Bernal v. Maximum Auto Search Corporation et al
ORDER denying 68 Plaintiff's Motion for Summary Judgment on Defendant's Counterclaims, by Judge Lewis T. Babcock on 9/3/2015. (ebuch)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Lewis T. Babcock, Judge
Civil Action No. 14-cv-01596-LTB-CBS
MAXIMUM AUTO SEARCH CORPORATION, a Colorado corporation; and
WESTERN SURETY COMPANY, a South Dakota company,
This case is before me on Plaintiff’s Motion for Summary Judgment on Defendant’s
Counterclaims [Doc # 68]. After consideration of the motion, all related pleadings, and the case
file, I deny Plaintiff’s motion.
In this case involving Plaintiff’s attempted purchase of a 2004 Porsche Cayenne (the
Vehicle”), Defendant Maximum Auto Search Corporation (“Maximum Auto”), the seller of the
Vehicle, asserts counterclaims against Plaintiff for breach of contract, unjust enrichment, and
fraud. The following facts are undisputed unless otherwise noted.
Early in 2014, Plaintiff signed a Buyers Order and Invoice (the “Buyers Order’); a Retail
Installment Sales Contract (the “RISC”); and Motor Vehicle Sales Contract Disclosures (the
“Disclosures”) in connection with the purchase of the Vehicle. See Exhibit 2 to Motion; Exhibit
B to Response. The Disclosures provide as follows:
You and the dealer have agreed that the vehicle will be delivered to you prior to
the purchase price being paid in full. If financing cannot be arranged at the terms
stated in the contract, and the contract is cancelled, you agree to pay the dealer
$100 dollars per day and 0.50 cents per mile for your use of the vehicle from the
date of delivery until the vehicle is returned to the dealer. ... You may also be
required by the contract to pay any costs the dealer may have to pay in regaining
possession of the vehicle.
See Exhibit B to Response.
The purchase price to be paid by Plaintiff for the Vehicle was $12,370. See Exhibit 2 to
Plaintiff agreed to make a down payment in the amount of $5,000 and finance the
remainder of the purchase price through Lobel Financial. Id. at pp. 1 & 2. Plaintiff paid $4,200
of the $5,000 down payment and took possession of the Vehicle on February 10, 2014. Id. See
also Motion, p. 1.
Lobel Financial would not agree to finance Plaintiff’s purchase of the Vehicle. See
Affidavit of Cliff Houser, § 5 & 7. Maximum Auto asserts that the RISC was therefore cancelled
pursuant to the following provision:
[Maximum Auto] intends to assign this contract to a financial institution. If
[Maximum Auto ] does not assign this contract to a financial institution,
[Maximum Auto] may cancel this contract upon written notice. ... Upon receipt of
our notice, you must immediately return the vehicle to [Maximum Auto].... If you
do not immediately return the vehicle, [Maximum Auto] may use any legal means
to recover it (including repossession), and you will be liable for all expenses
incurred in recovering the vehicle ... you are responsible for any loss or damage to
the vehicle and the costs of repair of any damage while the vehicle was in your
See Affidavit of Cliff Houser (“Affidavit”), ¶¶ 5 & 7 & Exhibit 2 to Motion, p. 4. Maximum
Auto further asserts that Plaintiff refused to return the Vehicle and that it was therefore required
to repossess it. See Affidavit, ¶ 8. Maximum Auto subsequently sold the Vehicle to another
purchaser for $13,975 but alleges that its profits were reduced by $1,079, representing
repossession costs, floor plan interest, and reconditioning fees. See Exhibit 3 to Motion &
Affidavit, ¶¶ 10 & 11.
II. Standard of Review
The purpose of a summary judgment motion under Rule 56 is to assess whether trial is
necessary. White v. York Int'l Corp., 45 F.3d 357, 360 (10th Cir. 1995). Rule 56 provides that
summary judgment shall be granted if the pleadings, depositions, answers to interrogatories,
admissions, or affidavits show that there is no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The non-moving party
has the burden of showing that there are issues of material fact to be determined. Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986).
A party seeking summary judgment bears the initial responsibility of informing the
district court of the basis for its motion, and identifying those portions of the pleadings,
depositions, interrogatories, and admissions on file together with affidavits, if any, which it
believes demonstrate the absence of genuine issues for trial. Celotex, 477 U.S. at 323; Mares v.
