PAUL W. GRIMM, 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
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.,
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, 129 S.Ct. 1937. 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, 129 S.Ct. 1937.
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).
Id. (citations omitted); see Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 780-81 (4th Cir.2013).
"`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.
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, 499 Fed.Appx. 930, 938 (11th Cir.2012). "Notably, "the FDCPA does not apply to any person collecting on a debt that it `originated.'"" Ademiluyi, 929 F.Supp.2d at 525, 2013 WL 932525, at *18 (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
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
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, 841-43, 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:
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
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 affecting interstate or foreign commerce, engaged in a `pattern of racketeering activity', or engaged in the collection of an `unlawful debt.'" Defs.' Mem. 9.
Defendants argue that Plaintiff does not make "any factual allegations that the Defendants were engaging in `interstate or foreign commerce.'" Defs.' Mem. 11-12. In her Complaint, Plaintiff states twice that Defendants engaged in interstate commerce: She claims that Defendants
According to Defendants, Plaintiff does not allege any facts "supporting a claimed `racketeering activity'" or "a `pattern of racketeering activity.'" Defs.' Mem. 10-11. "Racketeering activity" is defined at § 1961(1) as any one of various indictable offenses, including numerous statutory offenses involving fraud. Plaintiff claims that Defendants engaged in, inter alia, "mail fraud, wire fraud, [and] financial institution fraud," Compl. ¶ 117, which qualify as racketeering activity. Assuming, arguendo, that Plaintiff alleges facts with sufficient particularity for the Court reasonably to infer that Defendants engaged in racketeering activity through acts of fraud, I will consider whether there was a "pattern of racketeering activity."
To allege that Defendants engaged in a "pattern of racketeering activity," Plaintiff must plead sufficient facts to allege "`continuity plus relationship,'" i.e., that Defendants engaged in at least two related offenses that constitute racketeering activities, and that those activities "`amount to or pose a threat of continued criminal activity.'" U.S. Airline Pilots, 615 F.3d at 318 (quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989)). Plaintiff describes Defendants' alleged illegal actions with regard to Plaintiff's purchase of the Equinox, Compl. ¶ 117,
With regard to whether there is continuity, it is noteworthy that, "`while two acts are necessary, they may not be sufficient,'" H.J. Inc., 492 U.S. at 237, 109 S.Ct. 2893 (quoting Sedima, 473 U.S. at 496 n. 14, 105 S.Ct. 3275), as "`proof of two acts, without more, does not establish a pattern,'" id. at 238, 109 S.Ct. 2893 (quoting 116 Cong. Rec. 18940 (1970) (statement of Sen. McClellan)). Rather, Plaintiff must demonstrate either "a closed period of repeated conduct, or ... past conduct that by its nature projects into the future with a threat of repetition." Id. at 241, 109 S.Ct. 2893. For closed-ended continuity, the related racketeering activities must "extend[] over a substantial period of time," i.e., a period of time greater than "a few weeks or months." Id. at 242, 109 S.Ct. 2893. The Supreme Court, "[w]ithout making any claim to cover the field of possibilities," has said that open-ended continuity exists where "the racketeering acts themselves include a specific threat of repetition extending indefinitely into the future," or "the predicate acts or offenses are part of an ongoing entity's regular way of doing business" or "the predicates are a regular way of conducting defendant's ongoing legitimate business ... or RICO `enterprise.'" Id. at 242-43, 109 S.Ct. 2893.
