Court Opinion

ID: 2982779
Source: CourtListenerOpinion
Date Created: 2015-09-22 20:35:34.104789+00
Date Added: 2024-06-11T15:00:47.581689
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 15a0151n.06

                                          No. 14-3585
                                                                                       FILED
                         UNITED STATES COURT OF APPEALS                          Feb 25, 2015
                              FOR THE SIXTH CIRCUIT                          DEBORAH S. HUNT, Clerk

ZACHARY LESTER, et al.,                         )
                                                )
       Plaintiffs-Appellants,                   )
                                                )
v.                                              )    ON APPEAL FROM THE UNITED
                                                )    STATES DISTRICT COURT FOR THE
WOW CAR COMPANY, LTD., et al.,                  )    SOUTHERN DISTRICT OF OHIO
                                                )
       Defendants-Appellees.                    )

       BEFORE: BOGGS and McKEAGUE, Circuit Judges; PEARSON, District Judge.*

       PER CURIAM. Zachary Lester and Brandi Lester (“Plaintiffs”) appeal the district

court’s orders (1) denying in part Plaintiffs’ motion for leave to file second amended complaint,

(2) denying Plaintiffs’ motion for adverse inference and sanctions, and (3) granting summary

judgment in favor of Amy Hartzler d/b/a Wow Car Company, Wow Car Company, Ltd., Max R.

Erwin, Sr. dba Wow Car Company, Mid-Ohio Motor Funding Group, Ltd., The Hartzler-Erwin

Group LLC, and Marmax Enterprises LLC (“Defendants”)1 in this action for breach of the

implied warranty of merchantability; breach of express warranty; violations of the federal Truth

in Lending Act (“TILA”), 15 U.S.C. '' 1601 et seq., the Ohio Consumer Sales Practices Act

(“OCSPA”), Ohio Rev. Code '' 1345.01 et seq., and the Ohio Deceptive Trade Practices Act

       *
          The Honorable Benita Y. Pearson, United States District Judge for the Northern
District of Ohio, sitting by designation.
       1
         Max R. Erwin, Sr. dba Wow Car Company, Mid-Ohio Motor Funding Group, LTD,
The Hartzler-Erwin Group LLC, and Marmax Enterprises LLC are hereinafter referred to as the
New Defendants.
No. 14-3585 Lester, et al. v. Wow Car Co., et al.

(“ODTPA”), Ohio Rev. Code '' 4165.01 et seq.; and joint venture and successor liability. We

find no reversible error and AFFIRM the district court’s rulings.

       In March 2011, Plaintiffs purchased a used 2001 Toyota Celica (“the vehicle”), with over

123,000 miles on it, from Defendant Wow Car Company for $5,493.19. The Celica was sold “as

is,” and Defendant Wow Car Company expressly withdrew any implied warranties. Mr. Lester

testified that he knew Defendant Wow Car Company did not offer any warranties; so when Eric

Johnson, the Company’s finance manager, suggested that Plaintiffs purchase a service agreement

(“Vehicle Service Agreement” or “Warranty”) from Coast to Coast Dealer Services, Inc., they

did so. The cost of the warranty was $1,598.

       Plaintiffs returned to Defendant Wow Car Company with the Celica twice during the first

week they owned it complaining of leaking oil.         A representative of Wow Car Company

instructed Mr. Lester to keep oil in the Celica and offered to contact Coast to Coast Dealer

Services, Inc. for him.    The representative instructed Plaintiffs to take the Celica to their

preferred mechanic. Six days after purchasing the vehicle, the engine blew. Plaintiffs alleged

that they submitted a claim to Coast to Coast Dealer Services, Inc., but the claim was denied on

the basis that the engine failure was due to excessive oil consumption.

       On August 18, 2011, Plaintiffs filed the above-entitled action in the Knox County, Ohio

Court of Common Pleas against Wow Car Company, Ltd., Columbus Finance, Inc., and Coast to

Coast Dealer Services, Inc.2 On September 21, 2011, Defendants removed the case to the United

       2
         Coast to Coast Dealer Services, Inc. was dismissed in the May 16, 2012 Opinion and
Order entered by the district court.

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No. 14-3585 Lester, et al. v. Wow Car Co., et al.

States District Court for the Southern District of Ohio pursuant to 28 U.S.C. '' 1331, 1441, and

1446.

        In July 2012, Plaintiffs, through new counsel, filed an amended complaint against Amy

Hartzler dba Wow Car Company, Wow Car Company, Ltd., and Columbus Finance, Inc. 3 The

amended complaint included a TILA disclosure claim for the first time.

        On June 14, 2013, Plaintiffs filed a motion for leave to file a second amended complaint.

