English v. Santander Consumer USA

MOTION for Summary Judgment

D. Md.April 14, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (SOUTHERN DIVISION) ERIC LAMAR ENGLISH, * PLAINTIFF, * V. * CASE NO. 16-02745 DKC SANTANDER CONSUMER USA, * DEFENDANT. * * * * * * * * * * * * * * DEFENDANT/COUNTER PLAINTIFF SANTANDER CONSUMER USA’S MOTION FOR SUMMARY JUDGMENT Defendant/Counter-Plaintiff Santander Consumer USA Inc. (“SC”), by its attorneys and pursuant to FED. R. CIV. P. 56, moves for summary judgment with respect to all claims and counterclaims asserted in this action by and against Plaintiff/Counter-Defendant Eric Lamar English (“English”) and for cause, states as follows: INTRODUCTION AND SUMMARY OF ARGUMENT SC provides consumer automobile financing, typically through dealerships. In December of 2015, English submitted a written application for credit containing false statements to SC, through RRR Bowie LLC d/b/a Toyota of Bowie (“Toyota of Bowie”). SC, in reliance on the application, approved the extension of credit to English. In January of 2016, English signed a Retail Installment Contract (the “Contract”) with Toyota of Bowie, financing his purchase of a 2016 Toyota Corolla for $39,808.08. Toyota of Bowie assigned the Contract to SC shortly after its execution. Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 1 of 30 2 English failed to make a single payment under the Contract. SC repossessed the Vehicle, sold it at auction, and applied the sale proceeds to reduce English’s obligations under the Contract. Following his default, English filed a personal bankruptcy. English failed to apprise SC of the pendency of his bankruptcy, and SC did not learn of the existence of the bankruptcy proceeding until after the deadline to file a complaint objecting to dischargeability. The basis for English’s claims is his assertion that he sent a check to SC in full satisfaction of his obligations pursuant to the Contract. In the course of this action, English has admitted that the purported check was in fact fraudulent and not a valid negotiable instrument. Based on the undisputed facts, SC is entitled to summary judgment on the claims asserted by English. The basis for SC’s claims are that following sale of the Toyota Corolla, a deficiency balance remained, owed by English to SC. English has admitted that he provided no notice to SC of his bankruptcy proceeding. SC did not learn of the bankruptcy proceeding until after the deadline for objecting to dischargeability. As a result, the claims of SC were not discharged in English’s bankruptcy filing by virtue of 11 U.S.C. 523(a)(3)(B), which excepts from discharge claims of the type presented here. STATEMENT OF UNDISPUTED MATERIAL FACTS 1. SC served its First Requests for Admission (“Requests for Admission”) upon English on February 2, 2017. See Affidavit of Andrew L. Cole, ¶¶ 2-3 (“Cole Affidavit”), attached hereto as Exhibit A and incorporated as though fully set forth herein. The Requests for Admission are attached to the Cole Affidavit as Exhibit 1. To date, English has not responded to the Requests for Admission. Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 2 of 30 3 2. The Requests for Admission are deemed admitted pursuant to Federal Rule of Civil Procedure 36(a)(3). 3. English has admitted that he has suffered no economic damages as a result of any action or omission by SC. See Request for Admission 1. 4. English has admitted that he has suffered no non-economic damages as a result of any action or omission by SC. See Request for Admission 2. 5. English has admitted that he has made no payments to SC since January 1, 2016. See Request for Admission 3. 6. English has admitted that he was not employed between January 1, 2015 and January 1, 2016. See Request for Admission 4. 7. English has admitted that his Social Security Number ends with 8324. See Request for Admission 5. 8. English has admitted that he applied for credit with SC using a Social Security Number ending with 4222. See Request for Admission 6. 9. English has admitted that in connection with obtaining credit from SC, he represented that his gross monthly income was $2,720.00 when in fact he was not employed and had no regular income. See Request for Admission 7. 10. English has admitted that he obtained credit from SC. See Request for Admission 8. 11. English has admitted that he made materially false representations to SC in connection with his obtaining of credit, and made such representations with the intent that SC rely on them. See Request for Admission 9. Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 3 of 30 4 12. English has admitted that his monetary obligation to SC totaled $10,371.76 as of August 17, 2016, exclusive of attorneys’ fees. See Request for Admission 10. 