JAN MARCIA J. MENGEL, CLERK SUPREME COURT OF OHIO IN THE SUPREME COURT OF OHIO. ANDY BUICK, INC. and ANDY CHEVROLET COMPANY,

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1 IN THE SUPREME COURT OF OHIO ANDY BUICK, INC. and ANDY CHEVROLET COMPANY, Defendants-Appellants, vs. RICARDO PHILLIPS, et al. Plaintiffs-Appellees. SUPREME COURT CASE NO On Appeal from the Lake County Court of Appeals, Eleventh Appellate District Court of Appeals, Case No L-093 CA PLAINTIFFS-APPELLEES' MEMORANDUM OPPOSING JURISDICTION Jay F. McKirahan, Esq. (# ) WHANN & ASSOCIATES, L.L.C Frantz Road Dublin, Ohio (614) (614) fax Counsel for Defendants-Appellants ELm JAN MARCIA J. MENGEL, CLERK SUPREME COURT OF OHIO Dated: January 19, 2007 Patrick J. Perotti, Esq. (# ) DWORKEN & BERNSTEIN Co., L.P.A. 60 South Park Place Painesville, Ohio (440) (440) fax Ronald I. Frederick, Esq. (# ) RONALD FREDERICK & ASSOCIATES 55 Public Square, Suite 1300 Cleveland, Ohio (216) (216) fax Laura A. DePledge, Esq. (# ) DEPLEDGE LAW OFFICE, INC Mentor Avenue Mentor, Ohio (440) (440) fax com Counsel for Plaintiffs-Appellees Ricardo Phillips, individually and on behalf of all others similarly situated

2 EXPLANATION OF WHY THIS IS NOT A CASE OF PUBLIC OR GREAT GENERAL INTEREST Andy Buick claims there is confusion and ambiguity in a CSPA rule in transactions dealing with car dealerships. It fails to mention that every court which dealt with matter has approached it the same way as the Eleventh District in this case. A customer goes to a car dealership and sees a vehicle stickered at $26,000. After much haggling, the salesperson agrees - in the words Andy Buick uses - to a "final sales price" of $24,000. To avoid after the fact add-ons of "overhead," "sales commission," "filing fees," etc., Ohio law requires that the price must "include[] all costs to the consumer except tax, title and registration fee, and a documentary service charge." OAC 109:4-3-16(B)(21). In violation of this requirement, Andy Buick bilked over 1,500 of its customers by after-the-fact tacking on two additional preprinted charges totaling approximately $146. Andy Buick fails to note that its ruse has unfortunately been used by many car dealerships to cheat customers. Rather than presenting inconsistency among the courts, or the districts, or the decisions, every case pertaining to these issues, including decisions from the Appellate Courts of the Sixth District, Eighth District, Eleventh District, and Twelfth District, have taken the same approach; substantively and on the certification of a class action. Richardson v. Car Lot Co., 10 Ohio Misc. 2d, 32 (1983); Charlie's Dodge, Inc, v. Celebrezze Comp, 72 Ohio App. 3d, 744 (Lucas Co App. 1991); Motzer Dodge Jeep Eagle, Inc. v. Ohio Attorney General, 95 Ohio App. 3d, 183 (Butler Co. App. 1994); Washington v. Spitzer Mgt., Inc., 2003WL (Cuyahoga County Appellate 2003); Phillips v. Andy Buick, Inc., 2006 WL (11`h Dist. 2006); Mia Johnson v. Tri- County Kia, etc. et al, Lorain County Court of Common Pleas, Case No. CV , 2

3 appeal denied, Lorain County Court of Appeals, No. 04-CA (2004). This practice has also been subject to injunctions sought and obtained by various different Attorneys General in Ohio. State of Ohio, ex rel. Anthony J. Celebreeze, Jr. Attorney General v. Lakewood Chrysler-Plymouth, Inc., Franklin Cty. C.P. Case No. 89-CV (car dealer who charges consumer a preprinted fixed fee commits an unfair and deceptive act in violation of the CSPA); William J. Brown v. Spitzer Buick Company, Summit Cty. C.P., Case No. CV (same). Litigation against this practice has resulted in millions of dollars being returned to bilked consumers or to a variety of charities. Denise M. Willis, et al., v. T.E. Clarke Motors, Inc., etc. et al., Cuyahoga County Court of Common Pleas, Case No. CV ; Juanita Bartok, et al. v. Serpentini Group, etc. et al., Cuyahoga County Court of Common Pleas, Case No. CV ; Lisa Washington, etc., et al. v. Spitzer Management, Inc., etc. et al., Cuyahoga County Court of Common Pleas, Case No. CV The law on this issue is clear and it has been applied uniformly by every Court to deal with it for over two decades, with no exception. The certification request by Andy is not because there is confusion or need for clarification. It is a dealership looking for a way to avoid compliance with law. That is not a basis for certification. The request should be denied. STATEMENT OF THE CASE AND OF THE FACTS This lawsuit like many others before it asserts a violation of the Ohio Consumers Sales Practices Act and the implementing rules adopted by the Ohio Attomey General. The case was filed as a class action, and the class was certified. Rather than being aberrant or unique, the class certification entered by the Lake County Court of Common 3

