RULING ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

CHARLES S. HAIGHT, Jr., Senior District Judge.

In this action, Plaintiff Marisol Morales brings suit against Defendant Barberino Brothers, Inc. ("Barberino"), an automobile dealership in Wallingford, CT, in relation to Defendant's allegedly improper and deceptive practices in connection with its sale of a car to Plaintiff. Plaintiff brings claims under the federal Truth in Lending Act, 15 U.S.C. § 1601, et seq. ("TILA") and the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a et seq. ("CUTPA"). Defendant has moved for summary judgment as to both counts under Rule 56 of the Federal Rules of Civil Procedure, seeking dismissal of Plaintiff's case in full. This Ruling resolves the motion.

I. Background

The following facts are derived from the parties' submissions pursuant to Local Rule 56(a), uncontroverted deposition testimony, and the exhibits attached to the parties' respective memoranda of law. Docs. 34-37. The facts recounted in this section are undisputed or indisputable.

On December 19, 2014, Plaintiff visited Barberino with her boyfriend in search of a new vehicle, her first ever visit to a car dealership. 56(a) ¶ 2; Doc. 35-1, at 27. On a return visit the following day, she completed the purchase of a new 2015 Nissan Altima, effectuated through a Retail Purchase Order and financed via a Retail Installment Contract. 56(a) ¶¶ 2-3; Doc. 34-2. Prior to executing the agreements, Plaintiff spent only 15-20 minutes in Barberino's Finance Manager's office, asked no questions about the paperwork, did not read the Retail Installment Contract,1 and did not negotiate. 56(a) ¶¶ 5-7; Doc. 34-4, at 35-36. She testified Defendant "told me there was not too much time. I felt like I was being rushed to sign the paperwork. . . . [H]e kept giving it to me, and he said you got to sign here, you got to sign here." Doc. 35-1, at 60.

The cash price Barberino charged Plaintiff for the vehicle was $31,322.80.2 Doc. 34-2. However, the manufacturer's suggested price was $24,150.00, as listed on the "Monroney sticker" attached to the car at the Barberino dealership.3 Doc. 36-3. Barberino subtracted $3,500 from the car's cash price of $31,322.80 to reflect a trade-in discount for Plaintiff's 2001 Toyota Camry, which had accumulated 200,930 miles and whose actual value approached $0. Id.; Doc. 36-4 Ex. 1, at 40. Plaintiff received the $3,500 trade-in discount in connection with a promotion that Barberino had been advertising at the time, which provided a $3,500 discount for trade-in vehicles regardless of actual value. Doc. 36-4 Ex. 1. The conditions of that program were as follows:

Def.'s Resps. to Plf.'s Interrogatories [Doc. 36-4 Ex. 2] ¶ 5.

Despite its program crediting customers $3,500 for all trade-in vehicles, Barberino readily acknowledges its policy, which it applied as to Plaintiff's purchase, to include in its initial cash price offer for the car the amount it credits to the customer for the trade-in.4 Doc. 36-4 Ex. 1, at 32-33. This came to light during the deposition of Hugo Loureiro, Barberino's General Sales Manager, who testified in detail as to Barberino's price offering process. The process is driven in the first instance by the financing agent with which Barberino works. That entity first provides Barberino what is called a "front-end advance number," which, at least in this case, amounted to 115% of the manufacturer's invoice, otherwise known as the "book-out invoice number." Here, the book-out invoice number was $22,672, leading to a front-end advance of $26,672.80. However,

Doc. 36-4 Ex. 1, at 31-33 (emphases added). Louriero then clarified that this allowed Barberino to add the $3,500 trade-in value of Plaintiff's car back into the cash price that Barberino offered Plaintiff for the new car.5 Louriero acknowledged that it was Barberino's standard procedure to make its initial offer to a customer match the maximum price for a vehicle that was approved by the lender, including the upward additions discussed above, and that it is "then up to the customer to negotiate down from that point." Doc. 36-4 Ex. 1, at 15. Worthy of reiteration, however, is that Barberino's trade-in program did not allow the customer to negotiate. Def.'s Resps. to Plf.'s Interrogatories [Doc. 36-4 Ex. 2] ¶ 5. And, Louriero testified that Plaintiff did not in fact negotiate, and that she accepted the maximum offer with which she was presented. Doc. 36-4 Ex. 1, at 36. In short, then, Barberino's trade-in program policy, which it applied to Plaintiff, was to deduct a $3,500 purported trade-in value only from a non-negotiable cash price offer that included a $3,500 upcharge. In other words, Barberino effectively credits customers like Plaintiff $0 for their trade-ins despite advertising that it would offer them a $3,500 credit. This practice is at the core of Plaintiff's complaint.

