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Daimler Trust v. Prestige Anapolis, LLC

United States District Court, D. Maryland

July 18, 2017




         Plaintiffs, Daimler Trust and Daimler Title Co. (“Daimler Title”) (collectively, “Plaintiffs”), are the owners/lessors of a 2016 Mercedes-Benz AMG GT S (the “Vehicle”).[1] The dispute arose when Defendant, Prestige Annapolis, LLC (“Prestige”), asserted a “garageman's lien” against the Vehicle based on modifications allegedly performed on the Vehicle by Prestige purportedly at the instruction of the Vehicle's lessee for which Prestige was not paid. On February 25, 2016, Plaintiffs filed a Complaint in this Court against Prestige alleging that Prestige, “act[ing] under the color of state law, ” unlawfully deprived Plaintiffs of their property interests in the Vehicle by failing to turn over possession of the Vehicle upon demand for it, “impress[ing] a nonconsensual (supposed) lien” on the Vehicle, and scheduling an “extra-judicial sale of the Vehicle” to enforce the lien. (Complaint, ¶ 10-11; ECF No. 1). That Complaint contains five counts: violation of Plaintiffs' due process rights under the Fourteenth Amendment, pursuant to 42 U.S.C. § 1983 (“§ 1983”) (Count I); replevin (Count II); deprivation of property without due process of law, in violation of Article 24 of the Maryland Declaration of Rights (Count III); conversion (Count IV); and declaratory relief (Count V). (Complaint, ¶¶ 44-106).

         On March 16, 2016, Plaintiffs sought the release of the Vehicle from Prestige's possession by filing a “Motion to Release Motor Vehicle Upon Court Approval of Bond and Request for Issuance of Show Cause Order.” (ECF No. 9). The next day, the Court issued a show cause order as to why the Vehicle should not be released to Plaintiffs. (ECF No. 10). On March 31, 2016, before that show cause order was resolved, Prestige filed a Motion to Dismiss. (ECF No. 13). Judge Hollander granted that Motion to Dismiss as to Courts I and III due to a lack of showing of “state action, ” but denied the motion as to the remaining counts: Counts II (replevin), IV (conversion), and V (declaratory relief). (ECF Nos. 25, 26). Thereafter, the parties resolved the show cause order through a “Stipulation of Release of the Vehicle and Filing of the Bond, ” which this Court approved on June 27, 2016. (ECF Nos. 29, 30). Through this mechanism, possession of the Vehicle was returned to Plaintiffs in exchange for Plaintiffs' posting of a bond equivalent to double the amount of the charge claimed by Defendant. The parties then consented to proceed before a magistrate judge pursuant to 28 U.S.C. § 636(c) and Local Rule 301.4 (D. Md. 2016). (ECF Nos. 33-36), and Defendant filed its Answer to Plaintiffs' Complaint on July 11, 2017. (ECF No. 37).

         Now pending before the Court is Plaintiffs' Motion for Partial Summary Judgment and Plaintiffs' Motion to Strike. (ECF Nos. 46, 52). After reviewing these motions and their related responses, replies, and supplementations, (ECF Nos. 47-51, 54-55), the Court finds that no hearing is necessary. Loc. R. 105.6 (D. Md. 2016). For the reasons that follow, Plaintiffs' Motion to Strike, (ECF No. 52), is GRANTED, and Plaintiffs' Motion for Partial Summary Judgment, (ECF No. 46), is GRANTED. This leaves the only unresolved issue as what damages flow, if any, from Prestige's conversion of the Vehicle. A separate order shall follow this memorandum opinion.

         I. Motion to Strike

         The Court must first address Plaintiffs' Motion to Strike because the resolution of that motion will determine the scope of the factual information and legal arguments that the Court can properly consider in its analysis of Plaintiffs' Motion for Partial Summary Judgment.

