W. Funding, Inc. v. S. Shore Towing, Inc.

• Decision Date: 14 April 2021
• Docket Number: Civil Action No. 3:19-cv-12853-FLW-TJB
• Parties: WESTERN FUNDING, INC., Plaintiff, v. SOUTH SHORE TOWING, INC., et. al., Defendants.
• Court: U.S. District Court — District of New Jersey

WESTERN FUNDING, INC., Plaintiff, v. SOUTH SHORE TOWING, INC., et. al., Defendants.

Civil Action No. 3:19-cv-12853-FLW-TJB

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

April 14, 2021

*NOT FOR PUBLICATON*

OPINION

WOLFSON, Chief Judge

:

Plaintiff Western Funding, Inc. ("Western"), sues Defendants South Shore Towing, Inc., SS Tow Enterprises, LLC, the New Jersey Turnpike Authority ("the NJTA"), Peter Iadarola, and Jennifer Iadarola¹ under 42 U.S.C. § 1983 over a towed car. According to Western, the NJTA instructed South Shore to tow a car in which Western has a first-priority security interest, then South Shore refused to release the car unless Western paid the towing/storage fees, all without review or a hearing. South Shore now moves to dismiss Western's Second Amended Complaint under Fed. R. Civ. P. 12(b)(1), alleging that it is not subject to § 1983 because it is merely a private entity hired as an independent contractor.² The NJTA also moves to dismiss Western's SecondAmended Complaint under Fed. R. Civ. P. 12(b)(6), alleging that Western has not adequately plead Monell liability. For the following reasons, South Shore's Motion to Dismiss Plaintiff's § 1983 claim against the company is GRANTED, its Motion to Dismiss Plaintiff's § 1983 claim against Peter Iadarola is GRANTED, and its Motion to Dismiss Plaintiff's § 1983 claim against Jennifer Iadorola is DENIED, and the NJTA's Motion to Dismiss Plaintiff's § 1983 claim against it is DENIED.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

South Shore tows disabled cars from the Garden State Parkway. See Sec. Am. Compl., ¶ 23; NJTA Br., Ex. A, ¶ 2.³ It does so pursuant to an "Agreement for Routine Towing Services" with the NJTA. See NJTA Br., Ex. A. The Agreement provides that "towing services" are "an essential function" of the Parkway, grants South Shore the right to remove cars from Zone 4, and exempts South Shore from up to 750 tolls annually. Id. South Shore pays the NJTA $11,250 per year under the Agreement, id. ¶ 5, and is classified as an independent contractor. Id. ¶ 14.

On May 28, 2018, the NJTA directed South Shore to tow a partially-overturned Nissan. See Sec. Am. Compl., ¶¶ 29-30. The Nissan was "way down" an embankment "resting on [a] broken tree suspended in [the] air off [the] ground." See South Shore Br., Ex. B. On June 4, 2018, Jennifer Iadarola, South Shore's manager, copied Western on a letter addressed to owner DuaneT. Tims, informing Tims that he is liable "for any and all accrued towing and storage charges" and proposing to "negotiate the fees," which "usually exceed the value of the vehicle," as well as "dispose of [the car]." Id. Ex. C. Tims apparently never responded, so South Shore refused to release the car to Western unless Western paid the towing/storage fees itself, see Sec. Am. Compl., ¶ 35, which at the time totaled $652.88, id., Ex. D, pursuant to South Shore's statutory garage lien.⁴ Western demanded the car free and clear of payment pursuant to its first-priority security interest, which it alleges takes precedence under state law. Id. ¶ 43. South Shore continues to possess the Nissan. Id. ¶ 18.

On May 23, 2019, by which time the towing/storage fees exceeded $8,566.48, Western filed suit against South Shore under 42 U.S.C. § 1983 for unlawfully possessing the Nissan. See ECF No. 1. South Shore initially moved to dismiss the Complaint on November 19, 2019, pursuant to Fed. R. Civ. P. 12(b)(1), because Western did not allege state action. See ECF No. 20. Western filed its First Amended Complaint on June 11, 2020, naming the NJTA as a defendant. See ECF no. 27. On July 30, 2020, the NJTA moved to dismiss that Complaint under Fed. R. Civ. P. 12(b)(6) for failing to allege a connection between it and South Shore sufficient to establish municipal liability under § 1983. See ECF No. 34. Western then filed a Second Amended Complaint on August 5, 2020. See ECF No. 35. Count I asserts that South Shore and the NJTA violated the Fourth and Fourteenth Amendments, and are liable under § 1983 to that extent. See Sec. Am. Compl., ¶¶ 69-75. Count II seeks declaratory relief for the same. Id. ¶¶ 92-97.