To effectuate the purchase of the car, Plaintiff entered into a financing agreement pursuant to the Retail Installment Contract with Barberino, which assigned its interest to non-party Regional Acceptance Corporation ("Regional"). Doc. 34-2. Including costs and fees, Plaintiff agreed to have $29,280.23 financed through the credit agreement, which carried a $15,517.45 finance charge, reflecting a 14.95% Annual Percentage Rate. Plaintiff was thereby indebted $44,797.68, to be paid in 72 monthly installments of $622.19, with first payment due February 3, 2015.

Shortly after purchasing the car, Plaintiff came to believe that Barberino engaged in a multitude of improper and illegal practices in securing her purchase and financing of the car. She brought the instant suit on March 2, 2015, which, pursuant to the Amended Complaint, brings claims for violation of TILA and of CUTPA. She alleges Defendant violated TILA in two ways: (i) failing to accurately itemize the amount financed; and (ii) failing to accurately disclose the finance charge. Doc. 31 ¶¶ 65, 68.6 As to CUTPA, Plaintiff brought suit in light of a number of allegedly deceptive and unfair acts, which she specifically lists in her summary judgment opposition. Doc. 36, at 6-7. Plaintiff also claims that Defendant violated certain Connecticut Department of Consumer Protection regulations which, she asserts, constitute per se CUTPA violations. Principally, Plaintiff claims that Defendant violated Conn. Agency. Reg. § 41-110b-28(b)(7), which states as follows:

Defendant has moved for summary judgment as to both claims.

II. Standard of Review

A motion for summary judgment may be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In assessing a motion for summary judgment, a court is required to resolve all ambiguities and draw all permissible factual inferences in favor of the non-moving party. Gonzalez v. City of Schenectady, 728 F.3d 149, 154 (2d Cir. 2013).

III. Discussion

The Court begins with TILA, it being the federal claim serving as the basis of this Court's jurisdiction. TILA is a disclosure statute concerned with consumers' "informed use of credit," which "results from an awareness of the cost thereof by consumers." 15 U.S.C. § 1601(c). TILA "reflect[ed] a transition in congressional policy from a philosophy of `Let the buyer beware' to one of `Let the seller disclose.'" Mourning v. Family Pub. Serv., Inc., 411 U.S. 356, 377 (1973). Its specific purpose is "to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices." Id. "TILA is a remedial statute, it is interpreted strictly in favor of the consumer." Frazee v. Seaview Toyota Pontiac, Inc., 695 F.Supp. 1406, 1408 (D. Conn. 1988).

Plaintiff alleges Defendant violated TILA by proffering inaccurate disclosures in the Retail Installment Contract. Specifically, she alleges "Barberino violated TILA by not accurately itemizing the amount financed . . . [in light of the fact that] the cash price of the Vehicle was inflated, in part, in order to compensate for the overallowance allowed on Plaintiff's Camry." Doc. 31 ¶¶ 65-66. Plaintiff also alleges that "the cash price of the Vehicle was inflated, in part, for purposes of recouping the discount fee charged by Regional, which amount should have been disclosed as part of the finance charge." Doc. 31 ¶ 68.

Two provisions of TILA are at issue. Section 1638(a)(2)(B) requires in certain instances that a creditor provide a "written itemization of the amount financed" of a given loan. Section 1638(a)(3) requires that a creditor accurately disclose the "finance charge," as defined by TILA.8

