This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-1911

 

Jeff Weigand, on behalf of himself

and all persons similarly situated,

Appellant,

 

vs.

 

Walser Automotive Group, Inc., et al.,

Respondents.

 

Filed June 6, 2006

Affirmed

Hudson, Judge

 

Hennepin County District Court

File No. CT 02-16142

 

 

Thomas J. Lyons, Jr., John H. Goolsby, Consumer Justice Center, P.A., 342 East County Road D, Little Canada, Minnesota 55117; and

 

Thomas J. Lyons, Thomas Lyons & Associates, 342 East County Road D, Little Canada, Minnesota 55117 (for appellant)

 

Katherine A. McBride, Gary W. Hoch, Meagher & Geer, P.L.L.P., 33 South Sixth Street, Suite 4200, Minneapolis, Minnesota 55402 (for respondents)

 

            Considered and decided by Hudson, Presiding Judge; Worke, Judge; and Crippen, Judge.*

U N P U B L I S H E D   O P I N I O N

HUDSON, Judge

On appeal from summary judgment in this consumer-fraud action under Minn. Stat. § 325F.69 (2002), appellant argues that (a) the private attorney general statute’s public-benefit requirement should be narrowly read; (b) his action benefits the public; (c) the consent order between respondent and the attorney general does not defeat the public benefit of this lawsuit; and (d) even if it did, appellant’s other consumer-fraud claims are outside of the scope of the consent order.  We affirm.

FACTS

 

On or about September 26, 1998, appellant Jeff Weigand purchased an automobile from respondent Walser Automotive Groups, Inc.  On September 25, 2002, appellant brought suit against respondent, alleging violations of Minn. Stat. § 325F.69, subd. 1 (2002), a provision of the Minnesota Consumer Fraud Act (CFA), and Minn. Stat. § 168.71(a), (b) (2002), a provision of the Minnesota Motor Vehicle Retail Installment Sales Act.  Appellant’s complaint was brought under the auspices of Minn. Stat. § 8.31, subd. 3(a) (2002), commonly referred to as the private-attorney-general statute.[1]  In his complaint, appellant alleged that one of respondent’s salespeople deceived and tricked appellant by falsely telling him that he was required to purchase a $1,500 service contract and a $340 credit-insurance policy in order to obtain financing.

On May 9, 2002, before appellant filed his complaint, the Minnesota Attorney General and respondent entered into a settlement agreement and consent order (consent order) following the attorney general’s investigation into respondent’s business practices.  The consent order served as a mechanism to resolve past complaints and to develop requirements for future marketing at respondent’s dealerships.  Among other things, the consent order prevented respondent from “in any way . . . suggest[ing] to a consumer that a Service Contract is a required purchase or that a Service Contract will increase the likelihood that a consumer will be approved for financing[.]”  The consent order also required respondent to

attempt in good faith to satisfactorily resolve all consumer complaints brought to its attention . . . within ten (10) days of its receipt of the complaint.  In the event that [respondent] does not resolve a written complaint . . . the consumer may choose to have his or her complaint arbitrated in accordance with the provisions of [the consent order].

 

The consent order constituted a “full and final resolution between the Minnesota Attorney General’s Office and [respondent] . . . of all claims relating to the investigation of . . . Service Contracts[.]”   

In October 2002, respondent moved to dismiss appellant’s complaint under Minn. R. Civ. P. 12.02(e).  The district court dismissed appellant’s complaint, and this court affirmed.  See Weigand v. Walser Auto. Groups, Inc., 670 N.W.2d 449 (Minn. App. 2003), rev’d, 683 N.W.2d 807 (Minn. 2004).  The supreme court reversed and remanded to the district court.  See Weigand v. Walser Auto. Groups, Inc., 683 N.W.2d 807, 813 (Minn. 2004). 

In March 2005, respondent moved for summary judgment, arguing that appellant could not demonstrate the requisite public benefit under Minn. Stat. § 8.31, subd. 3a, because the attorney general had already acted to protect the public interest.  The district court granted respondent’s motion for summary judgment, ruling that appellant could not use the private-attorney-general statute to bring a private cause of action based on business practices that the attorney general had already addressed.  This appeal follows.

D E C I S I O N

            Appellant argues that the district court erred when it granted respondent summary judgment because appellant’s claim benefits the public, in accordance with Minn. Stat. § 8.31, subd. 3a.

            “On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the [district court] erred in [its] application of the law.”  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  There is no genuine issue of material fact when the evidence “merely creates a metaphysical doubt as to a factual issue.”  DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).  The evidence must be “sufficiently probative with respect to an essential element of the nonmoving party’s case to permit reasonable persons to draw different conclusions.”  Id. The party resisting summary judgment “must do more than rest on mere averments.”  Id.  “A defendant is entitled to summary judgment as a matter of law when the record reflects a complete lack of proof on an essential element of the plaintiff’s claim.”  Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn. 1995). 

            Minnesota’s private-attorney-general statute, Minn. Stat. § 8.31 subd. 3a, allows individuals to seek damages by standing in place of the attorney general to enforce certain laws regarding “unfair, discriminatory, and other unlawful practices in business, commerce or trade” that the state attorney general is charged with enforcing.  Minn. Stat. § 8.31 subd. 1 (2004).  The Minnesota Supreme Court has ruled that such private actions may be brought only if they benefit the public.  Ly v. Nystrom, 615 N.W.2d 302, 314 (Minn. 2000). 

