### FILED May 21, 1999 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

MIKE HAR VEY , on behalf of himself ) C/A NO. 03A01-9807-CV-00235 and all others

similarl y situat ed, )

) ROAN E CIRC UIT Plaintiff-A ppellant, ) ) RUS SELL SIMM ONS , JR., v. ) JUDGE ) FORD MOTOR CREDI T COMPANY, ) AFFIRMED

) AND Defendant-Appellee. ) REMANDED

GOR DON BAL L, Knox ville, for Plaintif f-Appe llant. STEVEN D. LIPSEY, STONE & HINDS, P.C., Knoxvill e, and THOMAS M. BYRNE and

DANIEL H. SCHLUETER, SUTHERLAND, ASBILL & B RENNAN, LLP, Atlanta, for Defendant -Appellee. PAUL G. SUM MERS, Tennessee Attorney General and Repor ter, and TIMOTHY C. PHILLIPS, Assistant Att orney General,Nashville, Amicus Curi ae for the State of Tennesse

e.

O P I N I O N Franks, J.

Appellant filed his complaint designated a class action, al

leging that Ford Moto r Credit Compa ny (“Ford Credit”) engag ed in a scheme w ith Ford dealers to mislead consumers

and conceal the pract

ice of dealer r

eserve. The complaint initial ly all eged two causes of action based on Ford Credit’s violation of t

he Tennessee Consumer Protecti on Act (“TCPA”) and unjust enrichment . The Trial2

Court conditional

ly cert ified the reque sted class of cons umers, but subsequent

ly set aside th at order

.

Appe llant pur chased a used v an at a F ord dea ler in H arriman in 1996

. The dea ler arranged financing for the veh icle through appellee, Fo rd Moto r Credit Comp any, and acco rding to the c omplaint, ap pellant wa s unawa re that the intere st rate he rece ived inc luded n ot only Fo rd Cred it’s regu lar rate, b ut an ad ditional percen tage. A portion of the ad ditional interest rate is generally payable to the dealer by Ford Credit. T his prac tice is co mmo nly know n as “de aler rese rve”.

Appellant subsequently amended his Complaint to include a third cause of action for ci

vil conspira

cy. Responding t

o Ford Credit’s Motion t o Dismiss, the Trial Court dismissed the Amended Complaint, hol ding (1) that

the Amended Complaint failed t

o comply with Tenn.R.Ci v.P. 9.02; (2) that rel

iance was a required element under the T. C.P.A. which had not been plea d; (3) that

the unjust enr

ichment claim was invalid since the basi s of the parties’ relati onship was a written cont ract; (4) that the conspi

racy clai m could not stand because appellant had not

alleged any unlawful or tort

ious act. Appellant has appealed t he dismissal of t

he T.C.P.A. and consp iracy cl aims,

but ha s not

appea led t he dismiss al of

the un just enri chment

clai m. Under T.R.C.P. §12.02(6) , we are required t o construe the compla

int liberally in f avor of the plain tiff, takin g all alleg ations a s true. Sullivant v. Americana Hom es, Inc., 605 S.W.2d 246 (Tenn.App. 1980). A complai nt should not be dismissed for fai

lure to sta

te a claim unles s it appears bey ond doubt that the pl

aintiff can prove no set of facts in support of t he claim that would ent itle him or her

to relief. Id. The appellee argues t hat T.C.P.A. is

not applicable in this cas e. The appellee contends

that its conduct is permit

ted by the fede

ral Truth in Lendi

ng Act (“T. I.L .A.” ), a

nd th at t he T. C.P. A., by i ts o wn terms,doesnot a pply . The

T.C. P.A.3

does not apply t

o “[a]cts or t

ransactions r

equired or speci

fically authorized under t

he laws administer

ed by, or rul

es and regulations promulgated by , any regul atory bodie s or offic ers actin g unde r the auth ority of this state or o f the U nited S tates.” T .C.A. § 47-18-111(a)(1).

Appellee insis ts that si

nce the disclosure portions of t he appellant’s

sales contract are gove

rned by the T.I .L.A., fail ure to disclose “dealer res erve” is not actionable. T his argum ent fails for tw o reasons. F irst, courts hav e generally

cons tru ed th

e preempt

ive s cope

of th e T.I .L. A narr

owly . The

T.I .L. A.’s

own preemptiv e provision s are narrow ly worded a nd were intended “ to extend o nly to specific st

ate disclosure requirements , in the int erest of preser

ving uniform methods of disclosure. ” Heastie v. Community Bank , 690 F.Su pp. 716, 72 0 (N.D. Ill., 19 88); See also 17 Am.Jur.2d Consumer Protection § 259 (1990). Second, t he appellant does not contend that t

he appellee fail

ed to comply with t

he T.I.L.A. Rather, he alleges t hat the appellee en gaged in a scheme to mislead co nsumers c oncerning the true natu re of their financing. In Heastie, the Court consider ed language under the I llinois Consumer Fraud Act identical

to the T.C.P.A.’ s exclusionary provision and concl

uded that compliance with the T. I.L.A. “should not be a complete defense t o allegati ons of fraudulent schemes. ” Id. at 721. This result is consi stent with a pr ivately reported decision of thi s Court, holding t hat a dealer’s

