ROSEMARY M. COLLYER, District Judge.
This is a case about a luxury car auctioned by the District of Columbia Department of Public Works ("DPW") without notice to the holder of the note. Plaintiff DCFS USA, LLC ("DCFS") sues the District of Columbia under the Fifth Amendment of the U.S. Constitution and 42 U.S.C. § 1983, complaining that the D.C. failed to provide constitutionally-required prior notice. Finding merit to the constitutional claim, the Court will enter summary judgment for DCFS on Count I of the Amended Complaint.
In 2006, Stephen Yelverton purchased a 2006 Mercedes Benz SLK350 (the "Vehicle") from Mercedes Benz of Alexandria in Alexandria, Virginia. Mr. Yelverton signed a purchase agreement, under which he gave a down payment of $8,000.00 towards the Vehicle's purchase price of $55,177.66, and agreed to sixty monthly payments of $706.17 beginning in September 2006, with a final payment of $23,106.30 due in September 2011. The total purchase price, with interest, was $65,476.50. The Vehicle operated with a Virginia license plate.
Mercedes Benz of Alexandria assigned the purchase agreement to DaimlerChrysler Financial Services Americas LLC ("DCFSA"), giving DCFSA a first security interest in the Vehicle. DCFSA's security interest was properly perfected and was reflected on the Vehicle's Certificate of Title. Plaintiff DCFS is the successor in interest to DCFSA and thus became the secured creditor to the Vehicle. Eventually, Mr. Yelverton defaulted on the purchase agreement by failing to make timely payments. DCFS notified Mr. Yelverton of his default and demanded payment in full, in the amount of $42,606.70, on September 16, 2008. Mr. Yelverton never cured the default.
On December 22, 2008, the DPW towed and impounded the Vehicle. On January 12, 2009, the DPW published an impoundment notice in The Washington Times, notifying the public of the DPW's intent to sell the Vehicle at auction. On February 4, 2009, the DPW sent an impoundment notice, by first class mail, to Mr. Yelverton at his last known address. Mr. Yelverton did not respond to the notice. The Vehicle was advertised for online auction between March 12 and March 19, 2009, and was sold on March 17, 2009, for $18,900. As of that date, it remained unclaimed. The DPW sold the Vehicle free and clear of DCFS's security interest.
The District of Columbia provided neither DCFSA nor DCFS with prior mailed notice that the Vehicle was impounded and might be auctioned. In July 2009, DCFS learned that the Vehicle had been auctioned by DPW after conducting an internet search using the Vehicle's vehicle identification number. An employee of DPW then informed DCFS that it had not received notice because the Vehicle was not registered in the District. Pl.'s Cross-Mot.
DCFS alleges that the District denied it prior notice and a meaningful opportunity to be heard on the impoundment and sale of the Vehicle in violation of its right to procedural due process under the Fifth Amendment of the United States Constitution (Count I) and also alleges a violation of 42 U.S.C. § 1983 (Count II). See Am. Compl. [Dkt. # 27] Counts I-II. The Court ordered discovery solely on Count I, the Fifth Amendment claim, as the § 1983 claim would rise or fall with the first count. DCFS filed an Amended Complaint on November 19, 2010, omitting claims against Mr. Yelverton after he was voluntarily dismissed. See Am. Compl.; Notice of Voluntary Dismissal [Dkt. # 8]. The District filed an amended motion to dismiss, or in the alternative, for summary judgment and DCFS cross-moved for summary judgment. The cross motions are ripe.
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the adequacy of a complaint on its face, testing whether a plaintiff has properly stated a claim. FED.R.CIV.P. 12(b)(6). Federal Rule of Civil Procedure 8(a) requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Id. 8(a)(1). A complaint must be sufficient "to give a defendant fair notice of what the. . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal citations omitted). Although a complaint does not need detailed factual allegations, the facts alleged "must be enough to raise a right to relief above the speculative level." Id. In deciding a motion under Rule 12(b)(6), a court must treat the complaint's factual allegations as true, "even if doubtful in fact." Id.
