Jones v. Koons Auto. Inc.

• Decision Date: 05 November 2010
• Docket Number: Civil Action No. DKC 09–3362.
• Citation: 752 F.Supp.2d 670
• Parties: Gesele JONESv.KOONS AUTOMOTIVE, INC., et al.
• Court: U.S. District Court — District of Massachusetts

752 F.Supp.2d 670

Gesele JONES

v.KOONS AUTOMOTIVE, INC., et al.

Civil Action No. DKC 09–3362.

United States District Court, D. Maryland.

Nov. 5, 2010.

Bernard Thomas Kennedy, The Kennedy Law Firm, Edgewater, MD, Thomas Joseph Minton, Goldman and Minton PC, Baltimore, MD, for Plaintiff.Joseph M. Creed, Joseph Greenwald and Laake PA, Greenbelt, MD, for Defendant.

Michael R. Naccarato, Francis J. Gorman, Gorman & Williams, Baltimore, MD, for Intervenor Prestige Financial Services, Inc.

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for resolution in this consumer lending case are two motions: a motion to dismiss (ECF No. 16) filed by Defendant Koons Automotive, Inc. (“Koons”) and a motion to intervene (ECF No. 21) filed by Prestige Financial Services, Inc. (“Prestige”). The issues have been fully briefed and the court now rules pursuant to Local Rule 105. 6, no hearing being deemed necessary. For the reasons that follow, Koons' motion will be granted in part and denied in part, while Prestige's motion will be granted.

I. BackgroundA. Factual Background¹

This case traces its origins to December 18, 2008, when Plaintiff Gesele Jones bought a car. That day, Jones went to a car dealership in Capitol Heights, Maryland called Hampton Park Enterprise, LLC (“Hampton Park”). (ECF No. 13–2, Am. Compl. ¶ 7). Jones claims that during her time at the dealership Koons “initiated contact with [her]”; upon her arrival, she was told Koons would “do the sale.” (ECF No. 13–2, Am. Compl. ¶¶ 7, 11). Koons then sold her a used 2007 Pontiac G6 for $15,386.12. (ECF No. 13–2, Am. Compl. ¶ 7; ECF No. 13–3, Ex. 1, at 1). Jones gave Koons possession of her 2006 Ford Taurus as a trade-in and Koons “agreed to pay off” a lien on the car held by Prestige. (ECF No. 13–2, Am. Compl. ¶¶ 7, 24, 53). Unfortunately, Koons allegedly did not pay off the lien. ( Id. ¶ 14, 24–25, 54, 68). Jones alleges this failure to pay was intentional and in fact motivated by “actual malice.” ( Id. ¶ 59).

Before the transaction, Koons purportedly failed to disclose several finance charges. For instance, the Buyers Order lists a purchase price of $16,386.12, with a down payment of $1,000.00 paid at the time of purchase. (ECF No. 13–3, Ex. 1, at 1).² Jones maintains that she did not make any down payment and that the figure's inclusion “caused [Jones] to pay an additional $60 in sales tax.” (ECF No. 13–2, Am. Compl. ¶ 15). She characterizes this additional tax as an undisclosed finance charge. ( Id.). Jones further alleges that Koons failed to disclose several other items she views as finance charges, including a $20 “lien fee,” $223.25 for Virginia title tax, and a $300 processing fee (that exceeded Maryland's maximum fee of $100). ( Id. ¶¶ 16–18).

Koons also did not disclose to Jones that the car she was purchasing “had been used for short-term rentals.” ( Id. ¶¶ 22, 36, 45). Allegedly, Enterprise Leasing Company previously owned the car. ( Id. ¶ 22). In Jones' view, this omission was intentional and part of a pattern of conduct by Koons wherein it sold former rental cars without disclosing their origins. ( Id. ¶¶ 31–33).

B. Procedural Background

Jones filed her initial complaint against Hampton Park and Koons on December 17, 2009. (ECF No. 1). She then filed an amended complaint on March 15, 2010 against only Koons. The amended complaint contains nine counts: one count alleging violations of the Truth in Lending Act (“TILA”), one count alleging violations of the Maryland Consumer Protection Act (“MCPA”), one count alleging breach of the implied warranty of merchantability, two counts alleging deceit by non-disclosure or concealment, two counts alleging unjust enrichment, and two counts alleging negligent misrepresentation.

On April 13, 2010, Koons moved to dismiss the amended complaint. (ECF No. 16). A few months later, on September 12, 2010, Prestige moved to intervene as a plaintiff, asserting that it has an interest in the present lawsuit in light of Koons' alleged promise to pay off the lien on Jones' old car, the 2006 Ford Taurus. (ECF No. 21). Both Jones and Koons oppose the intervention. (ECF Nos. 22, 23).

II. AnalysisA. Motion to Dismiss

Koons has moved to dismiss on three separate grounds: lack of personal jurisdiction, improper venue, and the amended complaint's failure to state a claim.