         Following the parties' consent to proceed before a magistrate judge, the Court issued the first scheduling order in this case on August 2, 2016. (ECF No. 38). That order set the discovery, requests for admission, and dispositive pretrial motions deadlines.[2] In late September and early October of 2016, Plaintiffs filed various requests for extensions of time to file discovery disclosures. (ECF Nos. 40, 41). The Court issued an amended scheduling order on October 4, 2016, that, among other things, responded to those requests by extending the deadlines for discovery to February 6, 2017, requests for admission to February 20, 2017, and dispositive pretrial motions to March 6, 2017. (ECF No. 42).

         In a status report filed on February 16, 2017, Plaintiffs requested, with the consent of Prestige, [3] that the deadline for dispositive pretrial motions be moved to March 31, 2017 in order for Prestige to have thirty (30) days to respond to Plaintiffs' requests for admission, as required by Federal Rule of Civil Procedure 36. (ECF No. 43). The Court granted that request, setting March 31, 2017 as the new deadline for filing pretrial dispositive motions. (ECF No. 44).

         On February 20, 2017, Plaintiffs' counsel emailed[4] Defense counsel their requests for admission, asking Prestige to admit or deny twenty-nine (29) different statements concerning the Vehicle in question, Prestige's purported ownership interest in the Vehicle, dates and circumstances surrounding Prestige's possession of the Vehicle, communications between Prestige and the lessee, alterations or repairs made to the Vehicle, and other issues pertinent to the claims listed in the Complaint. (ECF No. 47-1). As will be discussed below, pursuant to Federal Rule of Civil Procedure 36, any responses from Defendant to those requests was due on March 22, 2017. However, no responses were received.

         On March 31, 2017, Plaintiffs filed their pending Motion for Partial Summary Judgment, [5] in which they rely, in part, [6] on unanswered requests for admission (now deemed admitted pursuant to Federal Rule of Civil Procedure 36) as support for their argument that there is no genuine dispute of material fact in this case and that they are entitled to judgment as a matter of law. Defense counsel ultimately emailed Plaintiffs' counsel Prestige's answers to the requests for admission on April 7, 2017, sixteen (16) days after they were due and seven (7) days after Plaintiffs had already filed their Motion for Partial Summary Judgment based, in part, on Prestige's prior lack of response. (ECF No. 51-3).

         A week later, on April 14, 2017, Prestige filed a timely Response in Opposition to Plaintiffs' Motion for Partial Summary Judgment, (ECF No. 49), the predominant thrust of which was that the Court should dismiss the case for want of subject matter jurisdiction because the amount-in-controversy did not exceed $75, 000. No reference was made to Prestige's belated response to Plaintiffs' requests for admission in that response. Plaintiffs filed their timely reply on April 28, 2017, (ECF No. 50), in which they responded to Prestige's jurisdictional arguments, reiterated their own arguments from the Motion for Partial Summary Judgment, and pointed out that Prestige did not dispute or otherwise address the factual assertions or legal analysis set forth in Plaintiffs' motion.

         On May 2, 2017, Prestige, without the Court's or Plaintiffs' consent, filed a Surreply, or as Prestige titled it: a “Reply to Memorandum in Opposition to Motion to Reconsider Subject Matter Jurisdiction and Omnibus Supplemental Response to Motion for Partial Summary Judgment, Statement on Disputed Facts and Motion to Allow Responses to Request for Admissions.” (ECF No. 51). In that filing, Prestige seeks permission from the Court to allow its late answers to Plaintiffs' requests for admission, and then, for the first time, responds to the merits of Plaintiffs' Motion for Partial Summary Judgment, using as factual support both Prestige's late answers to the requests for admission as well a detailed affidavit, dated May 1, 2017, from Mr. Omid Shaffaat, the “sole member of Defendant Prestige Annapolis LLC.” (ECF No. 51-2, 51-4). Prestige's Surreply also reiterates support for its lack of subject matter jurisdiction argument.

