Buyer of a used car sued the dealer

Tennessee Reports

Unpublished

NZIRUBUSA v. UNITED IMPORTS, M2004-01884-COA-R3-CV
(Tenn.App. 6-21-2006) FIDES NZIRUBUSA v. UNITED IMPORTS,
INC., ET AL. No. M2004-01884-COA-R3-CV. Court of Appeals
of Tennessee, at Nashville. January 11, 2006 Session.
Filed June 21, 2006.

[EDITOR’S NOTE: This case is unpublished as indicated by the
issuing court.] Appeal from the Circuit Court for Davidson
County; No. 03C-1769; Hamilton Gayden, Judge.

Judgment of the Circuit Court. Affirmed.

Joel H. Moseley, Sr., Joel H. Moseley, Jr., Nashville,
Tennessee, for the appellants, United Imports, Inc. and
Farhad Soheilinia.

Charles K. Grant, Mark A. Baugh, Yanika C. Smith,
Nashville, Tennessee, for the appellee, Fides Nzirubusa.

Patricia J. Cottrell, J., delivered the opinion of the
court, in which William C. Koch, Jr., P.J., M.S., and Frank
G. Clement, Jr., J., joined.

OPINION

PATRICIA J. COTTRELL, Judge

The buyer of a used car sued the dealer who sold it to
her, alleging that after she paid off the car loan in full,
the seller refused to release his lien and give her clear
title to the vehicle unless she paid him additional money
and persuaded her friends to buy cars from him. For his
part, the dealer claimed that the buyer still owed on the
car loan, and he denied the other allegations. He also
argued that the buyer’s claim under the Tennessee Consumer
Protection Act, Tenn. Code Ann. § 47-18-101 et seq,
was time-barred because it was filed more than five years
after she bought the car. After a full hearing on the
merits, the trial court ruled for the buyer and held that
the seller’s refusal to release his lien amounted to a
continuing violation of the Act which prevented the running
of the statute of limitations. The court awarded the buyer
treble damages and attorney fees, both of which are
authorized by the Tennessee Consumer Protection Act. We
affirm.

In 1997, Fides Nzirubusa, a recent political refugee from
Burundi, bought a used car from Gholam Ali Soheilinia d/b/a
United Imports. Ms. Nzirubusa gave Mr. Soheilinia a down
payment and financed the balance with him at an annual
percentage rate of 28%, with future payments of $300 per
month. She completed the twenty-five payments called for in
the contract ahead of schedule, but Mr. Soheilinia, himself
a 1978 political refugee from Iran, refused to release his
lien unless she paid an additional $500. Ms. Nzirubusa paid
the additional money, but Mr. Soheilinia still refused to
give her clear title, allegedly stating that he would only
release the title if she purchased another vehicle from him
or referred two other customers who would purchase vehicles
from him.

In September 1999, Gholam Soheilinia was killed during a
robbery of his business, and his son Farhad (Frank) took
over United Imports. In January 2002, he told Ms. Nzirubusa
that she owed an additional $538 on the vehicle, and that
if she paid, he would clear the title. She apparently paid,
but he still refused to give her the title, allegedly
claiming that she owed an additional $3,000 in late fees.
He also refused to give her a receipt for the $538, but she
was eventually able to persuade him to give her an
acknowledgment of payment, which was scribbled on a scrap
of paper.

In January 2003, Ms. Nzirubusa was involved in an accident
in which the other driver was at fault. The $1,712 check
from the insurance company was made payable to both her and
United Imports, the lien holder of record. Ms. Nzirubusa
claimed that Mr. Soheilinia refused to endorse the check
over to her and renewed the condition that she either
purchase another vehicle from him or refer two other
customers to purchase vehicles from him.

On March 6, 2003, Ms. Nzirubusa brought suit against Mr.
Soheilinia and United Imports in the General Sessions Court
of Davidson County. She claimed that the dealer’s actions
violated the Tennessee Consumer Protection Act and that
they also constituted fraud, breach of contract, and breach
of warranty of title. Mr. Soheilinia did not appear for the
hearing, and the court granted Ms. Nzirubusa a default
judgment for $7,614, which included treble damages of
$3,114 for her $1,038 overpayment, as well as $4,500 in
attorney fees. Mr. Soheilinia then filed an appeal in the
Circuit Court.