Defendant argues it committed no TILA violation. It initially argued that it was not liable under TILA only because it properly disclosed the "finance charge" pursuant to Section 1638(a)(3). In so arguing, it relied on Poulin v. Balise Auto Sales, Inc., 647 F.3d 36, 38 (2d Cir. 2011), which held that defendant-car dealership's increase of the sales price of a car far above its market value could not be construed as a backdoor (i.e., undisclosed) increase to the "finance charge." Doc. 34-1, at 3-5. The Poulin court held as such because TILA exclusively governs credit arrangements, and thereby is not implicated where a sales price is increased in such a way, as here, that the increased price would be paid by cash and credit customers alike. 647 F.3d at 39 ("Charges imposed uniformly in cash and credit transactions are not finance charges."); see also Frazee, 695 F. Supp. at 1408 ("Any differential between the fair value of the car and its cash price is attributable to a bad bargain, or perhaps a violation of the bargain in the sale of the car, and not any hidden finance charges."). Here, the uncontroverted deposition testimony of John Mocadlo, Barberino's Managing Partner, is that Barberino charges an "identical" amount when selling a car for cash as opposed to credit. Doc. 34-3, at 19. Plaintiff neither argues nor offers any evidence to the contrary. Specifically, she nowhere demonstrates—or avers—that Barberino added the trade-in over-allowance to the price of its cars only to its customers paying by credit rather than by cash. In such a situation, the finance charge requirement of TILA, "a disclosure statute, not a fair pricing law," Poulin, 647 F.3d at 38, is not applicable.

Plaintiff seems to acknowledge that Poulin bars a Section 1638(a)(3) claim. Rather, she now argues that Barberino violated TILA only "by not accurately itemizing the amount financed as required by 15 U.S.C. § 1638(a)(2)(B)." Doc. 36, at 10. In support, Plaintiff claims the following alleged inaccuracies in the itemization of amount financed:

Doc. 36, at 10-11.9

Despite her efforts, Plaintiff has not identified any factual inaccuracy on the itemization of amount financed. Plaintiff was offered a cash price for the Nissan Altima of $31,322.80. She agreed to that price. To pay for same, she agreed to pay a creditor a principal balance of $29,280.23, documented as an "amount financed" on her credit agreement. Although the purchase of the car was without a doubt a bad bargain for Plaintiff—i.e., a price $7,172.80 above the manufacturer's suggested price—these were the figures disclosed to her on the itemization of amount financed and they represent a true and accurate description of the terms of her credit arrangement. In other words, the contract stated that she would be financing $29,280.23 (in TILA's terms, her "amount financed"), and she in fact did finance $29,280.23 and owed as much ultimately to Regional. For the purposes of TILA, it is of no moment that the disclosed price of the car included the $3,500 value of her trade-in car despite Defendant's advertised trade-in program. As stated on a nearly identical set of facts:

Gregory v. Metro Auto Sales, Inc., 2016 WL 336861, at *3 (E.D. Pa. Jan. 27, 2016) (emphasis in original); cf. Diaz v. Paragon Motors of Woodside, Inc., 424 F.Supp.2d 519, 530 (E.D.N.Y. 2006) (finding that "an increase in price above the advertised price constitute[d] a hidden finance charge because [Plaintiff] was forced to pay the increase based on his need to secure sub-prime financing" (emphasis added)). Although there may be a tension between Barbarino's shamelessly admitted practice and the letter or spirit of consumer protection laws, it is simply not a TILA violation. Nor is the listing of the $3,500 trade-in allowance. Plaintiff refers to this as "the bogus $3,500 allowance," but she was in fact allowed a $3,500 reduction in the cash price of the car. Although that price was inflated in light of Defendant's practice of in essence erasing the benefit it purported to offer through its advertised trade-in program, it was, as dispositive here, a disclosed amount. In short, for much of the same reason that an inflated yet accurately disclosed cash price cannot constitute an inaccurate "finance charge," such a cash price cannot constitute an inaccurate "amount financed." For purposes of TILA, it is of no moment that Barberino did not disclose certain facts with respect to Plaintiff's agreement to purchase the car.10 What matters is whether Barberino failed to disclose accurately anything related to Plaintiff's agreement to finance the car. Plaintiff simply has not shown this.

