MEMORANDUM OPINION AND ORDER
Eddie Diaz brings this action against Paragon Motors of Woodside, Inc. ("Paragon") and Americredit Financial Services, Inc. ("Americredit") alleging that defendant Paragon Motors violated (1) the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq.,*fn1 (2) the Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691,*fn2 (3) New York's Vehicle & Traffic Law § 417-a,*fn3 (4) New York's "Used Car Lemon Law," New York General Business Law § 198- b,*fn4 (5) the Magnuson-Moss Warranty Act, 15 U.S.C. § 2310,*fn5 by breaching (a) express and (b) implied warranties, and (6) New York General Business Law § 349 by its deceptive sales practices.*fn6 In addition, plaintiff alleges that (7) co-defendant Americredit is liable for damages on all claims which plaintiff asserts against co-defendant Paragon, pursuant to 16 C.F.R. § 433.2 (the "Holder Rule"), as a provider of consumer credit. Presently before the Court is the plaintiff's motion for partial summary judgment on Paragon's liability with respect to its TILA, ECOA and NY V&T § 417-a claims. Also before the Court are Paragon's and Americredit's cross-motions for summary judgment on all claims alleged in the complaint.
For the reasons set forth below, plaintiff's Rule 56(b) motions for summary judgment on liability with respect to his TILA and NY V&T § 417-a claims are granted. Plaintiff's motion for summary judgment as to his ECOA claim is denied. Paragon's motions for summary judgment are granted with respect to plaintiff's claims for violations of ECOA, Used Car Lemon Law, Breach of Express Warranty pursuant to the MMWA, and the New York Deceptive Sales Practice statute to the extent that claim is based on violations of ECOA. Paragon's motions for summary judgment are denied as to plaintiff's claims for violations of Breach of Implied Warranty and Revocation of Acceptance pursuant to the MMWA, and the New York Deceptive Sales Practice statute to the extent that claim is based on violations of TILA and NY V&T § 417-a. Americredit's motions for summary judgment are granted with respect to plaintiff's claims for violations of TILA, ECOA, Used Car Lemon Law, Breach of Express Warranty pursuant to MMWA, and the New York Deceptive Sales Practice statute to the extent premised on violations of ECOA. Americredit's motions for summary judgement are denied with respect to plaintiff's claims for violations of NY V&T § 417-a, Breach of Implied Warranty and Revocation of Acceptance pursuant to MMWA and the New York Deceptive Sales Practice statute to the extent these violations are premised on violations of TILA and § 417-a.
The following facts are drawn from the parties' Local Rule 56.1 statements, affidavits, depositions, and exhibits submitted in connection with these motions. They are undisputed except where noted.
On May 9, 2003, plaintiff Eddie Diaz visited Paragon's used car dealership at 57-02 Northern Boulevard, Woodside, New York in Queens County. Diaz told Paragon's salesman that he was interested in purchasing a used 2002 Chrysler Town and Country advertised in the New York Daily News on May 8, 2003 for sale at a purchase price of $13,495.00.*fn7 Plaintiff made a deposit of $500.00 towards the purchase of the car in order to assure its availability. He also signed a document listing "$4,000 Cash Down" in the space provided for price, under which was written, "Subject to Bank Approval", but with no total vehicle price or other fees listed. (Joint Ex. 2). The document, variously described as an "initial intent to buy", "customer's intention to buy" or "a buyer's order" by Paragon, (Benstock Dep., 26, 32-33, 43), included a description of the vehicle, its stock and VIN numbers, mileage of 30,540, and a notation of the $500 deposit. A form intended to disclose by checked boxes prior use of the vehicle as a police vehicle, taxi-cab, driver education or rental vehicle as required by Vehicle and Traffic Law § 417-a,*fn8 was left blank. (Joint Ex. 2; Benstock Dep., 36).