Summary judgment should be granted only if the moving party has shown that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. See FED. R.CIV.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Waterhouse v. Dist. of Columbia, 298 F.3d 989, 991 (D.C.Cir. 2002). In determining whether a genuine issue of material fact exists, the court must view all facts and draw all justifiable inferences in the nonmoving party's favor and accept the nonmoving party's evidence as true. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A nonmoving party, however, must establish more than "the mere existence of a scintilla of evidence" in support of its position. Id. at 252, 106 S.Ct. 2505. In addition, the nonmoving party may not rely solely on allegations or conclusory statements. Greene v. Dalton, 164 F.3d 671, 675 (D.C.Cir.1999). Rather, the nonmoving party must present specific facts that would enable a reasonable jury to find in its favor. Id. at 675. If the evidence "is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted).
The District of Columbia seeks to have the Court consider an affidavit by Cynthia Jones, a Certified Public Manager for
See Def.'s Reply & Opp'n to Pl.'s Cross-Mot. for Summ. J. [Dkts. # 34, 35] ("Def.'s Reply"), Ex. A (Affidavit of Cynthia Jones) ("Jones Aff.") ¶¶ 4, 7. The District introduced the Jones Affidavit, and the facts stated therein, for the first time in its combined reply and opposition to DCFS's cross-motion for summary judgment.
DCFS strongly objects to the District's attempt to undermine its previous admission in discovery that D.C. did not search the database of Virginia's DMV to determine whether there were any lienholders reflected on the Vehicle's title. See Pl.'s Reply [Dkt. # 36] at 5-6. The District admitted—and the Court judicially established as fact—that it "did not search the records of Virginia's Department of Motor Vehicles to determine whether there were any lien holders reflected on the title of the Vehicle." Pl.'s Opp'n, Ex. G (District's Responses to Admission Requests) ¶ 5.
DCFS further moves to preclude the Jones Affidavit as a sanction under Rule 37 because of the District's failure to provide DCFS with information about the District's search of the databases of the four states during the course of discovery. See Pl.'s Reply at 7-9. "If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." FED.R.CIV.P. 37(c)(1). A primary consideration for a court is that any Rule 37 sanction must be just. See Bonds v. Dist. of Columbia, 93 F.3d 801, 808 (D.C.Cir.1996). "The choice of sanction should be guided by the `concept of proportionality' between offense and sanction." Id. (quoting Shea v. Donohoe Constr. Co., 795 F.2d 1071, 1077 (D.C.Cir.1986)).
In response to DCFS's interrogatory requesting that the District "[d]escribe in detail the method by which the District determined when, where, how and to whom to provide notice of the impoundment of the Vehicle," and to identify all related documents, the District merely provided a list of documents and gave no recitation of the details contained in the Jones Affidavit. See Pl.'s Reply, Ex. B (District's Interrog. Responses) ¶ 5; see also id., Ex. C (District's Supplemental Interrog. Responses) ¶ 5. A party must respond to an interrogatory, not by simply citing to a document, but by answering each question separately and fully in writing. See FED.R.CIV.P. 33(b)(1); see also Equal Rights Ctr. v. Post Props., Inc., 246 F.R.D. 29, 34 (D.D.C.2007). Similarly, in response to an interrogatory that asked for the name, address and phone number of "each individual likely to have discoverable information" and to "describe in detail his or her specific material knowledge or information," the District identified Ms.
DCFS notified the District of its deficient and unresponsive answers to no avail. See Pl.'s Reply, Ex. A (Discovery Deficiency Letter Dated 9/2/10). For instance, DCFS specifically requested that the District cure its failure to provide any information about the material knowledge of the individuals it identified as having potentially discoverable information, which included Ms. Jones. See id. at 1. The District's supplemental interrogatory responses, dated sometime in September 2010, simply stated that "the District not know [sic] what knowledge each individual possesses." Id., Ex. C (District's Supplemental Interrog. Responses) ¶ 3. Counsel responding to interrogatories is not at liberty to say she does not know the answers to very legitimate questions, but must provide "true, explicit, responsive, complete, and candid" responses. See Equal Rights Ctr., 246 F.R.D. at 32; United States ex rel. Pogue v. Diabetes Treatment Ctrs. of Am., Inc., 235 F.R.D. 521, 524 (D.D.C. 2006).
