Simmons v. Expo Enterprises. Inc. et al

Filing 33

RULING denying 22 Motion for Summary Judgment due to lack of subject matter jurisdiction and denying as moot 31 Motion to Strike. The Court cautions attorney for the plaintiff to strictly adhere to all Court imposed deadlines. Signed by Judge James J. Brady on 7/18/2014. (LLH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
KENDRA HALL SIMMONS
CIVIL ACTION
VERSUS
NO. 12-432-JJB-SCR
EXPO ENTERPRISES, INC.,
ET AL.
RULING
This matter is before the Court on the defendants Expo Enterprises, Inc. d/b/a Bethlehem
Motor World and Imn Jabbar’s Motion (rec. doc. 22) for Summary Judgment Due to Lack of
Subject Matter Jurisdiction. The plaintiff filed an opposition to the motion. Rec. doc. 30. For the
reasons provided herein, the Court DENIES the defendants’ Motion (rec. doc. 22) for Summary
Judgment Due to Lack of Subject Matter Jurisdiction.
Background
This action arises out of a disputed transaction involving a 2003 Lexus ES Sedan. On
January 25, 2012, Kendra Hall Simmons alleges that she applied for an extension of credit
through Expo Enterprises, Inc. d/b/a Bethlehem Motor World (“Bethlehem”) in order to purchase
a 2003 Lexus ES Sedan. As a result of this application, Bethlehem contacted Westlake Financial
Services (“Westlake”) “to determine if it would purchase a financing contract between
Bethlehem and Ms. Simmons for the purchase and finance of the Lexus.” Rec. doc. 1, p. 2, ¶ 9.
The plaintiff asserts that “Westlake agreed to purchase such a contract and Bethlehem and Ms.
Simmons entered into a contract for the purchase and finance of the Lexus, in which Ms.
Simmons was given credit for a $4,000 down payment.” Rec. doc. 1, p. 2, ¶ 10. Prior to January
25, 2012, the plaintiff claims that she performed work for Bethlehem but did not receive a
paycheck. Instead, the plaintiff agreed to have the amount owed for the services put towards the
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down payment for a vehicle she would purchase from Bethlehem. Accordingly, to satisfy the
required $4,000 down payment, Ms. Simmons allegedly remitted $2,000 in cash to Bethlehem on
January 25, 2012, and the remaining $2,000 came from the plaintiff’s prior services.
Subsequently, the plaintiff made her first scheduled payment to Westlake on February 23,
2012. However, after the payment was made, Imn Jabbar, the majority shareholder in Expo
Enterprises, Inc., informed the plaintiff that she needed to remit an additional $2,000 to
Bethlehem for the down payment. Ms. Simmons refused to make such payment. Thereafter, the
plaintiff alleges that “Imn Jabbar and Bethlehem . . . notified Westlake that Bethlehem needed to
buy the contract back from Westlake, and Westlake sold it back to Bethlehem.” Rec. doc. 1, p. 3,
¶ 17. Finally, after the plaintiff persisted in refusing to pay the additional $2,000, “Bethlehem
and Jabbar . . . made a police report to the Baton Rouge City Police accusing Ms. Simmons of
theft for not returning [the] vehicle to Bethlehem.” Rec. doc. 1, p. 3, ¶ 19. At some point later
and as a result of the police report, the East Baton Rouge Parish Sheriff’s Office detained Ms.
Simmons’ husband for a short duration of time but did not actually arrest him. To this day, the
plaintiff has never received the title to the Lexus, and as a result, she claims to have been
deprived of the use of the vehicle. Due to the foregoing allegations, the plaintiff filed the pending
lawsuit and set forth claims for relief under the Equal Credit Opportunity Act (ECOA) and
Louisiana’s state law on defamation.
After the defendants filed their counterclaim, it became readily apparent that the parties
possess substantially different views regarding the relevant events. See rec. doc. 9-1. In their
counterclaim, the defendants acknowledge that the plaintiff was employed by Bethlehem.
However, the defendants claim that Ms. Simmons initially requested to use the Lexus while
defendant Jabbar was out of the country and after approximately two weeks of employment.

