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Williams v. Dee Miracle Auto Group, LLC

United States District Court, D. Maryland

June 22, 2016

RIESHA WILLIAMS, Plaintiff,
v.
DEE MIRACLE AUTO GROUP LLC, et al. Defendants.

          REPORT AND RECOMMENDATION

          BETH P. GESNER UNITED STATES MAGISTRATE JUDGE

         The above-referenced case was referred to the undersigned to review plaintiff’s Motion for Default Judgment and to make recommendations concerning damages, pursuant to 28 U.S.C. § 636 and Local Rules 301 and 302. (ECF No. 26.) Currently pending is plaintiff’s Motion for Default Judgment (“Motion”) (ECF No. 25). No hearing is necessary. See Fed.R.Civ.P. 55(b)(2); Loc. R. 105.6. For the reasons discussed below, I respectfully recommend that plaintiff’s Motion (ECF No. 25) be GRANTED IN PART and DENIED IN PART, and that relief be awarded as set forth herein.

         I. Procedural Background

         Plaintiff filed her Complaint against Dee Miracle Auto Group, LLC (“Dee Miracle”) and Demont Raymond Bell (“Bell” or “Mr. Bell”) (collectively “defendants”) on August 20, 2015 (ECF No. 1), and both defendants were served with process on October 7, 2015. (ECF Nos. 5, 6.) Defendants did not respond to the Complaint, and, on November 2, plaintiff moved for an entry of default as to both defendants. (ECF No. 7.) The Clerk of Court entered default against both defendants on November 5, 2015.[1] Plaintiff filed her first Motion for Default Judgment on December 10. (ECF No. 9.) On December 15, Judge Hollander referred plaintiff’s Motion to the undersigned to prepare a report and recommendation. (ECF No. 11.)

         On December 30, 2015, the Court received a letter from defendant Demont Bell in which Mr. Bell alleged that service was improper and asked for “the opportunity to get a lawyer and defend [himself] at a hearing.” (ECF No. 13.) Judge Hollander construed defendant Bell’s letter as a Motion to Vacate Clerk’s Entry of Default. (ECF No. 15.)

         For the reasons stated in her Memorandum, Judge Hollander vacated the court’s entry of default as to Mr. Bell. (ECF Nos. 15, 16.) Given the requirement that corporate defendants be represented by counsel, however, Judge Hollander denied without prejudice the motion to vacate as to defendant Dee Miracle Auto Group, LLC and gave this defendant thirty (30) days from the date of her Order in which to move for reconsideration. Loc. R. 101.1(a). (ECF Nos. 15, 16.) Plaintiff then filed a Motion for Reconsideration (ECF No. 17) of Judge Hollander’s Order vacating the entry of default against defendant Bell, and Judge Hollander denied plaintiff’s motion on February 1, 2016. (ECF No. 18.) As the entry of default as to Mr. Bell had been vacated, plaintiff’s original Motion for Default Judgment was denied without prejudice. (ECF No. 19.)

         Defendant Dee Miracle Auto Group, LLC has remained in default since the clerk’s original entry of default on November 8, 2015. (ECF No. 8.) While the entry of default as to defendant Bell was vacated, Mr. Bell again failed to file a responsive pleading. Subsequently, plaintiff requested that an order of default be entered as to Mr. Bell. (ECF No. 21.) Judge Hollander denied plaintiff’s request, but expressly directed Mr. Bell to file a responsive pleading by March 23, 2016. (ECF No. 22.) When defendant failed to comply with Judge Hollander’s order, plaintiff again moved for an entry of default as to Mr. Bell (ECF No. 23), and on April 26, 2016, the clerk of court ordered an entry of default against defendant Bell. (ECF No. 24.) Plaintiff filed the pending Motion on April 28, 2016. (ECF No. 25.) As default has been entered against both defendants, plaintiff’s Motion is ripe for adjudication.

         II. Plaintiff’s Factual Allegations

         A common set of facts supports each of the causes of action set forth in plaintiff’s complaint. (ECF No. 1.) By virtue of the clerk’s entry of default, the court accepts as true the well-pleaded factual allegations in the complaint as to liability. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780-81 (4th Cir. 2001).