DCFS also tried to elicit further information on the WALES program, seeking clarification on the extent of searches conducted by the system and how Mr. Yelverton's name was ultimately uncovered by the system. See Pl.'s Reply, Ex. A (Discovery Deficiency Letter Dated 9/2/10) at 3. Given the discovery responses and admissions it had received, it appears that DCFS was under the impression that WALES only searched the District's own DMV records and explicitly sought clarification on this point. See id. Despite being on notice of this potential confusion, and despite explicit requests for information, the District wholly failed to respond. See, e.g., Ex. C (District's Supplemental Interrog. Responses) ¶ 6. "[I]nterrogatories are not only an information gathering tool, but also an opportunity to require one's opponent to state its position on an issue in controversy in writing and under oath." Covad Commc'ns. Co. v. Revonet, Inc., 258 F.R.D. 17, 20 (D.D.C.2009). At a minimum, the District's incomplete responses, despite explicit requests for further information and despite its duty to supplement, had the effect of hiding the ball that the WALES system searched records of jurisdictions beyond the District of Columbia.
The District's pattern in this case of failing grossly in its obligations to civil discovery is very troubling. The Court again reiterates its sympathy for counsel's workload, but there remain necessary consequences when information properly sought but not produced is suddenly unveiled in opposition to a motion for summary judgment (and in reply to a party's own motion). This record does not present a single inadvertent error. Not only did the District ignore its discovery obligations from June-July 2010, for which the Court entered an order on August 12, 2010, but the District also filed supplemental interrogatory responses in September 2010 that failed to correct the errors of its initial responses and only provided additional imprecise and insufficient information, and then further failed to supplement these responses once detailed information became known.
The sudden infusion of information from Ms. Jones in opposition to summary judgment—a DPW manager whose contemporaneous knowledge is imputed to the District—violates the letter and spirit of discovery and cannot be accepted. DCFS provides no substantial justification for this late offering—but instead argues that there is nothing untoward in its actions. See generally Def.'s Surreply. Given the costs of discovery, the fact that discovery has long since been closed, the fact that DCFS has justifiably relied on a theory of the case now altered by the District, and the number of discovery errors committed by the District, the Court cannot find the introduction of the Jones Affidavit at this juncture to be harmless. Because of the Court's previous ruling, the District's previous admission, and Rule 37, the Jones Affidavit and all argument relying upon it will be stricken from the record.
The Due Process Clause of the Fifth Amendment protects individuals against deprivations of "life, liberty, or property, without due process of law." U.S. CONST. amend. V. "Procedural due process imposes constraints on governmental decisions which deprive individuals of `liberty' or `property' interests within the meaning of the Due Process Clause of the Fifth or Fourteenth Amendment." Mathews v. Eldridge, 424 U.S. 319, 332, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); see Atherton v. D.C. Office of the Mayor, 567 F.3d 672, 689 (D.C.Cir.2009) ("A procedural due process violation occurs when an official deprives an individual of a liberty or property
DCFS seeks to enforce the procedural due process rights owed to its predecessor in interest, DCFSA, an entity which no longer exists. See Pl.'s Reply at 4. The Vehicle's Certificate of Title explicitly identified DCFSA as the secured creditor, and its address was clearly listed on the Certificate. As successor in interest to the Vehicle, DCFS stands in the shoes of and may enforce any rights of DCFSA.
Looking first to the District's statutory obligations, it must provide notice by first class mail to owners and lienholders within five days of impounding a vehicle.
In the alternative to mailed notice, the District may provide notice of an impoundment by publication in a newspaper of general circulation if (a) the address of the owner or lienholders cannot be determined or if (b) the mailed notice is returned as undeliverable. See id. § 50-2421.07(d). As the District failed to send notice of the impoundment or auction to DCFSA, no mail could have been returned as undelivered.
That the District violated the notification requirements outlined in its own laws or regulations, however, does not itself mean that it deprived DCFS of procedural due process due under the Fifth Amendment. See Tate v. Dist. of Columbia, 627 F.3d 904, 908 (D.C.Cir.2010) (noting
"[T]he Supreme Court has established a `general rule that individuals must receive notice and an opportunity to be heard before the Government deprives them of property.'" UDC Chairs Chapter, 56 F.3d at 1472 (quoting United States v. James Daniel Good Real Prop., 510 U.S. 43, 114 S.Ct. 492, 499, 126 L.Ed.2d 490 (1993)). "An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950). "As Mullane made clear, the Due Process Clause does not demand actual, successful notice, but it does require a reasonable effort to give notice." Small v. United States, 136 F.3d 1334, 1336 (D.C.Cir.1998).