Both parties filed motions for summary judgment, but the
trial court took the motions under advisement and decided
to conduct a hearing on the merits. Mr. Soheilinia
testified that he did not release his lien because Ms.
Nzirubusa still owed money on the car. Mr. Soheilinia
denied that Ms. Nzirubusa had paid him the $538 referenced
above, that Ms. Nzirubusa had ever presented an insurance
check to him for his signature, and that he had ever
refused to release titles to anyone who had fully paid off
his or her car loan.

The original bill of sale was entered into evidence, and
the dealer insisted that it required the buyer to pay a
total of $7,518 in addition to her down payment of $840,
instead of a total of $7,518 including the down payment. He
relied on a portion of the contract that listed a balance
due of $7,518. However, under the heading BASIC INFORMATION
ABOUT MY OBLIGATION (Federal Truth in Lending Disclosures),
the contract stated that “[t]he total cost of my purchase
on credit, including my down payment of $840 is $7,518.”
Other exhibits included receipts for the down payment and
for monthly payments made to Gholam and Farhad Soheilinia,
the aforementioned scribbled receipt for $538, a copy of
the vehicle’s title, and a facsimile of the check from the
insurance company.

Over objection, Ms. Nzirubusa was also allowed to introduce
the testimony of two Rwandan citizens who claimed they had
bought cars from Mr. Soheilinia and had been fraudulently
treated. One claimed that the dealer had withheld a clear
title from her after she paid off her car note in full.
Another testified that the dealer had repossessed his car
for one late payment when he was in the hospital, although
only four payments were left on his obligation, and that no
money was ever returned to him.

At the conclusion of proof, Mr. Soheilinia’s attorney moved
the court to dismiss Ms. Nzirubusa’s claims on the ground
that pursuant to all the pertinent statutes of limitations
and statutes of repose the time for filing the lawsuit had
passed. Ms. Nzirubusa’s attorney argued that the complaint
was timely filed, because the dealer’s refusal to release
his lien on Ms. Nzirubusa’s car amounted to a continuing
violation of the Consumer Protection Act and a continuing
breach of contract.

The court then ruled that the statute of limitations did
not bar the action because of the dealer’s continuing
breach of contract. The court also held that Ms. Nzirubusa
was entitled to prevail on her claim under the Consumer
Protection Act. The court found that the buyer had paid the
full amount due on her installment contract and that the
dealer’s subsequent unfair and deceptive trade practices
led her to overpay by $1,038. Like the General Sessions
Court, the Circuit Court entered a judgment under the Act’s
treble damages provisions for $3,114 plus attorney fees. In
addition, the court entered a mandatory injunction
requiring delivery of clear title to Ms. Nzirubusa. Mr.
Soheilina filed a motion for new trial, which was denied.
This appeal followed.

II. THE CONSUMER PROTECTION ACT

The Tennessee Consumer Protection Act (“Act”) declares that
the Act “shall be liberally construed” to promote its
purposes. Tenn. Code Ann. § 47-18-102. See also
Morris v. Mack’s Used Cars, 824 S.W.2d 538, 540 (Tenn.
1992). Those purposes include “protect[ing] consumers and
legitimate business enterprises from those who engage in
unfair and deceptive acts or practices in the conduct of
any trade or commerce in part or wholly within this state.”
Tenn. Code Ann. § 47-18-102(2). To that end, the Act
authorizes the court to award plaintiffs three times their
actual damages if the unfair or deceptive act was willful
or knowing, Tenn. Code Ann. § 47-18-109(a)(3), as
well as attorney fees in appropriate cases, Tenn. Code Ann.
§ 47-18-109(e)(1).

Private actions for violations of the Act have a one-year
statute of limitations. Tenn. Code Ann. § 47-18-110.
In 2002 the relevant statute of repose was increased to
five years, 2002 Tenn. Pub. Acts, ch. 617, § 1, and
at the time Ms. Nzirubusa purchased her car, the statute of
repose period was four years. Tenn. Code Ann. §
47-18-110 (1997).

