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Seekamp v. Fuccillo Automotive Group

March 15, 2010

HEIDI SEEKAMP, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
FUCCILLO AUTOMOTIVE GROUP, INC., FUCCILLO LINCOLN MERCURY HYUNDAI, INC., UNIVERSAL AUTOMOTIVE SERVICES, INC. DEFENDANTS.



MEMORANDUM-DECISION AND ORDER

Plaintiff Heidi Seekamp ("Plaintiff") commenced this action under Federal Rule of Civil Procedure 23 on behalf of herself and all others similarly situated, alleging a violation of the Insurance Law of the State of New York, Federal Truth in Lending Act ("TILA"), New York General Business Law § 349(a), and common law. Compl. (Dkt. No. 1). Defendants are Fuccillo Automotive Group, Inc., a New York corporation with its principal place of business in Adams, New York; Fuccillo Lincoln Mercury Hyundai, Inc., an automotive dealership incorporated in New York with its principal place of business in Adams, New York; and Universal Automotive Services, Inc., a New Jersey corporation ( collectively, "Defendants").

Presently before this Court is a Motion to dismiss filed by Fuccillo Automotive Group, Inc. and Fuccillo Lincoln Mercury Hyundai, Inc.*fn1 Defs.' Mot. (Dkt. No. 5). For the reasons discussed below, Defendants' Motion to dismiss is denied.

I. BACKGROUND

On or about June 12, 2007, Plaintiff entered into a purchase and sales agreement with Defendant, Fuccillo Lincoln Mercury, Inc. ("Fuccillo Hyundai") for the purchase of a 2007 Hyundai Elantra. Compl. (Dkt. No. 1, Attach. 2, Ex. A); Defs.' Mot. at 2. As part of the transaction, Plaintiff enrolled in an Auto Theft Security Discount Guarantee program ("ATSD"). Compl. ¶ 16. The ATSD cost the Plaintiff $295. Compl. (Dkt. No. 1, Attach. 3, Ex. B). The ATSD involved a form of "window etching" in which the vehicle's identification number ("VIN") was permanently engraved into its window. Compl. ¶ 2. Advertised as a theft deterrent, a VIN is traceable to a specific vehicle, making it more difficult to sell car parts etched with the number. Compl. ¶ 2. Defendant Fuccillo Automotive is purported to have sold ATSD policies to consumers through Fuccillo Hyundai and its subsidiaries. Compl. ¶ 14.*fn2 The ATSD policies were issued by Defendant Universal Automotive Services, Inc. ("Universal"). Defs.' Mot. at 2. Under the policy, Defendant Universal would indemnify Defendant Fuccillo Hyundai if the dealer had to issue a credit towards a new vehicle purchase due to theft. Defs.' Mot. at 2. Under the terms of the ATSD, if the Plaintiff's car was declared a total loss, due to unrecovered theft, or if it was recovered but still considered a total loss by Plaintiff's insurance company, the authorized dealer (Fuccillo Hyundai) would provide Plaintiff with a 10% discount towards the purchase of a replacement vehicle, in an amount up to $2000. Compl. (Dkt. No. 1, Attach. 3, Ex. B).

Plaintiff alleges that Defendants misrepresented the ATSD agreement as a warranty when it was in fact an insurance policy. Compl. ¶ 5. Plaintiff claims that because none of the Defendants are licensed insurance companies, brokers, or agents in New York, they are not authorized to engage in the sale of the ATSD insurance policy. Compl. ¶ 37. Plaintiff further claims that Defendant's sale of the policy is deceptive and in violation of N.Y. GBL § 349. Compl. ¶¶ 46--47.

