Chambers v. King Buick GMC, LLC, Civil Action No. DKC 13–2347.

• Decision Date: 02 September 2014
• Docket Number: Civil Action No. DKC 13–2347.
• Citation: 43 F.Supp.3d 575
• Parties: Latechia CHAMBERS, et al. v. KING BUICK GMC, LLC, et al.
• Court: U.S. District Court — District of Maryland

43 F.Supp.3d 575

Latechia CHAMBERS, et al.

v.KING BUICK GMC, LLC, et al.

Civil Action No. DKC 13–2347.

United States District Court, D. Maryland.

Signed Sept. 2, 2014.

Staci F. Dubnow, Richard S. Gordon, Gordon and Wolf Chtd, Towson, MD, for Plaintiff.

Paul J. Maloney, Andrew M. Williamson, Carr Maloney PC, Washington, DC, Steven M. Nemeroff, Wortman and Nemeroff, Bethesda, MD, for Defendants.

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Numerous motions are pending and ready for resolution in this putative class action civil RICO case, including: (1) a motion to dismiss the federal claims or to abstain filed by Defendants King Auto of Silver Spring LLC; King Buick GMC, LLC (“King Buick GMC”); King Hagerstown Motors LLC; King Lincoln, Inc.; King Vehicles, LLC; and King Volkswagen, LLC (ECF No. 34); (2) a separate motion filed by King Buick GMC, LLC to dismiss the claims in Counts I through VII of the amended complaint (ECF No. 36); (3) a motion to dismiss or, in the alternative, for summary judgment on Counts I through VII, filed by King Auto of Silver Spring, LLC; King Hagerstown Motors LLC; King Lincoln, Inc.; King Vehicles, LLC; and King Volkswagen, LLC (ECF No. 37); (4) a motion to consolidate cases filed by Plaintiff Latechia Chambers (ECF No. 63); (5) a motion for leave to file surreply and supplemental Rule 56(d) Declaration filed by Plaintiff (ECF No. 68); and (6) a motion to strike three notices of supplemental authority filed by Defendants (ECF No. 73). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Defendants' motion to dismiss federal claims or to abstain will be granted in part. King Buick GMC's motion to dismiss will be granted in part, and the other Defendants' motion to dismiss or for summary judgment will be granted. Plaintiff's motion for leave to file surreply and supplemental Rule 56(d) Affidavit and motion to consolidate cases will be denied. Defendants' motion to strike Plaintiff's notices of supplemental authority will be denied.

I. Background

This case traces its origin to March 17, 2011 and February 18, 2012, when Comfort Kaakyire and Latechia Chambers purchased, respectively, a used 2008 Saturn Outlook and 2010 Dodge Caliber from King Buick GMC. (ECF No. 22 ¶ 18). Ms. Kaakyire and Ms. Chambers each executed a Buyer's Order with King Buick GMC, which did not indicate that these vehicles were prior short-term rentals. (See ECF No. 22–2). Ms. Kaakyire instituted a putative class action lawsuit in the Circuit Court for Howard County on January 13, 2013, and later transferred the case to the Circuit Court for Montgomery County. On May 14, 2013, Ms. Kaakyire filed a first amended class action complaint in the Circuit Court for Montgomery County, on behalf of herself and a class of similarly situated consumers, alleging violations of COMAR 11.12.01.14(M)(1) due to King Buick GMC's failure to disclose the prior use of sold vehicles as short-term rental vehicles. This provision governs disclosure of former vehicle use:

(1) Vehicles formerly used for a purpose other than a consumer good shall be clearly and conspicuously identified as to their former use. This includes, but is not limited to, vehicles formerly used:

...

(f) As short-term rental vehicles.

COMAR 11.12.01.14(M)(1)(f).

On August 2, 2013, Ms. Kaakyire's counsel filed a notice of voluntary dismissal in the state court action, and subsequently filed a class action complaint in this court on August 12, 2013 against the following Defendants: King Buick GMC; and King Lincoln, Inc., King Auto of Silver Spring, LLC, King Vehicles, LLC, King Hagerstown Motors LLC, and King Volkswagen, LLC (“the Other Dealer Defendants”). (ECF No. 1). The Defendants filed separate motions to dismiss, but before the motions were adjudicated, Plaintiff filed an amended complaint on October 17, 2013, adding Latechia Chambers as a Named Plaintiff. (ECF No. 22). On October 22, 2013, Defendants tendered a Rule 68 Offer of Judgment to Ms. Kaakyire, which she accepted. (ECF No. 24). On December 13, 2013, the undersigned entered judgment against Defendants as to Ms. Kaakyire's claims, and she was dismissed from the lawsuit. (ECF No. 45). Thus, Latechia Chambers remains the only putative Named Plaintiff here.¹