ConAgra Poultry Co., Inc., 971 F.2d 492, 494 (10th Cir. 1992). Once a properly supported
summary judgment motion is made, the opposing party may not rest on the allegations contained
in his complaint, but must respond with specific facts showing the existence of a genuine factual
issue to be tried. Otteson v. United States, 622 F.2d 516, 519 (10th Cir. 1980); Fed. R. Civ. P.
If a reasonable juror could not return a verdict for the non-moving party, summary
judgment is proper and there is no need for a trial. Celotex, 477 U.S. at 323. The operative
inquiry is whether, based on all documents submitted, reasonable jurors could find by a
preponderance of the evidence that the plaintiff is entitled to a verdict. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 250 (1986). However, summary judgment should not enter if,
viewing the evidence in a light most favorable to the nonmoving party and drawing all
reasonable inferences in that party's favor, a reasonable jury could return a verdict for that party.
Anderson, 477 U.S. at 252; Mares, 0971 F.2d at 494.
A. Maximum Auto’s Counterclaim for Breach of Contract
Maximum Auto alleges that Plaintiff breached the Buyers Order and the Disclosures by
failing to pay the remaining $800 of the agreed upon down payment, the daily use and mileage
charges for the time that she was in possession of the Vehicle, and Maximum Auto’s repossesion
and other costs.
Plaintiff’s arguments in support of summary judgment on Maximum Auto’s breach of
contract claim are difficult to follow. First, Plaintiff seemingly argues that the integration clause
in the RISC precludes any claims based on the Buyer’s Order or the Disclosures. This clause,
however, provides that the RISC contains the parties’ entire agreement “regarding the financing
of the vehicle.” See p. 2 of Exhibit 5 to Motion. At a minimum then, there is a question of fact
as to whether this clause encompasses all matters addressed in the Buyers Order and Disclosures
including the requisite down payment to be paid by Plaintiff and Plaintiff’s liability for various
costs associated with her possession of the Vehicle.
Next, Plaintiff seemingly argues that because Maximum Auto never provided written
notice of cancellation, the RISC remained in full force and effect and her purchase of the Vehicle
was therefore automatically financed. The purported significance of this non sequitur is that
Plaintiff cannot be held liable for daily usage and mileage charges because liability for these
charges under the Disclosures is contingent upon a failure to obtain financing at the terms stated
in the contract. See Exhibit B to Response, ¶ E. It is undisputed, however, that such financing
was not obtained.
Finally, Plaintiff argues that Maximum Auto has no damages because it subsequently
sold the Vehicle for more than she would have paid for it. The amount of profit Maximum Auto
realized on the sale of the Vehicle was obviously reduced by any amounts it can prove it
expended in connection with Plaintiff’s possession of the Vehicle, and there is no merit to this
B. Maximum Auto’s Counterclaim for Unjust Enrichment
As set forth above, there are contested in this case regarding whether the RISC was
cancelled and what effect, if any, that cancellation would have on key provisions of the Buyer’s
Order and the Disclosures. If a jury finds that Maximum Auto did not have an enforceable
contract with Plaintiff to recover the damages it seeks, then Maximum Auto may be entitled to
recover these damages under a theory of unjust enrichment. See Interbank Investments, LLC v.
Eagle River Water and Sanitation Dist., 77 P.3d 814, 816 (Colo. App. 2013) (although a party
cannot recover for unjust enrichment where express contract covers the same subject matter,
there is an exception when the party has no rights under an enforceable contract because, for
example, the express contract failed or was rescinded).
In addition, as set forth above, the fact that Maximum Auto subsequently sold the
Vehicle for more than Plaintiff would have paid for it does not preclude a damages claim for lost
profits resulting from amounts Maximum Auto expended in connection with Plaintiff’s
possession of the Vehicle.
C. Maximum Auto’s Counterclaim for Fraud
As with Maximum Auto’s other counterclaims, Plaintiff argues that Maximum Auto’s
counterclaim for fraud must fail for lack of damages. For the reasons set forth above, there is no
merit to this argument, and Plaintiff is not entitled to summary judgment on Maximum Auto’s
counterclaim for fraud.
For the reasons set forth above, IT IS HEREBY ORDERED that Plaintiff’s Motion for
Summary Judgment on Defendant’s Counterclaims [Doc # 68]is DENIED.
3 , 2015 in Denver, Colorado.
BY THE COURT:
s/Lewis T. Babcock
LEWIS T. BABCOCK, JUDGE
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