Plaintiff further alleges that by misrepresenting the ATSD agreement as a warranty, Defendants engaged in deceptive consumer practices and conspiracy to commit consumer fraud. Compl. ¶¶ 59--60. Plaintiff alleges that such deceptive consumer practices include:

a) Selling the ATSD without having a license to do so; b) Failing to submit the ATSD to the Insurance Department for approval; c) Installing the "Etch Number" on all vehicles prior to the sale of the ATSD; d) Failing to state the charge for the ATSD on the Registration Form; e) Failing to submit the rate for the ATSD to the Insurance Department for approval; f) Failing to obtain a license as insurance carriers from the Department of Insurance to sell ATSD; g) Failing to obtain a license as insurance brokers or agents from the Department of Insurance; h) As to Fuccillo Hyundai and Fuccillo Automotive, receiving a commission from Universal on sales of the ATSD.

Compl. ¶ 60.

Plaintiff also claims that Defendants breached their contract by (1) misrepresenting the ATSD as an anti-theft system when it is an insurance policy; (2) asserting that the $2,000 indemnity benefit is not a guarantee of the anti-theft system, but rather an indemnity benefit payable contingent on Plaintiff's loss of vehicle; (3) deceptively printing on the ATSD agreement that it is "not an insurance policy;" (4) not including the premium for the ATSD on the consumer's retail installment contracts under the amount "Paid to insurance companies;" (5) overcharging the Plaintiff and others similarly situated for an illegal insurance contract. Compl. ¶ 60.

Plaintiff alleges that Defendants knowingly breached their fiduciary duties by accepting payment for the unlicensed ATSD insurance policy and not disclosing their commission earned from the sale of the ATSD. Compl. ¶ 73. Plaintiff further alleges that she and those similarly situated have suffered damages as a result of the Defendants' breach and monetary benefit. Compl. ¶ 74.

Plaintiff claims that Defendants intended to misrepresent the ATSD insurance agreement and have profited from its illegal sale. Compl. ¶ 76. Plaintiff further claims that Defendants have been unjustly enriched by the sale of the ATSD. Compl. ¶ 78.

Plaintiff also alleges that Defendants violated the Truth in Lending Act, 15 U.S.C. § 1601, et seq., by not including the ATSD insurance in the "finance charge" but rather in the "amount financed" portion of the sales agreement. Compl. (Dkt. No. 1, Attach. 2, Ex. A). Consequently, Plaintiff alleges that the Defendants failed to accurately disclose the finance charge, in violation of 15 U.S.C. § 1638(a)(3) and 12 C.F.R. §§ 226.18(d) and 226.4; failed to accurately disclose the APR, in violation of 15 U.S.C. § 1638(a)(4) and 12 C.F.R. § 226.18(e); and failed to accurately disclose the amount financed, in violation of 15 U.S.C. § 1638(a)(2) and 12 C.F.R. § 226.18(b). Compl. ¶ 84.

II. STANDARD OF REVIEW

Rule 12(b) of the Federal Rules of Civil Procedure requires that if matters "outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56." FED. R. CIV. P 12(b). There are, however, exceptions to the general rule, when a plaintiff "[c]hooses not to attach to the complaint or incorporate by reference a [document]... which is integral to the complaint, the defendant may produce the [document] when attacking the complaint for its failure to state a claim." Cortec Indus., Inc. v. Sum Holding, L.P., 949 F.2d 42, 47 (2d Cir. 1991) (citingMeyer Pincus & Assoc. v. Oppenheimer & Co., 936 F.2d 759, 762 (2d Cir. 1991)). The court may invoke this exception whenever "the incorporated material is a contract or other legal document containing obligations upon which the plaintiff's complaint stands or falls, but which for some reason... was not attached to the complaint." Global Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006). Judicial review of matters outside the pleadings further extends to matters "of which judicial notice may be taken." Leonard F. v. Israel Discount Bank of New York, 199 F.3d 99, 107 (2d Cir. 1999) (quoting Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991)). The extent to which judicial notice may be taken is dictated in part by Rule 201 of the Federal Rules of Evidence. SeeFED. R. EVID. 201 (stating "[a] judicially noticed fact must be one not subject to reasonable dispute in that it is... (2) capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably questioned."). See also Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir. 1991). A court may take judicial notice of [relevant] public disclosure documents. Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 75 (2d Cir. 1998) (citing Kramer, 937 F.2d ...


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