United States District Court, D. Maryland
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For Monica Sterling, Plaintiff: Tyler King, Tyler Jay King Esq Attorney At Law, Washington, DC.
For Ourisman Chevrolet of Bowie, Inc., Lew Gilinsky, William Taliaferro, Henry Hylton, Defendants: Richard W Evans, McCarthy Wilson, Rockville, MD.
Paul W. Grimm, United States District Judge.
This Memorandum Opinion addresses the Motion to Dismiss that Defendants Ourisman Chevrolet of Bowie, Inc., Henry Hylton, William Taliaferro, and Lew Gilinsky filed, ECF No. 5; Plaintiff Monica Sterling's Opposition, ECF No. 12; and Defendants' Reply, ECF No. 14. A hearing is not necessary. See Loc. R. 105.6. For the reasons stated herein, Defendant's Motion is GRANTED IN PART and DENIED IN PART. Defendants must file their Answers no later than May 16, 2013, at which time the Court will enter a Scheduling Order and schedule a Rule 16 conference call with the parties to discuss further pretrial proceedings. This Memorandum Opinion disposes of ECF Nos. 5, 12 and 14.
Plaintiff went to Ourisman's dealership on September 11, 2012 to trade in her 2007 Chevrolet Trailblazer for a different vehicle. Compl. ¶ ¶ 5, 10-11, ECF No. 1. She test drove a " fully loaded" Chevrolet Traverse and met with Ourisman employees, including Gilinsky, Hylton, and Taliaferro. Id. ¶ ¶ 7-9, 13-16. Gilinsky suggested a monthly payment of $650, Plaintiff said that it was acceptable to her, and Hylton met with Plaintiff regarding the necessary paperwork. Id. ¶ ¶ 17-19, 31. Hylton said that Plaintiff would have to provide her three most recent bank statements and a copy of Schedule C from her tax return, although she could sign the contract prior to producing the documents. Id. ¶ ¶ 19-20. He then informed her that the cost of the Traverse was $10,000 more than Ourisman originally quoted her, but that she could purchase a Chevrolet Equinox instead for the quoted amount. Id. ¶ ¶ 22, 24. Plaintiff left the dealership without purchasing a vehicle. Id. ¶ ¶ 25-27.
She returned with the requested documents the next day and test drove the Equinox. Id. After the test drive, Hylton informed Plaintiff that the Equinox would cost $800 per month, rather than the $650 per month he quoted her the day before. Id. ¶ 31. Plaintiff said that she would only pay $650 per month. Id. ¶ ¶ 32-33. Another employee named Robert later told Plaintiff that Ourisman could sell her the Equinox for $650 per month as expected, id. ¶ 38, and that she would have to make a deposit of $1,000 that day and a payment of $800 on September 20, 2012 before the transaction would be final, id. ¶ ¶ 40-41. Plaintiff signed a " Vehicle Sales Contract" and a " Retail Installment Sale Contract," agreeing to purchase the Equinox and trade in her own vehicle, and agreeing to the financing terms. Id. ¶ ¶ 44-45.
Approximately sixteen days later, Taliaferro called Plaintiff and told her for the first time that she had to sign an IRS form 4506-T, which Plaintiff did. Id. ¶ ¶ 49, 51, 55. About five days later, Taliaferro informed Plaintiff that Ourisman was unable to secure financing for her and therefore she needed to return the Equinox. Id. ¶ 59. Plaintiff returned the vehicle, id. ¶ 64, and Taliaferro said that Ourisman would " mail her the difference" left from her deposit, based on " how much Ms. Sterling
had driven the Equinox." Id. ¶ ¶ 65-66. Taliaferro loudly commented, " in the presence of third parties, . . . about how Ms. Sterling needed to deal with her credit, and get in touch with GMAC to straighten out her financing." Id. ¶ 68.
Plaintiff's Trailblazer " had been sold, driven 100 miles, did not start properly, and the 'check engine' light was on," and Ourisman replace the tires, such that they were no longer under warranty. Id. ¶ ¶ 74-76, 94. Additionally, Plaintiff incurred late fees for not making payments on the Trailblazer while Defendants had it. Id. ¶ 95. Ourisman had to buy the Trailblazer back to return it to her, id. ¶ 74-76, and told Plaintiff that she owed them $1,400, id. ¶ 78. After Plaintiff complained, Gilinsky told Plaintiff verbally, and in writing on the back of his business card, that Ourisman would return all of her money within four days. Id. ¶ ¶ 91-92.
Ourisman did not return Plaintiff's deposit. Id. ¶ 93. Plaintiff filed a Complaint against Defendants and Ally Financial, Inc., alleging various statutory claims, as well as the common law torts of fraud and negligence. Compl. 1.
II. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) provides for " the dismissal of a complaint if it fails to state a claim upon which relief can be granted." Velencia v. Drezhlo, Civil Action No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012). This rule's purpose " 'is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.'" Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). To that end, the Court bears in mind the requirements of Rule 8, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must contain " a short and plain statement of the claim showing that the pleader is entitled to relief," Fed.R.Civ.P. 8(a)(2), and must state " a plausible claim for relief," as " [t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice," Iqbal, 556 U.S. at 678-79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from Iqbal and Twombly ). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 663.
According to Plaintiff, this case " is essentially a simple case of fraud," with fraudulent behavior underlying each of the statutory claims. Pl.'s Opp'n 1. Plaintiff's fraud allegations must meet the " heightened pleading standard under Rule 9(b)." Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *5 (D. Md. Jan. 22, 2013).
Rule 9(b) states that " in alleging a fraud or mistake, a party must state with particularity the circumstances constituting the fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Such allegations [of fraud] typically " include the 'time, place and contents of the false representation, as well as the identity of the person making the misrepresentation and what [was] obtained thereby.'" In cases involving concealment or omissions of material facts, however, meeting Rule 9(b)'s particularity
requirement will likely take a different form. The purposes of Rule 9(b) are to provide the defendant with sufficient notice of the basis for the plaintiff's claim; to protect the defendant against frivolous suits; to eliminate fraud actions where all of the facts are learned only after discovery; and to safeguard the defendant's reputation.
Id. (citations omitted); see Spaulding v. Wells Fargo Bank, N.A., No. 12-1973, 714 F.3d 769, 2013 WL 1694549, at *9 (4th Cir. Apr. 19, 2013).
A. Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § 1692 et seq. (Count I)
" 'The FDCPA protects consumers from abusive and deceptive practices by debt collectors, and protects non-abusive debt collectors from competitive disadvantage. Section 1692e forbids the use of any false, deceptive, or misleading representation or means in debt collection and provides a non-exhaustive list of prohibited conduct.'" Stewart v. Bierman, 859 F.Supp.2d 754, 759 (D. Md. 2012) (quoting United States v. Nat'l Fin. Servs., Inc., 98 F.3d 131, 135 (4th Cir.1996) (quotation omitted)). Plaintiff claims that Defendants violated 15 U.S.C. § § 1692d, 1692e(2) and (10), and 1692f. To state a claim for relief under any of these provisions of the FDCPA, Plaintiff must allege that " (1) the plaintiff has been the object of collection activity arising from consumer debt, (2) the defendant is a debt [ ] collector as defined by the FDCPA, and (3) the defendant has engaged in an act or omission prohibited by the FDCPA." Stewart, 859 F.Supp.2d at 759-60 (citation omitted); see Ademiluyi v. PennyMac Mortg. Inv. Trust Holdings I, LLC, No. ELH-12-752, 929 F.Supp.2d 502, 2013 WL 932525, at *17 (D. Md. Mar. 11, 2013) (citing 15 U.S.C. § 1692). Defendants contend that " Plaintiff has not alleged facts sufficient to support a finding that any Defendant is a debt collector as defined in the FDCPA." Defs.' Mem. 7.
A " debt collector" is " any person who uses any instrumentality of interstate commerce . . . in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). Simply put, " a party qualifies as a debt collector where it operates a business that has the principal purpose of collecting debts or regularly attempts to collect debts that are owed to another." Goia v. CitiFinancial Auto, No. 12-12639, 499 Fed.Appx. 930, 2012 WL 6013206, at *6 (11th Cir. 2012). " Notably, " the FDCPA does not apply to any person collecting on a debt that it 'originated.'" Ademiluyi, 2013 WL 932525, at *13 (quoting 15 U.S.C. § 1692a(6)(F)(ii)).
Here, Plaintiff has not tried to allege, nor could she succeed in alleging, that any of Defendants is operating a business the principal purpose of which is to collect debts. Rather, Defendants are a car dealership and its employees; the principal purpose of their business is to sell cars. Nor had Plaintiff alleged that any of Defendants regularly collects debts due to another. Plaintiff points to ¶ 102 of the
Complaint and insists that it " specifically states how Defendants violated the FDCPA as debt collectors," Pl.'s Opp'n 5, but in that Paragraph, Plaintiff quotes the FDCPA and recites alleged acts of Defendants; she does not allege that Defendants are debt collectors. Plaintiff's only claim that Defendants are debt collectors is in ¶ 100 of the Complaint, where she alleges that " Defendants are creditors and debt collectors under 15 U.S.C. § 1692a." This is a " threadbare recital[s] of the elements" of the claim, and the Court is unable to " draw the reasonable inference that the defendant[s] [are] liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 663, 678-79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Moreover, a car dealership is, " [a]t most," a creditor--indeed, as noted, Plaintiff categorizes Defendants as " creditors," Compl. ¶ 100--and " 'creditors are not liable under the FDCPA.'" Eley v. Evans, 476 F.Supp.2d 531, 534 (E.D. Va. 2007) (quoting Scott v. Wells Fargo Home Mortg. Inc., 326 F.Supp.2d 709, 717 (E.D. Va. 2003)).