Tellingly, Plaintiff has not proffered a single court decision finding that an inflated, but accurately disclosed, "amount financed" constituted a violation of TILA § 1638(a)(2)(B). Plaintiff's heavy reliance on the California state appellate case, Thompson v. 10,000 RV Sales, Inc., 31 Cal.Rptr.3d 18 (Cal. Ct. App. 4th 2005), is misplaced. There, the appellate court held, inter alia, that a car dealership violated California law by "increasing the cash price to include an over-allowance on a trade-in vehicle in a credit transaction." Despite some broad language in the opinion, Thompson is not on point.11 There, like here, the plaintiff aimed to trade in a previously owned vehicle towards the purchase of a new vehicle. However, unlike Plaintiff here, that plaintiff had an outstanding loan balance on her trade-in car, and, moreover, one that was larger than the value of the vehicle. Specifically, the trade-in was worth $30,000 but was subject to a $46,000 loan balance, amounting to $16,000 of negative equity. The defendant dealership then over-valued the car at $54,000 for purposes of the trade-in, which it did only "to obtain lender approval for the purchase." Id. at 21; see also id. at 22 (10,000 RV's sales manager "testified he valued Thompson's trade-in vehicle at $54,000 rather than $30,000 for purposes of obtaining credit approval for Thompson's purchase"). As the court found, "the $24,000 over-allowance was added to the $69,398 price of the Safari a cash purchaser would pay." Id. at 22; see also id. (10,000 RV's sales manager "admitted negative equity is not included in the selling price for a cash buyer because the only reason for this practice . . . is to obtain financing for a credit buyer") (all emphases added).

In short, the Thompson defendant purposefully hid from the lender plaintiff's negative equity in the trade-in to demonstrate a purported net positive trade-in value such that plaintiff would satisfy the lender's loan-to-value ratio requirements. Moreover, the defendant failed to disclose any of this to the plaintiff. The court held this to be against California's "official policy relating to negative equity [which] reflects that adding either disclosed or undisclosed negative equity to the cash price of the vehicle is illegal." Id. at 32. It is clear that the California court was concerned specifically with undisclosed trade-in over-allowances that aimed to distort a credit purchaser's equity position. Where such negative equity is hidden from the lender, and in a way that is not disclosed to the borrower, such as in Thompson, there are legitimate reasons to be concerned about the borrower's awareness of the true terms of her credit arrangement, and laws akin to TILA are impacted. Here, in contrast, Morales owed nothing on her trade-in12 and therefore there are no concerns in the case at bar of hiding negative equity. She knew (or had access to the documents to learn) exactly the terms that governed each element of her credit transaction. Barberino may have proffered a bad bargain, but it did not do so by distorting a credit arrangement.

That TILA is not at issue in this circumstance is supported by official staff commentary as to Regulation Z, which acknowledges that negative equity should be included in a disclosed "amount financed" in order for a credit agreement to be properly disclosed to a borrower:

Truth in Lending, 63 Fed. Reg. 16,669, 16,673 (April 6, 1998) (emphases added).

The regulation thus provides that negative equity in a trade-in must be disclosed as part of the amount financed, but says nothing about generally disclosing the inclusion of a trade-in overallowance. This makes eminent sense in light of TILA's goals. A consumer trading in a vehicle with negative equity owes a balance on the earlier loan even after trading in the vehicle—i.e., in the example in the commentary above, the borrower still owes $2,000 on his initial credit agreement—and may think that such balance was transferred to and included in the "amount financed" on the credit agreement for the newer vehicle. Therefore, failure to disclose the negative equity amount may lead the borrower to be misinformed as to the amount owed to his or her creditor(s). This is simply not an issue where there is no negative equity on the trade-in—as with Plaintiff here, the "amount financed" on the loan for the newer vehicle will be precisely the total amount that the borrower owes his or her creditor(s). TILA is thereby not implicated.13

In light of the foregoing, Plaintiff's TILA claim must be dismissed.

* * *

Having dismissed Plaintiff's TILA claim, Plaintiff's CUTPA claim is all that remains. This federal Court's power to adjudicate that state law claim arises only from its power of supplemental jurisdiction. Supplemental jurisdiction is contrasted with original jurisdiction, which refers to those cases which the U.S. Constitution or Congress expressly permit the federal courts to adjudicate. 28 U.S.C. § 1331. Here, TILA was that source of original jurisdiction. Plaintiff's CUTPA claim was properly within the supplemental jurisdiction rule, 28 U.S.C. § 1367(a), which states in relevant part:

However, § 1367(c)(3) goes on to state as follows:

This is the situation at present. This Court must decide whether to exercise its discretionary authority to allow Plaintiff to try her state law claim in this federal tribunal. For the reasons that follow, the Court declines to do so.