The Supreme Court has addressed the adequacy of notice by publication or posting—in a local newspaper or elsewhere— on numerous occasions. "Notice by mail
In 1950, the Mullane Court explained its disapproval of notice by publication when the address of the affected party is known or easily ascertainable: "Chance alone brings to the attention of even a local resident an advertisement in small type inserted in the back pages of a newspaper, and if he makes his home outside the area of the newspaper's normal circulation the odds that the information will never reach him are large indeed." 339 U.S. at 315, 70 S.Ct. 652. The D.C. Circuit in 1998 expanded that "[a]lmost fifty years after Mullane, in an increasingly populous and mobile nation, newspaper notices have virtually no chance of alerting an unwary person that he must act now or forever lose his rights; they are no more effective than publishing a notice in the Federal Register." Small, 136 F.3d at 1336.
It is thus easy to conclude that DCFS had a constitutionally protected interest in the Vehicle, and was entitled to notice "reasonably certain to inform" it prior to the elimination of that interest. See Mullane, 339 U.S. at 315, 70 S.Ct. 652. The Vehicle had a Virginia license plate, and regardless of whether the registration sticker was expired at the time the Vehicle was impounded, the District neither searched the records of the Virginia DMV to determine the existence or identity of any lienholders nor mailed notice of the Vehicle's impoundment and intended auction to DCFSA. DCFSA's identity was readily ascertainable from the Vehicle's Certificate of Title had the District employed "reasonably diligent efforts." Mennonite, 462 U.S. at 798 n. 4, 103 S.Ct. 2706 (noting that mortgage was on file with county recorder, that mortgagee's identity was listed on mortgage, and that even though the address was not provided on the mortgage, the address could have been ascertained by reasonably diligent efforts).
The District nonetheless attempts to shift the blame to DCFS for its purported failure to take advantage of post-deprivation hearing procedures afforded by D.C. law. See D.C.CODE § 50-2421.11 (providing that in certain circumstances an "owner or lienholder who fails to reclaim a vehicle within the time prescribed shall nevertheless be entitled to recover the fair market of the vehicle disposed of"). In certain circumstances a state may provide notice and an opportunity to be heard after the initial deprivation of a property interest. "This Court has recognized, on many occasions, that where a State must act quickly, or where it would be impractical to provide predeprivation process, postdeprivation process satisfies the requirements of the Due Process Clause." Gilbert v. Homar, 520 U.S. 924, 930, 117 S.Ct. 1807, 138 L.Ed.2d 120 (1997); see also FDIC v. Mallen, 486 U.S. 230, 240, 108 S.Ct. 1780, 100 L.Ed.2d 265 (1988) ("An important government interest, accompanied by a substantial assurance that the deprivation is not baseless or unwarranted, may in limited cases demanding prompt action justify postponing the opportunity to be heard until after the initial deprivation.").
In this case, the record does not establish a need for quick or prompt action that might justify this Court's finding that notice and the opportunity for a hearing prior to a final deprivation was not required. District law provides that owners have 28 days to reclaim impounded vehicles after an impoundment notice is mailed and 14 days to reclaim a car after notice by publication. See D.C.CODE § 50-2421.08. Here, the District impounded the Vehicle on December 22, 2008, published notice of its intent to auction the Vehicle on January 12, 2009, offered the Vehicle up
The District also moves to dismiss, or in the alternative for summary judgment, on Count II of the Amended Complaint which alleges a violation under 42 U.S.C. § 1983. See Am. Compl., Count II. To state a claim for municipal liability under § 1983, a court must conduct a two-step inquiry. "First, the court must determine whether the complaint states a claim for a predicate constitutional violation." Baker v. Dist. of Columbia, 326 F.3d 1302, 1306 (D.C.Cir. 2003). "Second, if so, then the court must determine whether the complaint states a claim that a custom or policy of the municipality caused the violation." Id. "Each inquiry is separate and serves different purposes." Id. Discovery was limited to Count I of the Amended Complaint, see Scheduling Order [Dkt. # 12] ¶ 7, because the viability of the § 1983 claim depended upon the viability of the due process violation alleged in Count I.
As the Court has not allowed for discovery on the § 1983 claim, and because many material issues of fact remain unresolved on this claim, it will consider the District's motion as a motion to dismiss. The Amended Complaint alleges that the District deprived DCFS of its property interest in the Vehicle through the District's "official policy or custom of impounding vehicles for which there are not two or more unpaid tickets outstanding for a period of at least 60 days" and for which no other circumstances apply under District law, see Am. Compl. ¶ 39, and that the District had an official custom or policy of "not providing notice of impoundment to lienholders of vehicles registered outside the District of Columbia and/or failure to train or supervise DPW employees regarding the notice required" by District law "despite knowledge that the notice requirement was being systematically disregarded so as to violate the constitutional rights of lienholders." Id. ¶ 40.
