Gary Flanary, on behalf of Himself and all other similaly situated v. Carl Gregory Dodge of Johnson City, L.L.C. ( 2008 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
April 23, 2008 Session
GARY FLANARY, on behalf of himself and all other similarly situated, v.
CARL GREGORY DODGE OF JOHNSON CITY, L.L.C.
Direct Appeal from the Chancery Court for Washington County
No. 34497 Hon. G. Richard Johnson, Chancellor
No. E2007-01433-COA-R3-CV - FILED JUNE 17, 2008
This action charged the defendant with engaging in unfair and deceptive practices in violation of the
Tennessee Consumer Protection Act, and engaging in the unauthorized practice of law. The Trial
Court granted defendant summary judgment on the grounds that plaintiff failed to establish that he
suffered a loss of money or property. On appeal, we affirm the summary judgment.
Tenn. R. App. P.3 Appeal as of Right; Judgment of the Chancery Court Affirmed.
HERSCHEL PICKENS FRANKS, P.J., delivered the opinion of the Court, in which CHARLES D. SUSANO ,
JR., J., and D. MICHAEL SWINEY , J., joined.
Gordon Ball, Knoxville, Tennessee, for appellant.
Linda J. Hamilton Mowles, Knoxville, Tennessee, for appellee.
OPINION
BACKGROUND
Plaintiff brought this action against defendant, alleging that he had purchased a
vehicle from defendant and was charged certain amounts of money that were designated as “fees”,
but were rather additional profit for the defendant, and defendant was thus engaging in unfair and
deceptive practices in violation of the Tennessee Consumer Protection Act. Plaintiff sought to bring
his action on his own behalf and on behalf of others similarly situated, and sought damages,
declaratory and injunctive relief, and attorney’s fees.
Defendant moved for Summary Judgment, asserting that plaintiff was required to
submit his claims to binding arbitration, pursuant to the parties’ agreement. The Trial Court ruled
the arbitration agreement was not valid, but that this Court had dictated that arbitration agreements
were to be enforced, and “reluctantly” granted the motion to compel arbitration.
Plaintiff filed an appeal, and this Court determined that there was a genuine issue of
material fact as to whether there was mutuality with respect to the agreement to arbitrate, and
defendant was not entitled to summary judgment on that issue.
On remand, defendant filed an Answer, denying any wrongdoing, and in response to
plaintiff’s Request for Admissions, admitted that it charged defendant a $349.00 fee when he
purchased his vehicle that was labeled an “administrative fee”, but denied that this was all profit, and
denied that this was added to the price paid by every member of the proposed class.
SUMMARY JUDGMENT
Defendant moved for Summary Judgment, and attached a copy of the sales agreement.
The agreement shows the selling price of the vehicle, adds on various charges including the $349.00
administrative fee, subtracts the trade-in allowance, and then shows a balance due of $12,000.00.
Defendant attached excerpts from plaintiff’s deposition, wherein plaintiff admitted that he paid
$12,000.00 for the vehicle, and this was what he agreed to pay and that he looked at the numbers on
the agreement before he signed it. He admitted that he did not ask any questions about the
administrative fee, and that the parties reached an agreement to trade in his vehicle, and that the
dealer would add nerf bars and a hitch to the vehicle he was purchasing, and that he would pay
$12,000.00 as additional consideration. He stated that he was only interested in the bottom line
number, and that if it had been more than $12,000.00, he would not have taken the vehicle. Further,
that no one at the defendant’s dealership ever told him what the administrative fee was, because he
had never inquired.
Defendant also attached excerpts from the deposition of Michael Collins, who
testified that the administrative fee was often called a doc fee or processing fee, and was just a cost
of doing business. He admitted that this was simply a fee that was charged to the customer that
helped pay the overhead. Further, that the “ADM” charge listed on the sticker price of the vehicle
was additional dealership markup.
Defendant also filed a Statement of Undisputed Material Facts, and stated that
plaintiff agreed to pay $12,000.00 for the vehicle he purchased, and that this was what he was
charged, and that the added fees did not increase what plaintiff agreed to pay. Also attached was a
work sheet which plaintiff and the salesman completed, indicating plaintiff’s agreement to pay
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$12,000.00 “out the door” with the nerf bars installed.
