                 IN THE COURT OF APPEALS OF TENNESSEE
                                                                               FILED
                                    AT KNOXVILLE                               July 13, 1999

                                                                            Cecil Crowson, Jr.
                                                                            Appellate C ourt
                                                                                Clerk

MIKE HAR VEY , on behalf of himself
                           ) C/A NO. 03A01-9807-CV-00235
and all others similarly situated,
                           )
                           ) ROAN E CIRC UIT
    Plaintiff-A ppellant,  )
                           ) HON . RUS SELL SIMM ONS , JR.,
v.                         ) JUDGE
                           )
FORD MOTOR CREDIT COMPANY, )
                           )
    Defendant-Appellee.    )




GOR DON BAL L, Knox ville, for Plaintif f-Appe llant.

STEVEN D. LIPSEY, STONE & HINDS, P.C., Knoxville, and THOMAS M.
BYRNE and DANIEL H. SCHLUETER, SUTHERLAND, ASBILL & BRENNAN,
LLP, Atlanta, for Defendant-Appellee.

PAUL G. SUM MERS, Tennessee Attorney General and Reporter, and
TIMOTHY C. PHILLIPS, Assistant Attorney General, Nashville, Amicus Curiae for
the State of Tennessee.




                   OPINION ON PETITION FOR REHEARING


                                                            Franks, J.


              Plaintiff has filed a Petition for Rehe aring in resp onse our o pinion in

Harvey v. Ford Motor Credit Co., 1999 W L 356 301 (T enn.A pp).

              Plaintiff argues that the Cou rt misinterpreted the term “quoted Ford

Motor Cred it Rates” in his Amen ded Comp laint. He argues that the term “q uoted Ford

Motor Cred it Rates” refers to the final rate quoted to the consumer by the de aler. In

other sections of the Amended Complaint, the term “quoted rates” refers to the initial

rates set by the defendant and not the rates given to the consumer. In another portion

of the Am ended C ompliant, h oweve r, the plaintiff sta tes that the def endant “in structs
and/or permits its dealers to inform consumers that the interest rate quoted to them is a

fixed Ford Motor Credit rate, when in fact it is not.”

              Defendant responds that the Amended Complaint does not allege that

the dealer made any misrepresentation to the plaintiff. The Amended Complaint

alleges, however, that the dealer misrepresented to the plaintiff that he was “receiving

an approved interest rate qu oted by Defendan t and that such rate was f ixed by Ford

Motor Credit . . .” Thus, the Amended Complaint alleges that the dealer made a

misrep resenta tion to p laintiff. A ssumin g, arguendo, that the Amended Complaint

alleges that the defendant instructs dealers to misrepresent the source of the interest

rates quoted to the consu mer, the C omplaint is still d eficient. If the r eference to

“dealer manuals, policies and procedures” is sufficient to satisfy the requirements of

T.R.C.P. 9.02, no cause of action has been stated, because the complaint fails to allege

proximate cause.

               The Trial Court held that “reliance” was a requirement under the

Tennessee Consumer Protection Act. T.C.A. § 47-18-101 to -121. T.C.A. § 47-18-

109 estab lishes a private right of actio n for any pers on who suffers an “ascertainab le

loss . . . as a result of the use or employment by another person of an unfair or

deceptive act or practice . . .” In determining that reliance was a required element

under the Act, the Trial Court relied upon Ganzev oort v. Rus sell, 949 S.W.2d 293

(Tenn. 1997). In Ganzevoort, this Court had held that “reliance is not a part of the

cause of action, simply because the Act does not require it.” 1995 WL 623047 at *2

(Tenn.App.). We further noted that “the whole tenor of the act makes it clear that the

technical requirements of a cause of action for fraud and deceit are not a part of the

cause of action under the act.” Id. The Supreme Court affirmed, but did not

specifically address the reliance issue. The Court cited with approval the definitions

of “deceptive act or practice” found in decisions by Illinois and Vermont courts.


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Ganzev oort, 949 S.W.2d at 299 (citing Connor v. Merrill Lynch Realty, Inc., 581

N.E.2d 1 96 (Ill.Ct.Ap p. 1991); Bisson v. Ward, 628 A.2d 125 6 (Vt. 1993).