At the time, the parties agreed that Paragon would assist Diaz in financing the car.*fn9 Paragon thereafter submitted Diaz's loan application via an electronic data system called Dealer Track to determine whether Diaz was eligible for financing by a sub-prime lender, and at what amount.*fn10
On the same day, May 9, Consumer Portfolio Services, Inc. (CPS), a sub-prime lender, pre-approved a loan to Diaz subject to certain conditions, including income and employment verification and payment by Paragon of an acquisition fee of $199 later charged to Diaz. The pre-approval provided for a maximum payment per month of $350, at an annual interest rate of 19.95%. (Joint Ex. 5). Based on these terms, Paragon set a selling price of $16,130.13, with CPS to provide financing. Additional charges included $1,500 for an extended warranty,*fn11 $1,454.49 in taxes and $140 in license, title, state inspection and processing fees. The total selling price listed on the proposed bill of sale, dated May 10, 2003, was $19,224.62. The down payment was fixed at $6,000, so the total remaining due would be $13,224.62. (Joint Ex. 11, Proposed Bill of Sale). Because Diaz would ultimately send $21,000 in payments to CPS, the total amount financed was $7,775.38 ($21,000 less $13,224.62), according to a proposed Retail Installment Contract, also dated May 10, 2003. (Joint Ex. 10, Proposed Retail Installment Contract). CPS turned down the loan for unexplained reasons, and it was eventually picked up by Americredit.
On the following day, May 10, 2003, Diaz again offered to purchase the car for the advertised price of $13,495, gave an additional deposit of $1,000.00, and again asked Paragon to obtain financing. According to Diaz, there were no further negotiations with respect to the purchase price of the vehicle on May 10. (Diaz Dep. 26). The next day, May 11, Paragon informed Diaz that in order to obtain financing, he would have to put $6,000 down, instead of $4,000 as previously provided for in the May 9 agreement.
Diaz stated that on May 12, 2003, he returned to Paragon to pay the additional $4,500 requested for the down payment, but did not execute any documents until the following day.*fn12 According to Diaz, on May 13, 2003 he returned to Paragon and executed a Retail Installment Contract ("RISC"), dated May 12, 2003, which disclosed the final details of the sale, and reflected an increase in the purchase price of the vehicle. According to Diaz, the Paragon finance manager told him that the original advertised price of $13,495 was not available because a primary lender would not finance the car, because a secondary lender had to be used, and because the extended warranty was necessary to obtain financing. (Diaz Dep., 34-37). Because he was putting down $6,000, the balance of $14,047.18 was to be financed by Americredit Financial with 60 monthly payments at $367.87 per month, equaling $22,072.20. The total finance charge listed in the RISC was $8,025.02. The "total sale price" for the vehicle including $16,590 purchase price, $1,517.18 sales tax, $8,025.02 finance charge, $1,800 extended warranty, and other license, title, state inspection and processing fees was stated as $28,072.20. (Joint Ex. 3, Retail Installment Contract).
On a bill of sale dated May 12, 2003, but not signed until May 13 according to Diaz, the purchase price was listed as $16,590 plus $1,800 described as "Other Equipment" apparently representing the new price for the extended warranty, $1,517.18 sales tax, and $140.00 for license, title, state inspection and processing fees, for a total cash price of $20,047.18.*fn13 (Joint Ex. 9, Bill of Sale). The bill of sale included a statement, signed by Diaz, that the "principal pride [sic: prior?] use of th[e] vehicle was as a rental vehicle." (Joint Ex. 9). Diaz stated the bill of sale was the last document he signed before taking possession of the vehicle. (Diaz Dep., 32-33).
The sale included a limited warranty which covered repairs to covered parts, for 90 days or 4,000 miles. The warranty provided that the dealer would repair "covered parts listed on the reverse side" of the warranty or would reimburse the buyer for such repairs.*fn14 The warranty is dated May 10, 2003, but is not signed by either party.