The amended complaint by Ms. Chambers against all of the Defendants states that Defendants misrepresented the prior short-term rental use of the vehicles sold to Plaintiff and members of the putative class in a pre-printed space on the Buyer's Order specifically designed for the disclosure of this information. Although Defendants argue that Plaintiff was provided with a CarFax Report that revealed that the vehicle was a prior short-term rental, there is a dispute about whether the CarFax Report was provided to Plaintiff before she executed the purchase documents and whether Plaintiff initialed the CarFax Report as Defendants indicate. (See ECF No. 34–5, at 2).² Plaintiff alleges that Defendants failed to disclose to her and members of the class “clearly and conspicuously” that the vehicles they purchased were previously used as short-term rentals in violation of Maryland law. The amended complaint states:

[a]s the Maryland Motor Vehicle Administration (“MVA”) recognized when it enacted COMAR regulations requiring disclosure of prior short-term rental use, [ ] buyers seek to avoid vehicles used for short-term rentals because of the perception and expectation that these vehicles are driven hard by drivers who care little about them, may not have been well or consistently maintained, and more often are involved in accidents than vehicles uses for personal, family, and household purposes.

(ECF No. 22 ¶ 3). In Plaintiff's view, this omission was intentional and part of a fraudulent scheme by King Buick and the Other Dealer Defendants—to whom she refers collectively as the “King Auto Group”—of selling used short-term rental cars without disclosing their origins in the Buyer's Order or elsewhere clearly and conspicuously. Plaintiff asserts that Defendants consistently failed to make the requisite disclosures before consummating the sale transactions with car purchasers. COMAR 11.12.01.14(A)(2) defines “clear and conspicuous” as:

a statement, representation, or term different from other statements, representations or terms being made so as to be readily noticeable to the person to whom it is being disclosed either by its size, sound, length of time, color, placement in the advertisement, or the like.

Plaintiff maintains that “Defendants deliberately designed their standard sales agreements in a manner calculated to not draw attention to any disclosure of prior rental or other commercial use.” (ECF No. 22 ¶ 36).

Plaintiff asserts that the King Auto Group Defendants are all separately incorporated businesses that associate together as “King Auto Group,” as an association-in-fact, although there is no formal, legal entity with that name. These dealerships jointly market and sell vehicles and develop form documents such as the Buyer's Orders used at each dealership. Plaintiff asserts:

Defendants have an agreement to work together to market and sell used vehicles and actively are doing so. Defendants' cross-marketing and commingling and/or sharing of inventory and Carfax reports is evidence of their cooperation, joint agreements, and use of common procedures and documents to unlawfully sell such used vehicles without the disclosure required by Maryland law.

(ECF No. 22 ¶ 49). Plaintiff believes that all of the Defendants conspired to market and sell used vehicles without disclosing to consumers that the vehicles were previously used as short-term rentals. (Id. ¶ 45). Plaintiff states that Defendants King Lincoln, Inc. and King Vehicles, Inc. did not sell prior short-term rental vehicles in their own name but routinely sold these vehicles through “their King Auto Group coconspirators—King Buick, King Volkswagen, LLC, King Hagerstown Motors, LLC or King Auto of Silver Spring, LLC.” (Id. ¶ 44). Plaintiff further contends:

[a]s part of its scheme to mislead customers into believing that vehicles used for prior short-term rentals were never put to such use, King Auto Group dealerships further agreed to employ, and from time to time did employ, a form entitled “Disclosure of Prior Vehicle Use for Dealership or Commercial Purposes[.]”

[ ] This form ... is provided to buyers only after they have signed the sales agreement and thus become legally bound to purchase a vehicle, does not provide the “clear and conspicuous” disclosure of prior non-consumer use required by law.

(Id. ¶ 39). The amended complaint identifies fifteen additional vehicle sale transactions over a two-year period in which Defendants King Volkswagen LLC, King Hagerstown Motors, LLC, and King Auto of Silver Spring, LLC allegedly perpetrated the same fraudulent scheme to induce consumers into purchasing prior short-term rental vehicles. (Id. ¶ 43). Plaintiff alleges that she paid significantly more for her vehicle than it was worth and was overcharged as a result of the scheme.

The amended complaint asserts the following counts: implied warranty of merchantability (count I); violations of the Magnuson–Moss Warranty Act (“MMWA”), 15 U.S.C. §§ 2301 et seq. (count II) and the Maryland Consumer Protect Act (“MCPA”) (count III); deceit by non-disclosure or concealment (count IV); unjust enrichment (count V); negligent misrepresentation (Count VI); breach of contract (count VII); and violations of the Federal Racketeer Influence and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1962(a), (c), and (d) (counts VIII, IX, and X). Defendants filed separate motions to dismiss. All of the Defendants filed a motion to dismiss the federal claims (RICO and the MMWA) or, in the alternative, for abstention (ECF No. 34). King Buick GMC filed a separate motion to dismiss addressing the non-RICO claims. (ECF No. 36). The Other Dealer Defendants filed a...