relies on the fact that it could not assign the RIC as its basis for cancelling the RIC.
(Memorandum at 2, 7; Reply at 4, 6). Rohr-Ville cannot have it both ways. Having
reviewed the RIC and the attached Rider, we resolve these inconsistencies as a matter
oflaw. See Shelby County State Bank v. Van Diest Supply Co., 303 F.3d 832, 835 (7th
Cir. 2002) (contract interpretation is a question of law).

Rohr-Ville both extended credit and sold the car to Plaintiffs pursuant to the
RIC. Both sides knew (at least constructively) that Rohr-Ville intended to assign (by
sale, transfer, or otherwise) the RIC to Household. The RIC was subject to a condition
subsequent in the Rider that allowed Rohr-Ville to cancel the RIC if it could not assign
the RIC to Household within five business days. Allegedly having been unable to
assign the RIC within the specified time period, Rohr-Ville cancelled the RIC and
asked Plaintiffs to return the car. Thus, Rohr-Ville did not deny Plaintiffs’ application
for credit; Rohr-Ville extended them credit and later revoked it. Additionally, Rohr-
Ville never assigned the RIC to Household; indeed it was Rohr-Ville’s alleged inability
to assign the RIC that permitted it to cancel the RIC.
IL Equal Credit Opportunity Act

In Count I, Plaintiffs allege violations of the Equal Credit Opportunity Act
(“ECOA”). The ECOA entitles applicants for credit to written notification of an

adverse action from a creditor and a statement of the reasons therefor. 15 U.S.C.

4.



advises the consumer of the name and address of the person to whom the

request was made, and such person makes the disclosures to the consumer

required under section 1681m of this title.
15 U.S.C. § 168 1a(d)(2)(C). In other words, Rohr-Ville’s decision to revoke Plaintiffs’
credit will be not be deemed to be based on a consumer report if it was based on
Household’s decision to not extend credit and if Household made the required FCRA
disclosures to Plaintiffs. Again, we are faced with the dilemma of not knowing
whether or not Household made any such disclosure to Plaintiffs. Here, unlike the
ECOA claim, however, Plaintiffs have stated a claim for which relief can be granted.
They allege that Rohr-Ville revoked their credit based on a consumer report. Rohr-
Ville counter-alleges that its decision to revoke Plaintiffs’ credit was based, not on a
consumer report, but on Household’s decision not to extend credit, Because this is a
motion to dismiss, we must accept Plaintiffs version of the facts. See Bontkowski, 998
F.2d at 461. Accordingly, Count II is not dismissed.
It, Illinois Commercial Code

In Count II, Plaintiffs allege that Rohr-Ville’s repossession of the car violated
several sections of the Illinois Commercial Code: 810 ILCS 5/9-609-612, 614-616,
621, and 623. None of those statutes, however, govern the alleged conduct. Article

9 of the Illinois Commercial Code governs secured transactions. 810 ILCS 5/9-101-

5/9-9902. Rohr-Ville did not repossess the car pursuant to a security interest.



LEGAL STANDARD

"The purpose of a motion to dismiss is to test the sufficiency of the complaint,
not to decide the merits." Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir.
1990) (quoting Triad Assocs., Inc. v. Chicago Hous. Auth., 892 F.2d 583, 586 (7th Cir.
1989)). A complaint need only specify “the bare minimum facts necessary to put the
defendant on notice of the claim so that he can file an answer.” Higgs v. Carver, 286
F.3d 437, 439 (7th Cir. 2002) (citing Beanstalk Group, Inc. v. AM General Corp., 283
F.3d 856, 863 (7th Cir. 2002)). A complaint should not be dismissed for failure to state
a claim “unless it appears beyond doubt that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41,
45-46 (1957). With these principles in mind, we now address the motion before us.

DISCUSSION

Before addressing the merits of Rohr-Ville’s motion to dismiss, we must first
clarify certain inconsistencies put forth by both sides. In the complaint, Plaintiffs
allege that Rohr-Ville denied their application for credit. (Complaint 4] 6-10).
Elsewhere in the complaint, Plaintiffs allege that Rohr-Ville actually extended them
credit but later revoked it. (Complaint {{ 1, 14-15), Plaintiffs cannot have it both
ways. In its briefs, Rohr-Ville sometimes states that the RIC was assigned to

Household. (Memorandum at 4, 5; Reply at 4, 5-6). Elsewhere in its briefs, Rohr-Ville

3.


