registered on the odometer, or that the actual mileage is unknown if the transferor
knows that the odometer reading is different from the actual number of miles the car has
traveled. 49 U.S.C. § 32705. A plaintiff may recover under the Federal Odometer Act
if the transferor has failed to disclose the accurate mileage with the intent to defraud the
transferee. 49 U.S.C. § 32710. A transferor under this section is someone who
“transfers ownership of a motor vehicle by sale, gift, or any means other than by the
creation of a security interest, and any person who, as agent, signs an odometer
disclosure statement for the transferor.” 49 C.F.R. § 580.3. Thus, in order to prevail
under the Federal Odometer Act, the plaintiffmust show both a violation of the Act and
the intent to defraud. Jones v. Hanley Dawson Cadillac, 848 F.2d 803, 805-06 (7th Cir.

1988).

First, it is uncontroverted that Jojo and Lapite knew the odometer in the vehicle
it sold Decos was not working correctly. In her Requests for Admissions, Decos asked
them to admit that they knew the odometer reading was incorrect in August of 2000,
when they sold the vehicle to Decos. Req. for Adm., {| 7, 8. In addition, the Requests
asked for an admission that Lapite and Jojo certified the mileage as 138,411 and that
this was not the correct mileage at the time. Id., [{ 2-6. The Request was left
unanswered and is deemed admitted. Fed. R. Civ. P. 36(a). Furthermore, these factual
allegations also appeared in Decos’ Statement of Uncontested Facts, which are deemed
admitted “unless controverted by the opposing party.” L.R.56.1. The 56.1 statement
also includes a statement that Lapite’s sister was informed of the wiring problem and
declined repairs. Stmt. of Uncont. Facts, 19. Finally, Lapite is a transferor under the
act as alleged in Decos’ uncontested 56.1 Statement. Id., 10. Thus, Jojo and Lapite

conclusively admitted that Lapite is a transferor under the Act, that Lapite’s sister was

-4-


Unlike the Federal Odometer Act and the Illinois Vehicle Code, civil liability under

this section does not depend on the defendant’s intent to defraud. 15 U.S.C. § 16409(a).
Instead, the statute provides civil liability for any failure to comply with TILA
requirements. Id.

Again, Jojo and Lapite, by their unresponsiveness, have conceded several key
facts leading to liability. In her Requests for Admissions, Decos asked themto admit
that they “did not provide Tania Decos with the required Truth in Lending Disclosures
prior to the consummation of the sale in a form that she could keep.” { 13.
Additionally, in the Statement of Uncontested Facts, Decos asserted that the signing of
the retail installment contract consummated the transaction and that neither defendant
provided Decos with the disclosures in a form she could keep prior to the
consummation. ff] 25, 26. While it may be possible for a defendant to avoid civil
liability for a de minimis violation of the TILA, in factually similar situations courts
have specifically stated that the defendant’s violation was not de minimis. Floyd, 181
F. Supp. 2d at 1142. Regardless, Jojo and Lapite have not responded, and thus, their
violation of the Truth in Lending Act is established.

CONCLUSION

For the aforementionedreasons, Decos’ motion for summary judgmentis granted

Qari ? en

Charles P. Kocoras
United States District Judge

in its entirety.

Dated: April 17, 2002



court noted that the defendant had constructive knowledge that the mileage was in
excess of what he reported and was therefore civilly liable to the plaintiff. Id. The
court stated:

A transferor may not close his eyes to the truth. If a

transferor reasonably should have known that a vehicle’s

odometer reading was incorrect, although he did not know to

a certainty the transferee would be defrauded, a court may

infer that he understood the risk of such an occurrence...
Id. (quoting Nieto v. Pence, 578 F.2d 640, 642 (5th Cir. 1978)).

In this case, by not responding to either the Requests for Admissions or the
Statement of Uncontested Facts, Jojo and Lapite have admitted that they knew the
mileage was incorrect and certified it to Decos despite that knowledge. Neither Lapite
nor Jojo disputes that it had actual knowledge of the incorrect odometer reading. No
reasonable jury could infer that they did not have the intent to defraud; they admitted
that they knew the mileage on the car was incorrect. Stmt. of Uncont. Facts, { 15. In
addition, they admit that a faulty wiring problem was prohibiting the odometer from
working correctly and that Lapite’s sister took the car to Midway and was informed of
the problem but declined repairs. Id., [J 17, 18. Jojo and Lapite admit, in essence, that
they acted intentionally in certifying the inaccurate mileage report to Decos. Their
actions were in reckless disregard of the facts and amounted to an intentto defraud as
a matter of law. See Terry, 102 F. Supp. 2d at 663.

