Date: 11-15-2001

Case Style: Kellena Cornist and David Jones v. B.J.T. Auto Sales, Inc.; B.J.T. Finance, Inc.; James Hadley; Bill R. Hatcher; Thomas Tepe

Case Number: 00-5751

Judge: Boggs

Court: United States Court of Appeals for the Sixth Circuit

Plaintiff's Attorney: Candace J. Smith of Arnzen, Parry & Wentz, Kentucky and Stephen R. Felson of Felson & Felson, Cincinnati, Ohio, for Appellants.

Defendant's Attorney: Jon D. Brittingham and Frank C. Woodside III of Dinsmore & Shohl, Cincinnati, Ohio, A. Dennis Miller, Dennis Wood Van Houten of Droder & Miller Co., L.P.A., Cincinnati, Ohio, Gary J. Sergent of O'Hara, Ruber, Taylor, Sloan & Sergent, Covington, Kentucky, for Appellees.

Description: Kellena Cornist and David Jones appeal the judgment of the district court granting B.J.T. Auto Sales, Inc. summary judgment on all claims. Cornist's federal claims arise under the Truth in Lending Act, 15 U.S.C. § 1601 et seq. Cornist alleges that BJT charged prices and fees to credit customers that were lower or non-existent for cash customers without disclosing the items as "finance charges." Additionally, Cornist contends that BJT failed properly to disclose whether some of the fees were paid to third parties.

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Cornist filed her complaint in this action on May 2, 1997, alleging that BJT had failed to make disclosures required by the Truth in Lending Act in connection with the purchase of her automobile from BJT. Cornist listed as defendants BJT, BJT Finance, and several owners of the two corporations. Among Cornist's Truth in Lending Act allegations were that BJT charged increased base prices for cars to credit customers without disclosing such increased prices as finance charges, failed to disclose the distribution of document fees and service agreement fees to third parties, and assessed those fees only on credit customers without disclosing them as finance charges.

Cornist sued individually and as representative of a class of individuals who had bought automobiles on credit from BJT. Later, Cornist filed a Motion for Class Certification.

After relatively contentious discovery proceedings, BJT and its co-defendants filed motions for summary judgment. In response, Cornist presented data on nineteen cash transactions for comparison to hundreds of credit transactions, while also noting that BJT had not produced documentation on over 139 cash transactions that Cornist had identified. Cornist compiled this data into a chart that compared, among other things, the "mark-up," or the premium over its cost of acquisition at which BJT sold automobiles, on each of the transactions. The mark-up appeared from the chart to be consistently and significantly higher for cars sold on credit.

The district court granted summary judgment for the defendants on all of Cornist's Truth in Lending Act claims. The court held that, in order to satisfy the legal elements of the Truth in Lending Act, Cornist must demonstrate a "systematic" disparity in pricing between credit and cash customers. At best, according to the court, Cornist's responsive evidence showed "sporadic rather than systematic" price increases for credit customers. The court similarly held that Cornist had not created any genuine issue of material fact that BJT violated any of the Truth in Lending Act's disclosure requirements by its allocation of the service agreement and document fees.

Having dismissed all of Cornist's federal claims under the Truth in Lending Act, the court dismissed the remaining state claims for lack of subject matter jurisdiction, declining to exercise continuing supplemental jurisdiction over the claims. Additionally, the court held that Cornist's motion for class certification was moot, all her substantive claims having been dismissed.

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Click the case caption above for the full text of the Court's opinion.

Outcome: We affirm in part and reverse in part the district court's summary judgment.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: Reported by Kent Morlan