Dahir v. Cresco Capital, Inc.

• Decision Date: 31 May 2022
• Docket Number: 21-cv-1700 (ECT/BRT)
• Parties: Ali Dahir, on behalf of himself and all others similarly situated, Plaintiff, v. Cresco Capital, Inc., and Lone Mountain Truck Leasing, LLC, Defendants.
• Court: U.S. District Court — District of Minnesota

Ali Dahir, on behalf of himself and all others similarly situated, Plaintiff, v. Cresco Capital, Inc., and Lone Mountain Truck Leasing, LLC, Defendants.

No. 21-cv-1700 (ECT/BRT)

United States District Court, D. Minnesota

May 31, 2022

Adam R. Strauss and Benjamin William Tarshish, Tarshish Cody, PLC Minneapolis, MN; and Thomas J. Lyons, Jr., Consumer Justice Center P.A., Vadnais Heights, MN, on behalf of Plaintiff Ali Dahir.

R Henry Pfutzenreuter, Larkin Hoffman Daly & Lindgren Ltd. Minneapolis, MN, on behalf of Defendants Cresco Capital and Lone Mountain Truck Leasing.

OPINION AND ORDER

ERIC C. TOSTRUD, UNITED STATES DISTRICT COURT

In this putative class action brought originally in Hennepin County District Court, Plaintiff Ali Dahir alleges that Defendants Cresco Capital and Lone Mountain Truck Leasing violated Minnesota's Uniform Commercial Code and Consumer Fraud Act in connection with their repossession of a commercial truck Dahir had purchased from them. Defendants removed the case here, invoking subject-matter jurisdiction under the Class Action Fairness Act (“CAFA”) and then filed a motion to dismiss the suit under Federal Rule of Civil Procedure 12(b)(6).

In the course of adjudicating Defendants' Rule 12(b)(6) motion questions surfaced regarding whether the case meets CAFA's $5 million amount-in-controversy jurisdictional threshold, and the Parties were given the opportunity to file supplemental briefs addressing this question. After reviewing those submissions and other materials, I conclude that the case must be remanded to Hennepin County District Court because Defendants have not met their burden to allege facts plausibly showing that Dahir's original Complaint gives rise to an amount in controversy above CAFA's $5 million jurisdictional threshold.

I¹

Defendants sell commercial trucks. Lone Mountain “sells trucks to truck drivers all over the country.” Compl. [ECF No. 1-1] ¶ 15; Am. Compl. [ECF No. 12] ¶ 19. These sales occur “under so-called ‘lease-to-own' arrangements.” Compl. ¶ 16; Am. Compl. ¶ 20. “Each time a person purchases a truck from Lone Mountain through the ‘lease-to-^[1] own' program, the financing is completed through Cresco.” Compl. ¶ 18; Am. Compl. ¶ 22. Lone Mountain is a limited liability company that maintains its principal place of business in Carter Lake, Iowa.^[2] Compl. ¶ 5; Am. Compl. ¶ 6. Cresco is incorporated under Minnesota law and also maintains its principal place of business in Carter Lake, Iowa (at the same address as Lone Mountain). Compl. ¶ 4; Am. Compl. ¶ 5.

Dahir purchased a truck from Lone Mountain. Dahir is an Ohio citizen. Compl. ¶ 3; Am. Compl. ¶ 4. In 2016, Dahir purchased a truck from Lone Mountain for a total cost of $69, 300. Compl. ¶ 28; Am. Compl. ¶¶ 32, 46. The agreements Dahir signed in connection with this purchase required Dahir to make a down payment of $5, 500 and “make 44 regular monthly installment payments in the amount of $1, 450.” Compl. ¶ 31; Am. Compl. ¶ 36. If Dahir defaulted, Defendants could accelerate the balance due and repossess the truck, among other remedies. Compl. ¶ 39; Am. Compl. ¶ 44.

Dahir defaulted on his payment obligation, and the truck was repossessed. “As of June 2020, Plaintiff paid $66, 400 to Defendants, which included 42 of the 44 monthly payments (i.e., $60, 900) and the $5, 500 down payment.” Am. Compl. ¶ 47.^[3] In addition to his monthly payments, Dahir paid Defendants $590.00 toward $882.50 in additional fees during this time that included a “$100 fee to change the payment date, $275.00 in NSF fees, and $507.50 in late fees.” Id. ¶¶ 48-49. Though Dahir doesn't say so explicitly, he admits having a “valid balance owed” for the truck that was between $3, 192.50 and $3, 992.50, presumably in June 2020. Id. ¶ 65. Because of an “alleged default, ” Defendants repossessed the truck on June 25, 2020. Id. ¶ 54. The repossession occurred in Minnesota. Id. ¶¶ 53, 55.