1. Personal Jurisdiction

The court must first decide whether it has personal jurisdiction over Koons “because the dismissal of a case on an issue relating to the dispute, such as a failure to state a claim, is improper without resolving threshold issues of jurisdiction, including personal jurisdiction.” Sucampo Pharm., Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 548 (4th Cir.2006).

Koons is a Virginia corporation with a principal place of business in Fredericksburg, Virginia. (ECF No. 13–2, Am. Compl. ¶ 4). When a court's power to exercise personal jurisdiction over a nonresident defendant such as Koons is challenged by a motion under Fed.R.Civ.P. 12(b)(2), “the jurisdictional question is to be resolved by the judge, with the burden on the plaintiff ultimately to prove grounds for jurisdiction by a preponderance of the evidence.” Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir.2003) (citing Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 59–60 (4th Cir.1993)). Where, as here, the court chooses to rule without conducting an evidentiary hearing, relying solely on the complaint, affidavits and discovery materials, “the plaintiff bears the burden [of] making a prima facie showing of a sufficient jurisdictional basis to survive the challenge.” ³ Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir.2009) (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.1989)). In determining whether the plaintiff has proven a prima facie case of personal jurisdiction, the court “must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction.” New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 (4th Cir.2005) (quotations omitted).

“[F]or a district court to assert personal jurisdiction over a nonresident defendant, two conditions must be satisfied: (1) the exercise of jurisdiction must be authorized under the state's long-arm statute; and (2) the exercise of jurisdiction must comport with the due process requirements of the Fourteenth Amendment.” Carefirst, 334 F.3d at 396. Maryland's long-arm statute, Md.Code Ann., Cts. & Jud. Proc. § 6–103, authorizes the exercise of personal jurisdiction to the limits permitted by the Due Process Clause of the Fourteenth Amendment. See ALS Scan, Inc. v. Digital Service Consultants, Inc., 293 F.3d 707, 710 (4th Cir.2002); Base Metal Trading, Ltd. v. OJSC “Novokuznetsky Aluminum Factory,” 283 F.3d 208, 212–13 (4th Cir.2002). That broad reach does not suggest that analysis under the long-arm statute is irrelevant. Rather, it merely reflects that, “to the extent that a defendant's activities are covered by the statutory language, the reach of the statute extends to the outermost boundaries of the due process clause.” Dring v. Sullivan, 423 F.Supp.2d 540, 545 (D.Md.2006) (quoting Joseph M. Coleman & Assocs., Ltd. v. Colonial Metals, 887 F.Supp. 116, 118–19 n. 2 (D.Md.1995)).

a. The Maryland Long–Arm Statute

The court's analysis begins with the language of the long-arm statute, which provides in relevant part:

(b) A court may exercise personal jurisdiction over a person, who directly or by an agent:

(1) Transacts any business or performs any character of work or service in the State;

(2) Contracts to supply goods, food, services, or manufactured products in the State; [or]

(3) Causes tortious injury in the State by an act or omission in the State[.]

Md.Code Ann., Cts. & Jud. Proc. § 6–103(b). Jones relies on these three provisions to justify jurisdiction in this case. (ECF No. 20, at 4).⁴

“Only one provision of the statute need be satisfied in order to assert jurisdiction.” Bahn v. Chicago Motor Club Ins. Co., 98 Md.App. 559, 568, 634 A.2d 63 (1993). The first provision, transacting business in the state under Section 6–103(b)(1), “requires the defendant to conduct actions which culminate in purposeful activity within the state.” CoStar Realty Info., Inc. v. Field, 612 F.Supp.2d 660, 671 (D.Md.2009) (quotation marks omitted). Such activity “may be shown by a nonresident defendant initiating contact with the forum state.” Id.

The court is satisfied that, at the very least, Section 6–103(b)(1) authorizes the exercise of jurisdiction over Koons. Koons contends that Jones does not “allege that Koons held itself out as a Maryland car dealership, that Koons purported to transact business in Maryland, or that Koons or any agent was even present in Maryland.” (ECF No. 16, at 18). Koons is mistaken. Although the amended complaint is admittedly somewhat muddled, it does state that Koons went to a location in Maryland, where it “initiated contact” with Jones and sold her the car.⁵ (ECF No. 13–2, Am. Compl. ¶ 7). Jones further alleges that an agent of Koons prepared the requisite purchasing documents. ( Id. ¶ 14). Those documents were purportedly prepared and signed in Maryland. ( Id. ¶ 13). Agents of Koons allegedly informed Plaintiff—in Maryland—that it would pay off the lien on her 2006 Ford Taurus. ( Id. ¶ 8). Koons also purportedly took possession of the Taurus in Capitol Heights. ( Id. ¶ 7). All of these acts taken together constitute sufficient evidence of “purposeful activity” within the state of Maryland. See, e.g., Jason Pharms., Inc. v. Jianas Bros., Packaging Co., Inc., 94 Md.App. 425, 433–34, 617 A.2d 1125 (1993) (finding jurisdiction under Section 6–102(b)(1) where initial contact, negotiations, contract formation, and payment took place in Maryland); cf. Sleph v. Radtke, 76 Md.App. 418, 427, 545 A.2d...