The acts at issue here certainly did not "extend[] over a substantial period of time," see id. at 242, 109 S.Ct. 2893; Plaintiff began negotiations with Defendant on September 11, 2012 and returned the vehicle on October 6, 2012. Compl. ¶¶ 10, 61. Therefore, there is no closed-ended continuity. See H.J. Inc., 492 U.S. at 242, 109 S.Ct. 2893. Further, the Fourth Circuit has noted that open-ended continuity is not present when the fraudulent acts occur in an isolated sale. See GE Investment Private Placement Partners II v. Parker, 247 F.3d 543, 549-50 (4th Cir.2001) ("The courts ... have repeatedly recognized that... schemes involving fraud related to the sale of a single enterprise do not constitute, or sufficiently threaten, the `long-term criminal conduct' that RICO was intended to address. Where the fraudulent conduct is part of the sale of a single enterprise, the fraud has a built-in ending point, and the case does not present the necessary threat of long-term, continued criminal activity." (internal citations omitted)). Here, the acts Plaintiff describes pertain only to Defendants' attempted sale to Plaintiff; Plaintiff does not claim that Defendants "have engaged in a similar scheme involving any other [customer]." See id. Nor does Plaintiff allege that Defendants regularly conducted business the way they purportedly did with her. See H.J. Inc., 492 U.S. at 242-43, 109 S.Ct. 2893. Thus, Plaintiff has failed to state a RICO claim based on a pattern of racketeering
A violation of 18 U.S.C. § 1962(c) may occur through collection of an unlawful debt, rather than through a pattern of racketeering activity. See 18 U.S.C. § 1962(c). Defendants contend that Plaintiff fails to state a RICO claim based on collection of unlawful debt, insisting that Plaintiff did not incur any debt because "financing was never accepted." Defs.' Mem. 9. Alternatively, they argue that if there was a debt, it was not unlawful because Defendants' efforts to obtain financing for Plaintiff were not the type of "`gamble' ... that violates any law as required by the statute," id., and Defendants did not "lend[] money at a rate usurious under the law as required to constitute an `unlawful debt,'" id. at 10.
Defendants cite the statutory definition of "unlawful debt." Id. at 9. RICO defines "unlawful debt" as
18 U.S.C. § 1961(6). Although she acknowledges this definition, Plaintiff asserts: "That the case law regarding what constitutes an unlawful debt under RICO is sparse, does not mean that its definition is limited." Pl.'s Opp'n 6. Without citing any authority, Plaintiff insists that "`unlawful debts' are those arising under illegal activity," id., and that the debt she incurred when she signed the sales contract with financing terms was unlawful because "it arose under illegal activity pertaining to fraud," id. at 7.
Plaintiff does not allege that the loan rate was unreasonable, let alone usurious. Instead, her claim is based on the "gambling activity" in which, in Plaintiff's view, Defendants engaged, "in so far as they were making a gamble that the debt could be assigned by GMAC even though the Defendants did not obtain the proper documentation from Ms. Sterling." Compl. ¶ 116. However, Plaintiff does not allege in her Complaint that this "gambling activity" was in violation of any law. Therefore, assuming arguendo that Plaintiff incurred a debt, the debt did not stem from illegal gambling activity and thus was not "unlawful debt" under RICO. See 18 U.S.C. § 1961(6). Plaintiff has failed to state a RICO claim based on collection of unlawful debt. See Day, 2011 WL 887554, at *13; Iqbal, 556 U.S. at 663, 129 S.Ct. 1937. Consequently, Plaintiff's allegation of a RICO violation lacks the facts necessary to plead this cause of action. See Iqbal, 556 U.S. at 678-79, 129 S.Ct. 1937. Count II is DISMISSED. See Fed. R.Civ.P. 12(b)(6).
Congress passed TILA "`to assure a meaningful disclosure of credit terms'" by "`mandat[ing] that creditors make specific disclosures before extending credit to consumers.'" Jones v. Koons Automotive, Inc., 752 F.Supp.2d 670, 682 (D.Md.2010) (quoting Tripp v. Charlie Falk's Auto Wholesale Inc., 290 Fed.Appx. 622, 626 (4th Cir.2008)). TILA requires the disclosure of "[t]he identity of the
Plaintiff claims
Compl. ¶ 126. Defendant is correct that none of these "acts or omissions which [Plaintiff] alleges establish[es] a violation of the TILA." Defs.' Mem. 13. Moreover, Plaintiff concedes that, as Defendant contends, the retail installment sales contract that Plaintiff and Ourisman signed complies with the requirements of § 1638. Pl.'s Opp'n 7; Defs.' Mem. 13.