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According to the defendants, Mr. Gazi Soman—the individual left to manage Bethlehem while
Mr. Jabbar was outside the country—acquiesced to the plaintiff’s request. But, at some point
thereafter, the plaintiff wrongfully accessed the online database of Westlake, “fraudulently
applied for financing and created a false Bill of Sale for the Lexus.” Rec. doc. 9-1, p. 2, ¶ 4.
According to the counterclaim, the “[p]laintiff then had the Bill of Sale signed by someone who
had no authority to enter into such an agreement on behalf of the [d]efendants, as the only
individuals with apparent or express authority to do so were Mr. Soman and Mr. Jabbar.” Rec.
doc. 9-1, p. 2, ¶ 5. Further, the defendants claim that the “[p]laintiff fraudulently structured her
own loan and claimed to have paid $4,000 as a down payment for the vehicle, however, no
money was ever received by the [d]efendants and no receipt of such has ever been presented.”
Rec. doc. 9-1, p. 2, ¶ 6. When Mr. Jabbar returned to the country, he learned of the situation and
requested that the plaintiff return the vehicle. The plaintiff refused to do as such, and thus, “Mr.
Jabbar contacted the Baton Rouge Police Department to file a police report in order to see that
the vehicle [was] returned.” Rec. doc. 9-1, p. 3, ¶ 10. The defendants claim that they have been
deprived of the vehicle from the time the plaintiff stole it, and thus, they seek damages as a
result.
In the course of this litigation, the defendants filed the present motion for summary
judgment, seeking dismissal of all claims against them based on a lack of subject matter
jurisdiction. Subsequent thereto, the plaintiff filed a similar lawsuit against Expo Enterprises,
Inc. d/b/a Bethlehem Motor World and Westlake Services, LLC, alleging effectively the same
claims as the present suit. The Court consolidated that action with the present action. Rec. doc.
32.
Analysis

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1. Standard of Review
In their motion, the defendants essentially argue that this Court should dismiss the
plaintiff’s ECOA claim based on the evidence presented, and as a result of this dismissal, the
Court must then dismiss the remaining state law claims based on a lack of subject matter
jurisdiction. Summary judgment is proper when “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
Rule Civ. P. 56(a). The movant must demonstrate that there is no genuine issue of material fact
for trial. When the non-moving party has the burden of proof at trial, the movant need only
demonstrate that the record lacks sufficient evidentiary support for the non-moving party’s case.
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The moving party can do this by showing
that the evidence is insufficient to prove the existence of one or more essential elements of the
non-moving party’s case. Id. A party must support its summary judgment position by “citing to
particular parts of materials in the record” or “showing that the materials cited do not establish
the absence or presence of a genuine dispute.” Fed. Rule Civ. P. 56(c)(1).
Although the court considers evidence in a light most favorable to the non-moving party,
the non-moving party must show that there is a genuine issue for trial. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248–49 (1986). “[S]ummary judgment will not lie if the dispute about
a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Id. at 248. Conclusory allegations and unsubstantiated
assertions will not satisfy the non-moving party’s burden. Grimes v. Tex. Dep’t of Mental Health,
102 F.3d 137, 139–40 (5th Cir. 1996). Similarly, “[u]nsworn pleadings, memoranda or the like
are not . . . competent summary judgment evidence.” Larry v. White, 929 F.2d 206, 211 n.12 (5th

