Frazier v. Castle Ford, Ltd.

WOODWARD, J. On July 27, 2007, appellant and cross-appellee, Anthony M. Frazier, filed a class action suit in the Circuit Court for Montgomery County alleging that appellee and cross-appellant, Castle Ford, Ltd. f/k/a Crystal Ford Isuzu, Ltd. (“Crystal Ford”) 1 , fraudulently misrepresented the start and end dates of certain extended automobile warranties sold by Crystal Ford. Crystal Ford filed a motion to deny class action certification and a motion for summary judgment on November 13, 2007, and Frazier filed a motion to compel discovery on November 26, 2007. After a hearing on the parties’ motions on February 7, 2008, the circuit court (Bernard, J.) rendered an oral opinion on February 20, 2008, in which the court denied Frazier’s motion to compel discovery, granted Crystal ²⁸⁹ Ford’s motion to deny class action certification, and granted in part Crystal Ford’s motion for summary judgment, leaving outstanding Frazier’s request for attorney’s fees. By order dated September 15, 2008, the circuit court (Dugan, J.) awarded Frazier $20,950.52 in attorney’s fees, which represented the fees incurred by Frazier for the entire litigation.

Frazier appeals from the February 20, 2008 orders of the circuit court and presents three questions for our review, which we have rephrased and reordered as follows: I. Did the circuit court err in granting Crystal Ford’s motion for summary judgment?

II

Did the circuit court err in granting Crystal Ford’s motion to deny class action certification?

III

Did the circuit court abuse its discretion in denying Frazier’s motion to compel discovery? 2 Because we answer the first two questions in the negative, Frazier’s third question is rendered moot. Crystal Ford cross-appeals from the September 15, 2008 order of the circuit court and presents one question for our review, which we have slightly rephrased: Did the circuit court abuse its discretion in awarding Frazier the attorney’s fees and costs incurred for the entire litigation? We answer this question in the negative. Accordingly, we shall affirm the judgment of the circuit court. ²⁹⁰ BACKGROUND On December 23, 2004, Frazier came to Crystal Ford’s dealership in Silver Spring, Maryland to purchase an extended warranty for his 2003 Ford Explorer.

Frazier spoke with Tiana Robbins, a finance manager for Crystal Ford. In processing the sales transaction for a Ford Premium Care Extended Service Plan, Robbins received the relevant information from Frazier and entered it into Crystal Ford’s computer. Robbins altered the computer generated form to reflect that the extended warranty coverage would expire on December 31, 2008, a duration of approximately four years, or at 100,000 miles. Robbins also informed Frazier that his extended warranty would be honored until December 31, 2008.

Frazier signed the extended warranty contract, tendered a down payment, and financed the balance of 'the $1,700 purchase price. In November of 2006, Frazier brought his Ford Explorer into another Ford dealership for warranty repairs. Frazier was notified, however, that his extended warranty had expired on October 30, 2006. Upon contacting Ford representatives for assistance, Frazier was advised that Crystal Ford provided an incorrect expiration date for his warranty coverage.

Frazier then discussed the matter with Robbins, who informed him that the discrepancy was a result of improperly calculating the duration of the extended warranty. Robbins stated that the four year warranty coverage period did not begin on the purchase date of December 23, 2004, but related back to the “build date” of Frazier’s Explorer, which was October 30, 2002. Robbins told Frazier that his only option was to purchase a new extended warranty, which he declined to do. As a result, Frazier had to pay $552.99 out of his own pocket for the warranty repairs.

When Frazier’s attempts to have Crystal Ford honor the warranty contract proved unsuccessful, he retained counsel. On July 13, 2007, Frazier’s attorney -wrote a certified letter to Crystal Ford seeking compensation for the repairs covered by the warranty as represented by Robbins. "When his demand ²⁹¹ went unanswered, Frazier filed a class action suit on July 27, 2007, alleging that Crystal Ford’s misrepresentation of the coverage period, which Frazier claimed was made to “several hundreds” of other purchasers of similar extended warranties, constituted a deceptive trade practice under the Consumer Protection Act and fraud. Frazier sought compensatory damages, punitive damages, attorney’s fees, and declaratory and injunctive relief for himself and members of the putative class.

In August 2007, Crystal Ford paid to extend Frazier’s warranty to the originally specified date of December 31, 2008, and the Ford warranty company issued a check for the warranty repairs to Frazier’s Explorer, less a $100 deductible. On October 18, 2007, counsel for Crystal Ford sent a letter to Frazier’s attorney confirming the warranty extension and reimbursement of Frazier’s payment for the warranty repairs. On November 13, 2007, Crystal Ford filed a motion to deny class action certification and a motion for summary judgment. Meanwhile, Frazier filed a motion seeking discovery of, among other things, Crystal Ford’s past lawsuits, Crystal Ford’s income, and information on all previous extended warranties sold by Crystal Ford, including the names of the purchasers of these warranties.