         In response, Plaintiffs filed a Motion to Strike Prestige's Surreply and all accompanying documents that were docketed with it, including the answers to the requests for admission and Mr. Shaffaat's affidavit. (ECF No. 52). Prestige filed a timely Response to that Motion to Strike on May 23, 2017. (ECF No. 54). The Court issued a paperless order noting that it would reserve judgement on Plaintiffs' motion but that it would grant Plaintiffs leave to file a substantive response to any new issues and arguments raised in Prestige's Surreply. (ECF No. 53). Plaintiffs filed their timely substantive response on May 24, 2017. (ECF No. 55).

         In their Motion to Strike, Plaintiffs provide two separate justifications for striking Prestige's Surreply and accompanying materials. They contend that (1) Prestige failed to comply with Federal Rule of Civil Procedure 36 (“Rule 36”) by attempting to include late answers to the requests for admission in support of its Surreply, and that (2) Prestige failed to comply with the Local Rules of this Court by not seeking the Court's permission to file a Surreply and by setting forth new arguments in the Surreply that should have been raised in Prestige's original response to the motion for partial summary judgment.

         Federal Rule of Civil Procedure 36

         “Requests for admissions are a discovery device governed by Rule 36 of the Federal Rules of Civil Procedure.” Webb v. Green Tree Servicing, LLC, No. CIV.A. ELH-11-2105, 2013 WL 5442423, at *15 (D. Md. Sept. 30, 2013). This Rule “allows any party to serve on another party requests to admit the truth of facts, the application of law to fact, or opinions relating to matters within the scope of discovery.” Ball-Rice v. Bd. of Educ. of Prince George's Cty., No. CIV.A. PJM-11-1398, 2013 WL 2299725, at *2 (D. Md. May 24, 2013) (citing Fed.R.Civ.P. 36(a)(1)). The Rule's purpose, as has often been said, is “to ‘narrow the array of issues before the court, and thus expedite both the discovery process and the resolution of the litigation.'” Id. (citing Adventis, Inc. v. Consolidated Prop. Holdings, Inc., 124 F.App'x 169, 172 (4th Cir.2005)).

         Rule 36(a)(1) provides: “A party may serve on any other party a written request to admit, for purposes of the pending action only, the truth of any matters within the scope of Rule 26(b)(1)[7] relating to: (A) facts, the application of law to fact, or opinions about either; and (B) the genuineness of any described documents.” (Footnote added). In responding to a request for admission, “the answering party must either admit the matter requested or, ‘if a matter is not admitted, ... specifically deny it or state in detail why the answering party cannot truthfully admit or deny it.'” Webb, 2013 WL 5442423, at *15 (citing Fed.R.Civ.P. 36(a)(4)) (internal brackets omitted, footnote in the original). Furthermore, this Rule permits “a party to admit a matter in part and deny it in part or plead a lack of knowledge or information under certain circumstances.” Id. The effect of an admission is specified in Rule 36(b), which states:

A matter admitted under this rule is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended. Subject to Rule 16(e), [8] the court may permit withdrawal or amendment if it would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party in maintaining or defending the action on the merits. An admission under this rule is not an admission for any other purpose and cannot be used against the party in any other proceeding.

Webb, 2013 WL 5442423, at *15 (citing Fed.R.Civ.P. 36(b)) (footnote in the original).

         Most pertinent for present purposes is Rule 36(a)(3), which “establishes the time to respond to a request for admissions and the consequence of an untimely response.” Id. That portion of Rule 36 states:

A matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney. A shorter or longer time for responding may ... be ordered by the court.[9]

Id. (citing Fed.R.Civ.P. 36(a)(3) (footnote in the original).

         Here, there is no question that Prestige's responses to Plaintiffs' requests for admission were late. On February 20, 2017, Plaintiffs emailed their requests to Defense counsel. (ECF No. 47-1). Under Rule 36, the thirty (30) day deadline for responding to these requests was March 22, 2017, making Prestige's April 7th responses sixteen (16) days past due. Therefore, the question in not whether these responses were late, but whether the Court should nonetheless accept them.