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Cir. 1991). Furthermore, “[i]f the evidence is merely colorable, or is not significantly probative,
summary judgment may be granted.” Anderson, 477 U.S. at 249–50 (internal citations omitted).
“In a motion for summary judgment, a federal district court is not called upon to make
credibility assessments of conflicting evidence.” Melancon v. Ascension Parish, 823 F. Supp.
401, 404 n.19 (M.D. La. 1993). “To the contrary, all evidence is considered in the light most
favorable to the non-movant.” Id. “Credibility determinations, the weighing of the evidence, and
the drawing of legitimate inferences from the facts are jury functions, not those of a judge.”
Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 151 (2000) (quoting Anderson, 477
U.S. at 255).
2. Plaintiff’s Equal Credit Opportunity Act Claim
The plaintiff claims that the defendants violated the ECOA and Regulation B by failing to
provide the required notice of adverse action, and as a direct and proximate result of such
violation, the plaintiff suffered actual damages. Congress passed the ECOA “to insure that the
various financial institutions and other firms engaged in the extensions of credit exercise their
responsibility to make credit available with fairness, impartiality, and without discrimination on
the basis of sex or marital status.” Act of October 28, 1974, Pub. L. No. 93-495, § 502, 88 Stat.
1500. Under the ECOA, “[e]ach applicant against whom adverse action is taken shall be entitled
to a statement of reasons for such action from the creditor.” 15 U.S.C. § 1691(d)(2). Pursuant to
the statute, “‘adverse action’ means a denial or revocation of credit, a change in the terms of an
existing credit arrangement, or a refusal to grant credit in substantially the amount or on
substantially the terms requested.” 15 U.S.C. § 1691(d)(6). The statute defines “creditor” as “any
person who regularly extends, renews, or continues credit; any person who regularly arranges for
the extension, renewal, or continuation of credit; or any assignee of an original creditor who

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participates in the decision to extend, renew, or continue credit.” 15 U.S.C. § 1691a(e). The
ECOA also provides for a private right of action, whereby “[a]ny creditor who fails to comply
with any requirement imposed . . . shall be liable to the aggrieved applicant for any actual
damages sustained by such applicant.” 15 U.S.C. § 1691e(a).
In order to satisfy the notice requirement, a creditor must:
(A) provid[e] statements of reasons in writing as a matter of course to
applicants against whom adverse action is taken; or
(B) giv[e] written notification of adverse action which discloses (i) the
applicant’s right to a statement of reasons within thirty days after
receipt by the creditor of a request made within sixty days after such
notification, and (ii) the identity of the person or office from which
such statement may be obtained. Such statement may be given orally
if the written notification advises the applicant of his right to have the
statement of reasons confirmed in writing on written request.
15 U.S.C. § 1691(d)(2). “A statement of reasons meets the requirements of this section only if it
contains the specific reasons for the adverse action taken.” 15 U.S.C. § 1691(d)(3). However,
where a “creditor . . . did not act on more than [150] applications during the calendar year
preceding the calendar year in which the adverse action is taken,” the notice requirements “may
be satisfied by verbal statements or notifications.” 15 U.S.C. § 1691(d)(5). Moreover, the Code
of Federal Regulations provides that creditor must supply the required notification to the relevant
applicant within “30 days after taking adverse action on an existing account.” 12 C.F.R. §
202.9(a)(1)(iii).
The defendants’ initial contention is that the ECOA does not apply to the present matter,
because Bethlehem is not a “creditor” within the meaning provided in the statute. Specifically,
the defendants claim that Bethlehem only refers applications for credit, and thus, it does not fall
within the ECOA’s definition of a creditor. However, based on the evidence presented before
this Court, there is at least a genuine issue of material fact regarding whether Bethlehem is a
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creditor under the ECOA. The submitted retail installment contract and security agreement for
the Lexus provides information regarding the amount financed, finance charges, and the annual
percentage rate. Rec. doc. 30-2, p. 4. The document lists the seller as Bethlehem Motor World
and bears the signature of a Bethlehem employee. Id., rec. doc. 22-4, p. 4, 10–11. The document
further provides that the buyer promises to pay approximately $8,000 at an annual percentage
rate of 24.90 percent. Id. The installment contract also states that the annual percentage rate may
be negotiable with the seller, which the contract lists as Bethlehem. Id. at p. 8. Finally, the last
page of the contract provides that Bethlehem assigned the contract and security agreement to
Westlake Financial Services. Rec. doc. 30-2, p. 9. Accordingly, based on the face of the
installment contract and viewed in the light most favorable to the plaintiff, there is a genuine
issue of material fact as to whether Bethlehem is a creditor pursuant to the ECOA, as the contract
shows that Bethlehem extended credit to the plaintiff at a specific annual percentage rate and
subsequently assigned the contract to Westlake.
Next, the defendants contend that even if Bethlehem is an ECOA creditor, there is no
evidence that Bethlehem took adverse action against the plaintiff. According to the defendants,
only Westlake could have possibly taken adverse action against the plaintiff. However, the Court
finds sufficient evidence to show a genuine issue of material fact. There is evidence that
Bethlehem and Imn Jabbar informed the plaintiff that she must remit an additional $2,000 for the
vehicle. See e.g. rec. doc. 30-2, p. 2, ¶ 11. Further, the retail installment contract provides that
Bethlehem sold the Lexus to the plaintiff on credit, yet it is undisputed that the defendants
subsequently reported the vehicle as stolen. See rec. doc. 30-2, p. 2–4. If Bethlehem was the
original creditor and sold the vehicle on credit to the plaintiff—as the face of the retail
installment contract appears to support—then a subsequent report that the same vehicle had been