On February 7, 2008, the circuit court held a hearing on Frazier’s and Crystal Ford’s motions, the Honorable Marielsa Bernard presiding. Frazier conceded that Crystal Ford gave him the relief requested in his complaint, with the exception of attorney’s fees, by extending the warranty through December 31, 2008, and securing reimbursement for the warranty repairs, but argued that additional discovery was necessary to show that Crystal Ford consistently misstated the start and end dates of the warranty coverage to numerous other customers, as well as to support an award of punitive damages. Frazier maintained that (1) the alleged fraud Crystal Ford perpetuated on purchasers of extended warranties presented common issues of reliance and damages appropriate for class action treatment; (2) any motion to deny such certification would be premature; and (3) Crystal Ford was attempting to ²⁹² prevent class action certification by satisfying Frazier’s individual claims. Crystal Ford recognized that Robbins incorrectly determined the duration of the extended warranties, but stated that it had begun to remedy the problem by rewriting the warranty contracts with Ford to conform with the warranty start date inserted into its customers’ contracts. 3 At the conclusion of the hearing, the court held the parties’ motions sub curia.

On February 20, 2008, the circuit court, in an oral opinion, granted Crystal Ford’s motion to deny class action certification on the grounds that, because Frazier had been made whole by the extension of the warranty and reimbursement of the warranty repairs, he no longer had an interest to act on behalf of a class. As a result, Frazier’s motion to compel discovery was denied. Lastly, because Frazier received the relief he requested, the circuit court determined that Frazier’s suit was moot and thus Crystal Ford was entitled to summary judgment on all issues except the issue of attorney’s fees. On September 3, 2008, a hearing to decide Frazier’s request for attorney’s fees was held before the Honorable Joseph Dugan, Jr. Frazier argued that he was entitled to the entirety of his legal fees due to the results achieved by the efforts of his counsel: Frazier received the relief he sought and Crystal Ford remedied the warranty contracts of similarly situated customers.

Crystal Ford countered that, if the court decided an award of attorney’s fees was appropriate, it should be limited to only the amount necessary to secure Frazier’s relief, and not for any additional fees incurred on behalf of a denied class. After hearing argument, the trial court applied the factors discussed in this Court’s opinion in Blaylock v. Johns Hopkins Federal Credit Union, 152 Md.App. 338 , 831 A.2d 1120 (2003), and awarded $20,950.52 in counsel fees, which was ²⁹³ the entire amount sought by Frazier. On September 15, 2008, the court signed a written order consistent with the court’s decision. Timely notices of appeal and cross appeal were filed.

Additional facts will be set forth below as necessary to resolve the questions presented. DISCUSSION I. Did the circuit court err in granting Crystal Ford’s motion for summary judgment? Frazier argues that the circuit court improperly based its grant of Crystal Ford’s motion for summary judgment on the ground that Frazier was not entitled as a matter of law to injunctive relief and punitive damages. Specifically, Frazier contends that his claim for injunctive relief was not rendered moot by Crystal Ford’s extension of Frazier’s warranty and reimbursement of his payment for warranty repairs.

According to Frazier, there was also a dispute of material fact regarding whether Robbins’ conduct constituted “knowing and deliberate wrongdoing,” which would support an award of punitive damages. (Quotations omitted). Crystal Ford responds that the circuit court correctly held that it was entitled to summary judgment, because Frazier could not prove any injury. Specifically, Crystal Ford argues that in order to recover on a claim of fraud or deceptive trade practice, a plaintiff must prove actual injury or loss.

Crystal Ford claims that the alleged injury that Frazier sustained was rectified when Frazier was reimbursed for the warranty repairs and his warranty coverage was extended to December 31, 2008. Thus, according to Crystal Ford, Frazier cannot prove an essential element of his individual claims — actual injury. Moreover, Crystal Ford argues that Frazier’s claims for punitive damages and injunctive relief are “irrelevant,” because as measures of damages they cannot be recovered ²⁹⁴ unless the predicate to recovery — actual injury — has been proven. Crystal Ford also contends that there is insufficient evidence in the record to create a genuine dispute of material fact regarding the existence of actual malice, which is necessary to support an award of punitive damages.

