Kwon v. Santander Consumer United Statesa
| Decision Date | 30 September 2016 |
| Docket Number | 15-cv-3352 (SJF)(AKT) |
| Parties | DAE HYUK KWON, Plaintiff, v. SANTANDER CONSUMER U.S.A., Defendant. |
| Court | U.S. District Court — Eastern District of New York |
Pro se Plaintiff Dae Hyuk Kwon ("Plaintiff" or "Kwon") commenced this action against Defendant Santander Consumer U.S.A. ("Defendant" or "Santander") seeking to recover damages arising out of an allegedly usurious automobile loan. See Docket Entry ("DE") [2], Compl. Presently before the Court is Defendant's motion to dismiss Plaintiff's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), which Plaintiff opposes. DE [35]. For the reasons set forth herein, Defendant's motion to dismiss is granted in its entirety.
Unless otherwise noted, the following facts are drawn from the Complaint and are accepted as true for purposes of the instant motion.
On May 14, 2013, Kwon purchased a 2008 Lexus ES 350 automobile from non-party Masterz Automotive Intl., Inc. ("Masterz") for twenty-one thousand, seven hundred and thirteen dollars ($21,713.00), with a down payment of three thousand dollars ($3,000.00). Compl. § III(C). In conjunction with Plaintiff's purchase, non-party RoadLoans, a subsidiary of Defendant, drafted an automobile loan contract with an interest rate of twenty-five percent (25%) per annum (the "Loan"). Id. Masterz reviewed RoadLoans" proposed contract, contacted Santander, and reduced the interest rate to twenty-four and ninety-nine one hundredths percent (24.99%). Id. Masterz also offered Kwon "warranty services" for three thousand dollars ($3,000.00), which Kwon declined. Id.; see also Plaintiff's Affidavit and Written Deposition ("Pl.'s Aff."), DE [2], at 1. Plaintiff did not submit a copy of the Loan agreement with his Complaint or in opposition to the instant motion, and the parties to the agreement are not readily apparent from the face of the Complaint. However, in his Affidavit and Written Deposition, Plaintiff writes that Masterz "assigned the contract to Santander Consumer USA . . . ." Pl.'s Aff. at 1.
According to Plaintiff, he did not receive a copy of the contract or a bill of sale from Masterz at the time of purchase. Compl. § III(C). Plaintiff alleges that when he eventually received a copy of the contract in the mail, Masterz had "forged the warranty charge on the contract," and that the "warranty was put into the contract without [his] approval." Pl.'s Aff. at 1-2. Nevertheless, in June, July, and August 2013, Kwon made payments of five hundred and ninety-two dollars and thirty-five cents ($592.35) as required under the Loan. Id. at 2; see also Compl. § V. On August 4, 2013, the car was totaled in an accident and Plaintiff's insurance company subsequently paid Defendant a lump sum of twenty thousand, seven hundred and seventy-five dollars and forty cents ($20,775.40). Compl. § III(C).
By way of a Complaint filed in the United States District Court for the Southern District of New York on May 18, 2015, Plaintiff commenced this action against Santander, seeking to recover damages arising out of the Loan.1 DE [2]. According to Kwon, the Loan "was usurious in terms of interest rates, charging [him] at 25%, which is contrary to the maximum interest rate in New York, which is 16% per annum." Compl. § III(C). Accordingly, Plaintiff seeks to recover a total of two hundred and forty-five thousand, one hundred and seventy-one dollars and six cents($245,171.06) in damages "on [the] basis of usury and breach of contract." Id. at § V; see also Pl.'s Aff. at 1. Plaintiff also claims that he is entitled to damages for, inter alia, deceptive business practices, pain and suffering, emotional distress, increased insurance premiums, and opportunity costs. Compl. §§ III(C), V. Plaintiff subsequently withdrew his claims for pain and suffering and emotional distress. DE [29].
On February 4, 2016, Defendant tiled the instant fully briefed motion to dismiss Plaintiff's Complaint pursuant to Rule 12(b)(6). DE [35]. According to Santander, Plaintiff's claim sounding in usury is barred by the one (1)-year statute of limitations applicable to claims arising under N.Y. Gen. Oblig. Law § 5-513. See Defendant's Affirmation and Memorandum of Law in Support of Defendant's Motion to Dismiss ("Def.'s Mem."), DE [35-6], ¶ 2. Defendant further argues that Plaintiff fails to state a claim for relief under either N.Y. Gen. Oblig. Law § 5-513 or N.Y. Gen. Bus. Law § 349. Id. In opposition to Santander's motion, Plaintiff argues, inter alia, that "there was a clear cause of action in this case, which is based on an unlawful debt under the federal RICO Act . . . ." See Plaintiff's Affirmation and Memorandum of Law in Opposition to Defendant's Motion to Dismiss ("Pl.'s Opp'n"), DE [35-8], at 1. Kwon further contends that Defendant violated the Servicemember's Civil Relief Act of 2003, 50 U.S.C. § 3911 et seq., by sharing "an adverse report relating to the creditworthiness of [Plaintiff] . . . to a person engaged in the practice of assembling or evaluating consumer credit information." Id. at 2.