Nonetheless, Plaintiff insists that " Ourisman is a debt collector under the FDCPA because it acts as a debt collector for its intended assignees." Pl.'s Opp'n 4. However, " [t]he legislative history of section 1692a(6) indicates conclusively that a debt collector does not include . . . an assignee of a debt, as long as the debt was not in default at the time it was assigned." Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985) (citing S. Rep. No. 95-382, 95th Cong., 1st Sess. 3, reprinted in 1977 U.S.C.C.A.N. 1695, 1698)); see Martin v. Westlake Fin. Servs., No. 11-CV-6345 (CBA)(RML), 2012 WL 1301200 (E.D.N.Y. Apr. 16, 2012) (dismissing claim against Westlake, the company that provided the loan for plaintiff's vehicle purchase, for failure to state a claim under the FDCPA because " any assignment of rights between the dealership and Westlake occurred before any default on the debt, in which case Westlake is still not a debt collector" ). Even if Ourisman collected debts for its " intended assignees," Pl.'s Opp'n 4, Plaintiff has not alleged that Ourisman assigned a debt to an assignee, let alone that it assigned, or intended to assign, a debt that was in default. Therefore, none of Defendants is a debt collector, such that Plaintiff has failed to state a claim under the FDCPA for which relief can be granted. See Stewart v. Bierman, 859 F.Supp.2d at
Count I is DISMISSED. See Fed.R.Civ.P. 12(b)(6).
B. Racketeer Influenced and Corrupt Organizations Act (" RICO" ), 18 U.S.C. § 1961 et seq. (Count II)
RICO " 'is concerned with eradicating organized, long-term, habitual criminal activity,'" not " 'all instances of wrongdoing.'" Mitchell Tracey v. First Am. Title Ins. Co., No. WDQ-12-1329, 935 F.Supp.2d 826, 2013 WL 1296390, at *6-7 (D. Md. Mar. 28, 2013) (quoting U.S. Airline Pilots Ass'n v. Awappa, LLC, 615 F.3d 312, 317 (4th Cir. 2010) (internal quotation marks omitted)). Courts, therefore, must " 'exercise caution' to ensure that 'RICO's extraordinary remedy does not threaten the ordinary run of commercial transactions,'" while at the same time " read[ing] the terms of the statute 'liberally' to 'effectuate its remedial purposes.'" Id. (quoting U.S. Airline Pilots, 615 F.3d at 317 (internal quotation marks omitted)).
Plaintiff claims that Defendants violated 18 U.S.C. § 1962(c). Compl. ¶ 118. Section 1962(c) provides:
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
To state a claim for relief based on a violation of § 1962(c), Plaintiff must allege " (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity," Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985), or
(1) there was a RICO enterprise, (2) its activities affected interstate commerce, (3) the individual defendants were employed by or associated with the enterprise, (4) the defendants used, in the operation of the enterprise, income derived from the collection of unlawful debt, (5) the individual defendants participated in the conduct of the affairs of the enterprise through collection of unlawful debt, (6) the debt was unenforceable in whole or in part because of state or federal laws relating to usury, (7) the debt was incurred in connection with the business of lending money at a usurious rate, and (8) the usurious rate was at least twice the enforceable rate.
Day v. DB Capital Group, LLC, No. DKC-10-1658, 2011 WL 887554, at *13 (D. Md. Mar. 11, 2011) (citation and quotation marks omitted). The elements of RICO claims for collection of unlawful debt are largely the same as for RICO claims for racketeering activity; " [t]he key additional requirement is simply the allegation of a collection unlawful debt and the use of proceeds from that collection to further the enterprise." Id. In both instances, the enterprise must affect interstate commerce. See id.; Martin v. JTH Tax, Inc., No. 9:10-cv-03016-DCN, 2013 WL 1282224, at *4 (D.S.C. Mar. 27, 2013). Defendants contend that Plaintiff failed to allege sufficiently that " any Defendant was engaged in an enterprise ...