine” from the “03.25MY Diesel.” (JA 1337.) A Ford document titled “Extraordinary Measures for 2004MY Launch” referred to “03MY and other 04MY engines” (JA 2039) and another document titled “6.0L Diesel Single Agenda for Quality-OVERVIEW” referred to “2004 veh. Model year w/ 2003 engines.” (JA 1335.) Ford documents also indicate that it initially planned to begin installing what it called “04 engines” in the 2004 model year trucks beginning in September 2003. (JA 1339.) A supervisor at International Truck and Engine, where the engines were manufactured, upon learning that Corder had purchased a 2004 truck, gave Corder a 2003 engine manual and a 2004 engine manual, indicating that they were different engines. (JA 946, 1053.)
There is also substantial evidence from which a jury could find that Ford made significant improvements in the 2004 engine. A 29-page memorandum created in July 2003 entitled “6L 2004 MY Issues and Resolution Plans” identifies and discusses in detail six categories of problems with the Power Stroke engine and proposes fixes for the 2004 model. (JA 1341-1370.) None of the problems and fixes appear to refer to compliance with EPA emissions requirements. Ford‘s internal memos contain repeated references to improvements in the 2004 engine. (JA 801-808, JA 2042.) One memo titled “Extraordinary measures for 2004MY Launch” states “all 04MY engines 100% tested....” (JA 1309.) Ford admitted in interrogatory answers that the engine in Corder‘s truck and other Super Duty trucks assembled before September 29, 2003 did not include at least 30 improvements that were included in the 2004 engine. (JA 857-865.) Ford documents also indicate that Ford planned an early release of the 2004 model year of the Super Duty truck as “‘04 badge only” with
A jury could find from this evidence that a reasonable purchaser would have considered the improvements Ford made to the 2004 engine material to his choice of truck. In an analogous case, the Kentucky Court of Appeals held that a jury could find that the sale of a vehicle as new without disclosing its pre-sale repair history was a false, misleading or deceptive act under the KCPA. Smith v. General Motors Corp., 979 S.W.2d 127, 131 (Ky.Ct.App.1998). Here, a jury could find that given the widely-known problems with the 2003 engine (JA 848, 795), a reasonable purchaser of a 2004 F-250 Super Duty truck would have expected that it did not contain a 2003 engine, and that the sale to Corder of a 2004 truck without disclosing that the truck contained a 2003 engine was a misleading and deceptive act.
We also disagree with the district court‘s conclusion that Corder failed to show an “ascertainable loss of money or property.”
The result in Smith is consistent with the result reached by other courts. In an analogous case involving the purchase of an automobile that plaintiff claimed was not as represented, the Connecticut Supreme Court held, interpreting Connecticut‘s unfair trade practices act, that “the words ‘any ascertainable loss’ ... do not require plaintiff to prove a specific amount of actual damages in order to make out a prima facie case.” Hinchliffe v. American Motors Corp., 184 Conn. 607, 440 A.2d 810, 813-14 (1981). The court reasoned:
Moreover, the inclusion of the word “ascertainable” to modify the word “loss” indicates that plaintiffs are not required to prove actual damages of a specific dollar amount. “Ascertainable” means “capable of being discovered, observed or established.” ...
... Whenever a consumer has received something other than what he bargained for, he has suffered a loss of money or property. That loss is ascertainable even though the precise amount of the loss is not known.
Id. at 814. And in Scott v. Western Int‘l Surplus Sales, Inc., 267 Or. 512, 517 P.2d 661, 663 (1973), the court held that the plaintiff, who sought statutory damages under the Oregon Consumer Protection Act, had sufficiently established an “ascertainable loss,” saying:
[T]he plaintiff did not have to prove in what amount the value of the tent [he had purchased] was reduced because it was not as represented. He merely had to prove he suffered some loss.
Here, Corder produced evidence from which a jury could find that the truck he purchased was not as a reasonable consumer would expect it. Though he purchased a 2004 model Super Duty truck, the engine it contained was a 2003 engine that lacked the improvements in the 2004 engine.
Moreover, Corder offered expert evidence of a professional appraiser who opined that a more recent model year Ford F-Series Super Duty truck with a 6.0L Power Stroke diesel engine generally
II.
The district court also dismissed Corder‘s claims for unjust enrichment and money had and received, reasoning that there is no support for the contention that Ford‘s retention of any benefit would be unjust. We agree with that disposition. As the district court observed, quoting Luithly v. Cavalier Corp., 181 F.3d 102, at *4 n. 2 (6th Cir.1999), such an action lies “when money has been received by one party that, in justice and equity, belongs to another.” This is not such a case.
For the reasons stated, we VACATE the judgment of the district court and REMAND for further proceedings.
McKEAGUE, Circuit Judge, Dissenting.