Nonetheless, Plaintiff insists that Defendants violated TILA because, in her view, the contract's compliance "is rendered completely nugatory by the fact that Defendants did not intend to lend at those terms, unless the loan could be assigned." Pl.'s Opp'n 7. According to Plaintiff, the facts alleged in ¶ 126 "each represents a misrepresentation of the, `amount financed,' the, `finance charge,' the, `total payment,' and the, `payment schedule.'" Id. However, Plaintiff fails to claim in her Complaint that the terms of the contract were misrepresentations such that Defendants did not, in fact, make the required disclosures. Perhaps, if Plaintiff's Complaint contained the facts she contends it sets forth, the Court could infer defendant's liability under TILA. See Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Yet it does not, and therefore, Plaintiff fails to state a claim for relief under TILA. See id. at 678-79, 129 S.Ct. 1937. Count III is DISMISSED. See Fed.R.Civ.P. 12(b)(6).
The FCRA, which "Congress enacted FCRA in 1970 to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy," provides for civil liability for anyone who fails to provide the required notice to a consumer against whom an adverse action is taken based on the consumer's credit report. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52-53, 127 S.Ct. 2201,
It is true that Plaintiff does not state specifically that she was denied credit based on her credit report, but she also does not state that she was denied credit based on her failure to file her tax return. See id. Plaintiff alleges that Defendants obtained her credit report, then learned that she failed to file her 2011 tax return, and then denied her credit without providing the disclosures required pursuant to § 1681m. See id. ¶¶ 18, 56, 59 & 134. From this, the Court may infer reasonably that Defendants took the "adverse action" of denying credit to Plaintiff, see 15 U.S.C. § 1681a(k)(1)(A), based on either her credit report or her failure to file her tax return. See Iqbal, 556 U.S. at 663, 129 S.Ct. 1937. Additionally, Plaintiff sufficiently alleges that Defendants violated § 1681m by failing to provide the required disclosures. See Compl. ¶ 134. Therefore, this FCRA claim is facially plausible and survives Defendants' Motion to Dismiss. See Iqbal, 556 U.S. at 663, 129 S.Ct. 1937.
Plaintiff also claims that Defendants violated 15 U.S.C. § 1681b(f), which provides that "[a] person shall not use or obtain a consumer report for any purpose unless... the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section, and ... the purpose is certified ... by a prospective user of the report[.]" Relevantly, § 1681b(a) authorizes the consumer reporting agency to provide a consumer report as per "the written instructions of the consumer to whom it relates" and, upon reasonable belief, to someone who "intends to use the information" with regard to extending credit to the consumer or who "has a legitimate business need for the information ... in connection with a business transaction that is initiated by the consumer." 15 U.S.C. § 1681b(a)(2), (a)(3)(F)(i). According to Plaintiff, Defendants obtained her credit report "without themselves ever intending to extend credit." Compl. ¶ 136. However, as Defendants note, they had a legitimate purpose for obtaining Plaintiff's credit report:
The ECOA prohibits creditors from discriminating "`with respect to any credit transaction on the basis of race, color, religion, national origin, sex or marital status, or age,'" and "establishes certain notification requirements that a creditor must satisfy." Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *6 (D.Md. Jan. 22, 2013); (quoting Capitol Indem. Corp. v. Aulakh, 313 F.3d 200, 202 (4th Cir.2002) (quoting 15 U.S.C. § 1691(a)(1))). Specifically, creditors must "furnish applicants with a written `statement of reasons' for any `adverse action' taken, including a refusal to grant credit substantially as requested by the applicant," and must "advise applicants of non-adverse actions, although such notices need not include a statement of reasons." Martin v. Q & A Enters., No. 3:11CV654-HEH, 2012 WL 380065, at *4 (E.D.Va. Feb. 6, 2012); see 15 U.S.C. § 1691(d)("(1)Within thirty days ... after receipt of a completed application for credit, a creditor shall notify the applicant of its action on the application. (2) Each applicant against whom adverse action is taken shall be entitled to a statement of reasons for such action from the creditor...."). A creditor need not discriminate to violate the ECOA; failure to provide the required notification is an ECOA violation in and of itself. Coulibaly v. J.P. Morgan Chase Bank, N.A., No. DKC-10-3517, 2012 WL 3985285, at *4 (D.Md. Sept. 7, 2012). 15 U.S.C. § 1691e provides for civil liability for failure to comply with the ECOA.