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stolen would fall within the definition of an adverse action. The only explanation for why the
vehicle could have been “stolen” in those circumstances is if Bethlehem revoked or made some
other modification to the previous extension of credit. Accordingly, based on the evidence
presented, the Court finds that there is a genuine issue of material fact as to whether the
defendants took “adverse action” against the plaintiff within the meaning of the ECOA.
Additionally, the defendants claim that even if they are creditors and even if they took
adverse action, they provided the required verbal notice to the plaintiff, because they did not act
on more than 150 credit applications in the calendar year preceding the alleged adverse action.
See 15 U.S.C. § 1691(d)(5). Nevertheless, the record is insufficient for this Court to find no
genuine issue of material fact that the defendants provided the requisite notice. Even if
Bethlehem did not act on 150 applications in the year preceding the alleged adverse action, as the
defendants claim, it still must provide the required ECOA notification verbally. Rec. doc. 22-8,
p. 4, ¶ 21. See also 15 U.S.C. § 1691(d)(5). The Court is unable to find sufficient evidence
regarding any notice allegedly provided to the plaintiff, whether oral or written. In fact, the only
evidence of any notification from the defendants to the plaintiff is that the plaintiff would need to
provide an additional $2,000 down payment or return the vehicle. Rec. doc. 22-9, p. 16; rec. doc.
30-2, p. 2–3. As this notification alone would not satisfy the ECOA requirements, even if oral
notifications were permitted, the Court finds that there is a genuine issue of material fact
regarding whether the requisite notice has been provided to the plaintiff.
Finally, the defendants contend that there is no evidence that the plaintiff suffered actual
damages resulting from the failure to notify. However, the Court finds this argument wholly
unavailing. Actual damages recoverable under the ECOA include “out-of-pocket monetary
losses, injury to credit reputation and mental anguish, humiliation or embarrassment.” Fischl v.

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General Motors Acceptance Corp. 708 F.2d 143, 148 (5th Cir. 1983) (citing Anderson v. United
Finance Co., 666 F.2d 1274 (9th Cir. 1982); Owens v. Magee Finance Serv. of Bogalusa, Inc.,
476 F. Supp. 758 (E.D. La. 1979)). There is adequate evidence to raise a genuine issue regarding
whether the plaintiff suffered actual damages resulting from the alleged failure to notify under
the ECOA. See rec. doc. 22-4, p. 21. If the defendants failed to comply with their ECOA
requirements, this Court could find that such failure resulted in the damages allegedly suffered
by the plaintiff, including the alleged humiliation and embarrassment resulting from the
revocation of credit and the police report filed as a result.
Accordingly, looking at the evidence in the light most favorable to the plaintiff, the Court
cannot grant the defendants’ motion for summary judgment as to the plaintiff’s ECOA claim.
Accordingly, the ECOA claim is still pending before this Court, and thus, the Court retains
jurisdiction over the supplemental state law claims.
Conclusion
Therefore, the Court DENIES the defendants’ Motion (rec. doc. 22) for Summary
Judgment Due to Lack of Subject Matter Jurisdiction. Furthermore, as the Court has ruled on the
motion for summary judgment, the defendants’ motion to strike (rec. doc. 31) is now MOOT.
Nevertheless, the Court cautions the attorney for the plaintiff to strictly adhere to all Court
imposed deadlines.
Signed in Baton Rouge, Louisiana, on July 18, 2014.





JUDGE JAMES J. BRADY
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

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