Ross v. Twenty-Four/seven Bail Bonds, LLC, Civil Case No. SAG-20-0088

• Decision Date: 08 July 2020
• Docket Number: Civil Case No. SAG-20-0088
• Citation: 471 F.Supp.3d 673
• Parties: Vontessa ROSS, et al., Plaintiff, v. TWENTY-FOUR/SEVEN BAIL BONDS, LLC, et al., Defendants.
• Court: U.S. District Court — District of Maryland

471 F.Supp.3d 673

Vontessa ROSS, et al., Plaintiff,

v.TWENTY-FOUR/SEVEN BAIL BONDS, LLC, et al., Defendants.

Civil Case No. SAG-20-0088

United States District Court, D. Maryland.

Signed July 8, 2020

Chelsea Ortega, Jane Santoni, Matthew Thomas Vocci, Santoni, Vocci & Ortega, LLC, Towson, MD, for Plaintiff.

Kevin S. Brotspies, McElroy, Deutsch, Mulvaney & Carpenter, LLP, Morristown, NJ, for Defendant Crum & Forster Indemnity Company.

Shirlie Norris Lake, Eccleston and Wolf PC, Hanover, MD, for Defendant Herbert A. Thaler, Jr.

MEMORANDUM OPINION

Stephanie A. Gallagher, United States District Judge Plaintiffs Vontessa Ross and Kendra Sumpter ("Plaintiffs") filed a class action Complaint, concerning the issuance of bail bonds, against Twenty-Four/Seven Bail Bonds, LLC ("Twenty-Four/Seven"), Randolph Smith, Crum & Forster Indemnity Company ("C&F"), and Herbert A. Thaler, Jr., (collectively, "Defendants") in the Circuit Court of Maryland for Baltimore City on October 15, 2019. ECF 5. Defendant Thaler removed the lawsuit to this Court on January 13, 2020. ECF 1-2. Currently pending is a Motion to Dismiss filed by C&F. ECF 14; ECF 14-1 (collectively, "the Motion"). Plaintiffs filed an opposition, ECF 21, and C&F filed a reply, ECF 23. For the reasons explained below, C&F's Motion will be denied without prejudice, but this lawsuit will be stayed pending anticipated proceedings before the Maryland Insurance Administration ("MIA").

I. FACTUAL BACKGROUND

The following facts are alleged in Plaintiffs’ Complaint. Defendant Randolph Smith operates Defendant Twenty-Four/Seven, a bail bond company. ECF 5, ¶¶ 29, 30, 32, 36. Defendant C&F is a surety company authorized to do business in Maryland, and has appointed Twenty-Four/Seven to act as its authorized agent with respect to the issuance of bail bonds. Id. ¶¶ 28-29.

When a judge sets bail for a criminal defendant, the defendant can post the full amount of the bail, remain in jail, or purchase a bail bond. Id. ¶¶ 20-21. When a bail bond is purchased, the surety agrees to pay the State the full amount of the bond, should the defendant fail to appear. Id. ¶ 21. Bail bond companies act as the intermediary between the defendant and the surety, and charge a non-refundable premium for their services (typically ten percent of the total money bail). Id. ¶ 22. Usually, at the conclusion of a criminal case, a trial judge returns in full a bond directly posted by a criminal defendant, as long as the defendant appears for court proceedings. Id. If the defendant utilizes the services of a bail bond company, however, the premiums collected by the bail bond companies are not returned. Id. Bail bond companies pay a percentage of those retained premiums to the sureties. Id. ¶ 23.

On or about June 1, 2017, Plaintiffs signed a contract with Twenty-Four/Seven to obtain a $50,000 bail bond to effect the release of Plaintiff Sumpter from custody. Id. ¶¶ 37-38. The ten percent premium owed to Twenty-Four/Seven was $5,000. Id. ¶ 38. Plaintiffs paid $900 at the time of signing. Id. ¶ 39. The bail bond contract did not indicate the amount and due date for the installment payments, or the number of installment payments to be made. Id. ¶ 40. Plaintiffs made two additional installment payments in 2017, totaling $250. Id. ¶¶ 42-43.

On June 2, 2019, two years after the bond issued, Twenty-Four/Seven, through its attorney, Defendant Thaler, filed a consumer debt action in the District Court of Maryland for Baltimore City against Plaintiff Ross, to collect the remainder of the $5,000 premium. Id. ¶ 44. Plaintiffs allege that Defendants were not allowed to enter into or collect payments on bail contracts, including Plaintiffs’, because Twenty-Four/Seven was "an unlicensed bail bond company." Id. ; see also id. ¶¶ 33-35 (alleging that Twenty-Four/Seven's license with the MIA expired on August 21, 2016, but that Twenty-Four/Seven continued to do business without renewing it). Based on the fact that Twenty-Four/Seven was "unlicensed," and because their bail bond contract did not properly explain the required installment payments, Plaintiffs, and the proposed class, assert claims under the Maryland Consumer Debt Collection Act, the Maryland Consumer Protection Act, the Federal Fair Debt Collection Practices Act, and the Maryland common law for unjust enrichment. Id. ¶¶ 74-110. Plaintiffs and the class also seek various forms of declaratory and injunctive relief. Id. ¶¶ 111-16.

