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Cannon v. Cherry Hill Toyota

March 26, 1999

LOETTA CANNON, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
V.
CHERRY HILL TOYOTA, INC.,
DEFENDANT.



The opinion of the court was delivered by: Jerome B. Simandle U.S. District Judge

Honorable Jerome B. Simandle

OPINION

SIMANDLE, District Judge

This matter is before the court on plaintiff Loetta Cannon's motion for class certification of Count One and Count Two of her Complaint against defendant, Cherry Hill Toyota, pursuant to Federal Rule of Civil Procedure 23. Cannon proposes to represent a class consisting of "all consumers who purchased since July 1991 a service contract or extended warranty from Cherry Hill Toyota in connection with the purchase of a vehicle which was documented in a form retail installment agreement." (Plaintiff's Br. at pg. 2.) Because the court finds that Cannon has satisfied all of the requirements of Rule 23, the court grants Cannon's motion.

BACKGROUND

On July 30, 1996, Cannon purchased a used automobile from Cherry Hill Toyota. In addition to the vehicle, Cannon purchased, through Cherry Hill Toyota, an optional mechanical breakdown protection ("MBP") package from Interstate, Inc. Cannon financed the entire transaction through Cherry Hill Toyota. The transaction was memorialized in a retail sales installment contract, which reflects a charge of $1,167.21 for the MBP in a section entitled "Amounts Paid to Others On Your Behalf."

On July 29, 1997, Cannon commenced this case by filing a putative Class Action Complaint. Cannon alleges that Cherry Hill Toyota's representation in the "Amounts Paid to Others On Your Behalf" section of the retail sales installment contract that it paid $1,167.21 to Interstate, Inc. for MBP on her behalf was false and misleading because Cherry Hill Toyota retained a portion of that amount for itself without disclosing to Cannon that it was doing so. (Complaint at ¶¶ 17- 18.) Cannon further alleges that Cherry Hill Toyota routinely makes false and misleading representations to consumers about the amount of money it pays to third parties for MBP on their behalf because Cherry Hill Toyota routinely retains a portion of the price it charges consumers for MBP while affirmatively misrepresenting and failing to disclose the true distribution of those funds on its retail sales installment contracts. (Complaint at ¶¶ 19-21.)

Cannon claims that Cherry Hill Toyota's failure to disclose that it was adding a mark-up or surcharge to the actual cost of the service warranty Cherry Hill Toyota purchased for her from Interstate and its affirmative misrepresentation of the amount actually paid to Interstate on the retail sales installment contract violates the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq. (Count One), and the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-2 et seq. (Count Two). Cannon also claims that Cherry Hill Toyota violated the New Jersey Consumer Fraud Act by affirmatively misrepresenting to her that the vehicle she purchased had front wheel drive when, in fact, it did not (Count Three).

Cannon now moves for class certification under Federal Rule of Civil Procedure 23 on Counts One and Two of her Complaint. Cannon does not seek class certification of Count Three of her Complaint.

DISCUSSION

A. Class Action Principles

Rule 23(a) of the Federal Rules of Civil Procedure sets forth four general conditions that putative class representatives must satisfy before any case may be certified as a class action:

(1) the class is so numerous that joinder of all members is impracticable ["numerosity"], (2) there are questions of law or fact common to the class ["commonality"], (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class ["typicality"], and (4) the representative parties will fairly and adequately protect the interests of the class ["adequacy"]. Fed. R. Civ. P. 23(a).

Additionally, a plaintiff seeking class certification must demonstrate that the case falls within one of the categories set forth in Rule 23(b). In this case, Cannon seeks class certification under Rule 23(b)(3), which permits certification if

the court finds that the questions of law or fact common to members of the class predominate over any questions affecting only individual members ["predominance"], and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy ["superiority"]. The matters pertinent to the findings include: (A) defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating litigation of the claims ...


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