         Whether or not to prohibit untimely responses to requests for admission, and in turn deem those requests as admitted under Rule 36, is a matter committed to this Court's discretion. Donovan v. Porter, 584 F.Supp. 202, 208 (D.Md.1984). This Court and the Fourth Circuit have stated that late answers to requests for admission may be accepted “when such an amendment of the admission will not prejudice the other party, ” Donovan, 584 F.Supp. at 208, and where there are “compelling circumstances” justifying the untimeliness of the answer. Metpath, Inc. v. Modern Med., 934 F.2d 319 (4th Cir. 1991) (citing Moosman v. Joseph P. Blitz, Inc., 358 F.2d 686, 688 (2d Cir.1966), where the Second Circuit stated that “[u]nder compelling circumstances the District Court may allow untimely replies to avoid the admission”).

         Furthermore, “unanswered requests for admission can serve as the basis for summary judgment.” Vales v. Preciado, 809 F.Supp.2d 422, 426 (D.Md.2011) (“‘unanswered requests for admissions may properly serve as a basis for summary judgment and with a failure to make a timely response, the truth of the matter contained in the request for admission is conclusively established and may serve as the basis for the court's consideration of a motion for summary judgment'”) (quoting Donovan, 584 F.Supp. at 207-08); see also Batson v. Porter, 154 F.2d 566, 568 (4th Cir.1946) (where the Fourth Circuit held that unanswered requests for admissions are admitted and may support summary judgment, “unless a sworn statement is filed in which they are specifically denied or specific reasons are given why they cannot be truthfully admitted or denied”); see also J & J Sports Prods., Inc. v. Mumford, No. CIV.A. DKC 10-2967, 2012 WL 1409588, at *3 (D. Md. Apr. 20, 2012). Indeed, in a similar context, this Court has previously warned that under the requirements of Rule 36(a), “the answering party that objects to a request for admissions does so at its own peril, ” and that the “[f]ailure to adhere to the plain language of this [Rule] requires that the fact in question be admitted.” Poole ex rel. Elliott v. Textron, Inc., 192 F.R.D. 494, 499 (D. Md. 2000) (citing Asea, Inc. v. S. Pac. Transp. Co., 669 F.2d 1242, 1245 (9th Cir.1981)).

         The Court recognizes that, in the posture of summary judgment, late responses should not be summarily rejected. See Donovan, 584 F.Supp. at 208 (“Courts are particularly responsive to allowing late answers to requests for admission when summary judgment is involved. It does not further the interests of justice to automatically determine the issues of a lawsuit and enter summary judgment against a party because a deadline is missed”) (internal citations omitted). Nonetheless, given the resulting prejudice to Plaintiffs, the ample notice of when the responses were due, the lack of a compelling reason justifying their untimeliness, and the other discovery problems addressed in later sections of this opinion, the Court will not accept Defendant's late responses.

         First, Plaintiffs expended considerable time and effort crafting their Motion for Partial Summary Judgment, in which they rely, in part, on factual statements contained in the requests for admission that Prestige did not confirm or deny, and thus Plaintiffs properly believed were admitted under Rule 36. Even though Plaintiffs did eventually receive Prestige's answers to the requests on April 7, 2017, before submitting their Reply, Prestige's Response in Opposition to the Motion for Partial Summary Judgment did not challenge any of Plaintiff's factual or legal assertions (the response merely rehashed a jurisdictional argument already addressed by the Court). Nor did Prestige ever challenge those factual and legal assertions within the time period allowed by this Court, as will be discussed below. Accordingly, neither Plaintiffs' Motion for Partial Summary Judgment nor their Reply brief had any reason to address the objections or denials that Defendant gave in its late answers to the requests for admission.

         Second, Prestige got the opportunity of seeing exactly how Plaintiffs used the requests of admission in support of Plaintiffs' summary judgment arguments before forwarding responses crafted with the benefit of that strategic insight and affording Prestige an unfair advantage.