In order to survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must contain "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombley, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974 (2007)). A claim is considered plausible on its face "when the plaintiff pleads factual content that allows the court to draw the reasonableinference that the defendant is liable for the misconduct alleged." Ashcroft, 556 U.S. at 678, 129 S. Ct. at 1949. In deciding a motion to dismiss, "a court must 'accept all allegations in the complaint as true and draw all inferences in the non-moving party's favor.'" U.S. ex rel. Siegel v. Roche Diagnostics Corp., 988 F. Supp. 2d 341, 343 (E.D.N.Y. 2013) (quoting LaFaro v. New York Cardiothoracic Grp., PLLC, 570 F.3d 471, 475 (2d Cir. 2009)). In deciding a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the court's consideration is limited to:
(1) the factual allegations in the complaint, which are accepted as true; (2) documents attached to the complaint as an exhibit or incorporated . . . by reference; (3) matters of which judicial notice may be taken; and (4) documents upon whose terms and effect the complaint relies heavily, i.e., documents that are "integral" to the complaint.
Calculti v. SBU, Inc., 273 F. Supp. 2d 488, 498 (S.D.N.Y. 2003) (internal citations omitted); see also Messina v. Mazzeo, 854 F. Supp. 116, 128 (E.D.N.Y. 1994) ().
It is well-established that pleadings by pro se plaintiffs are held "to less stringent standards than formal pleadings drafted by lawyers." Hughes v. Rowe, 449 U.S. 5, 9, 101 S. Ct. 173, 176 (1980); see also Erickson v. Pardus, 551 U.S. 89, 94, 127 S. Ct. 2197, 2200 (2007) () (internal citations omitted). The Second Circuit has held that a court reviewing a pro se complaint must "construe the complaint broadly, and interpret it to raise the strongest arguments that it suggests." Weixel v. Bd. of Educ. of the City of New York, 287 F.3d 138, 146 (2d Cir. 2002) (internal alterations omitted). However, the court "need not argue a pro se litigant's case nor create a case for the pro se which does not exist." Molina v. New York, 956 F. Supp. 257, 259 (E.D.N.Y. 1995).
Liberally construing Plaintiff's Complaint, the Court interprets it to assert claims arising under: (i) N.Y. Gen. Oblig. Law §§ 5-511 and 5-513; (ii) the Racketeer Influenced and Corrupt Practices Act of 1970 ("RICO Act"), 18 U.S.C. § 1961 et seq.; (iii) N.Y. Gen. Bus. Law § 349; (iv) the Servicemember's Civil Relief Act of 2003 ("SCRA"), 50 U.S.C. § 3911 et seq.; and (v) common law breach of contract. For the reasons set forth herein, Plaintiff fails to plausibly state a claim under any theory of liability.
In New York, "a loan to an individual need only bear an interest rate higher than 16% per annum to be unenforceable." Weisel v. Pischel, 197 F.R.D. 231, 240 (E.D.N.Y. 2000); see also N.Y. Gen. Oblig. Law § 5-501 (2) (); N.Y. Banking Law § 14-a (). Pursuant to N.Y. Gen. Oblig. Law § 5-511, a usurious debt "shall be void . . . ." N.Y. Gen. Oblig. Law § 5-511(1); see also Bristol Inv. Fund, Inc. v. Carnegie Int'l Corp., 310 F. Supp. 2d 556, 562 (S.D.N.Y. 2003) (). Moreover, "a borrower who has paid interest under a usurious loan contract has the right to recover interest paid that exceeded the statutory maximum." Spirit Locker, Inc. v. EVO Direct, LLC, 696 F. Supp. 2d 296, 307-08 (E.D.N.Y. 2010) ).
Pursuant to N.Y. C.P.L.R. 215, an "action to recover any overcharge of interest or to enforce a penalty for such overcharge" must be commenced within one (1) year. N.Y. C.P.L.R.215(6); see also Chassman v. Shipley, No. 15 Civ. 5228, 2016 WL 1451585, at *3 (S....
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