                 NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                            File Name: 08a0185n.06
                               Filed: April 4, 2008

                                             No. 06-6540


                           UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT

DOROTHEA BROUGHTON and
MICHAEL BROUGHTON,

        Plaintiffs-Appellants,
                                                        ON APPEAL FROM THE UNITED
v.                                                      STATES DISTRICT COURT FOR THE
                                                        EASTERN DISTRICT OF KENTUCKY
ADAMS PONTIAC BUICK GMC TRUCK,
INC.,

        Defendant-Appellee.

                                                 /



BEFORE:         CLAY and McKEAGUE, Circuit Judges; and BOYKO, District Judge.*

        CLAY, Circuit Judge. Plaintiffs Dorothea and Michael Broughton appeal the district

court’s decision denying their claims under the Kentucky Consumer Protection Act, KRS § 367.170,

and under Kentucky common law, which arose out of their purchase of a new pickup truck. While

holding that it had supplemental jurisdiction to hear Plaintiffs’ claims, the district court granted

summary judgment to Defendant, holding both that Plaintiffs’ own testimony conflicted with their

claim that Defendant inflated an interest rate, and that no other genuine issue of fact existed as to the

price of the vehicle. While we agree with the district court that the record does not support a claim



        *
        The Honorable Christopher A. Boyko, United States District Judge for the Northern District
of Ohio, sitting by designation.
                                              No. 06-6540

that Defendants misrepresented the interest rate, the record does not account for a discrepancy

between the sticker price of the truck and the base price charged to Plaintiffs. Accordingly, we

AFFIRM the decision of the district court in part, REVERSE in part, and REMAND this case to

allow the district court to resolve the discrepancy with respect to the price of the vehicle, and for the

district court to resolve a genuine issue of material fact regarding whether Plaintiffs intended to use

the new truck primarily for the purposes stated in the Kentucky Consumer Protection Act.

                                      STATEMENT OF FACTS

        Plaintiffs Dorothea and Michael Broughton were living in Massachusetts in the spring of

2002, when they decided to move to Kentucky and purchase a farm. As part of this decision,

Plaintiffs also chose to trade in their Volvo for a heavy-duty pickup truck suitable for farm use.

According to Michael’s testimony, they eventually chose to purchase a GMC Sierra because it would

be able to “[m]ove rocks, get fence posts, hay, [and] stuff that horses need, like grain.” (J.A. 155.)

Dorothea also testified that the Sierra would allow them to tow a trailer during their move from

Massachusetts to Kentucky, to tow a horse trailer on their new farm, and to seat their kids in the

truck’s back seat.

        Plaintiffs also testified that the principal purpose of their new farm would be recreational.

Although Michael testified that he would “like to start something with alpacas”1 such as raising the

animals for wool and “possibly selling it to Churchill Weavers,” Plaintiffs never purchased any

alpacas. (J.A. 155–56.) Furthermore, while Plaintiffs grew hay on their Kentucky farm, they gave

this hay away to their neighbor for free and had never received any money for this crop. Dorothea


        1
            An alpaca is a domesticated animal similar in appearance to a small llama.

                                                   2
                                                   No. 06-6540

testified that she and her husband purchased four horses for “my children to ride and for me to ride.”

They never sold any of the horses, and they did not board other people’s horses at their farm. Both

Plaintiffs earn their living as teachers.

        With respect to their new truck, Plaintiffs contracted with Defendant, a Kentucky car

dealership, to purchase a new GMC Sierra on April 19, 2002. Both parties agree that Plaintiffs were

shown the sticker price of the vehicle—$35,983.00—prior to the purchase. Michael testified that

the dealer agreed to reduce that price through a $2002 rebate, and by another $2000 as credit for

trading in the Volvo. Inasmuch as Plaintiffs made a $5000 down payment on the truck, these figures

would result a loan of $26,981.00. As part of the sale, however, Defendant also agreed to pay off

the remainder of the money owed on Plaintiffs’ trade-in, on the condition that this amount would

also be financed. Michael testified that, at the time of the sale, he believed that he still owed

between $17,000 and $19,000 on the Volvo. Thus, using Plaintiffs’ figures, the total amount

financed should have been at least $43,981.2

        With respect to the interest rate on this loan, however, Plaintiffs’ own testimony portrays a

couple who may have been unaware of the nature of the bargain they were striking. Michael testified

that they originally hoped to receive “0.0” financing on their loan, (J.A. 162,) but that after