Mr. Soheilinia’s primary argument on appeal is that the
trial court erred by not finding that Ms. Nzirubusa’s suit
was time-barred. This argument depends on the theory that
the statutes began to run on September 20, 1997, the date
that Ms. Nzirubusa purchased the car, and had therefore
expired before March 6, 2003, when she brought suit. The
dealer’s theory rests, in turn, on his interpretation of a
definition found in the Act, Tenn. Code Ann. §
47-18-102, which reads,

(11) “Trade,” “commerce,” or “consumer transaction” means
the advertising, offering for sale, lease or rental, or
distribution of any goods, services, or property, tangible
or intangible, real, personal, or mixed, and other
articles, commodities, or things of value wherever
situated.

The dealer argues that his “offering for sale” occurred in
1997 and, thus, that it would be contrary to the language
and intention of the Consumer Protection Act to apply its
provisions against him in response to a suit filed over
five years later.

Ms. Nzirubusa argues that the trial court was correct in
ruling that the dealer had engaged in a continuing
violation of the Act that never abated because he never
released his lien on the car. She also contends that each
time that she asked for delivery of a clean title and was
refused on spurious grounds, the dealer committed an
additional deceptive act under the Tennessee Consumer
Protection Act. According to her argument, such acts
include the dealer’s refusal to add his endorsement to Ms.
Nzirubusa’s insurance check, since the dealer’s endorsement
was only required because of his unreleased lien. That
check was dated January 28, 2003, less than five weeks
before the buyer filed suit.

The place to begin our analysis is the relevant statute of
limitations which provides that any private action under the
Act shall be commenced within one year “from a person’s
discovery of the unlawful act or practice.” Tenn. Code Ann.
§ 47-18-110. Those acts or practices made unlawful
by the Act are set out in Tenn. Code Ann. §
47-18-104 and are generally defined as unfair or deceptive
acts or practices affecting the conduct of any trade or
commerce. Tenn. Code Ann. § 47-18-104(a). We do not
read the “affecting conduct of any trade or commerce”
language as limited to one specific transaction. In other
words, nothing in the definition relied upon by Mr.
Soheilinia changes the requirement that the acts alleged
deceptive or unfair affect trade or commerce generally.
Certainly, the acts alleged herein and found to have been
proved by the trial court were acts or practices that
affect trade or commerce.

The statute of repose provides that no private action may
be brought more than four years after the date of the
“consumer transaction giving rise to the claim for relief.”
Tenn. Code Ann. § 47-18-110. “Consumer transaction”
is defined in the provision relied on by the dealer and set
out above. Tenn. Code Ann. § 47-18-103(11). Further,
“consumer” is defined as a person who seeks or acquires any
“goods, services, or property, tangible or intangible,
real, personal or mixed, and any other article, commodity,
or thing of value. . . .” Tenn. Code Ann. §
47-18-103(2).

The language of both provisions establishes that the unfair
or deceptive act triggering the running of the statutory
period is not limited in time to the sale or contract for
sale and acts leading up to the sale. The definition of
“trade, commerce, or consumer transaction” includes not
only offering property for sale, but also “distribution of
any goods, services, or property, tangible or intangible,
real, personal, or mixed, and other articles, commodities,
or things of value wherever situated.” Tenn. Code Ann.
§ 47-18-103(11). Thus, it covers not only acts
leading to the initial agreement to engage in a consumer
transaction, but also the distribution of the property or
other things of value that were the subject of that
transaction. Similarly, the definition of consumer includes
someone who seeks property or a thing of value.