Plaintiff claims that "Defendants violated 15 U.S.C. § 1691(d) by failing to provide Ms. Sterling with the required written notices of their adverse actions." Compl. ¶ 142. Defendants do not contest whether Defendants complied with the ECOA notice requirements, but rather argue that Plaintiff fails to state a claim under the ECOA because Defendants "are not `creditors' for purposes of the notice provision of the ECOA." Defs.' Mem. 22.
For purposes of the ECOA notice requirement, a creditor is "any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit." 15 U.S.C. § 1691a(e). Creditors must report their adverse actions if they "`regularly participate[ ] in a credit decision.'" Martin, 2012 WL 380065, at *5 n. 7 (quoting 12 C.F.R. § 202.2(1)). A dealership may be, but is not necessarily, a creditor under this provision. See id.
Id.
In this regard, Martin v. Q & A Enterprises is informative. There, the plaintiff sought to purchase a car from a dealership,
Here, Plaintiff claims that Ourisman appears as the "Creditor-Seller" on the RISC, Compl. ¶ 45, and that Defendants negotiated monthly payments with her and discussed the paperwork necessary for financing, asking her "whether she would take the vehicle if they could get her a payment of a certain amount per month," and "explain[ing] that financing usually only required the three (3) most recently monthly bank statements, but now they were requiring bank statements plus a copy of Schedule C," id. ¶¶ 17, 19; see id. ¶¶ 20-41. Yet Plaintiff also claims that Defendants approached lenders to finance Plaintiff's purchase, telling her that Taliaferro "would see what he could do about either forcing GMAC to take the financing or finding an alternative source of financing," and then that "they were unable to get the financing through anywhere." Compl. ¶¶ 57, 59. The only reasonable inference the Court can make on these facts is that Defendants acted "merely as a third-party `arranger' or `referrer,'" and not a creditor. See Martin, 2012 WL 380065, at *5-6. Therefore, none of Defendants is a creditor for purposes of the ECOA notice provision, such that Plaintiff has failed to state a claim under the ECOA for which relief can be granted. See id.; 15 U.S.C. § 1691a(e). Count V is DISMISSED. See Fed.R.Civ.P. 12(b)(6).
The MCPA provides that "`a person may not engage in any unfair or deceptive trade practice,'" such as a "false or misleading statement[]," in relation to "`[t]he extension of consumer credit' or the `collection of consumer debts.'" Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *10
Plaintiff claims that Defendants "committed unfair and/or deceptive trade practices," in violation of Com. Law § 13-303,
Compl. ¶ 148.
Defendants argue that Plaintiff's MCPA claim, which involves fraud, should be dismissed because Fed.R.Civ.P. 9(b) "requires that the plaintiff identify the circumstances constituting fraud with particularity," and "[t]he Complaint fails, on its face, to allege which Defendant made the alleged `statements that had the capacity, tendency, and effect of misleading Ms. Sterling' or the `statements misleading Ms. Sterling.'" Defs.' Mem. 22-23 (quoting Compl. ¶ 148). Plaintiff insists that she has provided the requisite particularity in the paragraphs referenced in Paragraph 148 of her Complaint. Indeed, Plaintiff states the dates and approximate times of all of her interactions with Defendants, Compl. ¶¶ 10, 25, 26, 46 & 61, and she states that the in-person interactions occurred on Ourisman's lot and in Ourisman's building, id. ¶¶ 10-46, 61-92. Additionally, she identifies the speaker at each stage of the negotiations and for each interaction Plaintiff had with Defendants. See id. ¶¶ 10-92. Also, Plaintiff alleges that, as a result of these statements, Defendants obtained Plaintiff's vehicle, which they sold before insisting that she buy it back. Id. ¶¶ 42-47, 94, 95. Thus, in her fraud allegations underlying this Count, Plaintiff has met Rule 9(b)'s heightened pleading standard by including "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." Piotrowski, 2013 WL 247549, at *5 (quotation marks and citations omitted). Further, Defendants' statements misled Plaintiff to believe that her purchase of the Equinox was final and not contingent on any additional financing arrangements. Compl. ¶¶ 40-47. Plaintiff alleges sufficiently that Defendants made a false or misleading statement. See Piotrowski, 2013 WL 247549, at *10.