        2
            Plaintiffs’ analysis, is as follows:

        $35,983.00 sticker price
          - 2,000.00 trade-in credit
          - 5,000.00 down
          - 2,002.00 rebate
        +17,000.00 pay-off of Volvo
        --------------------------------------
        $43,981.00 Financed

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                                                 No. 06-6540

purchasing the truck he had the “feeling . . . that they were going to get me an [sic] interest between

2 and 6 percent . . . .” (J.A. 167.) Michael also admitted that he had no discussion with the dealer

about how much his monthly payment would be or the number of payments he would have to make,

and that the dealer never told him what the interest rate would be. Moreover, according to

Dorothea’s testimony, Plaintiffs knowingly signed incomplete financing and purchase agreements

in which the terms of the sale were left blank to be filled in later.

        The actual terms of the sale were very different from the one Plaintiffs described. According

to a purchase agreement signed by Dorothea, the “cash price of vehicle” was $43,086.80, not the

$35,983.00 sticker price. (J.A. 148.) Furthermore, the purchase agreement calculated the value of

Plaintiffs’ trade-in Volvo at $26,000, but also determined that Plaintiffs owed $24,544.51 on this

Volvo—resulting in a credit of only $1455.49 to Plaintiffs. The purchase agreement also added

$1943.08 in sales tax and $199.00 in “handling & fees,” resulting in a total purchase price of

$43,773.39. (Id.) Minus $7002.00 “cash down,” the purchase agreement resulted in $36,771.39 of

this purchase being financed.3 (Id.)



        3
            Defendant’s analysis, is as follows:

          $43,086.80 “cash price”
        - $26,000.00 trade-in credit
        +$24,544.51 owed on Volvo
        + $199.00 “handling and fees”
        - $7,002.00 “cash down,”
        --------------------------------------
          $36,771.39 Financed

The purchase agreement also adds a $1995.00 “service contract,” for a final total of $38,766.39.
(J.A. 148.)

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                                             No. 06-6540

        This financing, however, was done at a much higher interest rate than the two to six percent

Michael said he had the “feeling” he would receive. Under the financing agreement, which was

signed by both Michael and Dorothea, Plaintiffs agreed to pay a 14.34% interest rate. This high

interest rate resulted in monthly payments of $806.00, when Plaintiffs had previously paid only

$320.00 on their Volvo. Nevertheless, Plaintiffs made payments and used the new truck for at least

five months before they attempted to rescind the sale. When Defendant refused to agree to the

rescission, Plaintiffs continued to make payments for about two more years, tendering a total of 30

monthly payments to Defendant.

        This case was filed in December 2003, more than a year and a half after the original sale,

alleging that Defendant misrepresented the actual cost of the vehicle at the time of sale, in violation

of both the Kentucky Consumer Protection Act and Kentucky common law. Plaintiffs also alleged

federal truth in lending violations, although those claims were eventually dismissed.

                                            DISCUSSION

                                             Jurisdiction

        A federal district court has “supplemental jurisdiction over all other claims that are so related

to claims in the action within such original jurisdiction that they form part of the same case or

controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a). When a

district court has dismissed all claims over which it had original jurisdiction, the court has discretion

to “decline to exercise supplemental jurisdiction” over state law claims with respect to which it

initially asserted jurisdiction. § 1367(c)(3). Remand of the state law claims to state court is not

mandatory. Id. “[W]hen deciding whether to exercise supplemental jurisdiction, a federal court


                                                   5
                                             No. 06-6540

should consider and weigh in each case, and at every stage of the litigation, the values of judicial

economy, convenience, fairness, and comity.” City of Chicago v. International College of Surgeons,

522 U.S. 156, 173 (1997) (internal quotations omitted).

        The district court initially had original jurisdiction over Plaintiffs’ federal truth-in-lending

claim, and supplemental jurisdiction over the Kentucky law claims now on appeal. See § 1367(a).

Noting that both the federal and state claims arose out of the same sale between Plaintiffs and

Defendant, the district court exercised its discretion to retain jurisdiction over Plaintiffs’ state law

fraud claims once their federal claim was dismissed, (J.A. 111,) and granted summary judgment to

Defendant on both claims of fraud. Because this grant of summary judgment was a final judgment

of a district court, this Court now has jurisdiction to hear this appeal. 28 U.S.C. § 1291.

                                         Standard of Review

        This Court reviews a district court’s grant of summary judgment de novo. Spirit Airlines v.