The Trial Court entered an Order Granting Defendant’s Motion for Summary
Judgment, and plaintiff filed a Notice of Appeal.
ISSUES ON APPEAL
Plaintiff’s issue on appeal is “Whether the Trial Court erred in granting summary
judgment in favor of defendant on all of plaintiff’s claims?”
As this Court has often stated:
A trial court should grant a motion for summary judgment only if the movant
demonstrates that there are no genuine issues of material fact and that the movant is
entitled to judgment as a matter of law. Tenn. R. Civ. P. 56.03; Byrd v. Hall, 847
S.W.2d 208, 210-11 (Tenn.1993). A fact is material if it "must be decided in order
to resolve the substantive claim or defense at which the motion is directed." Byrd,
847 S.W.2d at 211. To determine whether a genuine issue of material fact exists,
"the trial court must take the strongest legitimate view of the evidence in favor of the
nonmoving party, allow all reasonable inferences in favor of that party, and discard
all countervailing evidence." Id. at 211. If a court determines either that a dispute
exists as to any material fact or that any doubt exists as to the conclusions to be
drawn from the facts, the movant's motion for summary judgment must be denied.
Id. Likewise, where the record shows that there is no genuine issue as to any material
fact, judgment for the moving party "shall be rendered forthwith." Tenn. R. Civ. P.
56.04.
Luther v. Compton, 5 S.W.3d 635, 639 (Tenn. 1999)
Plaintiff argues that the Trial Court erred in granting summary judgment on his claim
that defendant violated the Tennessee Consumer Protection Act. To state a claim under the Act,
plaintiff must show that defendant engaged in unfair or deceptive acts or practices and that the
defendant’s conduct caused an “ascertainable loss of money or property” to plaintiff. Tucker v.
Sierra Builders, 180 S.W.3d 109, 115 (Tenn. Ct. App. 2005). A deceptive act or practice has been
defined as “one that causes or tends to cause a consumer to believe what is false or that misleads or
tends to mislead a consumer as to a matter of fact.” Id. This Court has stated that “an act or practice
should not be deemed unfair ‘unless the act or practice causes or is likely to cause substantial injury
to consumers which is not reasonably avoidable by consumers themselves and not outweighed by
countervailing benefits to consumers or to competition.’” Id.
In this case, plaintiff did not show injury by listing the additional fees on the sales
agreement and the sticker of the vehicle. He testified that he negotiated an “out the door” price with
the salesman for the vehicle, and that is evidenced by the work sheet that was filed with the Court.
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He agreed to pay $12,000.00 between the vehicles, which is precisely what he paid. He testified that
he agreed to the price for the vehicle, and thus did not question the charge listed as an
“administrative fee” on the contract, but simply looked at the bottom line number. As such, there
was no showing that plaintiff was injured or suffered an “ascertainable loss of money or property”,
as is required to state a claim under the TCPA. This issue is without merit.
Plaintiff also argues that the Trial Court erred in granting summary judgment on his
claim that defendant engaged in the business of law, because defendant prepared legal documents,
i.e., a power of attorney and an arbitration agreement, and charged for it as part of the overhead cost
delineated as an administrative fee.
Regarding what constitutes the unauthorized practice of law in Tennessee, it has been
explained:
The Tennessee Supreme Court has held that "[t]he purpose of our statutes regulating
the practice of law is to prevent the public's being preyed upon by those who, for
valuable consideration, seek to perform services which require skill, training and
character, without adequate qualifications." It has additionally adopted the following
ethical consideration concerning the practice of law:
It is neither necessary nor desirable to attempt the formulation of a single specific
definition of what constitutes the practice of law. Functionally the practice of law
relates to the rendition of services for others that call for the professional judgment
of a lawyer. The essence of the professional judgment of the lawyer is his educated
ability to relate the general body and philosophy of law to a specific legal problem
of a client; and thus, the public interest will be better served if only lawyers are
permitted to act in matters involving professional judgment. Where this professional
judgment is not involved, non-lawyers, such as court clerks, police officers,
abstracters, and many governmental employees, may engage in occupations that
require a special knowledge of law in certain areas. But the services of a lawyer are
essential in the public interest whenever the exercise of professional legal judgment
is required.