B. Illinois Vehicle Code

Decos next asks that we grant summary judgment on her second count under the

Illinois Vehicle Code. Section 5/3-112.1 of the Illinois Vehicle Code provides that

when executing a transfer of title, the form must provide, among other things, the actual

mileage at the time of transfer or that the mileage is not accurate. 625 ILCS 5/3-

-6-


informed of the wiring problem and declined repairs, and that they had actual
knowledge that the mileage was incorrect as certified. Under the Federal Odometer
Act, if the defendant knows that the odometer reading is incorrect, he must disclose that
the mileage is unknown. 49 U.S.C. § 32705. By knowingly disclosing an inaccurate
odometer reading, Lapite and Jojo have violated the Federal Odometer Act.

Second, Decos must show that the above violation was committed with the intent
to defraud. 49 U.S.C. § 32710; Hanley Dawson Cadillac, 848 F.2d at 805-06. All
reasonable inferences must be drawn in favor of the nonmovant; however, the court is
“not required to draw every conceivable inference from the record—only those
inferences that are reasonable.” Bank Leumi Le- Israel, B.M. v. Lee, 928 F.2d 232, 236
(7th Cir. 1991). Although mere negligence will not support an inference that the
defendant acted with the intent to defraud, a plaintiffmay recover when the defendant’s
actions were due to either, gross negligence or a reckless disregard for the facts. See
Haynes v. Manning, 917 F.2d 450, 453 (10th Cir. 1990) (indicating that the majority of
courts conclude that reckless disregard is enough to prove intent to defraud); Ray Kim
Ford v. Dolour Daoud, 750 F. Supp. 327, 327 (N.D. Til. 1990).

Despite the intent requirement, courts have granted summary judgment in favor
of plaintiffs under the Federal Odometer Act. For instance, in Terry v. Whitlock, the
defendant inaccurately reported the mileage on a car he sold to the plaintiff. 102 F.
Supp. 2d 661, 662 (W.D. Va. 2000). The mileage certification to the plaintiff was
inaccurate despite the fact that the defendant himself had filed two documents with the
state indicating the mileage at 100,000 miles higher. Id. The defendant argued that he
did not actually know that the car’s mileage was in excess of what he reported to the

plaintiff. Id. at 663. In granting the plaintiffs summary judgment motion, however, the

-5-


C. Truth in Lending Act

Finally, Decos asks that we grant summary judgment on her third count under the
Truth in Lending Act (“TILA”). The TILA requires, among other things, that a lender
in a consumer credit transaction disclose certain details of the terms of the financing
agreement. 15 U.S.C. § 1638(a). For instance, the creditor must disclose the amount
of money financed, the borrower’s right to obtain a written statement of the itemized
amount financed, and the finance charge. Id. The purpose of the TILA is to ensure that
consumers receive meaningful disclosures of credit terms to avoid uninformed use of
credit buying practices. 15 U.S.C. § 1601(a). To fulfill this purpose, the TILA requires
that consumers be informed of the terms of credit before the credit is extended. 15
U.S.C. § 1601(b); 12 C.F.R. § 226.17(b) (Regulation Z). This timing requires that the
lender disclose the terms before the borrower “becomes contractually obligated on a
credit transaction.” 12 C.F.R. § 226.2(a)(13). Additionally, the creditor must make the
disclosures “clearly and conspicuously inwriting, in a form the consumer may keep.”
12 C.F.R. § 226.17. A lender will not be civilly liable if a violation of the Act is done
unintentionally as a result of clerical error. 15 U.S.C. § 1640. Courts have found,

however, that failure to provide the disclosure in a form the borrower could keep is not

the kind of clerical error excepted under the statute. See Polk v. Crown Auto, Inc., 221
F.3d 691, 692 (4" Cir. 2000) (reversing summary judgment in favor of defendant and
granting judgment in favor of plaintiff when plaintiff was not given disclosures in form
that he could keep prior to the consummation of the transaction); Floyd v. Security
Finance Corp. of Nevada, 181 F. Supp. 2d 1137, 1143 (D. Nev. 2001) (granting

summary judgment in favor of plaintiff borrower who was not given disclosure of

financing terms in a form she could keep prior to the consummation of the transaction).

