Southern Volkswagen v. Centrix Financial, No. RWT 04-CV-2577.

Decision Date15 February 2005
Docket NumberNo. RWT 04-CV-2577.
Citation357 F.Supp.2d 837
PartiesSOUTHERN VOLKSWAGEN, INC., et. al., Plaintiffs v. CENTRIX FINANCIAL, LLC, Defendant
CourtU.S. District Court — District of Maryland

Brad D. Weiss, Charapp Deese Weiss LLP, Washington, DC, for Plaintiffs.

Jeffrey S. Jacobovitz, Kutak Rock LLP, Washington, DC, for Defendant.


TITUS, District Judge.

The Plaintiffs, Southern Volkswagen, Inc. and seven other car dealers, filed a Complaint in the Circuit Court for Prince George's County, Maryland asserting claims for damages and equitable relief based on alleged violations of state antitrust statutes and the commission of various torts by the Defendant Centrix Financial, LLC ("Centrix"), a financial services firm that arranges financing for "credit-challenged individuals." After removing the case to this Court, Centrix filed a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. The Court has considered the memoranda of the parties and the arguments of counsel. For reasons explained below, the Motion will be granted with thirty days leave granted to file an Amended Complaint conforming to the requirements of this opinion.


As part of its business as a financing services firm1 Centrix enters into dealer agreements with car dealerships. The Plaintiffs' most significant allegations stem from the alleged refusal by Centrix to enter into such a dealer agreement with them. Plaintiffs allege that Centrix entered into dealer agreements with their competitors in Maryland and Virginia, but refused, and continues to refuse, to enter into an agreement with them. Compl. ¶ 7. Plaintiffs also proffer reasons why Centrix refuses to deal with them.

Plaintiffs allege that the refusal by Centrix to deal with them is due to an alleged agreement between Centrix and one or more unidentified competitor(s) of Plaintiffs. Id. at ¶ 8, 17. Plaintiffs also claim that one of their competitors told Centrix that "Southern was a fraud and being investigated for fraud crimes with banks and customers." Id. If all that happened was that a competitor of Plaintiffs told Centrix that "Southern was a fraud" and Centrix subsequently refused to enter into an agreement with the Plaintiffs, it is clear that no cause of action against Centrix would lie. However, reading the Complaint in a light most favorable to the Plaintiffs, it appears that the Plaintiffs are alleging that the statement, made by one of Plaintiffs' competitors to Centrix, induced Centrix to enter into an agreement with one or more of Plaintiffs' competitors whereby Centrix agreed not to contract with at least one of the Plaintiffs.2

Plaintiffs assert numerous causes of action arising out of the alleged refusal by Centrix to deal and the surrounding circumstances. Count I alleges a violation of Section 11-204(A)(1) of the Maryland Antitrust Act. Count II alleges a violation of the Maryland common law tort of Unfair Competition. Count III alleges Defamation and Invasion of Privacy — False Light. Count IV alleges Tortious Interference with Business Relations and Prospective Business Relations. Count V alleges a Civil Conspiracy to Unreasonably Restrain Trade in Violation of Maryland Common Law.


Rule 8(e)(1) of the Federal Rules of Civil Procedure requires that "[e]ach averment of a pleading shall be simple, concise and direct." Had this simple admonition been followed, the task of the Court would have been far easier in evaluating the sufficiency of the various causes of action asserted in the Complaint. The purpose of this command of Rule 8(e)(1) is to give a defendant "fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 48, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). In order for a complaint to be sufficient under Rule 8(e)(1), its allegations must be "detailed and informative enough to enable the defendants to respond." 5 CHARLES ALAN WRIGHT & ARTHUR MILLER, FEDERAL PRACTICE AND PROCEDURE § 1215 (3d ed.2004).