A certificate of title, which provides clear evidence of
the ownership of a motor vehicle, is a thing of value and
may be considered an article or property. Part of the
agreement to pay for an automobile is that ownership will
transfer, not just possession. Consequently, the buyer
continued to seek property or a thing of value.
Additionally, the furnishing of a clean title is a
distribution of property that arises from a commercial
transaction and, consequently, unfair or deceptive acts or
practices in regard to such a distribution can lead to
civil liability under the Act.[fn1]

Similar reasoning was applied in Sparks v. Allstate
Insurance Co., 98 F. Supp. 2d 933 (W.D. Tenn. 2000), where
the United States District Court was confronted with the
question of whether Allstate Insurance’s refusal to pay a
claim for a fire loss was actionable under the Tennessee
Consumer Protection Act. The insurance company relied upon
the same language as the dealer in this case to argue that
the definition set out in Tenn. Code Ann. §
47-8-102(11) means that the Act could only apply to the
initial sale of the policy. The court found, however, that
the payment of claims was, by its nature, a distribution of
property and that it therefore came within the ambit of the
Act. Sparks, 98 F. Supp. 2d at 937.

We hold that Ms. Nzirubusa’s lawsuit was not barred by
either the statute of limitations or the statute of repose.
Her claim was based on Mr. Soheilinia’s failure or refusal
to deliver to her unencumbered title to the car she bought.
Clear title has value, and a lien impairs the value of the
car to the owner. Each day that Mr. Soheilinia wrongfully
deprived Ms. Nzirubusa of unencumbered title was a
violation of the Act. Additionally, the dealer did not
simply fail to release his lien; instead, each time the
buyer asked for clean title, he created additional
conditions for the buyer to meet, thus holding out an
illusory hope that he would eventually comply with the
contract of sale. His violation of the Act was ongoing.

The unfair and deceptive acts complained of in this case
did not occur at the time the parties entered into their
contract of sale, but rather afterwards. The narrow reading
of the statute urged by the dealer would of necessity
exclude from the protections of the Act similar situations
where unfair or deceptive acts may occur at or near the end
of the installment period. An interpretation leading to
that result would contravene the legislature’s intent that
the Act be liberally construed in furtherance of its
purposes.

III. BREACH OF CONTRACT

As we indicated above, the trial court also found that Mr.
Soheilinia had committed a continuing breach of the contract
with Ms. Nzirubusa. Since the trial court granted the
plaintiff recovery under the Consumer Protection Act, we
need not discuss this alternate cause of action in any
great detail. However, Mr. Soheilinia argues on appeal that
a statute of limitations would have also barred recovery on
the breach of contract claim.

He relies upon Tenn. Code Ann. § 47-2-725(1), which
states that “[a]n action for breach of any contract for
sale must be commenced within four (4) years after the
cause of action has accrued.” Assuming that the statute
applies, for the same reasons set out above in our
discussion of the Consumer Protection Act, we agree with
the trial court that the dealer’s failure or refusal to
transfer unencumbered title to the car was an ongoing
breach of his contract to deliver ownership upon payment.
Consequently, we conclude the breach of contract claims
were timely filed.

Even if we were to apply the statute most favorably to Mr.
Soheilinia, Ms. Nzirubusa’s cause of action accrued after
she completed her final payment on the installment contract
and Gholam Ali Soheilinia refused to give her a clean title
to the automobile she had purchased from him. The record
shows that Ms. Nzirubusa made her final payment on her
installment obligation in April of 1999 and that she paid
an additional $500 to Mr. Soheilinia on May 31, 1999, but
that he still refused to release his lien on the
automobile. His breach was his failure to deliver title. It
thus appears that the filing of Ms. Nzirubusa’s complaint
on March 6, 2003 was timely under Tenn. Code Ann. §
47-2-725(1).

Mr. Soheilinia attempts to avoid this result by arguing
that Ms. Nzirubusa’s cause of action accrued in September
of 1997, when she first purchased the car. To bolster this
argument, he cites part (2) of Tenn. Code Ann. §
47-2-725, which reads, “[a] cause of action accrues when
the breach occurs, regardless of the aggrieved party’s lack
of knowledge of the breach. A breach of warranty occurs
when tender of delivery is made, except that where a
warranty explicitly extends to future performance of the
goods and discovery of the breach must await the time of
such performance the cause of action accrues when the
breach is or should have been discovered.”