13. English has admitted that he commenced a bankruptcy proceeding in April of 2016 (the “Bankruptcy”). See Request for Admission 11. 14. English has admitted that he did not list SC as a creditor in the Bankruptcy. See Request for Admission 12. 15. English has admitted that he did not notify SC of the Bankruptcy. See Request for Admission 13. 16. English has admitted that SC had no notice or actual knowledge of the Bankruptcy prior to December 27, 2016. See Request for Admission 14. 17. English has admitted that the WeRe Check was fraudulent. See Request for Admission 15. 18. English has admitted that the WeRe Check was not issued by a properly licensed financial institution. See Request for Admission 16. 19. English has admitted that the WeRe Check was not drawn on a bank account into which funds have been deposited. See Request for Admission 17. 20. English has admitted that the WeRe Check was not drawn on a bank account into which funds sufficient to pay the WeRe Check had been deposited. See Request for Admission 18. 21. English has admitted that WeRe Bank is not a member of the Federal Reserve. See Request for Admission 19. 22. English has admitted that the WeRe Check is not a negotiable instrument. See Request for Admission 20. Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 4 of 30 5 23. English has admitted that the WeRe Check does not constitute legal tender. See Request for Admission 21. 24. English has admitted that SC is not a “debt collector” for purposes of the Fair Debt Collection Practices Act. See Request for Admission 22. 25. English has admitted that SC has made no telephone calls to Derrick English that violated the Fair Debt Collection Practices Act or any other federal or state law. See Request for Admission 23. 26. English has admitted that SC has committed no violation of the Fair Debt Collection Practices Act with respect to him. See Request for Admission 24. 27. English has admitted that SC has committed no violation of any Truth in Lending Laws with respect to him. See Request for Admission 25. LEGAL STANDARD A. Standard for Grant of Summary Judgment 28. A party moving for summary judgment must show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the movant meets its burden, the non-movant must direct the court’s attention to evidence in the record sufficient to establish that there is a genuine issue of material fact for trial. Id. at 323–24. All reasonable inferences must be drawn in favor of the non-moving party. Matsushita, 475 U.S. at 587–88, 106 S.Ct. 1348; see also Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co., 336 F.3d 410, 412 (5th Cir.2003). The non-moving party “must [however] do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Electric Indust. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 5 of 30 6 89 L.Ed.2d 538 (1986) (citing U.S. v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)). Instead, the non-moving party must produce evidence upon which a jury could reasonably base a verdict in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also DIRECTV Inc. v. Robson, 420 F.3d 532, 536 (5th Cir. 2005). Unsubstantiated and subjective beliefs and conclusory allegations and opinions of fact are not competent summary judgment evidence. Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir.1998); Grimes v. Texas Dept. of Mental Health and Mental Retardation, 102 F.3d 137, 139– 40 (5th Cir.1996); Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.1994), cert. denied, 513 U.S. 871, 115 S.Ct. 195, 130 L.Ed.2d 127 (1994); Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir. 1992), cert. denied, 506 U.S. 825, 113 S.Ct. 82, 121 L.Ed.2d 46 (1992). Nor are pleadings summary judgment evidence. Wallace v. Tex. Tech Univ., 80 F.3d 1042, 1046 (5th Cir. 1996) (citing Little, 37 F.3d at 1075). The non-movant cannot discharge his burden by offering vague allegations and legal conclusions. Salas v. Carpenter, 980 F.2d 299, 305 (5th Cir. 1992); Lujan v. National Wildlife Fed’n, 497 U.S. 871, 889, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). Nor is the court required by Rule 56 to sift through the record in search of evidence to support a party’s opposition to summary judgment. Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (citing Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915–16 & n. 7 (5th Cir. 1992)). ARGUMENT I. SC’s Counterclaims A. English Breached the Contract 29. Under Maryland law, the elements of a breach of contract are 1) a contractual obligation and 2) a material breach of that obligation. Chubb & Son v. C & C Complete Servs., LLC, 919 F.Supp.2d 666, 678 (D. Md. 2013). Furthermore, in a breach of contract action, upon Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 6 of 30 7 proof of liability, the non-breaching party may recover damages for 1) the losses proximately caused by the breach, 2) that were reasonably foreseeable, and 3) that have been proved with reasonable certainty. Hoang v. Hewitt Ave. Associates, LLC, 936 A.2d 915, 934 (Md. Ct. Spec. App. 2007). 