Northwest Airlines, Inc., 431 F.3d 917, 930 (6th Cir. 2006). Summary judgment will be affirmed

if “the discovery and disclosure materials on file, and any affidavits show that there is no genuine

issue as to any material fact” which comprises an essential element of the non-moving party’s case.

Fed.R.Civ.P. 56(c). If, on the other hand, “a reasonable jury could return a verdict for the

non-moving party,” summary judgment for the moving party is inappropriate. Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986). In reviewing the district court's decision, this court draws all

justifiable inferences in favor of the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith

Radio Corp., 475 U.S. 574, 587 (1986).




                                                   6
                                             No. 06-6540

        Despite the inferences drawn in the non-moving party’s favor, the party opposing the motion

must “do more than simply show that there is some metaphysical doubt as to the material facts,” Id.

at 586, and may not contest a properly supported summary judgment motion merely by relying on

the pleadings. See Celotex Corp. v. Cartrett, 477 U.S. 317, 324 (1986). Rather, “the adverse party

‘must set forth specific facts showing that there is a genuine issue for trial.’” Anderson, 477 U.S.

at 250 (quoting Fed. R. Civ. P. 56(e)). This Court has no obligation to “wade through and search

the entire record for some specific facts that might support the nonmoving party’s claim.” See

InterRoyal Corp. v. Sponseller, 889 F.2d 108, 110-11 (6th Cir. 1989).

                                               Analysis

I.      PLAINTIFFS HAVE STATED A CLAIM UNDER KENTUCKY’S CONSUMER
        PROTECTION ACT

        Kentucky’s Consumer Protection Act (“CPA”) prohibits “unfair, false, misleading, or

deceptive acts or practices in the conduct of any trade or commerce . . . .” KRS § 367.170(1). A

private cause of action exists under this statute when the injured party purchased or leased goods or

services “primarily for personal, family or household purposes . . . .” § 367.220(1). The district

court held that Plaintiffs’ intended use of their truck to help run a farm did not constitute “personal,

family or household purposes,” and therefore concluded that they could not seek relief under the

CPA. For the reasons that follow, we disagree.

        The Supreme Court of Kentucky has only twice interpreted the CPA’s limitation of private

suits to cases involving goods or services used “primarily for personal, family or household

purposes.” In Stevens v. Motorists Mutual Insurance Company, 759 S.W.2d 819 (Ky. 1988), relying

largely on the Act’s plain language, Kentucky’s highest court held that a family who “purchased a

                                                   7
                                           No. 06-6540

homeowners' insurance policy protecting their home against certain losses . . . are the class of

persons who purchased services primarily for personal, family or household purposes.” Id. at 820.

Accordingly, Stevens allowed that family to recover against their insurance company. Id. at 821.

In Guaranty National Insurance Company v. George, 953 S.W.2d 946 (Ky. 1997), however, the

same court distinguished Stevens from a case involving the sale of a commercial liability policy. Id.

at 950. These cases make clear that the CPA’s private cause of action excludes commercial

transactions—that is, transactions which are made with the principal intent of generating a profit.

       The district court held that, because the truck at issue in this case “was purchased to be used

primarily for farming purposes,” Plaintiffs did not intend for it to be used “primarily for personal,

family or household purposes.” (J.A. 118.) This holding reads the words “personal, family or

household” far too narrowly. Plaintiffs are not farmers; they are schoolteachers who live on a farm.

While they keep horses on the farm, they keep these horses solely for personal and family use as

recreational riding animals. They grow some crops on the farm, but they give these crops away for

no profit. And while Michael Broughton did admit that he would “like to start something with

alpacas,” he has yet to purchase a single alpaca. (J.A. 155.) Moreover, even if Plaintiffs did intend

to put the truck to some commercial purpose, the CPA still allows them to recover if they purchased

it “primarily for personal, family or household purposes.” § 367.220 (emphasis added). At the very

least, a genuine issue of material fact exists as to whether the truck was purchased primarily to

maintain a commercial alpaca farm, and the district court erred in holding otherwise.

       The district court relied on Gooch v. E.I. DuPont de Nemours & Co., 40 F. Supp.2d 857

(W.D. Ky. 1998) in holding that Plaintiffs failed to state a claim under the CPA, yet this case


                                                 8
                                             No. 06-6540

supports a holding that the availability of the Act hinges upon whether a plaintiff principally intended

to profit from a transaction. In Gooch, the court held that a company which was “primarily in the

business of farming” could not seek relief under the CPA because it purchased the goods at issue in

that case to “maximize its profits.” Id. at 862. Unlike the company in Gooch, Plaintiffs are

schoolteachers who appear to enjoy farming as a hobby. They have earned no profits off of their

farm.