Defendants also contend that "Plaintiff does not allege facts to show that she suffered any actual injury as a result of the alleged `misleading' facts." Defs.' Mem. 24. To the contrary, Plaintiff claims that "Defendants replaced the tires on the Trailblazer causing Ms. Sterling to lose a warranty she had on them," Compl. ¶ 94, and that "Ms. Sterling has incurred late fees for the months of September and October for not paying the car note for her Trailblazer," id. ¶ 95. Plaintiff has stated
The MCDCA "`prohibits debt collectors from utilizing threatening or underhanded methods in collecting or attempting to collect a delinquent debt.'" Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *9 (D.Md. Jan. 22, 2013) (quoting Bradshaw v. Hilco Receivables, LLC, 765 F.Supp.2d 719, 731-32 (D.Md.2011) (citing Md.Code Ann., Com. Law § 14-202)). Com. Law § 14-202(8) provides that a debt collector may not "[c]laim, attempt, or threaten to enforce a right with knowledge that the right does not exist."
Plaintiff claims that Defendants violated §§ 14-202(3), (5), and (8)
Id. Defendants contend that "Plaintiff has not alleged that any of these Defendants... at any time ha[s] been attempting to `collect a debt' from her," Defs.' Mem. 26; that none of the factual allegations that Plaintiff identifies "concern any attempt to collect a debt," id. at 27; and that "Plaintiff does not allege that any Defendant used `threatening or underhanded methods in collecting or attempting to collect a delinquent debt,'" Defs.' Reply 6 (quoting Bradshaw, 765 F.Supp.2d at 732). Plaintiff counters that a debt existed because "the transaction was final, and Ourisman was in fact the creditor for the financing." Pl.'s Opp'n 10.
A careful review of the Complaint reveals that Plaintiff has not alleged that any Defendant was a debt collector, i.e., "a person collecting or attempting to collect an alleged debt arising out of a consumer transaction," Com. Law § 14-201(b), or
Plaintiff styled Count VIII as "Violation of Maryland Motor Vehicle[] Administration Orders," and in it she claims that Defendants "engaged in conduct that has been banned by the Maryland Motor Vehicle Administration ... in its Dealer Bulletin No. D 03-05-01 (March 10, 2005)...." Compl. ¶¶ 161-62. Defendants contend that "Plaintiff's allegation that the Defendants `violated the MVA rules and regulations' is simply not an actionable claim." Defs.' Mem. 28. Indeed, "a cause of action is a set of facts which would justify judgment for the plaintiff under some recognized legal theory of relief." Paul Mark Sandler & James K. Archibald, Pleading Causes of Action in Maryland 2 (MICPEL 4th ed. 2008); see Pepper v. Johns Hopkins Hosp., 111 Md.App. 49, 680 A.2d 532, 542 (1996), aff'd, 346 Md. 679, 697 A.2d 1358 (1997). Plaintiff has not identified either a statutory or a common law theory of relief that this Court recognizes. No cause of action exists in this Court for a violation of a Motor Vehicle Administration Dealer Bulletin. Therefore, Plaintiff has not pleaded facts for which this Court could provide relief, if Plaintiff were to prevail on the merits. As Plaintiff has no cause of action for a violation of a Motor Vehicle Administration Dealer Bulletin, see Sandler & Archibald, supra, at 1, Count VIII must be DISMISSED. See Fed.R.Civ.P. 12(b)(6).