Defendants terminated Dahir's agreement. Defendants notified Dahir of their decision to terminate the agreement in a letter dated June 25, 2020. Id. ¶ 56; see ECF No. 22-1 at 17. The letter notified Dahir of his obligations to “pay all remaining balances on the Lease, including fees and additional expenses incurred by Cresco in the termination of the Lease.” ECF No. 22-1 at 17. The letter notified Dahir that the truck would be sold or leased “privately . . . within 10 days following this notice.” Id. The letter also notified Dahir that he was “entitled to an accounting of the unpaid indebtedness” and that he could “request an accounting of [his] lease balance from [his] account manager.” Id. Dahir and Defendants communicated regarding Dahir's balance and ability to redeem the truck. “On June 26, 2020, Defendants informed [Dahir] that: (a) he needed to pay off the [t]ruck in full; and (b) that the alleged balance was approximately $6, 000.” Compl. ¶ 45; Am. Compl. ¶ 60. After Dahir requested an accounting, Defendants informed Dahir on June 30 that “he needed to pay $5, 992.50 to redeem” the truck and that this amount was due “in full by July 2, 2020.” Compl. ¶ 48; Am. Compl. ¶ 63. Defendants “blocked” Dahir from accessing “his online customer portal” to “verify the alleged balance owed.” Compl. ¶¶ 54-55; Am. Compl. ¶¶ 71-72. “On July 7, 2020, [Dahir] told Defendants that he wanted to redeem the [t]ruck.” Am. Compl. ¶ 73. In response, Defendants represented to Dahir that, if he wanted the truck back, he would have to “wait for it to go to auction” on Defendants' online system and bid for it there. Id. ¶ 74.

Dahir retained counsel, and his counsel and Defendants communicated regarding Dahir's balance and ability to redeem the truck. On July 9, Dahir's counsel demanded that Defendants return the truck to Dahir and “allow him to pay the alleged balance owed.” Id. ¶ 90. In response to counsel's demand, things changed. Defendants represented that Dahir's outstanding balance was $3, 992.50 (or $2, 000 less than what Defendants represented to Dahir before he retained counsel), and “Defendants provided the requisite [] wire instructions to complete the payment.” Id. ¶ 91. Dahir purchased the truck back from Defendants on July 9 for $3, 992.50. Id. ¶ 92. Dahir paid this amount “by wire and was charged a $30.00 fee.” Id. ¶ 93. Dahir owns the truck free of any obligations to Defendants. See id. ¶ 94; see also Compl. ¶¶ 65-68, 74; ECF No. 22-1 at 19-20 (certificate of title dated July 10, 2020).

Dahir brought this lawsuit in Hennepin County District Court. Dahir “perfected service” of his original Complaint on Defendants on July 15, 2021. Notice of Removal [ECF No. 1] ¶ 4. In his original Complaint, Dahir asserted four theories of recovery in four separate counts, all arising under Minnesota's Uniform Commercial Code (“UCC”). In Count I, Dahir alleged that Defendants failed to engage in commercially reasonable dispositions of collateral, including with respect to Dahir's truck. Compl. ¶¶ 112-20. In Count II, Dahir alleged that Defendants failed to provide UCC-compliant notices of collateral dispositions, including with respect to Dahir's truck. Id. ¶¶ 121-26. In Count III, Dahir alleged that Defendants' lease-to-own agreements violated the UCC by not requiring Defendants to “pay any lessee a surplus after disposition” and by including “an additional $2, 000 fee.” Id. ¶¶ 127-32. And in Count IV, Dahir alleged that Defendants violated the UCC “because they refused to allow [Dahir] and [would-be class members] to redeem their trucks at any time prior to the sale of their trucks.” Id. ¶¶ 133-38. Dahir concluded each Count in his original Complaint with the following damages allegation: “Plaintiff and the Classes have suffered damages in an amount to be proved at trial but reasonably believed to be in excess of $50, 000.” Id. ¶¶ 120, 126, 132, 138. And in his prayer for relief, Dahir sought actual and statutory damages for himself and class members, along with attorneys' fees and costs. Id. at 20, ¶¶ 3-5.

Defendants removed the case here and moved to dismiss Dahir's original Complaint under Rule 12(b)(6). Defendants filed their Notice of Removal on July 26, 2021. See ECF No. 1. Defendants invoked subject-matter jurisdiction under CAFA, alleging the presence of minimal diversity, a putative class with more than 100 members, and an amount in controversy of greater than $5 million. Id. ¶¶ 6-16. With respect to the amount in controversy, Defendants asserted that “the total amount of actual and statutory damages, attorneys' fees, and other monetary relief at issue in this action, on an aggregate, classwide basis, would exceed CAFA's $5 million jurisdictional minimum.” Id. ¶ 12. In support of this assertion, Defendants wrote:

Plaintiff alleges he “was required to make 44 regular monthly installment payments in the amount of $1, 450” and “was required to pay a down payment of $5, 500, ” which totals $69, 300. (Ex. A, Compl. ¶ 31.) Plaintiff further alleges, “Upon a truck driver's default, Defendants will repossess the driver's truck. Thereafter, Defendants will sell or lease the truck through its website, AlomstFreeTrucks.com [sic] . . . [.]

After Defendants sell or lease the truck, Defendants retain the proceeds. Defendants do not credit the lessee's account, whether by paying a surplus or reducing any deficiency balance.” (Id. ¶¶ 24-25.) Plaintiff also alleges that “Defendants wrongfully retained proceeds from sale of class members' trucks” and “Defendants wrongfully charged class members a $2, 000 fee.” (Id. ¶¶ [sic] 96.) Finally, Plaintiff alleges, and has separately demanded, in excess of $50, 000 in damages for his individual claims. (Id. ¶¶ 120, 126, 132, 138.)

Id. ¶ 13. Defendants then characterized another case filed against Defendants as “similar” and noted that ...