A few days after Diaz took possession of the vehicle on May 13, 2003, he complained that the brakes were not responding, the front wheels made a strange sound upon turning, and that there were problems with the air conditioning and mirrors. (Diaz Dep., 56-59). On May 20, he brought the vehicle back to Paragon for repairs to the mirror, ABS light and air conditioning, which were completed at no charge on May 23. (Def.'s Mem. Opp'n, Ex. 17).
Diaz brought the car back to Paragon again on May 30 for repairs to the C/S ABS*fn15 and brake light, and "the links and bushings." According to Diaz, the vehicle was sent to a Chrysler dealership, and returned about one month later, during which time Diaz rented another vehicle. Diaz did not pay for the repairs or rental vehicle, but stated that he paid $278 for additional insurance for the rental vehicle, which he did not seek to have reimbursed. (Diaz Dep., 70). The invoice from Bayside Chrysler, Plymouth, Jeep, Inc. describes repairs to the front suspension and ABS light, where "[c]ustomer states noise in front end over bumps" and "that the anti lock [sic] brake light is on and brake light on". Id. at Ex. 18. It is unclear from the invoice when the car was received and when it was delivered to Diaz, although it lists the "R.O. Date" as 06/06/03, and an invoice date of 06/27/03. (Def.'s Mem. Opp'n, Ex. 19). Diaz stated that after the car was returned to him the problem with the brake light reoccurred, and on July 10, he returned the vehicle to Bayside Chrysler for further repairs, which were completed that day or the day after at no charge to him. Diaz stated that the vehicle worked properly after these repairs.
After the 90-day warranty had expired, Diaz brought the car to Tony's Auto Body on October 9, 2003, for repairs following an accident in September 2003 (Def's Mem. Opp'n, Ex. 21; Diaz Dep., 89-93). On May 18, 2004, Jochi Auto Repair, Inc. performed work to the "Rear Anti Locks Sensor Installed Left and Right" and "Replace Front [illegible]". On July 20, 2004, Riverdale Chrysler Jeep performed additional repairs to the "check engine light". These repairs were either covered by insurance or Diaz's extended warranty. (Def.'s Ex. 22-23, Diaz Dep., 77-86.)
Plaintiff stated that several times he used the Chrysler for business instead of his other car, because he was concerned that the Chrysler was unsafe.*fn16 (Diaz Dep., 88). Diaz stated that he informed Paragon that he wanted them to take the vehicle back when he brought it in to be repaired for the second time in May or June of 2003. Paragon's agent did not accept the vehicle, but repaired it instead. (Diaz Dep., 88).
This Court has jurisdiction over plaintiff's TILA and ECOA claims pursuant to 28 U.S.C. §§ 1331 and 1337. Plaintiff contends that this Court has jurisdiction over plaintiff's Magnuson-Moss Warranty claims, pursuant to 15 U.S.C. § 2310(d)(1)(B), but has not alleged that it meets the amount in controversy requirements for jurisdiction in federal court. Nevertheless, this Court exercises supplemental jurisdiction over the warranty claims and plaintiff's remaining state law claims pursuant to 28 U.S.C. § 1367.
Where, as here, the parties have relied primarily on New York law, "such 'implied consent . . . is sufficient to establish choice of law.'" Motorola Credit Corp. v. Uzan, 388 F.3d 39, 61 (2d Cir. 2004)(citations omitted).
Summary judgment is appropriate "[w]hen the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Rule 56 of the Federal Rules of Civil Procedure provides for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "An issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Elec. Inspectors, Inc. v. Vill. of E. Hills, 320 F.3d 110, 117 (2d Cir. 2003). A fact is material when it "might affect the outcome of the suit under the governing law." Id.
