Mensie v. Toyota Motor Credit Corporation

Filing 26

ORDER denying 16 Motion to Dismiss without prejudice. Mensie must file an amended complaint by 7/17/2017. Automotive Warranty Services needs to be added as a defendant. And Mensie must clarify whether she received the attached GAP materials from th e dealer or Toyota before buying her vehicle and whether she relief on them. The Court appreciates the parties' Rule 26(f) report and will adopt the extended deadline for plaintiff's rebuttal expert. The Court, though, prefers its other proposed deadlines. Any other defendants should be added as soon as practicable. The parties should proceed with discovery. Signed by Judge D. P. Marshall Jr. on 6/27/2017. (jak)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION
MARIAN J. MENSIE, on behalf of
herself and on behalf of all others
similarly situated

v.

PLAINTIFF

No. 4:17-cv-85-DPM

TOYOTA MOTOR CREDIT
CORPORATION

DEFENDANT
ORDER

1. Mensie owed more to Toyota Motor Credit Corporation than her

RAV4 was worth when the vehicle was totaled in an accident. Her insurance
paid TMCC the market value. She called on the "optional guaranteed asset
protection (GAP)" coverage that she'd bought at a Toyota dealer with her
then-new vehicle to cover the difference. A company named Automotive
Warranty Services, Inc., paid most of it, but left a balance of approximately
$2,300. TMCC is holding Mensie responsible for this last bit of the debt.
Mensie has responded with this case. She says TMCC broke the GAP
contract by not waiving the balance and violated the Arkansas Deceptive
Trade Practices Act. She wants to pursue a class action - nationwide on the
contract claim, with an Arkansas subclass on the ADTPA claim. TMCC
moves to dismiss, saying that it's not on the GAP contract, which (it

continues) was performed according to its terms, and that the class allegations
should be stricken.
2. TMCC's motion is denied without prejudice and with directions to
amend. TMCC has asked, in essence, for judgment on the pleadings, which
embrace most of the parties' agreements. But this record isn't clear enough
or complete enough for the Court to say that Mensie has pleaded herself out
of court. National Car Rental System v. Computer Associates International, 991
F.2d 426, 428 (8th Cir. 1993). TMCC needs to stay in for now. It's contract
with Mensie was amended to include the GAP coverage, which Mensie
argues hard was ambiguous. TMCC stands, in some sense, in place of the
dealer who put this multi-part transaction together. The agreement between
the dealer and Automotive Warranty Services is not yet of record. And taking
the facts pleaded as true, Mensie has stated a plausible claim that some
deception was involved. Was it made plain for a consumer like Mensie, who
was financing more than 150% of her vehicle's value, that there would be a
gap between what the third party would pay TMCC and the debt balance,
either for some period or for the life of the loan? The Court is skeptical about
a nationwide class. But it's too early to tell, and this issue can be better

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resolved later in the case.
Mensie must file an amended complaint by 17 July 2017. Automotive
Warranty Services needs to be added as a defendant. And Mensie must
clarify whether she received the attached GAP materials from the dealer or
Toyota before buying her vehicle and whether she relied on them.
3. The Court appreciates the parties' Rule 26(£) report and will adopt
the extended deadline for plaintiff's rebuttal expert. The Court, though,
prefers its other proposed deadlines. Any other defendants should be added
as soon as practicable. The parties should proceed with discovery.
So Ordered.
y

D.P. Marshall Jr.
United States District Judge

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