Plaintiffs proposed to add four new defendants—Max R. Erwin, Sr. dba Wow Car Company,

Mid-Ohio Motor Funding Group, Ltd., The Hartzler-Erwin Group LLC, and Marmax Enterprises

LLC—all of whom, Plaintiffs asserted, were associated in some way with either Amy Hartzler or

Wow Car Company. In addition, Plaintiffs sought to add TILA and OCSPA violations and raise

an alter ego theory of liability. On August 12, 2013, the magistrate judge entered an Opinion and

Order that stated, in relevant part:

        … the Court concludes the following. First, any TILA or OSCPA claims which the
        Lesters wish to assert directly against the four proposed new defendants do not relate
        back to the original filing date and would be barred by the statute of limitations. Second,
        the Lesters should be permitted to assert an alter ego claim against the four proposed new
        defendants, but without prejudice to those defendants’ ability to move to dismiss that
        claim. Third, the Lesters should be permitted to re-plead their TILA claim against Ms.
        Hartzler, again without prejudice to her ability to re-file her motion to dismiss that claim.
        The Lesters shall file a second amended complaint in conformance with this order within
        fourteen days. The motion to amend (Doc. 68) is granted in part and denied in part as set
        forth in this Opinion and Order.

R. 78 at Page ID # 557-58. The Opinion and Order provides an extensive, detailed analysis of the state

of the law in this circuit on the question of whether a claim asserted against a newly joined party

        3
       A settlement was reached with Columbus Finance, Inc. On February 1, 2013,
Columbus Finance, Inc. was dismissed by stipulation of the parties.

                                                 3
No. 14-3585 Lester, et al. v. Wow Car Co., et al.

“relates back” to the filing of the original complaint under Fed. R. Civ. P. 15(c). See Ham v. Sterling

Emergency Servs. of the Midwest, Inc., 575 F. App=x 610 (6th Cir. 2014) (holding that plaintiff’s

claims were not timely under Rule 15(c)’s relation-back rule).        Plaintiffs timely filed a limited

objection pursuant to 28 U.S.C. ' 636(b)(1)(A) and Fed. R. Civ. P. 72(a). They

       specifically contest[ed] that supplemental [OCSPA] claims brought against new
       defendant Max Erwin, Sr. would be barred by the statute of limitations, because the
       statute of limitations has not run on that supplemental claim, which the Magistrate
       [Judge] did not address.

R. 79 at Page ID # 560.

       On August 26, 2013, Plaintiffs filed a second amended complaint against Amy Hartzler d/b/a

Wow Car Company, Wow Car Company, Ltd., Max R. Erwin, Sr. dba Wow Car Company, Mid-Ohio

Motor Funding Group, LTD, The Hartzler-Erwin Group LLC, and Marmax Enterprises, LLC.

       In September 2013, Defendants filed a joint motion to dismiss certain claims in the second

amended complaint.        The motion requested, inter alia, that the district court dismiss the New

Defendants because they are not “alter egos” of Amy Hartzler dba Wow Car Company or Wow Car

Company, Ltd.

       On November 14, 2013, the district judge entered an Opinion and Order sustaining Plaintiffs’

limited objection and granting in part Defendant=s joint motion to dismiss. The Opinion and Order

provides, in pertinent part:

       In considering the circumstances sub judice, the Court finds that the Lester[s’]
       alter ego claims should be dismissed without prejudice to re-filing if the Lesters
       establish liability on behalf of the defendants against whom the remaining claims
       are filed in the instant action. Importantly, this case was filed over two years ago
       and is scheduled for trial on January 27, 2014. (Order Setting Trial Date and
       Settlement Conf.; ECF No. 62.) The parties have engaged in extensive discovery,
       which closed over five months ago. For the Lesters to pursue these alter ego

                                                4
No. 14-3585 Lester, et al. v. Wow Car Co., et al.

       claims, discovery would necessarily re-open. Further, as the defendants correctly
       note, the Lesters will suffer no prejudice because the [statute] of limitations on
       these derivative claims do[es] not begin to run until a plaintiff obtains a judgment
       and, in any event, the defendants agree to the tolling of the period if that were
       necessary. Finally, the defendants have stipulated “to preserving the banking
       records Plaintiffs have subpoenaed, should Plaintiffs ultimately obtain a judgment
       against Hartzler and decide to file a case against Erwin, Hartzler-Erwin, Marmax,
       Mid-Ohio and Wow Ltd seeking to establish derivative liability.” (Def. Reply at
       2; ECF No. 91.)

R. 94 at Page ID # 705.

       Thereafter, the parties filed cross-motions for summary judgment. Plaintiffs also filed a

motion for adverse inference and sanctions as a result of Amy Hartzler d/b/a Wow Car

Company’s alleged spoliation of evidence.

       On June 6, 2014, the district judge entered an Opinion and Order denying Plaintiffs’

motion for adverse inference and sanctions and granting summary judgment in favor of

Defendants. R. 140. The Clerk entered a Judgment in a Civil Case on the same day.

       Having had the benefit of oral argument, and after a careful review of the record and the

briefing of the issues raised by Plaintiffs on appeal, we are not persuaded that the district court

erred in denying in part Plaintiffs’ motion for leave to file second amended complaint, denying

Plaintiffs’ motion for adverse inference and sanctions, and granting summary judgment in favor

of Defendants. Because the reasons for the decisions have been fully articulated by the

magistrate judge and district court in their opinions entered on August 12, 2013, November 14,

2013, and June 6, 2014, the issuance of a detailed opinion by this court would be duplicative and

serve no useful purpose.

                                                5
No. 14-3585 Lester, et al. v. Wow Car Co., et al.

       Accordingly, we AFFIRM the district court’s orders (R. 78, R. 94, and R. 140) upon the

findings of fact and reasoning set out by that court in its opinions.

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