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Green v. Momentum Motor Group, LLC

United States District Court, D. South Carolina, Rock Hill Division

November 21, 2017

Carolyn Green and Callrina Reid, Plaintiffs,
Momentum Motor Group, LLC, United Auto Credit Corporation, and Damon Young, an individual, Defendants.


          CAMERON MCGOWAN CURRIE Senior United States District Judge

         This matter is before the court on Plaintiffs' motion for summary judgment on default damages (“Motion”). ECF No. 40 (filed October 27, 2017). The Motion seeks a determination of damages against Defendant Momentum Motor Group, LLC (“Momentum”). Id. Momentum is in default and is the sole Defendant remaining in the action. ECF Nos. 19, 20.[1]

         The Motion is supported by factual allegations in the Amended Complaint (ECF No. 6), admitted as a consequence of Momentum's default, affidavits of both Plaintiffs (ECF Nos. 40-1, 40-2), legal argument included in the Motion (ECF No. 40), and a supplemental memorandum addressing the availability of damages for emotional distress injuries (ECF No. 44). Each of these documents was served on Momentum, which has not filed any response despite passage of the time to do so. ECF Nos. 43, 44 at 8.

         For reasons set forth below, the court grants Plaintiffs' Motion in part, awarding some but not all of the damages requested under the first through third causes of action.[2] The court defers entry of judgment to allow an election of remedies between the second and third causes of action.[3]


         Summary judgment should be granted if “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.R.Civ.P. 56(a). It is well established that summary judgment should be granted “only when it is clear that there is no dispute concerning either the facts of the controversy or the inferences to be drawn from those facts.” Pulliam Inv. Co. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir. 1987). The party moving for summary judgment has the burden of showing the absence of a genuine issue of material fact, and the court must view the evidence before it and the inferences to be drawn therefrom in the light most favorable to the nonmoving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).

         Rule 56(c)(1) provides as follows:

(1) A party asserting that a fact cannot be or is genuinely disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers or other materials; or
(b) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

Fed. R. Civ. P. 56(c)(1).


         Admitted Factual Allegations. By virtue of its default, Momentum has admitted the factual allegations of the Amended Complaint. Allegations relevant to the causes of action for which Plaintiffs seek an award of damages are summarized below.

         On or about February 27, 2017, Plaintiffs Callrina Reid (“Reid”) and Carolyn Green (“Green”), went to Momentum's place of business with the intent of purchasing a car for Reid's use. ECF No. 6 ¶ 12.[4] Reid selected a 2007 Honda Civic (“the car”). ECF No. 6 ¶¶ 12, 13. After checking Reid's credit, Momentum advised Reid it could not sell her the car on credit. Id. ¶ 13. Reid was not provided written notice of the denial of credit. Id.

         Momentum then checked Green's credit and advised Green it could sell her the car on credit. Id. Momentum required Green to complete a Retail Installment Contract and Security Agreement (“RIC”) to obtain financing. Id. The amount to be financed was $5, 606.65 at 24.99% interest, resulting in a total finance charge of $1, 779.74, and total payments of $7, 386.39. Id. ¶ 14. The charges included a “closing fee” of $250, included in the amount financed. Id. The RIC did not state any of these amounts were estimates. Id. In addition to the amount financed by Green, Reid made a $2, 500 down payment. Id.

         Once the RIC was completed, “Plaintiffs were assured by Defendant Momentum that the vehicle had been financed.” Id. ¶ 16 (alleging they were told United would be the lienholder).

         Plaintiffs took the car from the lot after receiving assurances financing was approved and any preconditions were satisfied (most critically, a requirement Momentum be able to assign its contract to a third party). Id. ¶¶ 16, 17.[5]

         Plaintiffs allege Momentum was the original creditor and sought to profit by “shopping [the loan] to a variety of finance companies.” Id. ¶ 18. They further allege United “purported to pay Momentum the highest profit” for the loan, but Momentum did not agree to the offered amount, leading to a later conspiracy between United and Momentum to attempt to force Plaintiffs to refinance on less favorable terms. Id. ¶¶ 18, 21.

         Reid experienced problems with the car immediately after taking it home. Id. ¶ 19. She took it back to Momentum twice, leaving it for repairs for a total of four weeks during which time she was without use of the car. Id. ¶¶ 19, 20. The problems were not resolved despite these efforts. Id.