4 Pleas is the same as the orders certifying classes entered in a host of other cases involving the same misconduct. Washington v. Spitzer, supra; Clark Ford, supra; Serpentini, supra; Tri-County Kia, supra. These cases involve the unlawful but common practice of auto dealerships reaching an agreed sales price with a customer, but then adding on standardized, preprinted fees which raise the purchase price by $100 or more. As Andy Buick admits in its Memorandum in Support of Jurisdiction to this Court, the parties reached a "negotiated final sale price" on the car. That price was reduced to writing and presented to the consumer in the Purchase Order. The dealership added two preprinted additional fees which increased the price by approximately $145. When required in discovery to disclose the extent of this practice, Andy Buick was forced to admit that 1,500 customers were subject to it. The dealership appealed the class certification order and the Eleventh District affirmed. The matter is now before this Count on a discretionary motion for certification. Because the law applicable is straightforward, and has been consistently applied by every court confronted with this type of practice since 1983, certification should be denied. ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW APPELLANT'S PROPOSITION OF LAW NO. 1 The term "advertisement" does not include the final negotiated sale price designated on a buyer's order for a motor vehicle. First, Appellant tries to create broad importance by stating that this case concerns not only car dealers, but "every supplier of consumer goods in the state". However, its proposition of law, above, addresses only "a buyer's order for motor vehicle", because 4

5 OAC 109: ( B)(21) likewise only applies to practices involving the "price for a motor vehicle". Similarly, Andy Buick tries to show a need for this Court's intervention by complaining that the regulations in this matter are confusing or ambiguous. However, every case on this subject has gone the same way. The field of car sales is unfortunately replete with deceptive practices. A striking number of substantive regulations under the CSPA pertain specifically to activities of car dealerships. Section 16(B)(21) addresses the deceptive practice of dealership reaching a "final price" with the customer, only to have the customer see that additional charges have been tacked-on. The regulations provide: (B) It shall be a deceptive and unfair act or practice for a dealer, manufacturer, advertising association, or advertising group, in connectiqn with the advertisement or sale of a motor vehicle, to: (21) advertise any price for a motor vehicle unless such price includes all costs to the consumer except tax, title, and registration fees, and a documentary service charge, provided such charge does not exceed the maximum documentary service charge permitted to be charged pursuant to Section of the Revised Code. After being caught - like so many other auto dealerships - with its hand in the cookie jar in 1,500 transactions, Andy tries to wiggle out of liability by claiming that it did not "advertise" a final sale price the car at any time. Andy claims that the law intends advertisement only to mean "a newspaper advertisement" or "a television commercial". That is not what the law unambiguously states. The leading way a communication is made to an auto purchaser is after they have seen the generic newspaper ads and TV 5

6 commercials, and are in the dealership. The key communications are the personal representations, oral and then written, by the salesman. The customer enters the dealership and begins to negotiate on the price of a car. Where a deal is reached, the salesperson says, `okay, we'll sell it for $24,000'. He then memorializes that to the consumer in the buyer's order. The regulation dealing with these practices therefore lists, not subsidiarly but as the first item, such one-to-one oral and written communication: Any electronic, written, visual, or oral communication made to a consumer by means of personal representation, newspaper, magazine, circular, billboard, direct mailing, sign, radio, television, telephone or otherwise, which identifies or represents the terms of any item of goods, service, franchise, or intangible which may be transferred in a consumer transaction. OAC 109: (C) (5). Andy Buick cannot "interpret" the rule to delete the words `written or oral communication made to a consumer by means of personal representation which identifies or represents the terms of any item of good in a consumer transaction'. As Andy Buick correctly states with complete accuracy at page 6 of its Memorandum to this Court: "The final negotiated sale price is the end result of the transaction". When the parties horse trade and reach that price, it is supposed to include "all costs to the consumer except tax, title or registration fee, and a documentary service charge". In the present case, it did not. The law prohibits what Andy did. Andy's demand to write that out of the law is unavailable. "A court must look to the language of the [provision], giving effect to the words used and not deleting words used or inserting words not used." Rosette v. Countrywide Home Loans Inc., 105 Ohio St. 3d 296, 12 (2005). 6