These allegations are sufficient to survive a motion to dismiss. See Baker, 326 F.3d at 1306. "The complaint need only set forth a short and plain statement of the claim, giving the defendant fair notice of the claim and the grounds upon which it rests." Runkle v. Gonzales, 391 F.Supp.2d 210, 220 (D.D.C.2005) (citations omitted). At this pre-discovery juncture, DCFS has alleged sufficient factual matter; the District's motion to dismiss Count
For the reasons stated above, Defendant's Amended Motion to Dismiss and/or Motion for Summary Judgment [Dkt. # 29] will be denied. Defendant's Motion for Summary Judgment as to Count II will be denied without prejudice. Plaintiff's Motion for Summary Judgment as to Count One of the Amended Complaint [Dkt. # 31] will be granted. A memorializing Order accompanies this Memorandum Opinion.
See Order [Dkt. # 18]. The District moved for reconsideration, see Def.'s Mot. for Reconsideration [Dkt. # 19], and argued in its reply that it had mistakenly, but in good faith, miscalculated the deadline for filing a reply in support of its original motion for an enlargement of time. See Reply in Support of Def.'s Mot. for Reconsideration [Dkt. # 21] at 1. The Court denied the motion for reconsideration. See Minute Entry Order 9/9/2010. Of course, the District also expressly admitted it did not search Virginia's DMV records, so its current predicament does not rest solely on the Court's previous sanction.
By definition, a successor in interest retains all of the rights of the original owner and is entitled to enforce those rights. See BLACK'S LAW DICTIONARY 1832 (9th ed. 2009) (defining "successor in interest" as "[o]ne who follows another in ownership or control of property" and noting that "[a] successor in interest retains the same rights as the original owner, with no change in substance."). Successors in interest may bring suit pursuant to the rights owed to their predecessors or, conversely, defend a suit by employing the rights and/or defenses available to their predecessors. See, e.g., Solomon v. Falcone, Civ. No. 09-2210, 791 F.Supp.2d 184, 188-89, 2011 WL 2342759, at *3 (D.D.C. June 15, 2011) (noting that plaintiff's claims, including an alleged violation of the Truth in Lending Act, 15 U.S.C. § 1601, et seq., were properly asserted against defendants as successors in interest and assignees of plaintiff's mortgage loan); Gilberg v. MetLife, Inc., 734 F.Supp.2d 5, 6 (D.D.C.2010) (noting that defendant filed a third-party complaint against a company as successor in interest to another company); Wash. Metro. Area Transit Auth. v. Georgetown Univ., 180 F.Supp.2d 137, 139-40 (D.D.C. 2001) (stating that because predecessors had reserved for themselves certain rights in a deed, those "rights now belong to Georgetown [University] as successor-in-interest"), rev'd on other grounds, 347 F.3d 941 (D.C.Cir. 2003); Democratic Nat'l Comm. v. McCord, 416 F.Supp. 505, 506 (D.D.C.1976) (explaining that because certain defendants were trustees of and successors in interest to certain political committees, that they "stand in the same position as, and can assert defenses which would have been available to, the Committees"); cf. FED.R.CIV.P. 25(c) ("If an interest is transferred, the action may be continued by or against the original party unless the court, on motion, orders the transferee to be substituted in the action or joined with the original party.").
The D.C. Circuit disagreed: "Tate had meaningful notice of her infractions and a series of hearings to contest them, culminating in the hearing on May 29, 2002, which she requested for the specific purpose of challenging the sale of her vehicle at auction." Id. at 908. "If the District subsequently sold it prematurely, that fact may well give rise to a common law tort under D.C. law but it did not deprive her of the only process due—namely, timely notice and a hearing. Tate does not challenge the adequacy of the administrative hearings themselves." Id. Accordingly, the Circuit found it was immaterial to the due process claim that the District sold Tate's vehicle prematurely, even if the District violated D.C. law in doing so. DCFS, on the other hand, did not learn of the auction until several months after the Vehicle had already been sold. In further contrast to Tate, DCFS did not have an opportunity to challenge the impoundment or sale.