I

            Appellant concedes that the public-benefit requirement must be satisfied to recover damages under Minn. Stat. § 8.31, subd. 3a, but contends that because the public-benefit requirement was judicially created and the rationale has never been clearly articulated, it should be narrowly construed.  But the public-benefit requirement under the private attorney general statute is reasonable and, contrary to appellant’s contention, was clearly articulated in Ly.  Specifically, the Ly court held that it is the “history and purpose of the office of the attorney general to prosecute misrepresentations involving only matters of public interest.”  Id.  We conclude that the district court properly construed and applied the public-benefit requirement established in Ly.

            Appellant next argues that his claim benefits the public because it seeks relief for misrepresentations that were made to a large number of consumers.  Appellant argues that this court should take this “opportunity to articulate a general test for whether a case under the Minnesota Private Attorney General statute contains a public benefit component.”  Appellant proffers such a test.  Appellant’s proposed test would require this court to determine: (1) whether the case arises out of a consumer transaction; and (2) whether the alleged misrepresentations affected a large number of people. 

            We decline appellant’s invitation to adopt a new “public-benefit” test for two reasons.  First, as we conclude below, regardless of the proper test for determining a public benefit, there is no longer any public benefit to protect because the attorney general’s office has already intervened to correct the complained-of sales activity and provided a remedy for aggrieved consumers.  Second, such a test is unnecessary because the supreme court in Ly has already provided a test.  In Ly, the supreme court held that the private attorney general statute applies only to those claimants who demonstrate that their cause of action benefits the public.  Ly, 615 N.W.2d at 313–14.  The court further emphasized that the private attorney general, like the constitutional officeholder, must act for “the protection of public rights and the preservation of the interests of the state.”  Id. at 313.  Conversely, section 8.31 was not intended to “protect private or individual interests independent of a public purpose.”  Id.

            Even if we were to accept appellant’s invitation, he does not satisfy the numerosity element of the very test he proposes.  To date, appellant has not identified any other persons whose rights he seeks to protect in this action.  Appellant claims that in seeking relief for individuals who have already been affected by respondent’s misrepresentations, he can eventually establish numerosity through class certification.  Appellant notes that “[w]hile the precise number is thus currently unknown to [a]ppellant, the evidence unearthed by [a]ppellant thus far indicates that . . .  misconduct . . . was perpetrated on at least one hundred other putative class members.”  But no class has been certified, even though appellant filed his complaint in September 2002.  Additionally, appellant presents no evidence that 100 class members exist and concedes that these potential class members may have settled their claims through arbitration as provided for in the consent order.  In sum, appellant has rested on the mere averment that there exist more than 100 putative class members; appellant must do more to survive summary judgment.  

II

            The district court ruled that appellant cannot use the private-attorney-general statute to bring a cause of action based on business practices that the attorney general had already addressed.  Appellant argues that the attorney general has not addressed the claims raised in his complaint because the consent order does not provide a remedy for consumers previously affected by respondent’s misrepresentations; rather, it serves to protect future consumers.  But the consent order does provide a remedy for consumers previously affected by respondent’s misrepresentations.  Paragraph 21 of the consent order requires respondent to attempt to resolve “all consumer complaints” and provides consumers with an option to have their complaints arbitrated.  (Emphasis added.)  Paragraph 21 draws no distinction between past and future consumer complaints.  Moreover, the consent order has no sunset clause.

            Appellant further contends that the arbitration procedure provided for in the consent order is merely a forum for presenting consumer complaints, not a remedy.  We disagree.  Under the terms of the consent order, consumers with any type of consumer complaint can use the arbitration procedure to seek damages and, presumably, be awarded damages if they are so entitled.  Finally, at oral argument, appellant suggested that if this court determines that his claim does not benefit the public, aggrieved consumers will, in effect, be required to satisfy the “public-benefit” test in order to successfully arbitrate their disputes under the consent order.  This argument likewise fails.  Our conclusion that appellant failed to satisfy the public-benefit requirement in no way limits or precludes aggrieved consumers from using arbitration to seek individual damage awards under the consent order.  Paragraph 21 of the consent order provides: 

            Walser shall attempt in good faith to satisfactorily resolve all consumer complaints brought to its attention by a consumer, the Minnesota Attorney General’s Office, or any third party on behalf of any consumer within ten (10) days of its receipt of the complaint.  In the event that Walser does not resolve a written complaint submitted by a consumer, by the Minnesota Attorney General’s Office, or by a third party on behalf of a consumer to the consumer’s satisfaction, the consumer may choose to have his or her complaint arbitrated in accordance with the provisions of paragraph 26.

 

Nothing in that language, or this opinion, subjects aggrieved consumers to any separate public-benefit requirement.

            The consent order constituted a full and final resolution between the attorney general and respondent.  Thus, the attorney general has already acted to protect the public.  Once the attorney general took action against respondent, the need for a private citizen to act “in lieu of the attorney general” ceased to exist.  See Ly, 615 N.W.2d at 313.  Because the attorney general has already acted to protect the public, appellant has not established that his suit benefits the public.  Accordingly, the district court did not err in granting respondent’s motion for summary judgment.

            Affirmed.