-8-


Minute Order Form (0697)

United States District Court, Northern District of [linois

Name of Assigned Judge Charles P. Kocoras Sitting Judge if Other
or Magistrate Judge . than Assigned Judge
CASE NUMBER 01 C 6646 DATE 4/17/2002
CASE Decos vs. Jojo Motors, Inc. et al
TITLE
[in the following box (a) indicate the party filing the motion, c.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.}
DOCKET ENTRY:
() o Filed motion of [ use listing in “Motion” box above.]
(2) Oo Brief in support of motion due
(3) o Answer brief to motion due. . Reply to answer brief due.
(4) im Ruling/Hearing on set for at
(5) aq Status hearing[held/continued to] [set for/re-set for] on set for at
(6) Oo Pretrial conference[held/continued to] [set for/re-set for] on set for at
(7) o Trial[set for/re-set for] on at
(8) o [Bench/Jury trial] [Hearing] held/continued to at
(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
CFRCP4(m) (General Rule 21 CFRCP41(a)(1) © FRCP41(a)(2).
qo) i [Other docket entry] Ruling held. ENTER MEMORANDUM OPINION: Decos’ motion (Doc
5-1) for summary judgment is granted in its entirety. Plaintiff to notice on the Court’s motion call, her
motion to award damages along with affidavits in support of such award. All other pending motions are
moot.
(il) @f [For further detail see order attached to the original minute order.]
No notices required, advised in open court.
No notices required. number of notices
Notices mailed by judge’s staff. .
. APR 1°8 2002
Notified counsel by telephone.
wv | Docketing to mail notices.
Mail AO 450 form. 7
Copy to judge/magistrate judge.
courtroom date mailed notice
SCT deputy’s
initials ar
Us Diteltime received in
central Clerk's Office ‘nailing deputy initials



112.1(b)(1). In addition, the transferee must sign the title form indicating that he is
aware of the odometer certification. 625 ILCS 5/3-112.1(c). A transferor is subject to
liability for a violation of any provision in the section with the intent to defraud. 625
ILCS 5/3-112.1(e). Liability under this section is determined in the same manner as
under the Federal Odometer Act. Buechin v. Ogden Chrysler-Plymouth, Inc., 511
N.E.2d 1330, 1339 (Il. App. Ct. 1987).

Again, by not responding to the Requests for Admissions or the Statement of

Uncontested Facts, Jojo and Lapitehave admitted several key facts. First, they admit
they knew the odometer was not working correctly and that the mileage reported on the
retail contract was not correct. Req. for Adm., J] 7-10. In addition, they admitted that
Decos did not sign the title form and that she did not see the title certificate prior to
purchasing the vehicle. Id., {ff 11-12. Finally, as mentioned above, they were aware
that Lapite’s sister took the car to Midway and that the car had a wiring problem
causing the odometer to malfunction. Stmt. of Uncont. Facts, J] 18-19.

In Buechin, the court noted that liability may be imposed when a defendant’s
statements are made “without reasonable grounds for belief in their truth.” 511 N.E.2d
at 1339. Even drawing all inferences in favor of the nonmovant, it is clear that Jojo and
Lapite made statements without reasonable belief in their truth because they had actual
knowledge that the certification was incorrect. In addition, prohibiting Decos from
signing the title form is a second violation of the Illinois Vehicle Code. As with the
previous count, no reasonable jury could infer that Jojo and Lapite acted without the

intent to defraud; liability also lies under the Illinois Vehicle Code.


is not sufficient to oppose summary judgment. Tolle v. Carroll Touch, Inc., 23 F.3d

174, 178 (7th Cir. 1994), All facts included in the movant’s statement of material facts,
as required under Local Rule 56.1, will be deemed admitted if not controverted by the
opposing party in a responding statement. L.R. 56.1(b)(3).

