In the
United States Court of Appeals
For the Seventh Circuit

No. 99-3092

Diane Janikowski,

Plaintiff-Appellant,

v.

Lynch Ford, Incorporated, Lynch Chevrolet,
Incorporated, Frank J. Lynch Incorporated, et al.,

Defendants-Appellees.



Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 98 C 8111--Suzanne B. Conlon, Judge.


Argued February 8, 2000--Decided April 21, 2000



  Before Cudahy, Manion, and Diane P. Wood, Circuit
Judges.

  Manion, Circuit Judge. Diane Janikowski entered
into a contract with Lynch Ford, Inc., to
purchase an automobile from Lynch Ford contingent
on her obtaining 5.9% APR financing. Lynch Ford
was unable to arrange financing at that rate, but
instead of canceling the contract, Janikowski
entered into a new contract agreeing to purchase
the car at an APR of 11.9%. However, she later
decided to sue Lynch Ford, Inc. and four other
car dealerships owned by Lynch, alleging that the
defendants violated the Truth In Lending Act
("TILA") and the Illinois Consumer Fraud Act
("ICFA"), and were unjustly enriched because,
while they originally disclosed the APR at 5.9%,
she ultimately became liable to pay 11.9%, and
because they failed to state that the 5.9% rate
was an estimate. The district court dismissed the
other Lynch dealerships and granted Lynch Ford
summary judgment. Janikowski appeals and we
affirm.

I.  Background
  On November 10, 1998, Diane Janikowski went to
Lynch Ford, Inc. to purchase a new car; she
decided on a 1999 Ford Escort. The sales
representative, Eric Vates, told Janikowski that
he would try to get her 5.9% APR financing, but
that due to the late hour in the day he could not
assure her that a financing institution would
accept her loan at that rate. Janikowski
nonetheless signed a Vehicle Purchase Order
agreeing to buy the Ford Escort, and a Retail
Installment Contract which listed the APR at
5.9%. Paragraph 9 of the Purchase Order also
provided: "If financing cannot be obtained within
5 business days for Purchaser according to the
proposals in the retail installment contract
executed between Seller and Purchaser, either
Seller or Purchaser may cancel the Agreement
shown on the face of this Order and the retail
installment contract."

  Even though Janikowski’s duty to purchase the
car was conditional, she drove the Escort home
that night. The next day, Vates called Janikowski
and told her that her loan had been approved, but
at an 11.9% interest rate. Janikowski returned to
the dealership that evening, traded in her old
car, and signed a new Purchase Order and Retail
Installment Contract, agreeing to purchase the
Escort at an APR of 11.9%.

  About one month later, Janikowski filed suit
against Lynch Ford and four other car dealerships
owned by Lynch. Her suit alleged that the
defendants violated TILA because they disclosed a
5.9% APR, while she became liable to pay an APR
of 11.9%, and that the defendants’ failure to
mark the 5.9% rate as an estimate also violated
TILA./1 Additionally, Janikowski contends that
the defendants’ conduct violated the Illinois
Consumer Fraud Act and constituted unjust
enrichment. Janikowski moved to certify her case
as a class action. The district court denied her
request to certify, dismissed the other Lynch-
owned dealerships, and granted Lynch Ford summary
judgment. Janikowski appeals.

II.   Analysis

  On appeal, Janikowski contends that the district
court erred in granting Lynch Ford summary
judgment, in dismissing the other Lynch
dealerships, and in denying her request for class
certification. We begin with the district court’s
decision granting Lynch Ford summary judgment. We
review this determination de novo, applying the
rotely recited summary judgment standard: Summary
judgment is appropriate if there are no genuine
issues of material fact and the moving party is
entitled to judgment as a matter of law./2

  TILA requires that all retail installment
contracts provide accurate disclosures. Gibson v.
Bob Watson Chevrolet-Geo, Inc., 112 F.3d 283, 285
(7th Cir. 1997). TILA also mandates certain
disclosures, including the contractual APR, 15
U.S.C. sec. 1638(a)(4), and these disclosures
must be in writing. The regulations further
explain that the disclosures must "reflect the
terms of the legal obligations of the parties,"
12 C.F.R. sec. 226.17(c)(1), and must be given
before the "consumer becomes contractually
obligated on a credit transaction." 15 U.S.C.
sec. 1638(c); 12 C.F.R. sec. 226.2(a)(13).