failure to di sclose “dealer reserve” was actiona ble wh en the d ealer en gaged in a patte rn of d eceptiv e cond uct. See Adkinson v. Harpeth Ford-Mercury, Inc. , 1991 WL 17177 (Tenn. App.) . Thus , app ell ee’sclai ms of compliance with the T. I.L.A. are not dispositi ve. The Trial Court deter

mined that “[a]s t

o any averment of fr

aud, the complain t must be dis missed fo r the plaintiff’s [appellan t’s] failure to state with particular

ity as r equired by Rule 9. 02 of the Tennessee Rules of Civi l Procedure.” Rule 9.02 requires that th e circumsta nces con stituting fraud must be p lead with4

particular

ity. The parties dis

pute whether this

requirement appl

ies to clai

ms under the T.C.P .A. Th is Cou rt has ap plied R ule 9.02 to claim s unde r the T.C .P.A. Humphries v. West End Terrace, Inc. , 795 S.W.2d 128 (Tenn.App. 1990). Other jurisdi ctions have also required that claims u nder state co nsumer p rotection acts be plead w ith specifi city. See e.g., Connick v. Suzuki Motor Co. , 675 N.E.2d 584 (Ill. 1996). Thus, the Ame nded C omplaint m ust be scrutin ized in light of these require ments. D espite Rule 9 .02' s par

tic ular ity requi remen ts, we must

dete rmine the s uffi cien cy of

the c lai ms in light o f Tenn .R.Civ .P. 8.01 's liberal p leading standa rds. Dobbs v. Guenther , 846 S.W.2 d 270 ( Tenn .App. 1 992).

The Amended Complaint essential ly all eges that the appe

llee and various Ford dealer

s violated t

he T.C.P.A. by mis leading consumers and misrepresenti

ng to them the pract

ice of “dealer r

eserve.” Although t

he Amended Complaint alleges

misrepresenta

tions by t he Ford dealer, i

t lists two principal act

ions by the appell

ee that could l

ink it to t he dealer’s conduct

or otherwise violate the T.C.P.A . First, the Am ended C omplaint sta tes that the app ellee has “q uoted its financing rate s in the national media and press. ” According to the Amended Complaint, the eff

ect of this adver

tising is to indicate

to consumers that

these rates “are fixed and not var

iable and that

each Ford Motor Company . . . dealer will make available t

o consumers precisel

y those rat

es which Ford Motor Credit quot es.” Nowhere in the Amended Complaint, however, does the appellant

allege that

he ever saw or heard any of these advertisements. Regardless of whether reliance is a required element und er the T.C.P.A., plaintiffs mu st at least allege that they were exposed to the offensive conduct. Thus, the Amended Com plaint fails to stat e a cause of action for thi s alleged violation.

The Amended Complaint also stat es that the appel

lee “through it

s dealer manuals and oth er policies and procedu res, instructs its dealers to inform custome rs5

that the quo ted Ford M otor Cred it rates are fixed and non -negotiable .” This claim also fails to alleg e any actionab le conduc t by the appellee . Although not entirely clear, the phra se “quoted Ford M otor Cred it rates” presum ably refers to the same retail rates alleged ly quoted by the a ppellee in its ad vertisemen ts. Althoug h the term c ould arguably me an the fina l rate quoted to the custom er by the dealer, th at meanin g would be inconsiste

nt with language i

n the section of t

he Amended Complaint describing t he appelle e’s adv ertising.

Whether the appellee ’s rates ar e negotiable does not

affect the pract

ice of “dealer reser

ve.” According to t

he Amended Complaint, once the appel lee quotes the fixed ra te, the dealer a dds any add itional percen tage. Thus , there is nothin g unfair or deceptive about

the appellee “fi

xing” its quot

ed rates. I

n fact, if t

he appellee instructs dealers to i

nform customers that

the appellee’ s rates are fixed and nonnegotiable, this inst

ruction would bett

er inform customers

about the practi

ce of dealer reserve. Customers would realize t hat the final

rate quoted by

the dealer was higher than the appell

ee’s rate. Although the Amended Complaint all eges that the dea

lers do not tell customers about the di sparity in financing, it does not recite any ac tions that could r ender th e appe llee liable for this a lleged m isrepres entation or non disclosu re. Thus, the a llegati on fa ils to s tat e a claim under

the T .C. P.A. The rem ainder of th e conduc t recited in the A mended Comp laint with appropriate spe

cificity refers to act

ions allegedl

y taken by

the Ford dealer. The dealer is not a part

y in thi s case and the Amended Complaint does not contend that t

he appellee sh ould be liab le for the de aler’s individu al conduc t. Thus, the co mplaint fails to state a claim against the appellee for T.C. P.A. violations. It ther efore fails t

o allege a consp iracy to vio late the T .C.P.A

.

We hold that the Tria

l Court correct

ly dismis sed the Amended Complaint, but we pret

ermit the is sue of whether reli ance is a requir ed element under6

the T.C.P.A. because we concl ude the complaint does

not otherwise st

ate a cause of action. Accordingly, we affirm the judgment of the Trial Court and remand with cost of the app eal assessed to the appe llant.

__________________________ Herschel P. Franks, J.

CONCUR:

___________________________ Houston M. Godd ard, P.J.

___________________________ William H. Inman, Sr.J.