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Wiley v. Regional Acceptance Corporation

United States District Court, D. Maryland

May 4, 2015



THEODORE D. CHUANG, District Judge.

In 2013, Defendant Regional Acceptance Corporation ("RAC") repossessed and sold a car purchased by Plaintiffs Jason and Reesha Wiley (the "Wileys") after they defaulted on their car loan payments. Due to a number of alleged errors in RAC's notices of repossession and sale, the Wileys, on behalf of themselves and a prospective class of similarly situated individuals, have brought suit against RAC. They assert claims for declaratory and injunctive relief, breach of contract, violations of the Maryland Credit Grantor Closed End Credit Provisions ("CLEC"), Md. Code Ann., Com, Law §§ 12-1001 et seq. (West 2015), and violations of the Maryland Consumer Debt Collection Act ("MCDCA"). Md. Code Ann., Corn. Law §§ 14-101 et seq. (West 2015). Presently pending is RAC's Motion to Dismiss. ECF No. 11. The issues have been fully briefed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons set forth below, the Motion is GRANTED IN PART and DENIED IN PART.


The following facts are presented as alleged in the Complaint. In 2007, the Wileys, a married couple, bought a used 2004 Honda Accord from Majestic Motor Cars, Inc. ("Majestic") in Glen Burnie, Maryland. Compl. ¶ 2, ECF No. 2..1 hey financed the purchase through a retail installment sale contract ("RISC") with Majestic, which later assigned the RISC to RAC. Id. ¶¶ 3-4. The RISC is subject to the requirements of the CLEC. Id. ¶ 4. By January 2013. the Wileys had fallen behind on their payments, so RAC mailed them a notice of its intent to repossess the car. Id ¶¶ 11-12, The Wileys have alleged that the notice was not sent by registered or certified mail and that they never received it. Id. ¶ 12. Despite making additional payments in February, March, and April 2013, the Wileys were unable to bring their account current. Id. ¶ 14.

In June 2013, RAC repossessed the car. Id. The Wileys have alleged that RAC did not send to them a separate notice of intent to repossess following their additional payments through April 2013, and that RAC "never complied with the CLEC requirement that any such notice be sent by certified or registered mail." Id ¶ 15. After it repossessed the car, RAC sent the Wileys a "Notice of Repossession and our Plan to Sell Property" (the "Redemption Notice"). Id ¶ 16. The Redemption Notice stated that RAC had repossessed the car and planned to sell it, and it outlined the Wileys' right to redeem (reacquire) the car and described the costs they would have to pay to do so. which included RAC's repossession and storage costs. Id. ¶¶ 16, 16(a). The Redemption Notice also informed the Wileys that RAC would sell the car at a public auction through an auctioneer. Id ¶ 16(d). The Wileys allege that the auctioneer identified by RAC advertises that its sales are private, dealer-only sales and requires a substantial deposit from prospective bidders. Id. The Redemption Notice also stated that the Wileys would be responsible for any attorney's fees and court costs arising from the sale, though none were incurred. Id. ¶ 16(c).

On July 12, 2013, RAC sold the Wileys' car at a private sale in West Virginia, about 380 miles from where the Wileys lived. Id. ¶ 17. Afterwards, RAC sent the Wileys a "deficiency notice" that identified how much the Wileys still owed RAC, but did not provide a full accounting of the private sale, as required by the CLEC. Id The Wileys were unable to learn any details of the sale by contacting the auctioneer directly. Id ¶ 19. About a month after the sale, RAC sent the Wileys a letter purporting to confirm the Wileys' agreement to pay a deficiency balance in an amount different from the one contained in the Deficiency Notice, hut the Wileys had made no such agreement. Id. ¶ 18.

The Wileys filed suit on August 22, 2014, seeking a declaratory judgment that RAC must provide timely, complete, and accurate redemption and deficiency notices as required by the CLEC (Count I). The Wileys also assert claims for breach of contract (Count II), a violation of the CLEC (Count 111), and a violation of the MCDCA (Count IV). all based on the allegation that RAC's inadequate notices and conduct violated the CLEC.

On September 25, 2015, RAC filed its Motion to Dismiss. ECF No. 11. In submitting their Opposition to Defendant's Motion to Dismiss, ECF No. 12. the Wileys requested leave to amend the Complaint and attached a proposed Amended Complaint, see Pl.'s Opp. Def.'s Mot. Dismiss ("Pl.'s Opp.") at 3, ECF No. 12; see also Pl.'s Opp. Ex. 1 ("Am. Compl."), ECF No. 12-1. The proposed Amended Complaint continues to claim that the Wileys never received a Notice of Intent to Repossess. but it no longer alleges that RAC failed to send such a notice by certified or registered mail. Am. Compl. ¶ 18. The proposed Amended Complaint also alleges additional facts in support of the claim that the Wileys' car was sold at a private dealer sale, including asserting that the auctioneer's website has markers indicating that RAC's auctions are "restricted to dealers." Id. ¶ 21. It also alleged that the sale was not conducted in a "commercially reasonable manner." Id. ¶ 49. On November 3, 2014, RAC filed its Reply in Response to Plaintiff's Opposition to Defendant's Motion to Dismiss, in which it opposed granting the Wileys leave to amend the Complaint. Def.'s Reply at 2 &. n.2, ECF No. 13.


I. Leave to Amend

Under Federal Rule of Civil Procedure 15(a), "a party may amend its pleading only with the opposing party s written consent or the court's leave." Fed.R.Civ.P. 15(02). Here, RAC opposes amendment of the Complaint. Rule 15 also provides that "Nile court should freely give leave when justice so requires." Id. Because no answer has yet been filed, and because this is the Wileys' first request for leave to amend, the Court will grant leave. The Wileys' are directed to file clean and redline copies of its proposed Amended Complaint, ECF No. 12-1, which shall be docketed.

II. Motion to Dismiss

In its Motion, RAC seeks dismissal based on its assertion that the Wileys have failed to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). Specifically, it claims that the Complaint does not sufficiently allege a violation of the CLEC and that in the absence of a plausible claim of a CLEC violation, the Wileys' claims for a declaratory and injunctive relief breach of contract. and a violation of the MCDCA necessarily fail. Dec.'s Mem. Supp. Mot. Dismiss Pl.'s Class Action Compl. ("Def.'s Mem.") at 1-2. ECF No. 11-1. Although the Motion was directed at the original Complaint and arguably could be denied as moot in light of the Amended Complaint, because the parties each had an opportunity to address arguments relating to the Amended Complaint, see Pl.'s Opp. at 17; Def.'s Reply at 4, and in the interests of efficient case management, the Court will rule on the merits of the arguments in the Motion to Dismiss as they apply to the Amended Complaint,

A. Legal Standard

To defeat a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the complaint must allege enough facts to state a plausible claim for relief. Ashcroft v. Igbal, 556 U.S. 662, 696 (2009). A claim is plausible when the facts pled allow the Court "to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id Legal conclusions or conelusory statements do not suffice. Id The Court must examine the complaint as a whole, consider the factual allegations in the complaint as true, and construe the factual allegations in the light most ...

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