To make the above subsection fit his theory, Mr.
Soheilinia reads “tender of delivery” as meaning the
initial delivery of the car to Ms. Nzirubusa, which then
forces him to recast her contract claim as one which only
alleged a “breach of warranty of title.”[fn2] Such a breach
occurs when a vendor sells property with faulty title, or
where the property is subject to an encumbrance of which
the buyer has no knowledge. Tenn. Code Ann. §
47-2-312. But Ms. Nzirubusa is not claiming that there was
any encumbrance on the car at the time of sale, other than
the vendor’s lien. The breach of contract she complains of
occurred after she paid off her loan and Mr. Soheilinia
refused to release his lien. As we noted, this occurred
less than four years before she filed her Complaint.

IV. WAIVER

Mr. Soheilinia’s remaining argument on appeal is that the
trial court committed reversible error by preventing his
attorney from putting on proof. The transcript of the
evidence shows that Ms. Nzirubusa’s attorney called four
witnesses, including Mr. Soheilinia., and that the
witnesses were cross-examined by his attorney. At the
conclusion of the plaintiff’s proof, the dealer’s attorney
moved the court to dismiss the complaint pursuant to Rule
41 of the Tennessee Rules of Civil Procedure. The ground
for his motion was that the complaint was time-barred by
the statute of limitations. After hearing arguments on the
question from both sides, the trial court dismissed the
motion.

THE COURT: The court denies your motion to dismiss. The
Court is of the opinion that this was a continuing breach.
Do you want to argue it anymore?

MR. MOSELEY SR.: Are you saying continuing breach of the
contract?

THE COURT: Right

MOSELEY: No.

The court then explained its reasoning, and in doing so it
announced the disposition it intended to make on the case as
a whole. The attorney did not offer to call any defense
witnesses or otherwise indicate an objection to the court
entering judgment. After a brief discussion as to a piece
of evidence that had been misplaced, the court adjourned.

Rule 41.02(2) of the Tennessee Rules of Civil Procedure,
which governs involuntary dismissals, provides:

After the plaintiff, in an action tried by the court
without a jury, has completed the presentation of
plaintiff’s evidence, the defendant, without waiving the
right to offer evidence in the event the motion is not
granted, may move for dismissal on the ground that upon
the facts and the law the plaintiff has shown no right to
relief. The court shall reserve ruling until all parties
alleging fault against any other party have presented
their respective proof-in-chief. The court as trier of the
facts may then determine them and render judgment against
the plaintiff or may decline to render any judgment until
the close of all the evidence; in the event judgment is
rendered at the close of plaintiff’s evidence, the court
shall make findings of fact if requested in writing within
three (3) days after the announcement of the court’s
decision.

The Advisory Commission Comments regarding that paragraph
make it clear that these provisions were designed to
eliminate the prior rule in chancery cases to the effect
that a defendant could not move for dismissal at the end of
the complainant’s proof without resting his case and
waiving his right to offer evidence.

Thus, under Rule 41.02, the auto dealer’s attorney could
have objected to the trial court’s determination of the
ultimate question as premature and requested the
opportunity to put on his own proof. He did neither.

Rule 36(a) of the Tennessee Rules of Appellate Procedure
authorizes our appellate courts to grant to parties
whatever relief the law entitles them to under the facts of
each case. The rule goes on to say that “[n]othing in this
rule shall be construed as requiring relief to be granted
to a party responsible for an error or who failed to take
whatever action was reasonably available to prevent or
nullify the harmful effect of an error.” Thus, even if the
trial court erred by not explicitly inviting the attorney
to present his proof, any such error could have been
corrected by timely bringing it to the court’s attention.
Pursuant to Rule 36(a), we decline to grant any relief.

V.

The judgment of the trial court is affirmed. We remand
this case to the Circuit Court of Davidson County. Costs of
this appeal are assessed against the appellant, Farhad
Soheilinia.

[fn1] Additionally, it is a Class C misdemeanor for any
person to fail or neglect to properly endorse or deliver
any certificate of title to the person lawfully entitled to
it. Tenn. Code Ann. § 55-3-127.

[fn2] The Complaint alleged that the defendants’ actions
constituted both breach of contract and breach of warranty
of title.