Bey v. Ally Bank

• Decision Date: 17 February 2022
• Docket Number: 1:21-cv-01079-STA-JAY
• Court: U.S. District Court — Western District of Tennessee
• Parties: NATALIE ELAINE WOODS BEY AND CLIFTON BOYD WOODS BEY, Plaintiffs, v. ALLY BANK, JEFFERY BROWN, CEO, JENNIFER LACLAIR, CEO, DOUGLAS TIMMERMAN, PAF, DAVID P. SHEVKY, CRO, Defendants.

NATALIE ELAINE WOODS BEY AND CLIFTON BOYD WOODS BEY, Plaintiffs,
v.
ALLY BANK, JEFFERY BROWN, CEO, JENNIFER LACLAIR, CEO, DOUGLAS TIMMERMAN, PAF, DAVID P. SHEVKY, CRO, Defendants.

No. 1:21-cv-01079-STA-JAY

United States District Court, W.D. Tennessee, Eastern Division

February 17, 2022

REPORT AND RECOMMENDATION ON DEFENDANTS' MOTION TO DISMISS

JON A. YORK, UNITED STATES MAGISTRATE JUDGE

On May 24, 2021, Plaintiffs, Natalie Elaine Woods Bey and Clifton Boyd Woods Bey (“Plaintiffs”), filed a pro se complaint. (Docket Entry “D.E.” 1.) This case has been referred to the United States Magistrate Judge for all pretrial matters for determination and/or report and recommendation as appropriate. (Admin. Order 2013-05, Apr. 29, 2013.) Before the Court is Defendants', Ally Bank, Jeffery Brown, Jennifer LaClair, Douglas Timmerman, and David P. Shevky (collectively “Defendants”), motion to dismiss and memorandum in support pursuant to Federal Rules of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. (D.E. 10, 11.) Plaintiffs submitted a response in opposition. (D.E. 20.) Defendants filed a reply. (D.E. 22.) For the reasons that follow, it is recommended that the Defendants' motion to dismiss be GRANTED.

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I. PROPOSED FINDINGS OF FACTS

On or about July 26, 2019, Plaintiffs purchased a 2013 Lexus LS460 VIN JTHBL5EF9D5120154 (“Lexus”) from Auto Universe in Memphis, Tennessee, for a total of $47, 145.92, as reflected in the Retail Installment Sale Contract (“Contract”). (D.E. 10-1.) Auto Universe assigned its interest to Ally as part of the Contract. (D.E. 10-1, PageID 104.) Among other terms, the Contract granted Ally a security interest in the Lexus, detailed how Plaintiffs' failure to make payments could result in a default, and entitled Ally to accelerate the payments on the Contract or repossess and sell the vehicle if Plaintiffs defaulted. (Id., Page ID 103-04.) Section 3 in the “Other Important Agreements” portion of the Contract provides the full details of the effect of a default, partially providing:

d. We may take the vehicle from you. If you default, we may take (repossess) the vehicle from you if we do so peacefully and the law allows it. If your vehicle has an electronic tracking device, you agree that we may use the device to find the vehicle. If we take the vehicle, any accessories, equipment, and replacement parts will stay with the vehicle. If any personal items are in the vehicle, we will store them for you. If you do not ask for these items back within 14 days from the day we take your vehicle, we may dispose of them as the law allows

f. We will sell the vehicle if you do not get it back. If you do not redeem, we will sell the vehicle. We will send you a written notice of sale before selling the vehicle. We will apply the money from the sale less allowed expenses, to the amount you owe. Allowed expenses are expenses we pay as a direct result of taking the vehicle, holding it, preparing it for sale, and selling it Attorney fees and court costs the law permits are also allowed expenses. If any money is left (surplus), we will pay it to you unless the law requires us to pay it to someone else. If money from the sale is not enough to pay the amount you owe, you must pay the rest to us. If you do not pay this amount when we ask, we may charge you interest at a rate not exceeding the highest lawful rate until you pay.

(Id.) In short, these terms of the Contract provide Ally the right to repossess and sell Plaintiffs' Lexus in the event of a default.