Rule 8(a)(2) also requires that a party's claim for relief be "short and plain." This command supplements the "simple, concise and direct" requirement of Rule 8(e)(1). Taken together, the two rules "underscore the emphasis placed on clarity and brevity by the federal pleading rules." WRIGHT & MILLER, supra at § 1217. These basic requirements are violated by a complaint that is "needlessly long, ... highly repetitious, or confused." Id. The twenty-page Complaint in this case is not, by virtue of its length alone, problematic. Rather, it is the confusing, overlapping and frequently inconsistent allegations contained in the Complaint that make the task of the Court much more difficult. For reasons explained below, the Court concludes that the Motion to Dismiss should be granted, but that thirty days leave to re-plead should be granted consistent with, and subject to the limitations of, this Opinion.

Each claim will be considered under the forgiving standard of Rule 12(b)(6). "A Rule 12(b)(6) motion should only be granted if, after accepting all well-pleaded allegations in the plaintiff's complaint as true it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief." Migdal v. Rowe Price-Fleming Int'l, Inc., 248 F.3d 321, 325 (4th Cir.2001) (citing Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir.1999)). In its determination, the court must consider all well-pled allegations in a complaint as true, see Albright v. Oliver, 510 U.S. 266, 268, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994), and must construe all factual allegations in the light most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.1999). The Court need not, however, accept unsupported legal conclusions, District 28, United Mine Workers of America, Inc. v. Wellmore Coal Corp., 609 F.2d 1083, 1085 (4th Cir.1979), or legal conclusions couched as factual allegations. Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986).

Turning to the specific allegations of the Complaint, it is apparent that all the claims other than defamation and false light are either completely or partially contingent on the viability of the antitrust claim. Therefore, the Court will consider first the Plaintiff's defamation and false light claims.

Defamation and False Light (Count III)

Rule 10(b) of the Federal Rules of Civil Procedure requires that "[e]ach claim founded upon a separate transaction or occurrence and each defense other than denial shall be stated in a separate count or defense whenever a separation facilitates the clear presentation of the matters set forth therein." Notwithstanding this mandate of Rule 10(b), Count III of the Plaintiffs' Complaint is entitled "Invasion of Privacy — Defamation and False Light." While these claims should have been separated into at least two separate counts, the Court will disregard this violation of the rules and address the sufficiency of the allegations with respect to each tort.

Before considering whether Plaintiffs' claims meet the elements of the torts at issue, it is necessary to examine Plaintiffs' allegations, which are not abundantly clear from the Complaint. The beginning of Plaintiffs' Complaint explains that one of Plaintiffs' competitors told Centrix that the Plaintiffs were a "fraud." See Compl. ¶ 8-16. This was the alleged reason why Centrix entered into the alleged agreement with that competitor, and perhaps others, to refuse to deal with Plaintiffs. See id. Thus, it seems clear that if an allegedly defamatory statement was made, it was made, at least originally, by a competitor of the Plaintiffs to Centrix. These facts, as stated in the beginning of the Complaint, do not support a cause of action for defamation or false light invasion of privacy against Centrix.

Later in the Complaint, however, Plaintiffs allege that an agent of Centrix "verbally told a competitor dealer representatives [sic] that Centrix would not do business with Southern because Southern was a `fraud and being investigated for fraud crimes with banks and customers.'" Compl. ¶ 32. When considering paragraphs 8 and 32 of the Complaint together, it is not clear whether Plaintiffs are alleging that Centrix repeated the statement told to it by one competitor to that competitor or to another competitor. At oral argument, counsel for Plaintiffs asserted that the defamatory statement was made to an unidentified competitor other than the one who originally made the statement to Centrix. Viewing Plaintiffs' defamation and false light claims in a light most favorable to the Plaintiffs, they will be treated as averring that a competitor told Centrix that at least one of the Plaintiffs was a fraud, and, when explaining to another competitor why it would not enter into an agreement with Plaintiffs, Centrix repeated that statement.

