The full case caption appears at the end of this opinion.
Manion, Circuit Judge. Diane Janikowski enteredinto a contract with Lynch Ford, Inc., topurchase an automobile from Lynch Ford contingenton her obtaining 5.9% APR financing. Lynch Fordwas unable to arrange financing at that rate, butinstead of canceling the contract, Janikowskientered into a new contract agreeing to purchasethe car at an APR of 11.9%. However, she laterdecided to sue Lynch Ford, Inc. and four othercar dealerships owned by Lynch, alleging that thedefendants violated the Truth In Lending Act(“TILA”) and the Illinois Consumer Fraud Act(“ICFA”), and were unjustly enriched because,while they originally disclosed the APR at 5.9%,she ultimately became liable to pay 11.9%, andbecause they failed to state that the 5.9% ratewas an estimate. The district court dismissed theother Lynch dealerships and granted Lynch Fordsummary judgment. Janikowski appeals and weaffirm. I. Background On November 10, 1998, Diane Janikowski went toLynch Ford, Inc. to purchase a new car; shedecided on a 1999 Ford Escort. The salesrepresentative, Eric Vates, told Janikowski thathe would try to get her 5.9% APR financing, butthat due to the late hour in the day he could notassure her that a financing institution wouldaccept her loan at that rate. Janikowskinonetheless signed a Vehicle Purchase Orderagreeing to buy the Ford Escort, and a RetailInstallment Contract which listed the APR at5.9%. Paragraph 9 of the Purchase Order alsoprovided: “If financing cannot be obtained within5 business days for Purchaser according to theproposals in the retail installment contractexecuted between Seller and Purchaser, eitherSeller or Purchaser may cancel the Agreementshown on the face of this Order and the retailinstallment contract.” Even though Janikowski’s duty to purchase thecar was conditional, she drove the Escort homethat night. The next day, Vates called Janikowskiand told her that her loan had been approved, butat an 11.9% interest rate. Janikowski returned tothe dealership that evening, traded in her oldcar, and signed a new Purchase Order and RetailInstallment Contract, agreeing to purchase theEscort at an APR of 11.9%. About one month later, Janikowski filed suitagainst Lynch Ford and four other car dealershipsowned by Lynch. Her suit alleged that thedefendants violated TILA because they disclosed a5.9% APR, while she became liable to pay an APRof 11.9%, and that the defendants’ failure tomark the 5.9% rate as an estimate also violatedTILA. [FOOTNOTE 1]
Additionally, Janikowski contends thatthe defendants’ conduct violated the IllinoisConsumer Fraud Act and constituted unjustenrichment. Janikowski moved to certify her caseas a class action. The district court denied herrequest to certify, dismissed the other Lynch-owned dealerships, and granted Lynch Ford summaryjudgment. Janikowski appeals. II. Analysis On appeal, Janikowski contends that the districtcourt erred in granting Lynch Ford summaryjudgment, in dismissing the other Lynchdealerships, and in denying her request for classcertification. We begin with the district court’sdecision granting Lynch Ford summary judgment. Wereview this determination de novo, applying therotely recited summary judgment standard: Summaryjudgment is appropriate if there are no genuineissues of material fact and the moving party isentitled to judgment as a matter of law. [FOOTNOTE 2]
TILA requires that all retail installmentcontracts provide accurate disclosures. Gibson v.Bob Watson Chevrolet-Geo, Inc., 112 F.3d 283, 285(7th Cir. 1997). TILA also mandates certaindisclosures, including the contractual APR, 15U.S.C. sec. 1638(a)(4), and these disclosuresmust be in writing. The regulations furtherexplain that the disclosures must “reflect theterms of the legal obligations of the parties,”12 C.F.R. sec. 226.17(c)(1), and must be givenbefore the “consumer becomes contractuallyobligated on a credit transaction.” 15 U.S.C.sec. 1638(c); 12 C.F.R. sec. 226.2(a)(13). Janikowski argues that Lynch Ford violated TILAbecause, although Lynch Ford disclosed an APR of5.9%, she was ultimately required to pay an APRof 11.9%. In making this argument, however,Janikowski does not focus upon what reallyhappened: She entered into two contracts, each ofwhich disclosed the relevant (albeit different)APR. Before she signed the contract on November10, 1998, Lynch Ford disclosed a contractual rateof 5.9%. That disclosure reflected the terms ofher legal obligations, as required by regulation.12 C.F.R. sec. 226.17(c)(1). She was not legallyobligated to purchase the Escort at any rateother than 5.9%. The next day, after Janikowskilearned that she had been denied financing at5.9%, the November 10, 1998 contract wascanceled. She then entered into a new contract,which disclosed an 11.9% APR. Therefore, eventhough Janikowski did not eventually obtainfinancing at 5.9%, Lynch Ford did not violateTILA because it accurately disclosed her legalobligations under the two contracts. [FOOTNOTE 3]
