United States District Court, D. Maryland
CATHERINE C. BLAKE, District Judge.
This case arises from the purchase by Anthony J. Price and Virginia K. Aldrich ("the plaintiffs") of a used Jeep from Berman's Automotive Inc. ("the Dealership"), a Baltimore car dealership. In their five-count amended complaint, the plaintiffs allege, among other things, that the Dealership failed to properly disclose the content of an agreement financing the plaintiffs' purchase of the Jeep, and that two Dealership employees orally misrepresented its monthly payment terms. They also seek compensation based on their post-purchase discovery that the Dealership advertised the Jeep on the internet for a lower price. Before the court are the Dealership's motion to dismiss the plaintiffs' original complaint or in the alternative for summary judgment, (ECF No. 3), the Dealership's motion to dismiss the plaintiffs' amended complaint or in the alternative for summary judgment, (ECF No. 7), and the plaintiffs' response to the motion to dismiss their amended complaint and cross motion for summary judgment, (ECF No. 8). The court finds oral argument unnecessary to resolve the issues. See Local R. 105.6 (D. Md. 2011). For the reasons that follow, the court will deny as moot the Dealership's motion to dismiss the plaintiffs' original complaint, grant in part and deny in part the Dealership's motion to dismiss, and deny the plaintiffs' cross motion for summary judgment.
On February 25, 2014, the plaintiffs went to the Dealership and decided to buy a 2003 Jeep Grand Cherokee ("the Jeep"). (Am. Compl. ¶¶ 8, 12, ECF No. 6.) They could not pay the Jeep's full price in cash, and so began to discuss a financing arrangement with the Dealership. ( Id. ¶¶ 7-8.) They told a Dealership salesperson "they could not afford payment[s] greater than $300.00 per month and he replied the payments would be about $300.00 - $301.00 a month for 36 months, " or about $10, 800 in total. ( Id. ¶ 7.) A female "[f]inance [p]erson" produced a Retail Installment Sales Contract ("RISC"). ( Id. ¶ 9.) Before signing the RISC the plaintiffs asked her if the monthly payments were under $300, and she said "words to [the] effect [that] once the balance of the down payment is made it will be right around $300.00 per month." ( Id. ) The finance person then "held [the RISC] in her hand... and told [the] plaintiffs where to sign or initial, " saying "initial here, initial there, " and "sign here[, ] sign there." ( Id. ¶ 10.) In doing so, she "only exposed the area of each sheet of paper that required [the] plaintiffs' initial[s] and/or signature." ( Id. ¶ 11.) She "retained control of each sheet of paper[, ] precluding [the] plaintiffs from reading the documents, " and did not "provide the documents to [the] plaintiffs for review prior to or during [their] execution" of the RISC. ( Id. ¶ 10.)
Following their execution of the RISC but "[d]uring the same transaction, " the plaintiffs signed a one-page down payment agreement. ( Id. ¶ 62; ECF No. 8-5 (down payment agreement).) The down payment agreement clarified that though the full down payment was $2, 000, the plaintiffs would pay $1, 200 that day, and the remaining $800 would be "deferred" until March 11, 2014. ( Id. )
Later that evening, the plaintiffs "saw on the Internet that the [Jeep] was advertised for $5, 995.00." (Am. Compl. ¶ 17.) They also reviewed the RISC, and "for the first time saw that [the Dealership] wrote on the RISC there would be 12 monthly payments at $882.31 per month rather than the agreed 36 monthly payments at approximately $300 per month." ( Id. ¶ 18.) They returned to the Dealership the following morning and spoke with the same finance person, asking her why the price the Dealership charged them was so much higher than the advertised price. ( Id. ¶ 19.) She said the reason was "because they did not purchase [the Jeep] on the Internet." ( Id. )
Motion to Dismiss Standard
When ruling on a motion under Rule 12(b)(6), the court must "accept the well-pled allegations of the complaint as true, " and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). "Even though the requirements for pleading a proper complaint are substantially aimed at assuring that the defendant be given adequate notice of the nature of a claim being made against him, they also provide criteria for defining issues for trial and for early disposition of inappropriate complaints." Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). "The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6)." Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To survive a motion to dismiss, the factual allegations of a complaint "must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). "To satisfy this standard, a plaintiff need not forecast' evidence sufficient to prove the elements of the claim. However, the complaint must allege sufficient facts to establish those elements." Walters, 684 F.3d at 439 (citation omitted). "Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is probable, ' the complaint must advance the plaintiff's claim across the line from conceivable to plausible.'" Id. (quoting Twombly, 550 U.S. at 570).
In considering a Rule 12(b)(6) motion, the court need not always limit its review to the pleadings. It can also take judicial notice of public records, including statutes, and can "consider documents incorporated into the complaint by reference, as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic." United States ex rel. Oberg v. Pennsylvania Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014) (citations and internal quotation marks omitted).
Count One: Truth in Lending Act
The plaintiffs first assert several violations of the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601-1667f. Congress passed TILA "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." 15 U.S.C. § 1601(a). "As such, TILA requires that a creditor make certain material disclosures at the time [a] loan is made." Gilbert v. Residential Funding LLC, 678 F.3d 271, 276 (4th Cir. 2012) (citing 15 U.S.C. § 1638(a)). These disclosures include, among other things, the amount financed, the finance charge, and the annual percentage rate. See 15 U.S.C. § 1638(a)(2)-(4).
The Federal Reserve Board implemented TILA through a regulation known as Regulation Z, codified at 12 C.F.R. § 226. Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 557 (1980). Regulation Z elaborates on the form and timing of disclosures, requiring that the creditor "make the disclosures... clearly and conspicuously in writing, in a form that the consumer may keep, " 12 C.F.R. § 226.17(a)(1), and that the creditor do so "before consummation of the transaction, " 12 C.F.R. § 226.17(b). See also Polk v. Crown Auto, Inc., 221 F.3d 691, 692 (4th Cir. 2000) ("[W]ritten disclosure in the form specified in subpart (a) must be provided to the consumer at the time specified in subpart (b)."). "Consummation means the time that a consumer becomes contractually obligated on a credit transaction." 12 C.F.R. § 226.2(a)(13).
The plaintiffs' first asserted TILA violation centers on the timing of the Dealership's disclosures. Specifically, the plaintiffs allege that a Dealership employee "held" and "retained control" of the RISC (which contained the TILA disclosures) while instructing the plaintiffs where to initial and sign, "precluding [the] plaintiffs from reading the documents...." (Am. Compl. ¶ 10.) Therefore, the plaintiffs conclude, the Dealership did not "provide the documents to [them] for review prior to or during execution." ( Id. )
The Official Staff Interpretations of Regulation Z ("the Interpretations") make clear that the plaintiffs have stated a claim as to the timing ...