The party seeking summary judgment has the burden of demonstrating that no genuine issue of material fact exists. Apex Oil Co. v. DiMauro, 822 F.2d 246, 252 (2d Cir. 1987). In order to defeat such a motion, the non-moving party must raise a genuine issue of material fact. Although all facts and inferences therefrom are to be construed in the light most favorable to the non-moving party, the non-moving party must raise more than a metaphysical doubt as to the material facts. See Matsushita, 475 U.S. at 586; Harlen Assoc. v. Vill. of Mineola, 273 F.3d 494, 498 (2d Cir. 2001). "[A]n adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P 56(e). The non-moving party may not rely on conclusory allegations or unsubstantiated speculation. Twin Labs., Inc., v. Weider Health & Fitness, 900 F.2d 566, 568 (2d Cir. 1990). Rather, the non-moving party must produce more than a scintilla of admissible evidence that supports the pleadings. First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289-90 (1968); Niagara Mohawk Power Corp. v. Jones Chem. Inc., 315 F.3d 171, 175 (2d Cir. 2003).
The trial court's function in deciding such a motion is not to weigh the evidence or resolve issues of fact, but to decide instead whether, after resolving all ambiguities and drawing all inferences in favor of the non-moving party, there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986); Pinto v. Allstate Ins. Co., 221 F.3d 394, 398 (2d Cir. 2000).
"The contention of one party that there are no issues of material fact preventing entry of judgment in its favor does not bar that party from asserting that there are issues of fact sufficient to prevent the entry of judgment as a matter of law against it." Walling v. Richmond Screw Anchor Co., 154 F.2d 780, 784 (2d Cir.), cert. denied, 328 U.S. 870, 66 S.Ct. 1383, 90 L.Ed. 1640 (1946). Thus, the mere filing of cross-motions for summary judgment does not mean that the court must grant judgment as a matter of law for one side or the other. E.g., Home Insurance Co. v. Aetna Casualty & Surety Co., 528 F.2d 1388, 1390 (2d Cir. 1976) ("The fact that both sides ... sought summary judgment does not make it more readily available."); Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir. 1975). "[T]he mere fact that plaintiff has failed to meet his burden of proof on his motion for summary judgment does not entitle the defendant to judgment on its motion." Rothenberg v. Chemical Bank New York Trust Co., 400 F.Supp. 1299, 1302 (S.D.N.Y. 1975). Rather, the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration." Schwabenbauer v. Board of Ed. of City School Dist. of City of Olean, 667 F.2d 305, 313-14 (2d Cir. 1981).
Mere conclusory allegations, speculation or conjecture will not avail a party resisting summary judgment. Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996). If there is evidence in the record as to any material fact from which an inference could be drawn in favor of the non-movant, summary judgment is unavailable. Holt v. KMI-Continental, Inc., 95 F.3d 123, 128 (2d Cir. 1996), cert. denied, 520 U.S. 1228, 117 S.Ct. 1819, 137 L.Ed.2d 1027 (1997); Rattner v. Netburn, 930 F.2d 204, 209 (2d Cir. 1991).
Truth in Lending Act (TILA)
The purpose of the Truth in Lending Act ("TILA")*fn17 is "to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit."
15 U.S.C. § 1601(a); Gibson v. Bob Watson Chevrolet-Geo. Inc., 112 F.3d 283, 285 (7th Cir. 1997) (TILA's purpose is "to protect consumers from being misled about the cost of credit"); Balderos v. City Chevrolet, 214 F.3d 849 (7th Cir. 2000). To this end, TILA requires clear and accurate disclosures by creditors*fn18 to consumers of any finance charge that the consumer will bear under the credit transaction. See 15 U.S.C. § 1638(a)(4).
TILA defines a "finance charge" as the "sum of all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit." 15 U.S.C. §1605(a).*fn19 However, the Federal Reserve Board's Official Staff Commentary to Regulation Z*fn20 exempts "the cost of doing business" from TILA's disclosure requirements:
Costs of doing business. Charges absorbed by the creditor as a cost of doing business are not finance charges, even though the creditor may take such costs into consideration in determining the interest rate to be charged or the cash price of the property or services sold. However, if the creditor separately imposes a charge on the consumer to cover ...