Furthermore, Federal Rule of Civil Procedure 36 allows a party to serve written
requests for admission upon another party. If the opposing party does not respond or
object to the requests to admit within thirty days, the matter is deemed admitted. Fed.
R. Civ. P. 36(a). Any matter that is admitted is conclusively established unless the court
grants a motion to withdraw or amend the admission by the opposing party. Fed. R.
Civ. P. 36(b). The purpose of the rule is to narrow the issues at trial by identifying and

eliminating the issues on which the parties agree. United States v. Kasuboski, 834 F.2d
1345, 1350 (7th Cir. 1987). Rule 36 allows parties to request admissions on a wide
range of fact and law, including applications of fact to law and ultimate facts. In re
Carney, 258 F.3d 415, 419 (Sth Cir. 2001). Moreover, default admissions under Rule
36 may form the basis for a summary judgment. Kasuboski, 834 F.2d at 1350. While
recognizing the potentially harsh result of this rule, the Seventh Circuit has also
recognized its necessity. Id. Decos served Jojo and Lapite with Requests for
Admissions on January 7, 2002. Answers were due within thirty days of that date in
order to avoid default admissions. They have not answered the request; the facts
contained within the requests are deemed admitted. Fed. R. Civ. P. 36(a).
DISCUSSION

A. Federal Odometer Act

Under the Motor Vehicle Information and Cost Savings Act (“Federal Odometer

Act”), a transferor of a vehicle is required to disclose either the cumulative mileage

-3-


was not 138,411 at the time Decos bought it, and Decos was not notified that the
displayed mileage was incorrect. In addition, Decos was not given a copy ofthe title
certificate before the sale was completed. Furthermore, Jojo did not provide Decos with
a statement of the lending terms before the completion of the transaction in a form she
could keep.

Approximately two months after purchasing the vehicle, Decos began having
transmission problems and brought the car to Midway. Midway examined the car and
indicated that there was a faulty wiring problem. The faulty wiring prevented the
odometer from accurately recording the mileage. Midway reported to Decos that the
actual mileage was 190,563, that the car had been examined by Midway in June, and
that the person who brought the car in during June declined repairs.

Decos filed a three-count complaint against both Jojo and Lapite, alleging
violations of the Federal Odometer Act (49 U.S.C. § 32701 et seq.), the Illinois Vehicle
Code (625 ILCS 5/3-112.1), and the Truth in Lending Act (15 U.S.C. § 1601 et seq.).

LEGAL STANDARD

Summary judgment is appropriate if the pleadings, depositions, interrogatories,
admissions on file, and any affidavits show that no genuine issue of material fact exists
and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).
A genuine issue of material fact exists only when there is “sufficient evidence favoring
the nonmoving party for a reasonable jury to return a verdict.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249 (1986). Once a motion for summary judgment has been
made, the opposing party must “set forth specific facts showing that there is a genuine
issue for trial.” Fed. R. Civ. P. 56(e). Although reasonable inferences will be drawn

in favor of the non-movant, a scintilla of evidence in favor of the non-movant’sposition

-2-


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

APR 1 8 2092

EASTERN DIVISION
TANIA DECOS, )
Plaintiff, ;
vs. 01 C 6646 DocKE TED
JOJO MOTORS, INC., and )
TETEOLA LAPITE, )
Defendants. }

MEMORANDUM OPINION

CHARLES P. KOCORAS, District Judge:

Before the court is a motion for summary judgment brought by Plaintiff Tania
Decos. For the following reasons, the motion is granted.

BACKGROUND

Pursuant to Rule 36 of the Federal Rules of Civil Procedure and Local Rule 56.1,
the following facts are uncontested. Defendant Jojo Motors (“Jojo”) purchased a 1994
Dodge Intrepid (vehicle identification number 2B3ED4GTORH16621 1) atauction in
April 2000. Defendant Teteola Lapite (“Lapite”) is the sole owner and president of Jojo
Motors. At the time the car was purchased, its odometer reading was 138,200. While
Jojo had ownership of the vehicle, Lapite’s sister took the vehicle to Midway Dodge
(“Midway”). She was informed of wiring problems that inhibited the odometer from
working correctly and declined repairs. Lapite and Jojo knew that the odometer was not
working correctly. In August, Plaintiff Tania Decos (“Decos”) purchased the car from
Jojo. Jojo certified the mileage as 138,411 on the retail installment contract. Lapite

signed the contract certifying the mileage on the car. The correct mileage on the car