The setting at bar—in which all federal claims have been dismissed at summary judgment, leaving only state law claims behind—is a familiar one. The Second Circuit has addressed the issue repeatedly, and, though reviewing only for an "abuse of discretion," has not been reluctant to find such discretion abused when a district court has retained a purely state law case. In fact, it has held that "federal courts, absent exceptional circumstances, should abstain from exercising pendent jurisdiction when federal claims in a case can be disposed of by summary judgment." Walker v. Time Life Films, Inc., 784 F.2d 44, 53 (2d Cir. 1986) (emphasis added). It has held so in light of its determination that "[i]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors to be considered under the pendent jurisdiction doctrine—judicial economy, convenience, fairness, and comity—will point toward declining to exercise jurisdiction over the remaining state-law claims." Valencia ex rel. Franco v. Lee, 316 F.3d 299, 305 (2d Cir. 2003) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S.343, 350 n.7 (1988)). In Lundy v. Catholic Health Systems of Long Island Inc., 711 F.3d 106 (2d Cir. 2013), the Second Circuit, after acknowledging that "[o]nce all federal claims have been dismissed, the balance of factors will usually point toward a declination," undertook to catalog those discrete instances in which it has endorsed the retention of jurisdiction following dismissal of federal claims:

The balance of the relevant factors make it apparent that Plaintiff's CUTPA claim would be best adjudicated in Connecticut state court. No issue of preemption arises, and the state claim bears no comparison to a federal claim.15 Although the parties have engaged in substantive discovery, the case is likely ninety days from being trial ready. See Doc. 14; c.f. Norwalk v. Ironworkers Loc. 6 Pens. Fund, 81 F.3d 1182, 1191-92 (2d Cir. 1996) (retention of state law claims okay where federal claim was dismissed nine days before scheduled start of trial); Raucci v. Rotterdam, 902 F.2d 1050, 1055 (2d Cir. 1990) (same where federal claims dismissed after close of discovery and trial ready date). Further, the instant ruling is the Court's only substantive input to this case.

Most pressing, however, are comity concerns. The application of a broad and remedial consumer protection statute such as CUTPA necessarily involves weighing sensitive state-level policy concerns. A federal court should not rule on such questions without necessity. As the Second Circuit has explained, `[w]here a pendent state claim turns on novel or unresolved questions of state law . . . principles of federalism and comity may dictate that these questions be left for decision by the state courts. This is particularly true if the federal claim on which the state claim hangs has been dismissed.'" Valencia, 316 F.3d at 306 (quoting Seabrook v. Jacobson, 153 F.3d 70, 76 (2d. Cir. 1998)); Lundy, 711 F.3d at 118 (federal court should consider whether "the state law claims involved only settled principles rather than novel issues"); B&M Serv. Station v. Norwich, 2000 WL 305981, at *10-11 (D. Conn. Feb. 25, 2000) (granting defendants' motion for summary judgment as to federal claims and declining to exercise supplemental jurisdiction over state law claims, including for CUTPA, because they "are uniquely matters of state law which the state courts should adjudicate"). There appear to be scant rulings from Connecticut state courts making rulings or entering judgements as to whether the specific conduct alleged by Plaintiff constitutes CUTPA violations. In fact, Plaintiff only supports one of its alleged specific CUTPA predicate acts with Connecticut case law, citing two nearly identical decisions from the same Connecticut trial court judge that allowed plaintiff to overcome a motion to strike by alleging that a dealership sold cars above the Monroney sticker price without affixing a supplemental sticker. Doc. 36, at 7 (citing Emmanuelli v. Merriam Motors, Inc., 35 Conn. L. Rptr. 407 (Conn. Super. Ct. 2003) and Valencia v. Crabtree Imports, Inc., 2004 WL 424499 (Conn. Super. Ct. Feb. 24, 2004)). She cites no case law to support her other specific contentions. Defendant, for its part, cites to no case law addressing the specifically alleged conduct supporting Plaintiff's CUTPA claim. This federal court should not unnecessarily decide novel questions of state law, and chooses not to do so in this case. Plaintiff's CUTPA claim is dismissed without prejudice to filing such a claim in state court.

IV. Conclusion

For the foregoing reasons, Defendant's Motion for Summary Judgment is GRANTED. In consequence, Plaintiff's claim for violation of the Truth in Lending Act, 15 U.S.C. § 1601, et seq. is DISMISSED WITH PREJUDICE; Plaintiff's claim for violation of the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a, et seq. is DISMISSED WITHOUT PREJUDICE to refiling in an appropriate jurisdiction. The Clerk is directed to close the file.

It is SO ORDERED.