Applying the law of defamation to these facts, the Court begins with an examination of the necessary elements. "To recover for defamation under Maryland law, a plaintiff must establish that: (1) the defendant made a defamatory statement regarding the plaintiff to a third person; (2) the statement was false; (3) the defendant was legally at fault in making the statement; and (4) the plaintiff suffered harm thereby." Holt v. Camus, 128 F.Supp.2d 812, 815 (D.Md.1999).

Plaintiffs' Complaint, as clarified by counsel at oral argument, meets the first element. It is without question that labeling an entity a "fraud" is a defamatory statement. At this stage of the litigation the Court must also deem the second element to be met. Although it may eventually be determined that the Plaintiffs have engaged in fraudulent activity, and could perhaps be under investigation, nothing in the Complaint suggests that such is the case. Thus, Plaintiffs have...

To continue reading

Request your trial
39 cases
  • Baron Financial Corp. v. Natanzon, No. SKG-03-3563.
    • United States
    • U.S. District Court — District of Maryland
    • 11 de julho de 2006
    ...that Natanzon must have in fact alleged a separate count of defamation in his complaint. See Southern Volkswagen, Inc. v. Centrix Financial, LLC, 357 F.Supp.2d 837, 851 (D.Md.2005)("In their Complaint, Plaintiffs allege that (1) the agreement by Centrix not to deal with them (the antitrust ......
  • Ziemkiewicz v. R+L Carriers, Inc.
    • United States
    • U.S. District Court — District of Maryland
    • 6 de fevereiro de 2014
    ...suffered harm.” Samuels v. Tschechtelin, 135 Md.App. 483, 763 A.2d 209, 241–42 (Md.Ct.Spec.App.2000); S. Volkswagen, Inc. v. Centrix Fin., LLC, 357 F.Supp.2d 837, 843 (D.Md.2005). Although “fault” is generally determined under a negligence standard, where a defendant “publishes a statement ......
  • Cloverleaf Enterprises, Inc. v. Md. Thoroughbred, Horsemen's Ass'n, Inc.
    • United States
    • U.S. District Court — District of Maryland
    • 6 de agosto de 2010
    ...right or justifiable cause on the part of the defendants; and (4) actual damage and loss resulting." S. Volkswagen, Inc. v. Centrix Fin., LLC, 357 F.Supp.2d 837, 850-851 (D.Md.2005). The two general types of tort actions for interference with contract "are inducing the breach of an existing......
  • Jennings v. Hous. Auth. of Balt. City
    • United States
    • U.S. District Court — District of Maryland
    • 28 de janeiro de 2014
    ..."calculated" to damage her in any economic relationship not connected to the lease contract. See, e.g., S.Volkswagen, Inc. v. Centrix Fin., LLC, 357 F. Supp. 2d 837, 851 (D. Md. 2005) (plaintiffs failed to state a claim for tortious interference because "nothing in the Complaint [suggested]......
  • Request a trial to view additional results
2 books & journal articles
  • Maryland
    • United States
    • ABA Archive Editions Library State Antitrust Practice and Statutes. Fourth Edition Volume II
    • 1 de janeiro de 2009
    ...recognized that the same result must govern state law claims. See id . at 450 n.4. 54. See S. Volkswagen, Inc. v. Centrix Financial, 357 F. Supp. 2d 837, 848-50 (D. Md. 2005). Maryland 23-7 4.b. Expulsion or Exclusion from Membership in Trade Associations or Other Groups No reported decisio......
  • Maryland. Practice Text
    • United States
    • ABA Antitrust Library State Antitrust Practice and Statutes (FIFTH). Volume II
    • 9 de dezembro de 2014
    ...that the same result must govern state law claims. See id . at 450 n.4. 54. See Southern Volkswagen, Inc. v. Centrix Financial, 357 F. Supp. 2d 837, 848-50 (D. Md. 2005). 55. Prior to the enactment of the act, the court of appeals was presented with a claim by a real estate company that its......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT