Danielson

LITTLE ROCK, Ark. (Legal Newsline) - The Arkansas Supreme Court, in a ruling last week, favored a group of plaintiffs who allege car dealers were charging them an illegal fee for preparing certain documents.

In the class action suit, Otis Campbell appealed several orders of the Pulaski County Circuit Court against Asbury Automotive Group Inc., Asbury Automotive Arkansas LLC, North Point Auto Group, North Point Ford Inc., NP FLM LLC, Prestige Toy LLC, Prestige Bay LLC, Premier NSN LLC, NP VKW LLC, Premier PON LLC, and NP MZD LLC. The defendants are referred to collectively as "Asbury" in court documents.

On Dec. 31, 2002, Charles and Carol Palasack filed a class action complaint against Asbury, alleging they were charged an illegal fee for the preparation of a vehicle installment contract.

Campbell was later added as a class representative in an amended complaint filed July 22, 2003.

On appeal, Campbell asserts that the circuit court erred in granting summary judgment to Asbury on the class' documentary-fee claim based on the Arkansas Deceptive Trade Practices Act, or ADTPA; that it erred in denying the class' motion to amend his complaint and motion for class certification to add a breach-of-fiduciary-duty claim relating to the documentary fee; it erred in denying class certification relating to the class' financing-fee claim against Asbury; and that the court erred in dismissing the class' unjust-enrichment claim relating to the documentary fee.

Asbury crossappealed, contending that the circuit court erred in granting summary judgment to Campbell on the class' claim that the assessment of a documentary fee constituted the unauthorized practice of law; that it erred in ruling that Asbury had a fiduciary relationship with its customers; and that the court erred in ruling that it was not entitled to the defense of good-faith reliance.

The Court, in its ruling filed April 14, affirmed in part and reversed and remanded in part on direct appeal, and affirmed on cross-appeal. Justice Paul E. Danielson wrote the Court's 36-page majority opinion.

The Court reversed the circuit court's grant of summary judgment to Asbury on the class' documentary-fee claim, and remanded the case.

However, the justices said they would not reverse the court's decision denying the class' motion to amend its complaint.

"Circuit courts are given broad discretion in matters regarding class certification, and this Court will not reverse a circuit court's decision to grant or deny class certification absent an abuse of discretion," the Court wrote.

As to Campbell's financing-fee claim, the Court found that the circuit court "abused its discretion" and erred in denying class certification.

The justices said to find unjust enrichment, a party must have received something of value, to which he or she is not entitled and which he or she must restore. There must also be some operative act, intent or situation to make the enrichment unjust and compensable.

"Here, the circuit court based its grant of summary judgment solely on the fact that a contract existed between the parties," the Court wrote.

"Because the mere existence of a contract does not always foreclose a claim of unjust enrichment, we hold that the circuit court erred in granting summary judgment and reverse and remand."

The Court, ruling on Asbury's first cross-appeal, said it is "abundantly clear" that Asbury engaged in the unauthorized practice of law.

It also found that the circuit court did not err in ruling that Asbury had a fiduciary relationship with its customers. By virtue of its unauthorized practice of law, "it was held to the same standard of care as a licensed attorney," the Court wrote.

As to Asbury's final cross-appeal, the Court affirmed the circuit court's ruling that Asbury was not entitled to rely on the defense of good-faith reliance.

"A defendant is not entitled to rely in good faith on a legislative act for protection from liability, where it was incumbent upon that defendant to know and abide by the clear public policy of the state," the Court wrote.

Asbury claimed that "there was no expression of public policy" on the matter. However, at the time it was charging its documentary fee, Arkansas Code prohibited corporations from practicing law, the Court noted.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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