Plaintiff claims that Defendants are liable for fraud. Compl. ¶¶ 164-70. To state a claim for fraud under Maryland law, Plaintiff
Marchese v. JPMorgan Chase Bank, N.A., 917 F.Supp.2d 452, 465 (D.Md.2013) (quoting Thompson v. Countrywide Home Loans Servicing, L.P., No. L-09-2549, 2010 WL 1741398, at *3 (D.Md. Apr. 27, 2010) (citing Martens Chevrolet, Inc. v. Seney, 292 Md. 328, 439 A.2d 534 (1982))). Also, as noted, Plaintiff must meet the "heightened pleading standard under Rule 9(b)," by "`stat[ing] with particularity the circumstances constituting the fraud.'" Piotrowski v. Wells Fargo Bank, N.A., No. DKC-11-3758, 2013 WL 247549, at *5 (D.Md. Jan. 22, 2013); see Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 780-81 (4th Cir.2013). However, Rule 9(b) permits "intent, knowledge, and other conditions of a person's mind [to] be alleged generally." Fed.R.Civ.P. 9(b).
Plaintiff has alleged successfully all elements of fraud under Maryland law:
Further, as discussed in detail supra in Part III.F, Plaintiff pleaded the circumstances of Defendants' fraudulent acts with particularity. See Compl. ¶¶ 10-92. Thus, Plaintiff has stated a claim for fraud. See Fed.R.Civ.P. 9(b); Marchese, 917 F.Supp.2d 452, 464-65.
Plaintiff's tenth count is for "Negligence & Breach of Fiduciary Duty and Implied Covenants of Good Faith and Fair Dealing." Compl. 24 & ¶¶ 171-76. She claims that "¶¶'s 10 to 96," i.e., the entire fact section of her Complaint, support this count. Compl. ¶ 175. As best this Court can determine, this count seems to encompass claims for negligence based on fiduciary duty and breach of the implied covenants of good faith and fair dealing. "Rule 10(b) provides that, `[i]f doing so would promote clarity, each claim founded on a separate transaction or occurrence ... must be stated in a separate count.'" Cunningham v. LeGrand, No. 2:11-cv-0142, 2011 WL 1807360, at *2 (S.D.W.Va. May 10, 2011) (quoting Fed.R.Civ.P. 10(b)). Rule 10(b) works with Rule 8(a) "`to require the pleader to present his claims discretely and succinctly, so that his adversary can discern what he is claiming and frame a responsive pleading, the court can determine which facts support which claims and whether the plaintiff has stated any claims upon which relief can be granted....'" Id. (quoting Fikes v. City of Daphne, 79 F.3d 1079, 1082-83 (11th Cir. 1996)). Plaintiff certainly has neither pleaded these claims distinctly nor identified the specific facts supporting each claim. Nonetheless, as Defendant has not stated any difficulty in discerning what Plaintiff claims, this Court will undertake to unpack this count and address each claim.
Preliminarily, I note that breach of the implied covenants of good faith and fair dealing is not an independent cause of action. Mount Vernon Props., LLC v. Branch Banking & Trust Co., 170 Md.App. 457, 907 A.2d 373, 381 (2006); see Sandler & Archibald, supra, at 61. Rather, it "`is merely part of an action for breach of contract,'" as "`[t]he implied duty of good faith "prohibits one party to a contract from acting in such a manner as to prevent the other party from performing his obligations under the contract."'" Mount Vernon Props., 907 A.2d at 381 (quoting Swedish Civil Aviation Admin. v. Project Mgmt. Enters., Inc., 190 F.Supp.2d 785, 794 (D.Md.2002) (citation omitted)). Therefore, I construe Plaintiff's tenth count to include claims for breach of contract,
To state a claim for negligence based on fiduciary duty, Plaintiff must allege that (1) a fiduciary relationship existed, (2) the fiduciary breached the duty it owed to the beneficiary, and (3) the breach caused harm to the beneficiary. Sandler & Archibald, supra, at 436-38 (noting that no independent cause of action exists for breach of fiduciary duty, but breach of fiduciary duty can be alleged as an element of another cause of action, such as negligence); Dynacorp Ltd. v. Aramtel Ltd., 208 Md.App. 403, 56 A.3d 631, 685 n. 46 (2012) (stating elements). Here, the turning point is whether a fiduciary relationship existed between the dealership and Plaintiff, its customer. "`A fiduciary relationship ... involves a duty on the part of the fiduciary to act for the benefit of the other party to the relation as to matters within the scope of the relation.'" Lasater v. Guttmann, 194 Md.App. 431, 5 A.3d 79, 93 (2010) (quoting Buxton v. Buxton, 363 Md. 634, 770 A.2d 152, 164 (2001) (citation and quotation marks omitted)). It is more than a "`confidential relationship,'" which only requires that one party "`has gained the confidence of the other and purports to act or advise with the other's interest in mind.'" Id. (quoting Buxton, 770 A.2d at 164 (citation and quotation marks omitted)). Examples of fiduciary relationships include "`trustee and beneficiary, guardian and ward, agent and principal, attorney and client, partners in a partnership, corporate directors and their corporation.'" Id. (citation and quotation marks omitted).