Ally notified Plaintiffs of their default on March 2, 2021. (D.E. 1-1, PageID 67-68.) In doing so, Ally informed Plaintiffs that it had repossessed the vehicle due to their default, that they

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had accelerated the payments, and that Plaintiffs could reacquire the Lexus by paying the full amount remaining on the Contract. (Id.) Ally further communicated to Plaintiffs that the remaining amount to be paid was $9, 891.11 due by March 7, 2021. (Id.) Instead of paying the remaining amount, Plaintiffs insisted that they do not owe a debt, despite the existing Contract, and filed a Complaint against the Defendants. (D.E. 1.) Within the Complaint, Plaintiffs allege that:

Ally Bank illegally, deceptively, and/or otherwise unjustly, qualified [Plaintiffs] for a loan which Ally Bank knew or should have known that [Plaintiffs] could not qualify for or afford . . . . Had Ally Bank used a more accurate and appropriate factor, such as Tax Forms and a more determinative level of scrutiny . . . [Plaintiffs] would not have qualified for the loan in the first place. Consequently, Ally Bank sold [Plaintiffs] a loan product that it knew or should have known would never be able to be fully paid back by [Plaintiffs].

(D.E. 1, PageID 6.)

II. PROPOSED CONCLUSIONS OF LAW

A. Standard of Review

Defendants move to dismiss Plaintiff's claims for lack of subject matter jurisdiction and failure to state a claim, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), respectively. (D.E. 11, PageID 106) To survive Rule 12(b)(6) dismissal, following the United States Supreme Court's opinions in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), a complaint must “‘contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” Courie v. Alcoa Wheel & Forged Prods., 577 F.3d 625, 629 (6th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). The court “construes the complaint in a light most favorable to [the] plaintiff” and “accepts all factual allegations as true” to determine whether they plausibly suggest an entitlement to relief. HDC, LLC v. City of Ann Arbor, 675 F.3d 608, 611 (6th Cir. 2012). However, “pleadings that . . . are no more than

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conclusions[] are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Iqbal, 556 U.S. at 679; see also Twombly, 550 U.S. at 555 n.3 (“Rule 8(a)(2) still requires a ‘showing,' rather than a blanket assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only ‘fair notice' of the nature of the claim, but also ‘grounds' on which the claim rests.”).

“Pro se complaints are to be held to ‘less stringent standards than formal pleadings drafted by lawyers,' and should therefore be liberally construed.” Williams v. Curtin, 631 F.3d 380, 383 (6th Cir. 2011) (quoting Martin v. Overton, 391 F.3d 710, 712 (6th Cir. 2004)). Pro se litigants, however, are not exempt from the requirements of the Federal Rules of Civil Procedure. Wells v. Brown, 891 F.2d 591, 594 (6th Cir. 1989); see also Brown v. Matauszak, 415 Fed.Appx. 608, 613 (6th Cir. 2011) (“[A] court cannot create a claim which [a plaintiff] has not spelled out in his pleading.” (internal quotation marks omitted)); Payne v. Sec'y of Treas., 73 Fed.Appx. 836, 837 (6th Cir. 2003) (affirming sua sponte dismissal of complaint pursuant to Fed.R.Civ.P. 8(a)(2) and stating, “[n]either this court nor the district court is required to create Payne's claim for her”); cf. Pliler v. Ford, 542 U.S. 225, 231 (2004) (“District judges have no obligation to act as counsel or paralegal to pro se litigants.”); Young Bok Song v. Gipson, 423 Fed.Appx. 506, 510 (6th Cir. 2011)(“[W]e decline to affirmatively require courts to ferret out the strongest cause of action on behalf of pro se litigants. Not only would that duty be overly burdensome, it would transform the courts from neutral arbiters of disputes into advocates for a particular party. While courts are properly charged with protecting the rights of all who come before it, that responsibility does not encompass advising litigants as to what legal theories they should pursue.”).

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B. Analysis

a. Lack of Subject Matter Jurisdiction

Defendants first argue that Plaintiffs have not alleged facts sufficient to establish subject matter jurisdiction. “Federal courts are courts of limited jurisdiction.” Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). The federal district court has original jurisdiction in two circumstances: (1) where diversity jurisdiction exists; and (2) in “all civil actions arising under the Constitution, laws, or treaties of the United States, ” referred to as federal question jurisdiction. 28 U.S.C. §§ 1331-32. “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c); see also Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject matter jurisdiction, the court must dismiss the action.”).

“The statutory language of 28 U.S.C. § 1332 that reads “between . . . citizens of different States” requires complete diversity...