7 APPELLANT'S PROPOSITION OF LAW NO. 2 Applying the typical definition of "advertisement", Plaintiff does not meet the requirements for class certification. The foregoing "proposition of law" is not a proposition of law. Propositions of law express important, broad principles generally applicable throughout the state. This is an assignment of error applicable only to this case. certification: The "subheadings" under this proposition of law likewise do not meet the test of a) Where a plaintiff asserts class action allegations but the record demonstrates that issues of commonality do not predominate, the plaintiffappellee fails to satisfy the requirements of ORCP 23 (A)(2). b) Where a plaintiff asserts class action allegations but the record demonstrates that issues of typicality do not predominate, the plaintiffs-appellee fails to satisfy the requirements of ORCP 23(A)(3). c) Where a plaintiff asserts class action allegations but the record demonstrates that questions of law or fact common to members of the punative class do not predominate and that a class action is not superior to other methods of litigation, the plaintiff-appellee fails to satisfy the requirements of ORCP 23(B)(3) for class certification. 1) The first subsection of 23(B)(3) has not been met because questions of law or fact common to members of the class do not predominate over questions affection only individual members. 2) The second prong of 23(B)(3) is inapplicable because the class method is not the superior method of adjudicating PlaintifPs claims. These statements are not new pronouncement on areas of confusion in class action practice. These are generic concepts which are already uniformly established by repeated decisions of this Court. See, e.g. In re: Consolidated Mgt. Satis. Cases, 97 Ohio St. 3d 465, 8 (2002) (common questions must predominate to allow class certification). Id. at 13; Cope v. Metropolitan Life Ins. Co., 820 Ohio St. 3d 426, ( 1998) (class 7

8 treatment must be the superior method to allow class certification); Baughman v. State Farm Mgt. Auto Ins. Co., 88 Ohio St. 3d 480, (2000) (the plaintiff's circumstances must be typical of class members to allow class certification). Andy Buick does not want this Court to certify an issue of class action law on which there is considerable ground for disagreement and the need for clarification. It wants to this Court to serve as a further, general appeal, in an effort to re-argue to seven more judges its desire not to comply with the law. That is not the function of certiorari. When Andy Buick was certified in a class action regarding these particular car dealership tactics, Andy Buick joined a large and well-settled group. Washington v. Spitzer, supra; Clark Ford, supra; Serpentini, supra; Tri-County Kia, supra. Rather than suggesting conflict, the courts have been steady and uniform on all these certifications. 8

9 CERTIFICATE OF SERVICE This is to certify that a copy of Plaintiffs-Appellees' Memorandum Opposing Jurisdiction was sent to the following by and by first class U.S. mail on January 19, 2007, addressed as follows: Jay F. McKirahan, Esq. WHANN & ASSOCIATES, L.L.C Frantz Road Dublin, Ohio whannassoc@rrohio.com Counsel for Defendants-Appellants And as a courtesy to: Ronald I. Frederick, Esq. RONALD FREDERICK & ASSOCIATES 55 Public Square, Suite 1300 Cleveland, Ohio ronj@clevelandconsumerlaw.com Laura A. DePledge, Esq. DEPLEDGE LAW OFFICE, INC Mentor Avenue Mentor, Ohio depledgelawinc@aol. com Patrick J. Perotfi, Esq. DWORKEN & BERNSTEIN Co., L.P.A. One of the Attorneys for Plaintiffs-Appellees 10

10 CONCLUSION This case involves law which is clear and unambiguous. It has been uniformly and consistently applied by every court to address the issue, on the merits as well as in allowing class certification. Simply put, the regulations mean exactly what they state. Andy Buick's complaint that the law should be different is not a matter for certification, but something to be taken up with the Attorney General regarding its rule making over motor vehicle dealers, or the General Assembly regarding the Consumer Sales Practices Act. Certification should be denied. Respectfully submitted, Patrick J. Perotti, Esq. (# ) DWORKEN & BERNSTEIN Co., L.P.A. 60 South Park Place Painesville, Ohio (440) (440) fax pperotti@dworkenlaw.com Ronald I. Frederick, Esq. (# ) RONALD FREDERICK & ASSOCIATES 55 Public Square, Suite 1300 Cleveland, Ohio (216) (216) fax ron, f@clevelandconsumerlaw. com Laura A. DePledge, Esq. (# ) DEPLEDGE LAW OFFICE, INC Mentor Avenue Mentor, Ohio (440) (440) fax depledgelawinc@aol. com Counsel for Plaintiffs-Appellees Ricardo Phillips, individually and on behalf of all others similarly situated 9