§ 1691(d)(2). Plaintiffs allege Rohr-Ville violated the ECOA when it revoked the
credit it allegedly extended them without providing the required written notification.
Rohr-Ville counters that it was merely a third party to the credit application process.
Specifically, Rohr-Ville states that it tried to obtain credit for Plaintiffs from
Household. The ECOA contemplates such an arrangement and provides:

Where a creditor has been requested by a third party to make a specific

extension of credit directly or indirectly to an applicant, the notification

and statement of reasons required by this subsection may be made directly

by such creditor, or indirectly through the third party, provided in either

case that the identity of the creditor is disclosed.
15 U.S.C. § 1691(d)(4). The complaint alleges that Rohr-Ville never gave written
notification but makes no mention as to whether they received written notification
directly from Household. The statute does not require Rohr-Ville to give the written
notification; it requires either Rohr-Ville or Household to give the written notification.
15 U.S.C. § 1691(d)(4). Thus, in order to state a cause of action, Plaintiffs must allege
the injury of not receiving written notification from either source. They did not do this.
Count I is dismissed without prejudice.
Il. Fair Credit Reporting Act

In Count II, Plaintiffs allege violations of the Fair Credit Reporting Act

(“FCRA”). The FCRA requires a person that “takes adverse action with respect to any

consumer that is based in whole or in part on any information contained in a consumer

5.



Rohr-Ville repossessed the car pursuant to its ownership interest. Rohr-Ville became
the owner of the vehicle when the RIC was cancelled pursuant to the condition
subsequent in the Rider. See Burns v. Elmhurst Auto Mall, Inc., 2001 WL 521840, at
*2-3 (N.D. Ill. May 16, 2001) (dismissing Illinois Commercial Code repossession
claims because auto dealer became owner of the vehicle at issue upon cancellation of
the governing retail installment contract due to the condition subsequent of dealer’s
inability to assign the retail installment contract to a financing entity). Accordingly,
Count III is dismissed with prejudice.
CONCLUSION

Based on the foregoing analysis, we grant the motion in part and deny it in part.
Count I is dismissed without prejudice. Plaintiffs are granted leave to amend Count I
within thirty days. If not amended within thirty days, the dismissal of Count I will

become with prejudice. Count III is dismissed with prejudice.

Charles P. Kocoras

Chief Judge
United States District Court
Dated; __ MAY:5.92003
-8-



‘Minute Order Form (0697)

United States District Court, Northern District of Illinois

Name of 3 Judge if Oth
or Magistrate Jodge Charles P, Kocoras nan Auired Judge
CASE NUMBER 02 C 7103 DATE 5/9/2003
CASE Brand et al vs. Rohr-Ville Motors, Inc.
TITLE
[In the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.)
DOCKET ENTRY:

(1) Oo Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

Q) ia} Answer brief to motion due__. Reply to answer briefdue___.

(4) Qo Ruling/Hearingon___setfor_____at__.

(5) a Status hearing set for 8/12/2003 at 9:30 A.M..

(6) Oo Pretrial conference[held/continued to] [set for/re-set for]on__——ssetfor_ at.
(7) o Trial[set for/re-set for]on at

(8) o [Bench/Jury trial] [Hearing] held/continuedto sat

(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) (OlLocal Rule 41.1 COFRCP41(a(1) CFRCP41(a)(2).

ao) [Other docket entry] Ruling held. ENTER MEMORANDUM OPINION; Defendant’s motion
(Doc 14-1) to dismiss is granted in part and denied in part. Count I is dismissed without prejudice. The
Court amends its Memorandum Opinion, in that plaintiffs are granted leave to amend Count I by May 23,
2003. If not amended by May 23, 2003, the dismissal of Count I will become with prejudice. Count II
is dismissed with prejudice. Defendant is given to June 6, 2003 to answer all pending counts. All
discovery to be completed by August 12, 2003.

al) @ [For further detail see order attached to the original minute order.]