        The district court also relied on Aud v. Illinois Central Railroad Co., 955 F. Supp. 757 (W.D.

Ky. 1997) and Cohen v. North Ridge Farms, Inc., 712 F. Supp. 1265 (E.D. Ky. 1989) which held

that railroad ballast, ties and tracks and a thoroughbred horse, respectively, were not “consumer

goods” protected by the CPA. Aud, 955 F.Supp. at 759; Cohen, 712 F. Supp. at 1271. These cases

are inapposite, however, as the instant case involves the sale of a pickup truck, a good routinely sold

in the consumer market.

        The district court erred in holding that, because Plaintiffs intended to use the truck they

purchased to help run a farm, it necessarily followed that they were not operating that farm for

personal, family or household use. On remand, the district court must resolve the genuine issue of

material fact over whether Plaintiffs intended to use their new truck primarily for the purposes stated

in the CPA.

II. A GENUINE ISSUE OF MATERIAL FACT EXISTS AS TO WHETHER
DEFENDANT MADE MISREPRESENTATIONS TO PLAINTIFFS

A.      The CPA

        Under the CPA, Plaintiffs may recover if they can prove “unfair, false, misleading, or

deceptive acts or practices” on the part of Defendant. KRS § 367.170(1). Plaintiffs allege that

                                                   9
                                            No. 06-6540

Defendant misled them both by charging a higher interest rate than the parties agreed to, and by

inflating the base price of the truck. For the reasons which follow, we hold that the first allegation

lacks merit, but that the second claim may proceed to trial.

       1.      Interest Rates

       Plaintiffs first allege that Defendant agreed to finance the truck at an interest rate of 6% or

less, and that it fraudulently inflated this rate to 14.34%. Plaintiff Michael Broughton’s own

testimony, however, belies this claim. While Michael testified that he had the “feeling . . . that

[Defendant was] going to get me an [sic] interest between 2 and 6 percent,” he also admitted that he

had no discussion with the dealer about how much his monthly payment would be or the number of

payments he would have to make, and that the dealer never told him what the interest rate would be.

(J.A. 167–68.) Given this admission, there is no genuine issue as to whether or not Defendant

misled Plaintiffs about their interest rate. For Defendant to have misled Plaintiffs, it would have

needed to make an actual representation as to what the interest rate would be. Plaintiff Michael

Broughton admits that such a representation did not occur. Accordingly, the district court properly

dismissed Plaintiffs’ claim regarding their interest rate.

       2.      Base Price of the Truck

       We reach a different conclusion, however, with respect to Plaintiffs’ claims regarding the

base price of the truck. Defendant admits that, at the time of the purchase, Plaintiffs were shown the

sticker price of the truck they purchased, $35,983.00, and a document included in the record

confirms this price. (J.A. 64) Nevertheless, the purchase agreement, which Plaintiff Dorothea

Broughton claims was blank at the time that she signed it, lists the “Cash Price of Vehicle” at


                                                  10
                                              No. 06-6540
$43,086.80. (J.A. 62.) Defendant does not provide any explanation for the $43,086.00 base price

listed on the purchase agreement.

        Rather than explaining the rationale behind this number, Defendant repeats an error made

by the district court. The district court noted that, had the total cost of the vehicle been calculated

according to the figures described in Plaintiffs’ testimony, Plaintiffs would have financed

approximately $43,500, rather than the approximately $38,700 actually charged to Plaintiffs under

the purchase agreement.4 The district court then concluded that, because the actual price of the

vehicle was less than the final cost of the vehicle had the price been calculated using all of Plaintiffs’

numbers, Plaintiffs could not possibly be victims of fraud.

        It does not follow, however, from the fact that Plaintiffs themselves miscalculated the cost

of the truck that Defendant did not overcharge Plaintiffs. Defendant admits that the sticker price of

the truck was $35,983.00. It provides no explanation for the $43,086.80 base price listed on the

purchase agreement. Accordingly, a genuine issue of material fact exists as to whether Defendant

fraudulently inflated the base price of the vehicle, and the decision of the district court dismissing

Plaintiffs’ claim that the base price of the vehicle was inflated must be reversed. On remand, the

district court shall determine why the sticker price is inconsistent with the base price actually charged




        4
         Recall that Plaintiffs calculated the cost of the vehicle as follows: $35,983.00 sticker price-
2,000.00 trade-in credit - 5,000.00 down - 2,002.00 rebate +17,000.00 pay-off of Volvo =
$43,981.00 Financed.
        The purchase order made the following calculation: $43,086.80 “cash price”- $26,000.00
trade-in credit + $24,544.51 owed on Volvo + $199.00 “handling and fees” - $7,002.00 “cash down”
+ $1995.00 “service contract” = $38,766.39.