         Plaintiff Riesha Williams (“plaintiff”) is a resident of Suitland, Maryland. (ECF No. 1 at ¶ 3.) Defendant Dee Miracle Auto Group, LLC is a limited liability company organized under the laws of Maryland, with a place of business at 900 Larchmont Avenue, Capitol Heights, MD 20743. (Id. at ¶ 4.) Defendant Demont Raymond Bell is the “primary owner” of Dee Miracle. (Id. at ¶ 5.) Plaintiff’s Supplemental Memorandum indicates that Mr. Bell also conducts business as a sole proprietorship under the name “Dee Miracle Auto Group.” (ECF No. 14-9.)

         On March 11, 2015, plaintiff entered into a consumer credit transaction with one or both defendants arising out of plaintiff’s purchase of a 2002 Nissan Altima (“the Vehicle”) from defendants.[2] (ECF No. 1 at ¶ 7.) The parties’ agreement is memorialized in three separate documents: the Payment Arrangement Contract for Purchase of a Car or SUV (“Contract”) (ECF No. 1-4); the Bill of Sale (ECF No. 1-5); and the Payment Plan Sheet (ECF No. 1-6). (See also ECF No. 25 at 6-7.) It is not entirely clear from whom the car was purchased or to whom payment was made and future payment owed. The Contract does not mention “Dee Miracle Auto Group, LLC” or “Dee Miracle Auto Group.” On the line above “Dealer’s Signature” is what appears to be the signature of Demont Bell. (Id.) The Bill of Sale is printed on the letterhead of “Dee Miracle Auto Group”-but there is no reference to its registration as an LLC. (ECF No. 1-5.) The “Odometer Disclosure Statement” contains the name and signature of Demont Bell. (Id.) Only plaintiff’s name appears on the Payment Plan Sheet. (ECF No. 1-6.)

         The Contract states that the total vehicle price was $5, 500.00. (ECF No. 1-5.) In addition, the transaction included a “20% Finance Charge” on the purchase price, totaling $1, 100.00. (Id.) The Contract states that plaintiff made a down payment of $3, 000.00, leaving the “Total Balance Due” as $3, 600.00. (Id.) While the Bill of Sale reflects the $3, 000.00 down payment and that the “Total Owed” was $3, 600.00, the Bill of Sale also indicates that plaintiff paid $200.00 in “Processing Fees, ” making the total “Cash Paid” at the time of closing $3, 200.00. (ECF No. 1-6.) The Contract does not mention or define the term “Processing Fees.” (See ECF No. 1-5.) Plaintiff claims that the down payment amounted to $3, 200.00 and that the $3, 000.00 down payment indicated on the documents is incorrect. (ECF No. 1 at ¶¶ 10-11.)

         The Contract provides for periodic payments of $200.00 by plaintiff to defendants. (ECF Nos. 1-4, 1-6.) The Contract, however, contains contradictory terms regarding the frequency of payments. (Id.) Specifically, the Contract states that “[plaintiff] agrees to make monthly payments of $200 beginning 3/27/15 and continuing every month until the balance is paid in full.” (ECF No. 1-4) (emphasis added). At the same time, the Bill of Sale contains a handwritten note reading, “200 biweekly / comes on the 3rd / to make both / payments.” (ECF No. 1-5) (emphasis added). Similarly, the Payment Plan Sheet reads “$200 biweekly” on the upper part of the sheet and lists eighteen (18) biweekly dates from “4/3/15” to “11/27/15” on which payment was anticipated. (ECF No. 1-6) (emphasis added). The Payment Plan Sheet reflects only one cash payment of $400.00 made on April 3, 2015. (Id.)