  Janikowski argues that Lynch Ford violated TILA
because, although Lynch Ford disclosed an APR of
5.9%, she was ultimately required to pay an APR
of 11.9%. In making this argument, however,
Janikowski does not focus upon what really
happened: She entered into two contracts, each of
which disclosed the relevant (albeit different)
APR. Before she signed the contract on November
10, 1998, Lynch Ford disclosed a contractual rate
of 5.9%. That disclosure reflected the terms of
her legal obligations, as required by regulation.
12 C.F.R. sec. 226.17(c)(1). She was not legally
obligated to purchase the Escort at any rate
other than 5.9%. The next day, after Janikowski
learned that she had been denied financing at
5.9%, the November 10, 1998 contract was
canceled. She then entered into a new contract,
which disclosed an 11.9% APR. Therefore, even
though Janikowski did not eventually obtain
financing at 5.9%, Lynch Ford did not violate
TILA because it accurately disclosed her legal
obligations under the two contracts./3

  Alternatively, Janikowski argues that Lynch Ford
violated TILA because it failed to disclose that
the 5.9% APR was an estimate. Section
226.17(c)(2) of the federal regulations provides
that: "If any information necessary for an
accurate disclosure is unknown to the creditor,
the creditor shall make the disclosure based on
the best information reasonably available at the
time the disclosure is provided to the consumer,
and shall state clearly that the disclosure is an
estimate." 12 C.F.R. sec. 226.17(c)(2).
Janikowski contends that Lynch Ford’s failure to
label the 5.9% rate as an estimate violated
section 226.17(c)(2). However, contrary to
Janikowski’s position, the 5.9% APR was not an
estimate--it was the contractual rate, albeit a
condition to the parties’ duty to perform. It was
an accurate disclosure for that contract, and the
5.9% rate did not and could not vary under its
terms. If the financing condition had been
satisfied, Janikowski would be able and obligated
to purchase the car at 5.9%. However, when
Janikowski did not receive approval of financing
at 5.9%, she could have canceled the contract and
refused to purchase the Escort. Either way, the
disclosed rate was a set rate, not an estimate.

  Janikowski also argues that Lynch Ford engaged
in a practice of "spot delivery" and that this
violates TILA. According to Janikowski, "spot
delivery" involves (1) the entering into a sales
contract with a consumer at a low interest rate
when the seller knows the consumer will not
qualify for that rate; (2) followed by the seller
giving the consumer possession of the car, and
accepting the consumer’s trade-in; (3) and
finally, the late notification to a consumer that
their financing has been denied and that they
must enter into a new contract, which the
consumer will do because they no longer have
their trade-in and because they have become
attached to their new car./4

  There are two primary problems with Janikowski’s
theory--factual and legal. Factually, the
undisputed evidence in this case shows that while
Janikowski drove the new Ford Escort home on the
evening of November 10, 1998, she had not yet
delivered her used car as a trade-in. In fact,
she did not deliver her trade-in until the next
day, after she had learned that she had been
denied financing at 5.9% and after (or at the
same time) she entered into the new contract at
11.9%. So the trade-in aspect of the so-called
"spot delivery" practice is missing. This quick
turnaround time also negates the premise in the
"spot delivery" scenario that the consumer will
have become attached to their new car and thus
willing to purchase it at a higher interest rate;
in this case Janikowski had possession of the new
car for less than twenty-four hours. And contrary
to the hypothetical of "becoming attached," also
hypothetically she could have driven the car
hundreds of miles and returned it the next day
and kept her current car, no strings attached.
  Also missing from the "spot delivery" scenario
is the knowledge component. While Janikowski
contends that Vates knew she would not receive
financing at 5.9%, the record does not support
this contention. Rather, Vates’ uncontradicted
testimony is that he had reviewed Janikowski’s
credit history and concluded she had a credit
rating of "2," and that individuals with a credit
rating of 0, 1, or 2 qualified for 5.9%
financing. The financing company later rated
Janikowski at a "4," and as a result she only
qualified for financing at 11.9%. But this does
not negate Vates’ testimony that he believed she
rated a "2," that he believed that she may have
obtained financing at 5.9%, and that even after
the financing company rated her as a "4," the
financing company, on its own initiative, could
have altered that rating over the weekend after a
personal representative reviewed Janikowski’s
application. (Vates also told Janikowski--at
least twice--that he could not guarantee that she
would obtain financing at 5.9%.) Nor can
Janikowski create an issue of fact as to Vates’
knowledge by presenting "expert testimony" that
"Lynch deliberately defrauded Ms. Janikowski by
misrepresenting its ability to obtain financing
at the rate quoted." There is no evidence that
Vates knew Janikowski would not obtain financing,
and on which the expert could base his
opinion./5 See Harmon v. OKI Systems, 115 F.3d
477, 480 (7th Cir. 1997) ("Without any evidence
in the record to support that (legal) conclusion,
[expert’s] statement simply is not enough to get
. . . to the jury."). Thus, the "actual
knowledge" element of the "spot delivery" theory
is also missing.