No notices required, advised in open court.
No notices required. umber of notices
Notices mailed by judge's staff.
Notified counsel by telephone, date docketed
vo | Docketing to mail notices.
Mail AO 450 form. iunaa Loryisia sn docket initials
Copy EQ eernasisrate judge.
wo m Ohi h date mailed notice
scT deputy’s
initials — +
Daté/time received'in *
central Clerk's Office inaling deputy intinle



report” to provide notification of the decision and to disclose certain information
regarding the consumer reporting agency that issued the consumer report. 15 U.S.C.
§ 1681m(a).

Rohr-Ville argues that we should dismiss the FCRA claim pursuant to Treadway
v. Gateway Chevrolet, 2002 WL 554513 (N.D. Ill. April 12, 2002). In Treadway, the
court dismissed an FCRA claim because it found that the defendant itself (an

automobile dealer) did not use a consumer report while attempting to arrange financing
for the plaintiff consumer from a financing entity. Jd. The Treadway court specifically
noted that the plaintiff failed to allege that the dealer itself (as opposed to the financing
entity) relied on a credit report in denying her credit. Id. Unlike the plaintiff in
Treadway, however, Brand and Standifer do allege that Rohr-Ville itself relied on a
credit report when it revoked their credit. Additionally, unlike the dealer in Treadway
that only tried to arrange for financing for the consumer, Rohr-Ville actually extended
credit to Plaintiffs and then attempted to sell or otherwise assign the credit rights to
Household.

Rohr-Ville also relies on an exclusion in the FCRA as a basis to dismiss Count
II. The FCRA excludes from the definition of consumer report:

. .. any report in which a person who has been requested by a third party

to make a specific extension of credit directly or indirectly to a consumer
conveys his or her decision with respect to such request, if the third party

-6-


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
NIKKI BRAND and MICHAEL STANDIFER,
Plaintiffs,

)
)
)
)
vs. )  02C7103
)
ROHR-VILLE MOTORS, INC., )

)

)

Defendant.

MEMORANDUM OPINION
CHARLES P. KOCORAS, Chief District Judge:

This matter comes before the court on Defendant Rohr-Ville Motors, Inc.’s
(“Rohr-Ville”) motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).
For the reasons set forth below, we grant the motion in part and deny it in part.

BACKGROUND

Because this is a motion to dismiss, we accept all well pleaded facts and
allegations in the complaint as true and draw all reasonable inferences in a light most
favorable to Plaintiffs Nikki Brand and Michael Standifer. See Bonthowski v. First
Nat’l Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993). Plaintiffs purchased a Kia
Sephia automobile on credit from Rohr-Ville. Shortly thereafter Rohr-Ville allegedly

revoked their credit and repossessed the vehicle. Rohr-Ville allegedly never informed



Plaintiffs why specifically they were denied financing. Furthermore, Plaintiffs never
gave them any written notification regarding the denial of credit.

In the motion to dismiss, Rohr-Ville attaches a Retail Installment Contract
(“RIC”) and rider to the RIC (“Rider”), which were executed between Rohr-Ville and
Plaintiffs. The RIC governed Plaintiffs’ debt obligations and was intended to be
assigned to the financing entity, Household Automotive Finance (“Household”). The
Rider permitted Rohr-Ville to cancel the RIC if Rohr-Ville was unable to sell, transfer,
or otherwise negotiate the RIC to a third party financing entity (such as Household)
within five business days. The Rider further stated that, upon such cancellation of the
RIC and upon Rohr-Ville’s demand, Plaintiffs must return the car to Rohr-Ville. Rohr-
Ville alleges that it was unable to sell, transfer, or otherwise negotiate the RIC to
Household within five business days and so cancelled the RIC. Rohr-Ville further
alleges it demanded Plaintiffs return the car, but they did not. Thereafter, Rohr-Ville
repossessed the vehicle.

The complaint alleges three counts. Count I is an Equal Credit Opportunity Act
claim. 15 U.S.C. § 1691. Count II is a Fair Credit Reporting Act claim. 15 U.S.C.
§ 1681. Count Il is an Illinois Commercial Code claim. 810 ILCS 5/9-609-612,

614-16, 621, and 623. Rohr-Ville moves to dismiss the entire complaint.