The 2004 F-250 Super Duty Truck plaintiff Kenneth Corder purchased is equipped with a non-defective engine that conforms to Ford‘s representations. Yet, Corder believes the engine he received is less valuable than the engine he assumed the truck was equipped with. Although he is largely satisfied with the performance of the truck and its engine, Corder believes he was misled by Ford‘s material omission.
In my opinion, sympathy with Corder‘s indignation, whether justified or not, has clouded the majority‘s application of Kentucky law to the record facts. Without ever defining specifically how Ford‘s conduct could be deemed “unlawful” under Kentucky law, the majority yields to plaintiff‘s urging and concludes that it could be deemed misleading or deceptive for Ford to have marketed as new a 2004 model-year truck equipped with an engine manufactured during model-year 2003 without disclosing the date of the engine‘s manufacture. In my opinion, the majority paints with a brush too broad, carelessly glossing over numerous critical details. I therefore respectfully dissent.
From the outset, we recall that our appellate task is to identify error in the district court‘s judgment. Absent error, the district court‘s judgment should be affirmed. The district court held that plaintiff Kenneth Corder failed to carry his burden of demonstrating the existence of a triable fact issue by presenting substantial evidence (i.e., more than a mere scintilla of evidence) of material facts supporting the essential elements of his claim, as defined by the Kentucky Consumer Protection Act (“KCPA“). Like the district court, the majority focuses on two essential elements of the claim: whether Corder suffered an “ascertainable loss of money or property” as a result of Ford‘s use of “an unfair, false, misleading or deceptive practice.”
1. Misleading or Deceptive Practice
Ford is not alleged to have engaged in any “unfair” or “false” practice. In fact, Corder admits that he did not rely on any affirmative misrepresentation in deciding to purchase his Ford F-250 Super Duty
The Kentucky Consumer Protection Act does does not define “misleading” and “deceptive.” As the majority recognizes, they are terms to be defined as they would be “generally understood and perceived by the public.” Smith v. General Motors Corp., 979 S.W.2d 127, 131 (Ky.App.1998). Under Kentucky law, a material omission may be misleading or deceptive. Id. In Smith, the court held that the sale of a vehicle as new without disclosure of its pre-sale history of repairs by the dealer—repairs that had been ineffective to correct the defect—could be deemed a misleading or deceptive practice. Id. The majority believes this case is analogous to Smith. In so concluding, however, my colleagues ignore significant differences.
In Smith, the court recognized that generally, an omission is a material omission and is actionable only if the defendant had a duty to disclose. Id. at 129. A duty to disclose “may arise from a fiduciary relationship, from a partial disclosure of information, or from particular circumstances such as where one party to a contract has superior knowledge and is relied upon to disclose same.” Id. In concluding that General Motors could be deemed liable for a material omission amounting to a misleading or deceptive practice, the Smith court identified three sources of a duty to disclose, two statutory and one in common law. Id. at 129-130. Here, in contrast, the majority has conspicuously failed to identify what duty Ford breached by failing to disclose the date the engine in Corder‘s truck was manufactured or what the source of any such duty is under Kentucky law.
The majority purports to follow Smith by allowing the trier of fact to decide whether Ford‘s material omission was “misleading” or “deceptive.” However, unlike the Smith court, the majority has failed to lay the legal groundwork for such a ruling by first identifying the legal basis for Ford‘s supposed duty to disclose, the breach of which rendered the nondisclosure a “material omission” under Kentucky law, potentially actionable as a misleading or deceptive act under the Kentucky Consumer Protection Act.
Corder argues that Ford had a duty to disclose the date the engine was manufactured and that the failure to disclose was a material omission because the information would have affected his choice of truck. Corder does not complain that the 6.0L V-8 Power Stroke diesel engine he received is defective.1 Whereas Smith received an
Corder‘s proffered definition of “material omission,” ostensibly adopted by the majority, is unhinged from any duty to disclose. It is in this respect inconsistent with the teaching of Smith, and is not supported by any other Kentucky authority.2 The majority fails to explain why, in applying Kentucky law, we should expect the Kentucky courts to enforce the Kentucky Consumer Protection Act in a manner at odds with the teaching of the Kentucky Court of Appeals in Smith.
The majority also sidesteps the threshold question whether Corder‘s professed expectation regarding disclosure of the date of engine manufacture may be fairly deemed to represent the expectation of a reasonable consumer. Even assuming the truthfulness of Corder‘s testimony about the significance, in his mind, of the precise date of the engine‘s manufacture, is this the perception of a “reasonable consumer?” Would a reasonable consumer (in contrast with an employee at the plant where the engines were manufactured), shopping for a 2004 F-250 Super Duty Truck in May 2004, consider the precise date of the engine‘s manufacture (whether in August 2003 or October 2003), or even the label assigned to the particular 6.0L V-8 Power Stroke diesel engine (whether “2003.25” or “Job 1.5“), a material factor in his or her purchase decision? The implied conclusion that such an expectation is objectively reasonable strains plausibility.