  Beyond these sundry factual problems,
Janikowski’s "spot delivery" theory fails legally
because this practice does not violate TILA. That
Act requires truthful disclosures of a consumer’s
legal obligations, and as discussed above, Lynch
Ford satisfied that statutory obligation.
Therefore, even if the factual premises of the
so-called "spot delivery" theory were present,
this situation would not violate TILA./6

  Janikowski also contends that Lynch Ford
violated the ICFA. Under Illinois law, failing to
disclose the financing terms of a consumer
contract violates the ICFA. Grimaldi v. Webb, 668
N.E.2d 39 (Ill. App. 1996). However, as discussed
in the context of TILA, Lynch Ford did not fail
to disclose, or misstate the financing terms.
Therefore, because in this case--unlike Grimaldi-
-Lynch Ford disclosed the financing terms,
Janikowski’s ICFA claim fails as well./7

  Because Lynch Ford disclosed the APRs for which
Janikowski was legally obligated before the
consummations of both the November 10 and
November 11 contracts, it did not violate TILA or
the ICFA. We therefore AFFIRM./8



/1 Janikowski alleged in her complaint that Lynch
Ford disclosed an APR of 5.4%, but the Retail
Installment Contract disclosed the APR at 5.9%.
On appeal she does not contend that the contract
improperly listed 5.9% as the rate which was
disclosed to her before she signed the contract.
Therefore, we will use 5.9% as the relevant rate.

/2 On appeal, Janikowski contends that we should
reverse the district court’s decision because it
failed, in part, to apply Local Rule 12N, which
provides that if the party opposing summary
judgment does not object to the proposed findings
of fact, the court should accept those facts as
admitted. However, Janikowski fails to even
recite the proposed findings of fact that the
district court allegedly failed to accept as
truth. She also fails to discuss at all how those
facts, if treated as admitted, would alter the
district court’s decision. Therefore, she has
waived this argument.

/3 As noted earlier, under the first contract
Janikowski was not legally obligated to purchase
the Escort at any rate other than 5.9%. In fact,
Lynch Ford was at risk when it permitted her to
take possession of the new car before financing
was approved. Had Janikowski decided not to sign
the revised 11.9% contract, Lynch could
technically have been stuck with a "used" car
causing immediate depreciation. So while the 5.9%
contract was indeed an attractive enticement to
Janikowski, it was also a risk to Lynch if
Janikowski was not satisfied with the 11.9%
alternative.

/4 Janikowski seems to take this sequencing from a
newspaper article. J. Dirks, "Scott’s Oregon AG
Sign Agreement," The Columbian (Vancouver, WA),
Mar. 5, 1998, sec. D 1.

/5 On appeal, Janikowski asserts in her "statement
of facts" that Vates "knew that Janikowski would
not qualify for, or receive, financing with a
5.9% APR prior to his disclosure of that rate to
Janikowski on November 10, 1998." In support of
this "fact," Janikowski cites to Lynch Ford’s
"Reply/Response to Plaintiff’s Rule 12(N)/12(M)
Statement of Additional Facts," in which Lynch
Ford denied this proposed fact. At best, this
citation indicates that a factual dispute exists.
But when we look to the underlying record--which
Janikowski did not cite in her appellate brief--
it becomes clear that there is no evidence that
Vates knew that Janikowski would not obtain
financing at 5.9% because there is nothing to
support the expert’s conclusion that Vates had
this knowledge.

/6 Additionally, the underlying premise of the "spot
theory"--that a consumer is unfairly put at risk
of being denied financing--is also misplaced
because as explained supra at n.3, the dealership
has an equal, if not higher risk.

/7 While Janikowski’s complaint also alleged a claim
of unjust enrichment, on appeal Janikowski did
not present any legal argument supporting this
theory. Therefore, that claim was waived. LINC
Finance Corp. v. Onwuteaka, 129 F.3d 917, 921
(7th Cir. 1997).

/8 Because the district court properly granted Lynch
Ford summary judgment, we need not consider
whether the district court erred in dismissing
the other Lynch-owned dealerships or in denying
class certification.