"[R]egulations proscribing the unauthorized practice of law are designed to protect
'the public from being advised and represented in legal matters by incompetent and
unreliable persons over whom the judicial department could exercise little control.'
" It is the court's responsibility to " 'regulate the practice of law and to restrain such
practice by laymen in a common-sense way in order to protect primarily the interest
of the public[.]' "
Under those guidelines, the Tennessee Supreme Court has recently held that "[t]he
preparation and filing of a complaint requires 'the professional judgment of a lawyer,'
and is, therefore, the practice of law." Following that lead, the Tennessee Court of
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Appeals subsequently determined that "the drafting of pleadings and legal documents
or the selection and completion of form documents constitutes the practice of law."
Fifteenth Judicial Dist. Unified Bar Ass'n v. Glasgow, No. M1995-00020-COA-R3-
CV, 1999 Tenn. App. LEXIS 815, at *12-* 13, 1999 WL 1128847, at *4 (Tenn. Ct.
App. Dec.10, 1999) (holding that "more than mere clerical work ... [and] not simply
reducing [the] clients' words to writing or filling in blanks on preprinted forms at the
specific direction of [the] clients" constitutes the unauthorized practice of law). In
making its determination, the court of appeals acknowledged the following:
As a general matter, other courts have held that the sale of self-help kits or printed
legal forms does not constitute the unauthorized practice of law as long as the seller
provides the buyer no advice regarding which forms to use or how the forms should
be filled out. Conversely, sellers who do advise customers on which forms to use and
how to fill them out have been found to be engaging in the practice of law.
Glasgow, 1999 Tenn.App. LEXIS 815, at *9 n. 4, 1999 WL 1128847, at *3 n. 4
(internal citations omitted).
In re Rose, 314 B.R. 663, 703-704 (Bkrtcy. E.D. Tenn.,2004)(citations omitted).
In this case, the plaintiff’s claim that defendant engaged in the unauthorized practice
of business of law was not supported by proof that defendant did anything akin to advising or
representing plaintiff in any capacity, nor that defendant did anything that would require the
professional judgment of a lawyer. The simple act of filling in the blanks on form documents that
have been prepared for a business use does not constitute the unauthorized practice of law. This
issue is also without merit.
Next, plaintiff argues the Trial Court erred in granting summary judgment on his
claim of intentional misrepresentation/fraudulent inducement, as the unexplained “administrative
fee” and “ADM” charge were misrepresented to plaintiff as legitimate/non-negotiable charges. In
order for plaintiff to proceed on a claim of fraud/misrepresentation, he or she must show
damage/injury. See Lamb v. Megaflight, Inc., 26 S.W.3d 627 (Tenn. Ct. App. 2000); Metro Gov’t
v. McKinney, 852 S.W.2d 233 (Tenn. Ct. App. 1992). Since plaintiff did not offer evidence that he
was injured in this transaction, this claim also fails.
Finally, plaintiff seeks to proceed with a claim of unjust enrichment/money had and
received (which plaintiff conceded are essentially the same cause of action), but plaintiff must show
that defendant received a benefit, under circumstances rendering it inequitable to retain it . Bennett
v. Visa USA, Inc., 198 S.W.3d 747 (Tenn. Ct. App. 2006); CPB Mgmt., Inc. v. Everly, 939 S.W.2d
78 (Tenn. Ct. App. 1996). As we previously observed, the proof was undisputed that plaintiff paid
a price for the vehicle that was his “out the door” figure, that is a bottom line price that plaintiff
agreed to pay, and as such, he cannot show that defendant was unjustly enriched.
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We affirm the Judgment of the Trial Court and remand, with the cost of the appeal
assessed to Gary Flanary.
______________________________
HERSCHEL PICKENS FRANKS, P.J.
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