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Clarke v. West Palm Nissan, LLC

United States District Court, S.D. Florida

January 23, 2018

TAYLOR CLARKE, Plaintiff,
v.
WEST PALM NISSAN, LLC, Defendant.

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

          ROBIN L. ROSENBERG, UNITED STATES DISTRICT JUDGE.

         This cause is before the Court on Defendant's Motion to Dismiss [DE 18]. The Motion has been fully briefed. For the reasons set forth below, the Motion is granted.

         I. FACTUAL ALLEGATIONS

         Plaintiff attempted to purchase a vehicle from Defendant. DE 1 at 7. In connection therewith, Plaintiff executed various agreements. See generally DE 1; DE 18. Plaintiff agreed to grant Defendant a “seller's right to cancel.” DE 1 at 2. That right permitted Defendant the opportunity to locate financing (at terms acceptable to Plaintiff) after Plaintiff took possession of the vehicle. Id; DE 18. If Defendant was unable to locate auto financing for Plaintiff, Defendant's right to cancel allowed Defendant the opportunity to cancel the sale of the vehicle and retake possession of the vehicle, provided that Defendant returned all consideration it previously received from Plaintiff back to Plaintiff. Id. Defendant was unable to locate auto financing for Plaintiff. DE 1 at 9. Defendant invoked its right to cancel the sale. Id. This lawsuit followed.

         II. STANDARD OF REVIEW

         When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), this Court must accept all factual allegations in a complaint as true and take them in the light most favorable to the plaintiff; however, a plaintiff is still obligated to provide grounds of his or her entitlement to relief which requires more than labels, conclusions and a formulaic recitation of the elements of a cause of action. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 561-563 (2007). Unwarranted deductions of fact in a complaint cannot be admitted as true for the purposes of testing the sufficiency of the allegations. Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242, 1248 (11th Cir. 2005). The facts as pled must state a claim for relief that is plausible on the face of the pleading. Iqbal, 556 U.S. at 678-69.

         III. ANALYSIS

         Plaintiff invokes the federal question jurisdiction of this Court by bringing three federal claims: Violation of the Truth in Lending Act (Count I), Violation of the Motor Vehicle Information and Cost Savings Act (Count V), and a count styled as a “Constitutional Challenge” alleging that certain Florida statutes violate the federal Truth in Lending Act (Count VIII). Each count is addressed in turn.

         The Truth in Lending Act, Count I

         As best as the Court can discern, Plaintiff has alleged two different grounds for her Truth in Lending Act claim. The first is that Defendant's unilateral right to cancel the sale of a vehicle violates TILA. The second is that Defendant did not disclose to Plaintiff that it-the Defendant-was a creditor.

         Defendant's Right to Cancel the Sale.

         Defendant's right to cancel appears in the sales contract, which is attached as an exhibit to Plaintiff's Complaint. DE 1-1 at 4. Plaintiff admits in her Complaint that the right to cancel clause existed in the agreements she signed[1] and that Defendant invoked that clause after she took possession of one of Defendant's vehicles. DE 1 at 1-4. Plaintiff argues that Defendant has violated TILA because its agreement with Plaintiff included a unilateral right to cancel the sale. Thus, Plaintiff's dispute with Defendant under TILA is a legal dispute-Plaintiff argues that the existence of the right to cancel clause itself violates TILA. Id.

         A seller's unilateral right to cancel a sales contract or a contract conditioned upon seller-located financing, does not, by itself, violate TILA. See, e.g., Bragg v. Bill Heard Chevrolet, Inc., 374 F.3d 1060, 1068 (11th Cir. 2004). Numerous cases support this proposition because, importantly, a sales contract conditioned upon financing does not relieve the seller of TILA disclosure obligations. Id. Thus, a unilateral right to cancel a sale or a sales contract conditioned upon seller-located financing does not, in and of itself, violate TILA because TILA applies to the entire transaction from the moment the buyer executes the sales contracts:

[Plaintiff's] signature on [the sales agreements] rendered him contractually obligated to the purchase of credit and thus constituted consummation for purposes of TILA disclosures. To give full effect to TILA's goal of providing meaningful and timely disclosure of important credit terms, we hold that in a financing agreement containing a condition precedent where the condition of obtaining financing is within the exclusive ...

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