Plaintiff claims that Defendants "owed a legal duty including a fiduciary duty" to Plaintiff because they "held themselves out as professionals in the sales industry, deserving of trust and confidence." Compl. ¶ 172. Defendants argue that "it is plain that a salesman and a customer do not have a confidential or fiduciary relationship," as "[a] confidential relationship may only exist in a business relationship if certain factors above and beyond a typical business relationship" are present. Defs.' Mem. 31. Plaintiff counters, without citing any supporting authority, that, "[r]egardless of what type of relationship the Defendants had with Ms. Sterling, ... they owed a legal duty of care of that of a reasonable person." Pl.'s Opp'n 10. This is unsurprising because, to the contrary, any duty owed from one party to another arises from the relationship between the parties. See Buxton, 770 A.2d at 163-64. Plaintiff has not pleaded sufficient facts to show that a seller and a customer are in a fiduciary relationship or specifically that she was in a fiduciary relationship with Defendants. Nor has this Court's research revealed any case law holding that a car dealership is a fiduciary with regard to its customers. Plaintiff has failed to state a claim for negligence based on fiduciary duty. See Dynacorp, 208 Md.App. 403, 56 A.3d at 685 n. 46.
A breach of contract is "a failure without legal excuse to perform any promise which forms the whole or part of a contract...." In re Ashby Enters., Ltd., 250 B.R. 69, 72 (Bankr.D.Md.2000) (quoting Conn. Pizza, Inc. v. Bell Atl.-Wash., D.C., Inc., 193 B.R. 217, 225 (Bankr.D.Md.
In Count XI, Plaintiff states that "[t]his is an action for declaratory judgment for the purposes of determining a question of actual controversy between the parties," and she "seeks a declaration of her rights with respect to Ourisman under the theory of Respondeat Superior." Compl. ¶¶ 178-79. Defendants argue that there is no "justiciable controversy" because Plaintiff "is asking for a declaration as to whether she may generally obtain relief directly against Defendant Ourisman `under the theory of Respondeat Superior.'" Defs.' Mem. 34.
It is unclear whether Plaintiff seeks a declaratory judgment under the Maryland Declaratory Judgment Act, Md.Code Ann., Cts. & Jud. Proc. §§ 3-401-3-415, or the Federal Declaratory Judgment Act, 28 U.S.C. § 2201. The Maryland Declaratory Judgment Act provides:
Id. § 3-406. It also provides:
Id. § 3-408. Neither provision applies here.
Under federal law, a plaintiff seeking declaratory relief "must show that he is in danger of being injured by the opposing party's conduct and that the danger is both `real' and imminent' and neither `conjectural' nor `hypothetical.'" Gardner v. Montgomery Cnty. Teachers Fed. Credit Union, 864 F.Supp.2d 410, 421 (D.Md.2012) (quoting City of Los Angeles
Plaintiff seeks "punitive damages under the tort theories of liability." Compl. 25. Notably, the only surviving tort claim is for fraud. Defendants argue for dismissal of the punitive damages claim on the basis that Plaintiff does not claim that Defendants acted with "actual malice," as is required to recover punitive damages. Defs.' Mem. 35.