         Plaintiff alleges that defendants violated the federal Truth in Lending Act by failing to use statutorily required language in the agreement, by presenting contradictory terms in the agreement, and by failing to make mandatory disclosures. (ECF No. 1 at ¶¶ 1-18.) Plaintiff also alleges that defendants did not own the vehicle at the time of purchase, but that defendants represented that they were capable of transferring ownership to plaintiff. (ECF No. 1 at ¶¶ 20-22.) In addition, plaintiff claims that defendant failed to register the vehicle with the Maryland Motor Vehicle Administration (“MVA”) on plaintiff’s behalf, as defendants agreed to do at the time of sale/purchase. (Id. at ¶ 32.) Moreover, plaintiff alleges that at some point subsequent to the sale/purchase, defendants repossessed the vehicle and retained all payments made by plaintiff. (Id. at ¶ 35.) Plaintiff alleges that by falsely representing defendants’ ownership and by failing to register the car on plaintiff’s behalf as agreed, defendants defrauded plaintiff and violated the Maryland Consumer Protection Act. (Id. at ¶¶ 19-36.)

         III. Legal Standard for Entry of Default Judgment

         In reviewing a motion for default judgment, the court accepts as true the well-pleaded factual allegations in the complaint as to liability. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780-81 (4th Cir. 2001). It remains for the court, however, to determine whether these unchallenged factual allegations constitute a legitimate cause of action. Id. If the court determines that liability is established, the court must then determine the appropriate amount of damages. Id. The court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. See, e.g., Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 154-155 (2d Cir. 1999).

         IV. Defendants’ Liability

         A. Truth in Lending Act (“TILA”)

         The federal Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq., seeks “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…” 15 U.S.C. § 1601(a). To that end, § 1638 of TILA requires creditors to disclose nineteen different items in each consumer credit transaction. 15 U.S.C. § 1638(a). See also Davis v. Second Chance Pre-Owned Auto Sales, LLC, 2015 WL 2137272, at *2 (S.D.W.Va. May 7, 2015). These disclosures include: the “amount financed;” the “the finance charge;” the “annual percentage rate;” the “total of payments;” “total sale price;” and “descriptive explanations” of these terms. 15 U.S.C. § 1638(a).

         Under TILA, a “creditor” is a person “who both (1) regularly extends, whether in connection with loans, sales of property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness.” 15 U.S.C. § 1602(g). A consumer transaction under the act is one in which “credit is offered or extended [to] a natural person, and the money, property, or services which are the subject of the transaction are primarily for personal, family, or household purposes.” 15 U.S.C. § 1602(i). Here, plaintiff alleges that defendants are “creditors” within the definition of TILA. (ECF No. 1 at ¶ 5.) Plaintiff also alleges that she obtained the credit at issue to purchase the vehicle for personal, family, and household purposes. (Id. at ¶ 7.) Accordingly, defendants’ actions were subject to TILA’s disclosure requirements. 15 U.S.C. § 1638(a).

         Plaintiff alleges that defendants failed to make numerous disclosures required by TILA. In particular, plaintiff alleges that defendants failed to state, inter alia: the “amount financed” in violation of § 1638(a)(2)(A); the consumer’s right to obtain, upon written request, a written itemization of the amount financed, in violation of § 1638(a)(2)(B); the “finance charge” in violation of § 1638(a)(3); the “annual percentage rate” in violation of § 1638(a)(4); the “total of payments” in violation of § 1638(a)(5). These terms[3] are not used-nor are descriptive explanations thereof provided-in the parties’ agreement. (See ECF Nos. 1-4, 1-5, 1-6.) Defendants, therefore, are liable for violating TILA, and plaintiff is entitled to default judgment on this claim.

         B. Common Law Fraud

         Federal Rule of Civil Procedure 9(b) imposes a heightened pleading standard for fraud claims: “a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). “These circumstances include ‘the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.’” Marshall v. James B. Nutter & Co., 816 F.Supp.2d 259, 267 (D. Md. 2011) (quoting Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999)).

         Here, plaintiff merely asserts that, “[t]he defendants made the false representations that they owned the Vehicle and were capable of transferring ownership to Plaintiff for the purpose of defrauding.” (ECF No. 1 at ¶ 22.) The complaint does not state the time, the place, or the identity of the person making the allegedly fraudulent statements. Marshall, 816 F.Supp.2d at 267. (See ECF No. 1 at ¶¶ 19-26.) Thus, plaintiff’s complaint fails to ...


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