         Third, Prestige should have been aware of the deadline for answering the requests for admission, along with the consequences for not doing so. Not only is Rule 36 clear on this matter, but Prestige was advised of this deadline at various points in this litigation. In fact, included in the requests that were emailed to Prestige was a detailed “instructions” section, which provided a detailed and accurate summary of Prestige's rights and obligations under Rule 36. (ECF No. 47-1). Moreover, Plaintiffs' status report, which the Court construed as a consent motion to modify the scheduling order, [10] requested the Court move the pretrial motions deadline so that Defendant would have thirty (30) days to respond to Plaintiffs' requests for admission as required under Rule 36. (ECF No. 43).

         Defense counsel concedes that it received Plaintiffs' email containing the requests for admission on the evening of February 20, 2017 and then forwarded the requests to Mr. Shaffaat the next day. (ECF No. 51, ¶ 1-2). Prestige acknowledges that it “does not have a detailed explanation as to why its e-mail communication from counsel [to Mr. Shaffaat] was not received, but the delay in responding was because the requests were not received by [Mr. Shaffaat] electronically.” (ECF No. 51, ¶ 3). The Defense then deflects its own error onto Plaintiffs, suggesting that this Court ought to overlook this untimeliness because “this case [should] be decided on the merits and not on a literal late night procedural maneuverings[11] and service of a Request for Admissions.” (ECF No. 51, ¶ 5).

         The Court does not find this explanation to be in any way compelling. Not only did the Court not receive a request for extension of time, but as noted above, by waiting until it had Plaintiffs' Motion in hand-with its detailed factual roadmap of Plaintiffs' theory of the case- before submitting its late responses, Prestige benefitted from its own “procedural maneuverings” to the prejudice of Plaintiffs. It is also noteworthy that Prestige did not at all rely on its untimely answers in its initial Response in Opposition to Plaintiffs' Motion but waited until after Plaintiffs' Reply before asserting any factual rebuttal. Prestige also does not explain why, given Defense Counsel's timely receipt of the requests, Prestige should be excused for failing to file a timely response or otherwise ask for an extension. Accordingly, the Court will not accept the late answers to the requests for admission and will consider those requests admitted for purposes of ruling on the Motion for Partial Summary Judgment.

         Local Rules

         In addition to the untimeliness of Prestige's answers to the requests for admission under Federal Rule Civil Procedure 36, Prestige's “Reply to Memorandum in Opposition to Motion to Reconsider Subject Matter Jurisdiction and Omnibus Supplemental Response to Motion for Partial Summary Judgment, Statement on Disputed Facts and Motion to Allow Responses to Request for Admissions, ” runs afoul of this Court's Local Rules and principles regarding surreplies and briefing procedures.

         It is not uncommon for this Court to, in its discretion, to strike filings for failure to comply with the Local Rules. Farwell v. Story, No. CIV.A. DKC 10-1274, 2010 WL 4963008, at *10 (D. Md. Dec. 1, 2010) (“Compliance with the Local Rules is not optional”); see also Air Line Pilots Ass'n v. Precision Valley Aviation, Inc., 26 F.3d 220, 224 (1st Cir. 1994) (“District courts enjoy broad latitude in administering local rules, ” and “[i]n the exercise of that discretion, district courts are entitled to demand adherence to specific mandates contained in the rules”) (internal citations omitted). This is particularly the case where such filings are procedurally improper, see e.g. Chubb & Son v. C & C Complete Servs., LLC, 919 F.Supp.2d 666, 679 (D. Md. 2013) (“The Court grants [defendant's] Motion to Strike Surreply. Plaintiffs did not file their surreply in conformity with the Local Rules, surreplies are disfavored in this District, and the surreply would not alter the Court's analysis”), or where such filings are untimely, see e.g. LBCMT 2007-C3 Urbana Pike, LLC v. Sheppard, No. CIV. JKB-12-3056, 2015 WL 1880083, at *1 (D. Md. Apr. 22, 2015) (“The motion to strike will be granted based upon the lack of a request by [defendant] for late filing of his reply and based upon the absence of good cause”).