In particular, Crystal Ford contends that there are no allegations, or factual support, that Robbins “acted maliciously or with any ill-will or intent to injure Frazier.” Finally, Crystal Ford maintains that the circuit court properly granted its motion for summary judgment as to Frazier’s claim for injunctive relief, because there was no injunctive relief that the court could award to make Frazier whole. Standard of Review Maryland Rule 2-501(a) provides that a party “may make a motion for summary judgment on all or part of an action on the ground that there is no genuine dispute as to any material fact and that the party is entitled to judgment as a matter of law.” A trial court’s grant of a motion for summary judgment is reviewed de novo. Dashiell v. Meeks, 396 Md. 149, 163 , 913 A.2d 10 (2006). “[T]he standard of review for a grant of summary judgment is whether the trial court was legally correct.” LaSalle Bank, N.A. v. Reeves, 173 Md.App. 392, 401 , 919 A.2d 738 (quotations omitted), cert. denied, 400 Md. 649 , 929 A.2d 891 (2007). We must determine “first, whether a material fact was placed in genuine dispute, thus requiring a trial, and, second, if trial by a fact-finder is not required, whether the Circuit Court was legally correct in granting summary judgment.” Haas v. Lockheed Martin Corp., 396 Md. 469, 478 , 914 A.2d 735 (2007).

Analysis In granting Crystal Ford’s motion for summary judgment, the circuit court stated that it was undisputed that Frazier received from Crystal Ford the relief he sought by filing suit, to wit, the extension of his warranty and reimbursement for warranty repairs. The court, however, held the case ²⁹⁵ open for the sole issue of determining appropriate attorney’s fees. First, we agree with the circuit court that there was no dispute of material fact regarding the relief received by Frazier from Crystal Ford. In an affidavit included with Crystal Ford’s motion for summary judgment, the president of Crystal Ford stated that Robbins incorrectly determined the start and end time of Frazier’s extended warranty, that Crystal Ford had since extended Frazier’s warranty to the represented expiration date of December 31, 2008, and that it had arranged for payment of the warranty repairs Frazier incurred, less the $100 deductible.

At the motions hearing, the following colloquy occurred between the trial court and Frazier’s counsel: THE COURT: Actually, let me, let me go to something else that I was wondering— [FRAZIER’S COUNSEL]: Yes. THE COURT: — without even addressing the motion to deny the class certification. What damages is your client alleging at the present time? Because my understanding is that he has been, everything that he asked for in the complaint, other than attorneys fees, have been addressed, because he received his extended warranty, the repair bill that he had incurred when he didn’t have the extended warranty coverage was paid, minus the $100 deductible. [FRAZIER’ S COUNSEL]: Yes.

Thus the court correctly determined that Frazier received all of the relief that he requested for the actual injury that he suffered. Frazier challenges the court’s ruling that punitive damages were unavailable as a matter of law. Frazier’s argument, however, is misguided. It is clear that under Maryland law, a litigant cannot recover punitive damages without an award of compensatory damages.

The Court of Appeals has explained that “[t]here are two threshold conditions that parties must meet before being entitled to receive ²⁹⁶ an award of punitive damages. The first condition is that there be a compensatory damages award underlying an award of punitive damages.” Caldor, Inc. v. Bowden, 330 Md. 632, 661 , 625 A.2d 959 (1993) (citations omitted); accord Philip Morris, Inc. v. Angeletti, 358 Md. 689, 773 , 752 A.2d 200 (2000) (“[A] jury must find compensatory damages as a foundation before it may award punitive damages.”); Shabazz v. Bob Evans Farms, Inc., 163 Md.App. 602, 639 , 881 A.2d 1212 (“[A] necessary condition for the recovery of punitive damages is an underlying award of compensatory damages.”), cert. denied, 390 Md. 92 , 887 A.2d 656 (2005). Furthermore, nominal damages are not available in an action for fraud, see Schwartzbeck v. Loving Chevrolet, 27 Md.App. 139, 145-46 , 339 A.2d 700 (1975), or for a deceptive trade practice under the Consumer Protection Act, see Lloyd v. GMC, 397 Md. 108, 143 , 916 A.2d 257 (2007) (stating that “a private party suing under the Consumer Protection Act must establish ‘actual injury or loss.’”). Therefore, an award of compensatory damages for an actual injury or loss is a condition precedent to receiving punitive damages in claims for fraud and deceptive trade practice.

As previously stated, it is undisputed that Crystal Ford provided all of the compensatory relief that Frazier requested in his complaint on his individual, as opposed to his class action, claims. The warranty coverage was extended through December 31, 2008, and Frazier was reimbursed the cost of the warranty repairs. The circuit court repeatedly stated that Frazier had “been made whole.” As a result, there were no further compensatory damages that Frazier could recover at a trial in the instant case. Therefore, punitive damages were not available to Frazier as a matter of law.