Alternatively, Janikowski argues that Lynch Fordviolated TILA because it failed to disclose thatthe 5.9% APR was an estimate. Section226.17(c)(2) of the federal regulations providesthat: “If any information necessary for anaccurate disclosure is unknown to the creditor,the creditor shall make the disclosure based onthe best information reasonably available at thetime the disclosure is provided to the consumer,and shall state clearly that the disclosure is anestimate.” 12 C.F.R. sec. 226.17(c)(2).Janikowski contends that Lynch Ford’s failure tolabel the 5.9% rate as an estimate violatedsection 226.17(c)(2). However, contrary toJanikowski’s position, the 5.9% APR was not anestimate–it was the contractual rate, albeit acondition to the parties’ duty to perform. It wasan accurate disclosure for that contract, and the5.9% rate did not and could not vary under itsterms. If the financing condition had beensatisfied, Janikowski would be able and obligatedto purchase the car at 5.9%. However, whenJanikowski did not receive approval of financingat 5.9%, she could have canceled the contract andrefused to purchase the Escort. Either way, thedisclosed rate was a set rate, not an estimate. Janikowski also argues that Lynch Ford engagedin a practice of “spot delivery” and that thisviolates TILA. According to Janikowski, “spotdelivery” involves (1) the entering into a salescontract with a consumer at a low interest ratewhen the seller knows the consumer will notqualify for that rate; (2) followed by the sellergiving the consumer possession of the car, andaccepting the consumer’s trade-in; (3) andfinally, the late notification to a consumer thattheir financing has been denied and that theymust enter into a new contract, which theconsumer will do because they no longer havetheir trade-in and because they have becomeattached to their new car. [FOOTNOTE 4]
There are two primary problems with Janikowski’stheory–factual and legal. Factually, theundisputed evidence in this case shows that whileJanikowski drove the new Ford Escort home on theevening of November 10, 1998, she had not yetdelivered her used car as a trade-in. In fact,she did not deliver her trade-in until the nextday, after she had learned that she had beendenied financing at 5.9% and after (or at thesame time) she entered into the new contract at11.9%. So the trade-in aspect of the so-called”spot delivery” practice is missing. This quickturnaround time also negates the premise in the”spot delivery” scenario that the consumer willhave become attached to their new car and thuswilling to purchase it at a higher interest rate;in this case Janikowski had possession of the newcar for less than twenty-four hours. And contraryto the hypothetical of “becoming attached,” alsohypothetically she could have driven the carhundreds of miles and returned it the next dayand kept her current car, no strings attached. Also missing from the “spot delivery” scenariois the knowledge component. While Janikowskicontends that Vates knew she would not receivefinancing at 5.9%, the record does not supportthis contention. Rather, Vates’ uncontradictedtestimony is that he had reviewed Janikowski’scredit history and concluded she had a creditrating of “2,” and that individuals with a creditrating of 0, 1, or 2 qualified for 5.9%financing. The financing company later ratedJanikowski at a “4,” and as a result she onlyqualified for financing at 11.9%. But this doesnot negate Vates’ testimony that he believed sherated a “2,” that he believed that she may haveobtained financing at 5.9%, and that even afterthe financing company rated her as a “4,” thefinancing company, on its own initiative, couldhave altered that rating over the weekend after apersonal representative reviewed Janikowski’sapplication. (Vates also told Janikowski–atleast twice–that he could not guarantee that shewould obtain financing at 5.9%.) Nor canJanikowski create an issue of fact as to Vates’knowledge by presenting “expert testimony” that”Lynch deliberately defrauded Ms. Janikowski bymisrepresenting its ability to obtain financingat the rate quoted.” There is no evidence thatVates knew Janikowski would not obtain financing,and on which the expert could base hisopinion. [FOOTNOTE 5]
See Harmon v. OKI Systems, 115 F.3d477, 480 (7th Cir. 1997) (“Without any evidencein the record to support that (legal) conclusion,[expert's] statement simply is not enough to get. . . to the jury.”). Thus, the “actualknowledge” element of the “spot delivery” theoryis also missing. Beyond these sundry factual problems,Janikowski’s “spot delivery” theory fails legallybecause this practice does not violate TILA. ThatAct requires truthful disclosures of a consumer’slegal obligations, and as discussed above, LynchFord satisfied that statutory obligation.Therefore, even if the factual premises of theso-called “spot delivery” theory were present,this situation would not violate TILA. [FOOTNOTE 6]
Janikowski also contends that Lynch Fordviolated the ICFA. Under Illinois law, failing todisclose the financing terms of a consumercontract violates the ICFA. Grimaldi v. Webb, 668N.E.2d 39 (Ill. App. 1996). However, as discussedin the context of TILA, Lynch Ford did not failto disclose, or misstate the financing terms.Therefore, because in this case–unlike Grimaldi-Lynch Ford disclosed the financing terms,Janikowski’s ICFA claim fails as well. [FOOTNOTE 7]
Because Lynch Ford disclosed the APRs for whichJanikowski was legally obligated before theconsummations of both the November 10 andNovember 11 contracts, it did not violate TILA orthe ICFA. We therefore AFFIRM. [FOOTNOTE 8]
Janikowski alleged in her complaint that LynchFord disclosed an APR of 5.4%, but the RetailInstallment Contract disclosed the APR at 5.9%.On appeal she does not contend that the contractimproperly listed 5.9% as the rate which wasdisclosed to her before she signed the contract.Therefore, we will use 5.9% as the relevant rate. FN2
On appeal, Janikowski contends that we shouldreverse the district court’s decision because itfailed, in part, to apply Local Rule 12N, whichprovides that if the party opposing summaryjudgment does not object to the proposed findingsof fact, the court should accept those facts asadmitted. However, Janikowski fails to evenrecite the proposed findings of fact that thedistrict court allegedly failed to accept astruth. She also fails to discuss at all how thosefacts, if treated as admitted, would alter thedistrict court’s decision. Therefore, she haswaived this argument. FN3
As noted earlier, under the first contractJanikowski was not legally obligated to purchasethe Escort at any rate other than 5.9%. In fact,Lynch Ford was at risk when it permitted her totake possession of the new car before financingwas approved. Had Janikowski decided not to signthe revised 11.9% contract, Lynch couldtechnically have been stuck with a “used” carcausing immediate depreciation. So while the 5.9%contract was indeed an attractive enticement toJanikowski, it was also a risk to Lynch ifJanikowski was not satisfied with the 11.9%alternative. FN4
Janikowski seems to take this sequencing from anewspaper article. J. Dirks, “Scott’s Oregon AGSign Agreement,” The Columbian (Vancouver, WA),Mar. 5, 1998, sec. D 1. FN5
On appeal, Janikowski asserts in her “statementof facts” that Vates “knew that Janikowski wouldnot qualify for, or receive, financing with a5.9% APR prior to his disclosure of that rate toJanikowski on November 10, 1998.” In support ofthis “fact,” Janikowski cites to Lynch Ford’s”Reply/Response to Plaintiff’s Rule 12(N)/12(M)Statement of Additional Facts,” in which LynchFord denied this proposed fact. At best, thiscitation indicates that a factual dispute exists.But when we look to the underlying record–whichJanikowski did not cite in her appellate brief–it becomes clear that there is no evidence thatVates knew that Janikowski would not obtainfinancing at 5.9% because there is nothing tosupport the expert’s conclusion that Vates hadthis knowledge. FN6
Additionally, the underlying premise of the “spottheory”–that a consumer is unfairly put at riskof being denied financing–is also misplacedbecause as explained supra at n.3, the dealershiphas an equal, if not higher risk. FN7
While Janikowski’s complaint also alleged a claimof unjust enrichment, on appeal Janikowski didnot present any legal argument supporting thistheory. Therefore, that claim was waived. LINCFinance Corp. v. Onwuteaka, 129 F.3d 917, 921(7th Cir. 1997). FN8
Because the district court properly granted LynchFord summary judgment, we need not considerwhether the district court erred in dismissingthe other Lynch-owned dealerships or in denyingclass certification.
Janikowski v. Lynch Ford, Inc. In the United States Court of Appeals For the Seventh Circuit No. 99-3092 Diane Janikowski, Plaintiff-Appellant, v. Lynch Ford, Incorporated, Lynch Chevrolet, Incorporated, Frank J. Lynch Incorporated, et al., Defendants-Appellees. Appeal from the United States District Courtfor the Northern District of Illinois, Eastern Division. No. 98 C 8111–Suzanne B. Conlon, Judge. Argued February 8, 2000–Decided April 21, 2000 Before Cudahy, Manion, and Diane P. Wood, Circuit Judges.