30. English and SC are parties to the Contract. A true and correct copy of the Contract is attached hereto as Exhibit B. 31. English breached the Contract by failing to make a single payment. See Request for Admission 3. 32. English’s obligations to SC totaled $10,371.76 as of August 17, 2016, exclusive of attorneys’ fees. Request for Admission 10. 33. The rate of interest under the Contract is 23.64% per annum. See Exhibit B. 34. As of the date hereof, the total obligations of English to SC, exclusive of attorneys’ fees is $11,983.28. A worksheet calculating interest between August 17, 2016 and the date hereof is attached hereto as Exhibit C. Interest continues to accrue at the rate of $6.71 per diem through the entry of judgment. See Exhibit C. B. English made Fraudulent Representations to Induce SC to Extend Credit 35. Under Maryland law, a plaintiff alleging fraud must prove: (1) that the defendant made a false representation to the plaintiff, (2) that its falsity was either known to the defendant or that the representation was made with reckless indifference as to its truth, (3) that the misrepresentation was made for the purpose of defrauding the plaintiff, (4) that the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) that the plaintiff suffered compensable injury resulting from the misrepresentation. Gourdine v. Crews, 405 Md. 722, 758 (2008). Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 7 of 30 8 36. On or about December 31, 2015, Mr. English applied to obtain credit from SC by submitting a written application (the “Credit Application”). See Request for Admission 6. In the Credit Application, English made materially false representations to SC in connection with his obtaining of credit, and made such representations with the intent that SC rely on them. Request for Admission 9. 37. First, in the Credit Application, English used a social security number ending in 4222 when, in fact, English’s actual social security number ends with 8324. Requests for Admission 5 & 6. 38. Second, in the Credit Application, English represented that his gross monthly income was $2,720.00 when in fact he was not employed and had no regular income. Request for Admission 7. Furthermore, English was not employed between January 1, 2015 and January 1, 2016. Request for Admission 4. The representations in his Credit Application are in stark contrast to English’s sworn statements in his Application to Proceed in District Court without Prepaying Fees or Costs (Dkt. 2), wherein English has not been employed since June 2015 and has averaged zero monthly income since August 2015. See Dkt. 2. Additionally, in the Bankruptcy Case (defined below), English filed his Official Form 122A-1 Chapter 7 Statement of Current Monthly Income (“122A-1”) showing that his average monthly income for the six (6) months preceding April 2016 was $800, which came in the form of “help from family.” A true and correct copy of English’s 122A-1 is attached hereto as Exhibit D. Therefore, English is judicially estopped1 from asserting that his income at the time he submitted the Credit Application, December 31, 2015, is any amount more than $800 per month. Lowery, 92 F.2d at 1 The elements for judicial estoppel are: i) the party sought to be estopped must be seeking to adopt a position that is inconsistent with a stance taken in prior litigation and the position sought to be estopped must be one of fact rather than law or legal theory; ii) the prior inconsistent statement must have been accepted by the court; and iii) the party sought to be estopped must have “intentionally misled the court to gain an unfair advantage.” Lowery v. Stovall, 92 F.3d 219, 224 (4th Cir. 1996). Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 8 of 30 9 223 (“[J]udicial estoppel precludes a party from adopting a position that is inconsistent with a stance taken in prior litigation.”). English signed and filed the 122A-1 under penalty of perjury. Therefore it is part of the summary judgment record and can be relied on without an affidavit. 39. English successfully obtained credit from SC. Request for Admission 8. 40. As a result of English’s fraud, SC has suffered damages in the amount of $10,371.76 as of August 17, 2016, exclusive of attorneys’ fees. Request for Admission 10. As of April 14, 2017, SC’s damages caused as a result of English’s fraud are in the amount of $11,983.28 exclusive of attorney’s fees. See Exhibit C. C. English’s Obligation was not Discharged pursuant to 11 U.S.C. 523(a)(3)(B) 41. 