David A. Flynn, Inc. v. General Motors Acceptance Corp.

345 F. App'x 974
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 24, 2009
Docket08-3815
StatusUnpublished
Cited by2 cases

This text of 345 F. App'x 974 (David A. Flynn, Inc. v. General Motors Acceptance Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
David A. Flynn, Inc. v. General Motors Acceptance Corp., 345 F. App'x 974 (6th Cir. 2009).

Opinion

OPINION

FRIEDMAN, Circuit Judge.

The appellant David A. Flynn, who recently had purchased a General Motors truck dealership, filed suit in the district court against General Motors Acceptance Corporation (“GMAC”), General Motors’ financial arm and a secured creditor of the dealership. It sought damages for GMAC’s alleged failure to disclose to him all the facts it knew about odometer tampering on used trucks the dealership had sold. The district court granted summary judgment for GMAC and dismissed Flynn’s suit, holding that the undisputed facts before it showed that GMAC disclosed to Flynn what it was aware of about odometer tampering. We AFFIRM.

I

A. In the fall of 2003 Flynn, an experienced businessman who had previously been involved in automotive dealerships, began considering the purchase of Midway Motors Sales (“Midway”), a General Motors truck dealership owned by the Mer-cure brothers. In April 2004, he executed an agreement with the brothers to purchase Midway.

Before closing on the transaction, Flynn heard rumors from several sources of odometer tampering at Midway. On May 26, 2004, Flynn told Midway’s service manager that he was “ ‘concerned about rumors flying around that Mercure is going to get indicted for odometer fraud state and federally.’ ” The service manager told him that “ ‘It’s true,’ ” and that Mercure had actually rolled back the odometers. When Flynn later asked one of the brothers about the matter, the latter denied any odometer tampering.

On the same day Flynn spoke with the Midway service manager, he also spoke to four GMAC employees by telephone. He surreptitiously recorded those conversations.

The first employee he called, Robert Fabian, told him that he, too, had heard the same rumors of odometer tampering at Midway, but that he did not have direct *976 personal knowledge whether it had occurred. Fabian referred Flynn to Steve Hidell, who told Flynn that he was aware of the rumors, and that GMAC had begun an investigation of the matter. Apart from his reference to the rumors and GMAC’s ongoing investigation, Hidell stated that he was otherwise “out of the loop” and had no further factual information.

Hidell referred Flynn to his boss, Chapman, who also said that he had heard rumors about odometer tampering at Midway. Chapman also told him that a lawsuit had been filed in Michigan against Midway and GMAC in connection with an alleged odometer rollback, and suggested that he look into it.

Later that day Anita Bhama, an attorney at GMAC, called Flynn. She confirmed that the aforementioned lawsuit had been filed. She told him that GMAC had concerns about odometer rollbacks at Midway, that GMAC had reported the matter to law enforcement authorities and that the company was cooperating in that investigation.

Flynn closed on the acquisition on May 28, 2004. Before doing so, he did not discuss the proposed acquisition with his controller because he knew that, in light of the rumored odometer tampering, “ ‘he’d [the controller] say don’t do the deal.’”

B. Flynn filed the present diversity suit against GMAC in the United States District Court for the Northern District of Ohio. Flynn’s amended complaint contained five claims: for negligence, fraud, negligent misrepresentation, intentional misrepresentation, and breach of fiduciary duty.

The district court granted summary judgment for GMAC and dismissed the complaint. It held that Flynn had produced no evidence that GMAC made false statements or misrepresentations, and that GMAC was under no duty to disclose additional information. In its order denying reconsideration, the court stated that the depositions of the four GMAC employees Flynn had spoken to on May 26, 2004 “revealed that GMAC did not have definitive evidence of odometer tampering and that its employees had provided accurate information to Flynn.”

II

The record fully supports the district court’s factual determination that GMAC did not make any false or misleading statements and that it did not breach a “duty to refrain from making false or misleading statements when inquiry was made by Flynn.” (Memorandum of Opinion, RE # 23, p. 5). At most, the evidence showed that GMAC had a “suspicion” or had heard rumors, but not that it had definitive knowledge that there had been odometer tampering at Midway. Because of a lack of evidence that the four GMAC employees that Flynn spoke with on May 26, 2004 had actual knowledge that Midway had tampered with odometers, all of Flynn’s causes of action, which depended on such knowledge by GMAC, fail.

Flynn contends that Bhama’s deposition testimony that GMAC had “documentary evidence” of rollbacks shows that she had more than “mere suspicion” when she spoke to Flynn. He relies on the following exchange during her deposition:

Q. On the date you spoke with Mr. Flynn, did you have actual knowledge there had been odometer tampering by Midway Motors with respect to the Modern Builder Supply [a Midway customer] vehicle?
*977 A. We had suspicions of it.... In the few months preceding that conversation, GMAC had discussed with Midway and Modern Builder Supply concerns about odometer tampering, based on documentary evidence that suggested that odometer tampering had occurred. Do I have actual knowledge personally? No.

The “documentary evidence” to which she referred related to GMAC’s “suspicion” of “odometer tampering” and did not constitute “documentary evidence” of rollbacks, as Flynn contends. She stated unequivocally “No” to the question whether she had “actual knowledge personally” of tampering.

In his brief Flynn relies on and quotes from a deposition given by another GMAC employee, Jerry Galvin, in a different case, Midway’s subsequent bankruptcy proceeding. That document is not part of record in this case and we therefore do not consider it. We decide appeals on the basis of the record in the ease before us, not on the basis of the record in some other case. It was most inappropriate for Flynn and his counsel to rely on the Galvin deposition.

Flynn asserts a claim for negligent misrepresentation, which he alleges GMAC committed when, in the language of the district court denying that claim, it failed “to disclose the full breadth of its investigation of the odometer fraud.” Under Ohio law defining that claim,

[o]ne who, in the course of his business, profession, or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in then-business transactions ... is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

Andersons, Inc. v. Consol., Inc., 348 F.3d 496, 505-06 (6th Cir.2003) (quoting Delman v. City of Cleveland Heights, 41 Ohio St.3d 1, 534 N.E.2d 835, 838 (Ohio 1989)).

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345 F. App'x 974, Counsel Stack Legal Research, https://law.counselstack.com/opinion/david-a-flynn-inc-v-general-motors-acceptance-corp-ca6-2009.