According to Western, liability exists under § 1983 for the following reasons: the NJTA granted South Shore a monopoly over "essential" towing services in Zone 4 of the Garden State Parkway; instructed South Shore to tow the Nissan in the first place; compensated South Shore forits services with possession of the Nissan (or the fees paid to recover it); received a "kickback" in the form of the $11,250 annual fee; and South Shore held the car indefinitely, subject to fees, to raise funds to pay the NJTA and turn a profit under the Agreement. See Sec. Am. Compl., ¶¶ 69-75. Western alleges that this arrangement violates due process because neither the NJTA nor South Shore provided any means to challenge the tow or the fees, and the Fourth Amendment because the NJTA did not obtain a warrant before initiating the tow. Id. ¶ 72. South Shore renewed its dismissal motion with Western's consent, which I deemed to be refiled. See ECF No. 43. Both motions are now pending.

II. LEGAL STANDARD

Under Fed. R. Civ. P. 12(b)(6), a court may dismiss an action if a plaintiff fails to state a claim upon which relief can be granted. Id. When evaluating a Rule 12(b)(6) motion, the court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)). A complaint survives a motion to dismiss if it contains 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 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

To determine whether a complaint is plausible, a court conducts a three-part analysis. Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010). First, the court "takes note of the elements a plaintiff must plead to state a claim." Id. (quoting Iqbal, 556 U.S. at 675). Second, the court identifies allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 131 (quoting Iqbal, 556 U.S. at 679). For example, "[a] pleading thatoffers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do," Iqbal, 556 U.S. at 678, nor am I compelled to accept "unsupported conclusions and unwarranted inferences, or a legal conclusion couched as a factual allegation." Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (quoting Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007)). Third, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief." Santiago, 629 F.3d at 131 (quoting Iqbal, 556 U.S. at 680). This is a "context-specific task that requires the [ ] court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.

III. DISCUSSION

42 U.S.C. § 1983 provides in relevant part:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.

Id. "To state a claim under § 1983, a plaintiff must allege the violation of a right secured by the Constitution and laws of the United States, and must show that the alleged deprivation was committed by a person acting under color of state law."⁵ West v. Atkins, 487 U.S. 42, 48 (1988);Gomez v. Toledo, 446 U.S. 635, 640 (1980) ("By the plain terms of § 1983, two - and only two - allegations are required in order to state a cause of action under that statute. First, the plaintiff must allege that some person has deprived him of a federal right. Second, he must allege that the person who has deprived him of that right acted under color of state or territorial law.").

A. Plaintiff's Claim Against the NJTA

I begin with Plaintiff's claim against the NJTA, a governmental entity, which asserts Monell liability. By its terms, § 1983 applies only to "persons." Id. "States, arms of the States, and state officials acting in their official capacities are 'not persons' within the meaning of [the] statute." Didiano v. Balicki, 488 Fed. App'x. 634, 638 (3d Cir. 2012); see Will v. Mich. Dep't of State Police, 491 U.S. 58, 67, 71 (1989); Howlett v. Rose, 496 U.S. 356 (1990) ("Will establishes that the State and arms of the State, which have traditionally enjoyed Eleventh Amendment immunity, are not subject to suit under § 1983."); Mitchell v. Forsyth, 472 U.S. 511, 526 (1985) (stating these rules embody the doctrine of qualified immunity); Pearson v. Callahan, 555 U.S. 223, 231 (2009) (stating the purpose of qualified immunity is "to shield officials from harassment, distraction, and liability when they perform their duties reasonably"); Wright v. City of Philadelphia, 409 F.3d 595, 599 (3d Cir. 2005).

Monell extends § 1983 liability to municipalities, but only if a plaintiff alleges that an official policy or unofficial custom caused the constitutional violation of which he complains. Monell v. New York City Dep't. of Social Services, 436 U.S. 658, 690 (1978); McTernan v. City of York, 564 F.3d 636, 658 (3d Cir. 2009). A municipality is subject to Monell liability as long as it is not "considered part of the State for Eleventh Amendment purposes." Monell, 436 U.S. at 690 n.54; Bolden v. Se. Pa. Transp. Auth., 953 F.2d 807, 813 (3d Cir. ...