II. LEGAL STANDARD

Under Rule 12(b)(6), a defendant may test the legal sufficiency of a complaint by way of a motion to dismiss. See In re Birmingham , 846 F.3d 88, 92 (4th Cir. 2017) ; Goines v. Valley Cmty. Servs. Bd. , 822 F.3d 159, 165–66 (4th Cir. 2016) ; McBurney v. Cuccinelli , 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom. , McBurney v. Young , 569 U.S. 221, 133 S.Ct. 1709, 185 L.Ed.2d 758 (2013) ; Edwards v. City of Goldsboro , 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law "to state a claim upon which relief can be granted."

Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed. R. Civ. P. 8(a)(2). That rule provides that a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendants with "fair notice" of the claims and the "grounds" for entitlement to relief. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

To survive a motion under Fed. R. Civ. P. 12(b)(6), a complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ; see Ashcroft v. Iqbal , 556 U.S. 662, 684, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted) ("Our decision in Twombly expounded the pleading standard for ‘all civil actions’ ..."); see also Willner v. Dimon , 849 F.3d 93, 112 (4th Cir. 2017). However, a plaintiff need not include "detailed factual allegations" in order to satisfy Rule 8(a)(2). Twombly , 550 U.S. at 555, 127 S.Ct. 1955. Further, federal pleading rules "do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted." Johnson v. City of Shelby, Miss. , 574 U.S. 10, 135 S. Ct. 346, 346, 190 L.Ed.2d 309 (2014) (per curiam).

Nevertheless, the rule demands more than bald accusations or mere speculation. Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ; see Painter's Mill Grille, LLC v. Brown , 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than "labels and conclusions" or "a formulaic recitation of the elements of a cause of action," it is insufficient. Twombly , 550 U.S. at 555, 127 S.Ct. 1955. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth "enough factual matter (taken as true) to suggest" a cognizable cause of action, "even if ... [the] actual proof of those facts is improbable and ... recovery is very remote and unlikely." Twombly , 550 U.S. at 556, 127 S.Ct. 1955.

In reviewing a Rule 12(b)(6) motion, a court "must accept as true all of the factual allegations contained in the complaint" and must "draw all reasonable inferences [from those facts] in favor of the plaintiff." E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc. , 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see Semenova v. MTA , 845 F.3d 564, 567 (4th Cir. 2017) ; Houck v. Substitute Tr. Servs., Inc. , 791 F.3d 473, 484 (4th Cir. 2015) ; Kendall v. Balcerzak , 650 F.3d 515, 522 (4th Cir. 2011), cert. denied , 565 U.S. 943, 132 S.Ct. 402, 181 L.Ed.2d 257 (2011). However, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain , 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). "A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer" that the plaintiff is entitled to the legal remedy sought. A Soc'y Without a Name v. Virginia , 655 F.3d 342, 346 (4th. Cir. 2011), cert. denied , 566 U.S. 937, 132 S.Ct. 1960, 182 L.Ed.2d 772 (2012).

III. ANALYSIS

Each of Plaintiffs’ claims hinges on whether Twenty-Four/Seven violated the Maryland Insurance Code by (1) issuing bail bonds while not properly licensed or registered as a trade name of a valid license holder, as required by Md. Code Ann., Ins. §§ 10-103, -113 (West 2020); or (2) failing to provide Plaintiffs with the schedule for the installment payments, as required by Md. Code Ann., Ins. § 10-309(c). If neither statutory violation occurred, then each of Plaintiffs’ claims fails, because Plaintiffs would have no basis to contend that the bail bond contracts were unenforceable, or that Twenty-Four/Seven had somehow misrepresented its licensing status. Further, unless Twenty-Four/Seven acted in violation of the Maryland Insurance Code, its operator, Smith, its alleged agent, C&F, and its attorney, Thaler, could not be liable for any contributions to any such violation or for trying to collect on an "unenforceable" contract.

In addition to enumerating the various requirements for sureties, bail bondsmen, and other insurers to comply with state law, the Maryland Insurance Code contains an extensive remedial scheme, permitting the Commissioner to take a wide range of actions against any entity who violates of the Code's provisions. Specifically, with respect to § 10-309, the section provides, "If a bail bondsman violates any provision of this section, the Commissioner may take any actions authorized under 10-126 of this title." Id. § 10-309(f).

It is fair to say, however, that with respect to the two statutory violations at issue in this case, the Maryland Leg...