         “In general, parties are not permitted to file surreplies.” MTB Servs., Inc. v. Tuckman-Barbee Const. Co., No. CIV.A. RDB-12-02109, 2013 WL 1224484, at *6 (D. Md. Mar. 26, 2013) (citing Local Rule 105.2(a) (D.Md.2011)).[12] However, in its discretion, the Court may permit surreplies where “the moving party would be unable to contest matters presented to the court for the first time in the opposing party's reply.” Marshall v. Capital View Mut. Homes, No. CIV. RWT-12-3109, 2013 WL 3353752, at *2-3 (D. Md. July 2, 2013) (internal citations and quotations omitted). Nonetheless, even where this discretion is exercised, “[s]urreplies are allowed only pursuant to a court order, ” Marshall, 2013 WL 3353752, at *2-3 (citing Local Rule 105.2(a) (D.Md.2011))[13]; see also Dwonzyk v. Baltimore Cty., Md., 328 F.Supp.2d 572, 578 (D. Md. 2004) (“Given that the Plaintiff failed to seek leave of court, the surreply will not be considered by this Court”) (internal citations omitted), and “[a] motion for leave to file a surreply may be denied when the matter addressed in the reply is not new.” Marshall, 2013 WL 3353752, at *2-3 (internal citations and quotations omitted).

         Here, Prestige's motion, which the Court construes as a surreply, presents two problems in light of the above rules and principles. First, Prestige never sought permission of the Court to file the motion, which is clearly required under the Local Rules and this Court's guidance relating to surreplies. Dwonzyk, 328 F.Supp.2d at 578 (“Unless otherwise ordered by the court, surreply memoranda are not permitted to be filed”) (citing Local Rule 105.2(a)). Second, even if Prestige had properly requested leave to file a surreply, such a request would have been denied because Plaintiffs' reply did not contain any new information or arguments from its motion for summary judgment, leaving Prestige no need to file a surreply. Marshall, 2013 WL 3353752, at *2-3 (“A motion for leave to file a surreply may be denied when the matter addressed in the reply is not new”) (internal citations and quotations omitted).

         Prestige, however, asks this Court to construe its filing not as a surreply, but instead “as a motion to request the court to allow the admissions responses and to consider the supplemental materials which are potentially responsive to the Motion for [Partial] Summary Judgment.” (ECF No. 54, page 1). Prestige has appended to that filing a detailed affidavit from its principal, Mr. Shaffaat, outlining (apparently for the first time) a chain of events that form the basis for its defense. Notably, that affidavit was signed May 1, 2017, a few days after Plaintiffs' Motion for Partial Summary Judgment, with its detailed factual roadmap, had been fully briefed. It is, to say the least, puzzling as why this information did not come to light during the discovery phase of this case and only surfaced after Prestige's initial Response in Opposition when Plaintiff's motion was otherwise ripe. Having offered no compelling explanation, the Court will deny Prestige's request. Accordingly, for the reasons stated above, the Court will grant Plaintiffs' Motion to Strike, and as a result, the Court will not consider Prestige's Surreply or its related materials, in the resolution of Plaintiffs' Motion for Partial Summary Judgment.[14]

         II. Motion for Partial Summary Judgment

         In turning to the underlying motion, the Court will first address Plaintiffs' arguments set forth in their Motion for Partial Summary Judgment, and then will discuss Prestige's argument for lack of subject matter jurisdiction.

         In April of 2015, William Betteridge (the “Lessee”) leased the Vehicle, that is the subject of the present dispute, from “Mercedes Benz of Annapolis” (a dealership in Annapolis, Maryland), pursuant to a “closed-end vehicle lease agreement” (the “Lease Agreement”). (Complaint, ¶ 19), (Requests for Admission, 3; ECF No. 47-1), (Walter Declaration, ¶ 2; ECF No. 48), (Lease Agreement, page 2; ECF No. 48-1). Title to that Vehicle was issued on June 2, 2015 in the name of Daimler Trust, with Daimler Title listed as the first and only lien holder. (Cert. of Title, 1; ECF ...

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