For this reason, ostensibly, the majority nowhere identifies specifically what Ford was obligated to disclose in order to render its sale to Corder of the 2004 F-250 Super Duty Truck with 2003.25 Power Stroke engine other than misleading or deceptive. Instead, the majority points to evidence that the “Job 1.5” version of the Power Stroke engine incorporated numerous improvements not incorporated into the predecessor “2003.25” version. Notwithstanding undisputed record evidence that these improvements were primarily designed to address new 2004 EPA-mandated emission-control requirements and did not materially affect any of the engine‘s performance features, such as horsepower and torque, the majority simply states that a reasonable purchaser would have considered these improve-
2. Ascertainable Loss
My colleagues also disagree with the district court‘s conclusion that Corder failed to present evidence that he has suffered an “ascertainable loss of money or property.” The record shows that Corder continues to own the 2004 F-250 Super Duty Truck, that he is satisfied with the performance of the truck, that he can use the truck for all of its intended purposes, and that he has no express plans to sell it. Corder‘s alleged disappointment stems not from the performance of his engine, but from his sense that the truck‘s value is diminished because of earlier negative publicity about the first-generation Power Stroke engines. Even though the earlier defects may have been corrected in the “2003.25” engine he has, Corder wishes he had the “Job 1.5” engine introduced after September 29, 2003, which is not only free of the notorious defects of the past, but is also perceived as such. Corder “believes,” based on conversations with people at work and outside of work, that his truck is worth $5,000 to $10,000 less than a 2004 F-250 Super Duty Truck equipped with an engine manufactured after September 29, 2003. Corder dep. p. 163, JA 917. He admitted he has no other support for his opinion. Id.
The district court held that Corder‘s bare assertion of harm is too speculative. Such a potential loss, unsupported by factual showing or legal support, was held to be insufficient to satisfy the ascertainable loss requirement of the Kentucky Consumer Protection Act. The majority disagrees, observing that “ascertainable loss” has not been specifically defined by the Kentucky courts. My colleagues therefore rely on opinions from courts in Connecticut and Oregon to conclude that Kentucky law does not require evidence of actual loss to make out a viable claim under KCPA.
Again, I believe the majority takes improper liberties with Kentucky law. While “ascertainable loss” has not been specifically defined by the legislature or case law, the available authorities indicate that “ascertainable loss of money or property” has been defined in Kentucky in accordance with its plain and ordinary meaning. See Schlenk v. Ford Motor Credit Co., 308 F.3d 619, 622 (6th Cir.2002) (affirming dismissal of KCPA claims for lack of showing of ascertainable loss); Red Bird Motors, Inc. v. Endsley, 657 S.W.2d 954, 956 (Ky.App.1983) (reversing judgment for the plaintiff on KCPA claim for lack of proof of specific damage). Kentucky law hardly supports the proposition that Corder has adequately demonstrated an ascertainable loss in money or property where the presumed loss in value has neither been actually sustained nor substantiated even by comparative appraisals.
The majority considers the expert opinion of automobile appraiser Wayne Marsden sufficient to create a genuine issue of material fact. Marsden opined that a 2004 model year Ford F-Series Super Duty Truck that has a 6.0L Power Stroke diesel engine manufactured prior to September 29, 2003 has reduced resale value in comparison with trucks equipped with the
Marsden‘s opinion is as interesting for what it does not say as for what it does say. While Marsden baldly stated that “a consumer like Corder” has “suffered” a “financial loss,” he (a) did not explain how Corder (who is satisfied with the performance of his truck and has no intent to sell) can be deemed to have suffered a loss; (b) did not characterize the loss as an “ascertainable loss of money or property;” (c) did not even attempt to ascertain or quantify the loss; and (d) did not tie the loss to any misleading or deceptive practice by Ford (as opposed to Corder‘s inaccurate assumption), as required by the KCPA. In my opinion, Marsden‘s opinion, while probative, is insufficient, standing alone, to create a triable fact issue on Corder‘s claim under the Kentucky Consumer Protection Act.
Having carefully reviewed the majority‘s opinion in light of the requirements of Kentucky law and the record evidence relied on by Corder, I remain unpersuaded that the district court erred in granting summary judgment to Ford. Accordingly, I respectfully dissent.
Selena REED, Plaintiff-Appellee, v. Arneil ROSE, City of Cleveland, Defendants, and Timothy Clark, Defendant-Appellant.
No. 07-3274.
United States Court of Appeals, Sixth Circuit.
July 14, 2008.