11 U.S.C. 523(a)(3)(B) provides that a debt, otherwise dischargeable, is not discharged where: [the debt] is neither listed nor scheduled under section 521(a)(1) of this title, with the name, if known, to the debtor, of the creditor to whom such debt is owed in time to permit – if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for a determination of dischargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request. . . 11 U.S.C. § 523(a)(3)(B). 42. On April 21, 2016 (the “Petition Date”), English filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of Maryland, Case No. 16-15489 (the “Bankruptcy Case”). Request for Admission 11. English did not schedule SC as a creditor in the Bankruptcy Case. Request for Admission 12. English did not notify SC of the Bankruptcy Case. Request for Admission 13. SC did not have knowledge of the Bankruptcy Case until December 27, 2016. Request for Admission 14. Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 9 of 30 10 43. The Bankruptcy Case was determined to be a “no asset” case and no deadline for filing proofs of claim was ever set; however, the default deadline for filing proofs of claim in the Bankruptcy Case was August 22, 2016. See Federal Rule of Bankruptcy Procedure 3002(c). The deadline for creditors to object to the dischargeability of particular debts expired July 25, 2016. See Federal Rule of Bankruptcy Procedure 4004. Unaware of the Bankruptcy Case, SC was likewise unaware of the proof of claim filing deadline and the deadline to object to dischargeability of debts. D. English’s Obligation was not Discharged pursuant to 11 U.S.C. 523(a)(2)(B) 44. Section 523(a)(2)(B) of Title 11 of the United States Code (the “Bankruptcy Code”) excepts from discharge any debts for money, property, services, or credit “obtained by use of a statement in writing that is materially false, respecting the debtor’s or an insider’s financial condition, on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied, and that the debtor caused to be made or published with intent to deceive.” 11 U.S.C. § 523(a)(2)(B). 45. As discussed infra, the Credit Application was made in writing by English and contained numerous false representations with the intent that SC would rely on them to extend credit to English. See Request for Admission 9. English made material misrepresentations in the Credit Application submitted to SC including his social security number and financial condition at the time he submitted the Credit Application. See Request for Admission 4-7. SC approved the Credit Application. Request for Admission 8. Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 10 of 30 11 II. English’s Claims A. FDCPA Claims Fail as a Matter of Law 46. To prevail on a claim for Fair Debt Collection Practices Act (“FDCPA”) claim, a plaintiff must establish that (1) the plaintiff has been the object of collection activity arising from a consumer debt; (2) the defendant is a debt collector as defined by the FDCPA, and (3) the defendant has engaged in an act or omission prohibited by the FDCPA. Stewart v. Bierman, 859 F.Supp. 2d 754, 759 (D. Md. 2012). 47. In order to violate the FDCPA, one must first be a “debt collector.” See Ramsay v. Sawyer Prop. Mgmt. of Md., LLC, 948 F.Supp. 2d 525, 531-32 (D. Md. 2013). 48. English has admitted that SC is not a debt collector. Request for Admission 22. 49. English has furthermore admitted that SC has committed no violation of the FDCPA. Request for Admission 24. 50. As a result of the foregoing, SC is entitled to summary judgment with respect to the FDCPA claims asserted by English. B. TILA Claims Fail as a Matter of Law 51. English has admitted that SC has committed no violation of any Truth in Lending laws with respect to English. Request for Admission 25. 52. English has admitted that he has suffered no damages as a result of any violation of a Truth in Lending Law with respect to English. Request for Admission 1 & 2. 53. As a result of these admissions, SC is entitled to summary judgment with respect to the Truth in Lending Act claims asserted by English. Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 11 of 30 12 C. Other English Claims 54. English’s complaint is vague, and the claims he has asserted against SC are not clear. To the extent English asserts claims in addition to the claims brought under the FDCPA and TILA, those claims also fail as a matter of law and should be summarily denied. English is unable to successfully prove the damages element of any other claim(s) because he has admitted that he suffered no economic damages and/or non-economic damages as a result of any act or omission by SC. See Request for Admission 1 & 2. CONCLUSION 55. Based upon the allegations in the Complaint filed by English, his admissions, and the facts set forth by SC in affidavits submitted in support of this motion, SC is entitled to summary judgment as to all claims and counterclaims. WHEREFORE, Santander Consumer USA Inc. respectfully requests that the Court enter an Order: a. Granting this motion; b. Entering judgment in its favor and against English in the amount of $10,371.76 as of August 17, 2016, together with pre-judgment interest of $1,611.52 through April 14, 2017 and pre-judgment interest from April 15, 2016 through the date of judgment in the amount of $6.71 per diem, and post-judgment interest at the legal rate, such judgment to be non-dischargeable pursuant to 11 U.S.C. 523(a)(3)(B) and 11 U.S.C. § 523(a)(2)(B); c. Entering summary judgment in favor of SC and against English with respect to all claims asserted by English in his Complaint; and d. Granting such other and further relief as is appropriate under the circumstances. Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 12 of 30 13 Dated: April 14, 2017 /s/ Allen M. DeBard Andrew L. Cole, Fed. Bar No. 14865 Allen M. DeBard, Fed. Bar No. 19614 LeClairRyan 222 Severn Avenue, Suite 42 Building 1, 2nd Floor Annapolis, Maryland 21403 (443) 837-1135 (410) 224-0098 (Facsimile) andrew.cole@leclairryan.com allen.debard@leclairryan.com Attorneys for Santander Consumer USA Inc. Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 13 of 30 14 CERTIFICATE OF SERVICE I HEREBY CERTIFY, that on this 14th day of April, 2017, copies of the foregoing paper or pleading were served via first class mail, postage pre-paid, upon: Mr. Eric Lamar English 3802 Enders Lane Bowie, Maryland 20716 /s/ Allen M. DeBard Allen M. DeBard Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 14 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 15 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 16 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 17 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 18 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 19 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 20 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 21 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 22 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 23 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 24 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 25 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 26 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 27 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 28 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 29 of 30 Case 8:16-cv-02745-DKC Document 24 Filed 04/14/17 Page 30 of 30 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND (SOUTHERN DIVISION) ERIC LAMAR ENGLISH, * PLAINTIFF, * V. * CASE NO. 16-02745 DKC SANTANDER CONSUMER USA, * DEFENDANT. * * * * * * * * * * * * * * ORDER GRANTING DEFENDANT/COUNTER PLAINTIFF SANTANDER CONSUMER USA’S MOTION FOR SUMMARY JUDGMENT Having read and considered Defendant/Counter Plaintiff Santander Consumer USA’s Motion for Summary Judgment (the “Motion”) and any response thereto, it appearing that there is no dispute of material fact, and that the defendant/counter-plaintiff is entitled to judgment as a matter of law, it is hereby: ORDERED, that the Motion is Granted; and it is further ORDERD that judgment is entered in favor of Santander Consumer USA Inc. (“SC”) and against Eric Lamar English (“English”) in the amount of $10,371.76, together with pre-judgment interest totaling $1,611.52 through April 14, 2017, and additional pre-judgment interest at the rate of $6.71 per day from April 15, 2017 through the date hereof, with post-judgment interest to run at the statutory rate, and attorneys’ fees and costs in an amount to be determined upon submission by SC; and it is further ORDERED, that the money judgment entered herein is declared to be not discharged by English pursuant to 11 U.S.C. §§ 523(a)(2)(3) and 523(a)(3)(B); and it is further Case 8:16-cv-02745-DKC Document 24-1 Filed 04/14/17 Page 1 of 2 2 ORDERED that judgment is entered in favor of SC and against English with respect to all claims asserted by English in his Complaint and such claims are dismissed with prejudice; and it is further ORDERED, that SC may, but is not required, to file a statement of its attorneys’ fees and costs incurred in this matter, which are allowed by the parties’ contract, within 30 days of entry of this Order. Dated: Judge Deborah K. Chasanow, United States District Judge cc: Andrew L. Cole, Esq. Allen M. DeBard, Esq. LeClairRyan 222 Severn Avenue, Suite 42 Building 1, 2nd Floor Annapolis, Maryland 21403 Mr. Eric Lamar English 3802 Enders Lane Bowie, Maryland 20716 Case 8:16-cv-02745-DKC Document 24-1 Filed 04/14/17 Page 2 of 2