"A party who seeks punitive damages, `must make a specific demand for that relief in addition to a claim for damages generally, as well as allege, in detail, facts that, if proven true, would support the conclusion that the act complained of was done with "actual malice."'" Louers v. Lacy, No. JKS-10-2292, 2011 WL 2434579, at *3 (D.Md. June 15, 2011) (quoting Biktasheva v. Red Square Sports, Inc., 366 F.Supp.2d 289, 296 (D.Md.2005) (quoting Scott v. Jenkins, 345 Md. 21, 690 A.2d 1000 (1997))). "Actual malice" is "`the performance of an unlawful act, intentionally or wantonly, without legal justification or excuse but with an evil or rancorous motive influenced by hate; the purpose being to deliberately and wilfully [sic] injure the plaintiff.'" Beverly v. Vitran Exp., Inc., No. CCB-12-1599, 2012 WL 3772579, at *3 (D.Md.2012) (quoting Drug Fair of Md., Inc. v. Smith, 263 Md. 341, 283 A.2d 392, 398 (1971)). Proof of fraud is also proof of actual malice. Ben-Joseph v. Mt. Airy Auto Transporters, LLC, 529 F.Supp.2d 604, 608 n. 8 (D.Md.2008) (citing Bowden v. Caldor, Inc., 350 Md. 4, 710 A.2d 267, 276 (1998)).
As noted, Plaintiff specifically demanded punitive damages. Compl. 25. Further, Plaintiff has pleaded sufficient facts to survive Defendants' Motion to Dismiss as to her fraud count. Therefore, she also has stated a claim for punitive damages on the fraud count. See Ben-Joseph, 529 F.Supp.2d at 608 n. 8; Bowden, 710 A.2d at 276.
Defendants insist that Plaintiff's "claims against the individual Defendants must be dismissed" because each was acting within the scope of his employment for Defendant Ourisman "while committing the acts alleged and described by the Plaintiff in her Complaint." Defs.' Mem. 35. Defendants have not cited any authority for, or provided any argument in support of, this proposition, which appears to be a twist on the well-known rules of respondeat superior. Cf. Wood v. Walton, 855 F.Supp.2d 494, 499 (D.Md.2012) ("Under Maryland law, an employer may be liable for acts `which his [employee] does with the actual or apparent authority of the [employer], ... the [employee] does within the scope of his employment, or ... the [employer] ratifies with the knowledge of all the material facts.'") (citation and footnote omitted). The Court will not develop Defendants' argument for them. Defendants' motion to dismiss the claim as to the individual defendants is DENIED, without prejudice to Defendants restating the same proposition, supported by authority, in a motion for summary judgment.
In sum, for the reasons stated above, Defendants' Motion to Dismiss is GRANTED IN PART and DENIED IN PART. As noted, Plaintiff has failed to state a claim for which relief can be granted under the FDCPA, RICO, TILA, ECOA, MCDCA, the Maryland Declaratory Judgment Act or the Federal Declaratory Judgment Act. Accordingly, Counts I, II, III, V, VII, and XI are DISMISSED. See Fed.R.Civ.P. 12(b)(6). Also, Plaintiff has failed to state a claim for a violation of a Motor Vehicle Administration Dealer Bulletin, negligence based on fiduciary duty, or breach of contract based on a breach of the implied covenants of good faith and fair dealing. Therefore, Counts VIII and X are DISMISSED. See id. Plaintiff has stated claims as to all Defendants for fraud and violations of the FCRA, specifically 15 U.S.C. § 1681m, and the MCPA. See Ashcroft v. Iqbal, 556 U.S. 662, 663, 678-79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Accordingly, Counts IV, VI and IX remain. Additionally, Plaintiff's claim for punitive damages on the fraud count remains.
Defendants shall file an Answer no later than May 16, 2013, at which time the Court will enter a Scheduling Order and schedule a Fed.R.Civ.P. conference call with the parties to discuss further pretrial proceedings.