Accordingly, Frazier’s claim for punitive damages could not prevent the entry of summary judgment in favor of Crystal Ford. Frazier also contends that the circuit court erred in ruling that he was not entitled to injunctive relief as a matter of law. Specifically, Frazier contends that injunctive relief was necessary for oversight over Crystal Ford’s reformation of extended warranty contracts “provided to other customers defrauded in ²⁹⁷ similar fashion to Frazier.” (Emphasis added). Frazier’s argument, however, goes to his class action suit, and thus is irrelevant to his request for injunctive relief on his individual claims. “Injunctive relief is a preventative and protective remedy, aimed at future acts, and is not intended to redress past wrongs.” Eastside Vend Distribs., Inc. v. Pepsi Bottling Grp., Inc., 396 Md. 219, 240 , 913 A.2d 50 (2006) (quotations and emphasis omitted).

As a result of Crystal Ford’s extending Frazier’s warranty and securing repayment of his warranty repairs, there was no injunctive relief that the court could have possibly fashioned for Frazier’s individual claims. See Carroll Cnty. Ethics Comm’n v. Lennon, 119 Md.App. 49, 58 , 703 A.2d 1338 (1998) (citing case law for the proposition that “a resolution between the parties may moot [a] claim for injunctive relief”). Therefore, the circuit court properly granted Crystal Ford’s motion for summary judgment.

II

Did the circuit court err in granting Crystal Ford’s motion to deny class certification? Frazier argues that the circuit court improperly granted Crystal Ford’s motion to deny class certification. According to Frazier, the court incorrectly determined that Crystal Ford’s tendering of the relief requested in the complaint required denial of class certification. Frazier claims that Crystal Ford’s warranty extension and reimbursement represented an attempt to elude litigating a class action suit by satisfying only the class representative’s claims.

Additionally, Frazier contends that the court erroneously concluded that class action certification was inappropriate due to a lack of uniformity. Frazier maintains that Crystal Ford perpetuated the same fraud on other customers. Crystal Ford responds that the court correctly granted its motion to deny class action certification, because Frazier’s claim was moot. According to Crystal Ford, a majority of courts have held that the tender of payment or settlement of a ²⁹⁸ class representative’s claim before certification requires dismissal of the entire suit because there is no remaining controversy to adjudicate.

Crystal Ford notes that the Court of Appeals recognized this principle in Creveling v. Government Employees Insurance Co., 376 Md. 72 , 83 n. 3, 828 A.2d 229 (2003), despite not having considered this exact issue. Crystal Ford argues that Frazier would have been shielded from dismissal on mootness grounds if he had filed a motion to certify the class prior to receiving the relief requested. Crystal Ford concludes that the circuit court was required to dismiss the suit because Frazier received the relief he requested in the complaint and never moved for class action certification. 4 Standard of Review The Court of Appeals has recently restated the standard of review regarding class action certification: We ordinarily review a [Circuit Court’s] decision regarding whether to certify a class action for an abuse of discretion. [T]he basis of the certification inquiry is essentially a factual one, and thus, deference is due. Our standard of review for determining whether a Circuit Court used a correct legal standard in determining whether to grant or deny class certification is de novo.

Anne Arundel Cnty., Md. v. Halle Dev., Inc., 408 Md. 539, 569 , 971 A.2d 214 (2009) (alteration in original) (citations and quotations omitted). Analysis Maryland Rule 2-231(c), which governs certification in class action lawsuits, states in relevant part: “On motion of any party ..., the court shall determine by order as soon as ²⁹⁹ practicable after commencement of the action whether it is to be maintained as a class action.” In the case sub judice, Crystal Ford satisfied Frazier’s individual claims in August 2007 and then filed a motion to deny class action certification on November 13, 2007. In granting Crystal Ford’s motion to deny class action certification, the circuit court noted the following: [L]et me address the motion to deny class certification. [Frazier] clearly is no longer a member of any class because he’s been made whole, so really, he has no interest as far as this Court can see to put forward, and to indicate that he is acting on behalf of a class. Although Maryland courts have not directly addressed the issue before us, the Court of Appeals observed in a footnote in Creveling that, “when named plaintiffs’ individual claims are satisfied following the filing of a class action complaint but before the filing of a Motion for Class Certification, many courts conclude that the entire action should be dismissed.” 376 Md. at 84 n. 3, 828 A.2d 229 .

On the other hand, according to the Court, “[s]ome courts conclude that the filing of a class action complaint invokes the interests of potential class members that remain live despite the mootness of a named plaintiffs claim.” Id. The Court then identified a third line of cases where “defendants tender relief to named plaintiffs while a Motion for Class Certification is pending before the trial court.” Id. at 85 n. 3, 828 A.2d 229 . In those cases, the general rule is that the mootness of the individual claim requires dismissal of the entire action, unless “a tender comes while plaintiffs diligently pursue a pending motion for class certification.” Id. In our view, the better reasoned cases support the principle that, if the individual claims of the named plaintiffs are satisfied by settlement or tender of full payment after the filing of the complaint but before the filing of a