               Under th e Illinois Con sumer Fra ud Act, pla intiffs are no t required to

prove a ctual relia nce. Conn ick v. Su zuki M otor C o., 675 N .E.2d 5 84 (Ill. 19 96).

Vermont’s Consumer Fraud Act, however, grants a cause of action to consumers who

contract for goods or services “in reliance upon” false or fraudulent representations.

Vt. Stat. Ann. tit. 9, § 2461(b)(199 7).

               The Tennessee Consumer Protection Act does not require reliance. We

elect to follow this Court’s reasoning in Ganzevoort, although n ot specifically

addressed by the Supreme Court. First, the Act contains no express requirement of

reliance . Secon d, the A ct is to be liberally co nstrued to prote ct cons umers . Morris v.

Mack’s Used Cars , 824 S.W.2d 538 (Tenn. 1992). Finally, this Court has noted that

state con sumer protecti on acts genera lly do not re quire re liance. See Lien v. Couch,

1998 W L 848 101 (T enn.A pp.), appeal denied, May 10, 1999.

               Althoug h the Act d oes not req uire reliance, p laintiffs are req uired to

show that the defendant’s wrongful conduct proximately caused their injury. T.C.A.

§47-18-109 establishes a private right of action for any person who suffers an

“ascertainable loss . . . as a result of the use or employment by another person of an

unfair or deceptive act or practice. . .” In Stracener v. Swindle , we cited this language

and noted : “[s]imilarly, proxim ate causation must be p roven w hether the c laim is

based on fraud . . . or on mere negligence . . .” 1995 WL 414873 at *3 (Tenn.App.

1995). In Connick, the court noted that while plaintiffs need not prove reliance, they

must show that the defendant’s conduct proximately caused the injury. 675 N.E.2d

584 (Ill. 1 996). See also Carroll v. C ellco Partn ership, 713 A.2d 509, 515 (N.J.

Super. Ct. App. Div., 1998) (“Although plaintiffs need not prove reliance under the

Consumer F raud Act, they must show an ascertainable loss as a result of d efendant’s


                                               3
conduct and a ca usal relationship.”).

               In this case, the Amended Complaint does not allege a casual connection

between the defendant’s conduct and any injury suffered by the plaintiff. Although

the Amended Complaint alleges that the plaintiff paid higher interest rates by

financing through the dealer and not directly with the defendant, there is no allegation

that the defendant made direct loans to the public. Although the Amended Complaint

alleges that the plaintiff was “required to pay hidden fees,” he was clearly informed of

the total interest rate, which he was free to accept or reject. Regardless of how

payment was allocated between the dealer and defendant, the plaintiff was aware of

what his overall payment and total interest rate would be. Additionally, the plaintiff

does not allege that he would have refused to engage in the transaction had he known

that some p ortion of his payment w ould go to the dealer. T he plaintiff w as also free to

seek financing from other sources. Accordingly, the Amended complaint does not

allege a cau se of action under the C onsume r Protection A ct.

               Finally, plaintiff arg ues the Co urt erred in dis missing the portion of h is

Amended Complaint addressing the defendant’s advertising. The plaintiff argues that

he could not have believed the rate quoted to h im by the dealer was the de fendant’s

direct rate unless he had seen advertisements regarding the defendant’s rates. The

Amended Complaint alleges, however, that the dealer told the plaintiff that he was

receiving th e defend ant’s fixed ra te. Thus, it w as not nece ssary for the pla intiff to

have seen any advertisement to that effect. As noted, if the plaintiff had seen the

defenda nt’s advertisin g, he wo uld have b een awa re of the disp arity between the rate

advertised and the rate he received. The Amended Complaint does not allege that

plaintiff saw any of defendant’s advertisements. Accordingly, the allegations

concerning defendant’s advertising fail to state a claim.

               We den y the Petition to R econsider w ith the addition al cost assesse d to


                                               4
the appellan t.




                              __________________________
                              Herschel P. Franks, J.


CONCUR:




___________________________
Houston M. Godd ard, P.J.




___________________________
William H. Inman, Sr.J.




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