         Plaintiffs attempted to make their first payment to United but were told the loan had been “sent back” to Momentum. Id. ¶ 21. Plaintiffs contacted Momentum and were told the credit application had been “turned down due to the car being driven by Plaintiff Reid.” Id. Neither Plaintiff was provided written notice of this credit denial. Momentum stated Plaintiffs would need to return the car to refinance it. Id. At some point during this period, the car was repossessed by United and Plaintiffs were given written notice of the repossession. Id. ¶ 25.[6] Plaintiffs requested but were denied return of the $2, 500 down payment. Id. ¶ 21.

         Causes of Action.

         Plaintiffs assert seven causes of action against Momentum. Their Motion seeks an award of damages only as to the first three causes of action, which are discussed, in order, below.[7] ECF No. 40-1.

         Equal Credit Opportunity Act.

         Plaintiffs' first cause of action alleges Momentum is a creditor under the Equal Credit Opportunity Act, 15 U.S.C. § 1691 (“ECOA”), and violated the ECOA by failing to provide required notices of credit denials. Id. ¶¶ 28, 29. Plaintiffs allege (1) “Momentum was required to send Plaintiff Green an adverse action letter, or other written notice, when it denied Plaintiff Green credit and sought to restructure the contract”; and (2) “Momentum was required to provide [Plaintiff] Reid with an adverse action or other written, notice after initially denying her credit as opposed to making a blanket and unsubstantiated statement that Plaintiff Reid had simply been ‘denied.'” Id. ¶¶ 29, 31.

Plaintiffs' damages demand under this cause of action reads as follows:
Plaintiffs seek actual damages for physical sickness and mental suffering, including, but not limited to, worry, aggravation, stress, humiliation, anxiety, anger, fear, frustration, inconvenience, mental suffering, loss of sleep and embarrassment. Plaintiffs also seek the required punitive damages not to exceed $10, 000 as set forth in the ECOA and attorneys' fees for Defendants' violations of the ECOA.

Id. ¶ 32.

         South Carolina Unfair Trade Practices Act.

         Plaintiffs' second cause of action alleges willful violation of the South Carolina Unfair Trade Practices Act, SC Code Ann. § 39-5-10, et seq. (“SCUTPA”). It alleges Momentum (acting in concert with United) fabricated a reason to deny Green's loan and engaged in a scheme to “create a never-ending source of income, either by way of illegally taking down payments on vehicles which Defendants know they will be repossessing or by using the payment of a down payment to leverage individuals into refinancing vehicles at unfavorable terms after the original financing ‘falls through.'” Id. ¶ 35. Plaintiffs allege a statement in the RIC that interest began to accrue when the contract was signed was false because other language stated the RIC did not become effective until it was assigned to a third-party finance company. Id. ¶ 36. They allege Momentum engaged in an unfair or deceptive practice in refusing to return Reid's $2, 500 down payment and did so for the purpose of coercing Plaintiffs to enter a new contract more advantageous to Momentum. Id. ¶ 37. Plaintiffs also allege Momentum took the $99 payment for the service contract but never submitted the application to ProGuard. Id. ¶ 38.

         Plaintiffs allege they “have suffered an ascertainable loss due to” these actions and seek actual damages, treble damages, attorneys' fees and costs. Id. ¶ 40. They identify the following injuries in addition to the loss of the down payment and payment for a service contract they did not receive:

Plaintiffs [suffered] worry, humiliation, fear, loss of sleep, anxiety, nervousness, physical sickness, physical pain and mental anguish. Additionally, Plaintiffs suffered out of pocket losses, including but not limited to the cost of finding replacement transportation, charges associated with the inspection of the vehicle, and attorneys' fees and costs.

Id. ¶ 41 (alleging the challenged actions were willful and, therefore, support treble damages).[8]

         South Carolina Dealer's Act.

         Through their third cause of action, Plaintiffs seek recovery from Momentum under the South Carolina Dealer's Act, SC Code Ann. § 56-15-10 (“Dealer's Act”). Under this cause of action, Plaintiffs allege Momentum is a “dealer” subject to the Dealer's Act and violated the Dealer's Act by engaging in unfair and deceptive acts. Id. ΒΆ 43. Plaintiffs identify three actions as supporting this claim: (1) refusal to return Plaintiffs' down payment; (2) ...

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