                                                   11
                                             No. 06-6540
to Plaintiffs. Defendant may prevail if it can demonstrate that Plaintiffs were made aware of and/or

agreed to the $43,086.80 base price prior to their signing the purchase agreement.

B.      Common Law Fraud

        Plaintiffs also allege that Defendant committed common law fraud in misrepresenting the

sale price of the truck. To state a common law fraud claim under Kentucky law, Plaintiffs must

prove six elements: 1) Plaintiffs must show that Defendant made a “material misrepresentation;”

2) “which is false;” 3) which Defendant knew “to be false or made recklessly;” 4) which was made

in order to induce Plaintiff to act in a certain manner; 5) that Plaintiff so acted in reliance on the

misrepresentation; and, 6) that Plaintiff was injured as a result of this reliance. Denzik v. Denzik, 197

S.W.3d 108, 110 (Ky. 2006).           “Fraud may be established by evidence which is wholly

circumstantial.” United Parcel Service Co. v. Rickert, 996 S.W.2d 464, 468 (Ky. 1999).

        As discussed above, Plaintiffs have not raised a genuine issue of material fact as to whether

Defendant made a “material misrepresentation” regarding the interest rate of the truck’s financing.

Accordingly, Plaintiffs’ common law fraud claim regarding the interest rate lacks merit. See Denzik,

197 S.W.3d at 110. With respect to the base price of the truck, however, we conclude that the

discrepancy between the sticker price and the actual price charged to Plaintiffs raises enough of an

inference that Defendant may have knowingly or recklessly made false statements, which induced

Plaintiffs to purchase an overpriced truck, to allow a jury to resolve this claim. Accordingly, we

reverse the district court insofar as it held that no issue of material fact exists regarding whether

Defendant misrepresented the base price of the truck.

C.      “Unreasonable Delay”


                                                   12
                                             No. 06-6540
       Defendant, relying on Gargotto v. Sherman, 180 S.W.2d 565 (Ky. 1944), argues that

Plaintiffs, by continuing to use the truck after discovering its allegedly inflated purchase price,

“cannot now claim that they are entitled to revoke acceptance of the Sierra.” (Defendant’s Br. at 13)

In Gargotto, Kentucky’s then-highest court held that when the purchaser of a good engages in

“unreasonable delay” in attempting to rescind a sale, “the purchaser affirms the sale and loses his

right of rescission.” Id. at 566. Gargotto, however rested upon KRS § 361.690, which has since

been repealed. See id. at 599.

       KRS § 361.690 was included in Kentucky law as part of the Uniform Sales Act, which

Kentucky has since been replaced with the Uniform Commercial Code (“UCC”). See KRS § 361.

The UCC, however, does not control this case. Generally speaking, a claim filed under the CPA is

timely if filed within that statute’s two year statute of limitations. KRS § 367.220(5). We can find

no provision of Kentucky law which imposes an “unreasonable delay” standard on claims brought

under the CPA. Similarly, although the UCC contains a provision requiring a buyer rejecting

tendered goods to do so “within a reasonable time,” KRS § 355.2-607, the UCC supplements, but

does not displace claims for common law fraud. See KRS § 355.1-103. Accordingly, even if we

were to hold that a fraud claim under the UCC must be brought “within a reasonable time” of an

allegedly fraudulent sale, no provision of Kentucky law applies this UCC standard to common law

fraud claims. Accordingly, Defendant’s claim that this case was not timely filed lacks merit.

                                          CONCLUSION

       The district court properly granted summary judgment to Defendant regarding whether

Defendant misrepresented the interest rate charged to Plaintiffs. Nevertheless, the district court erred


                                                  13
                                            No. 06-6540
in holding that no genuine issue of material fact exists both with respect to Plaintiffs’ intended use

for their new vehicle, and with respect to the discrepancy between the truck’s sticker price and the

actual price of the truck at sale. Accordingly, we AFFIRM in part the grant of summary judgment

to Defendant with respect to the interest rate issue, and REVERSE and REMAND with respect to

Plaintiffs’ claim regarding the price discrepancy and the intended use of the new vehicle.




                                                 14
