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Anderson v. J.R.'S Auto Sales of Union City, LLC

United States District Court, W.D. Tennessee, Eastern Division

June 13, 2018

J.R.'S AUTO SALES OF UNION CITY, LLC; et al. Defendants.



         Before the Court is Defendants Hopkins Investments II; J.R. Allen, individually and d/b/a Hopkins Investment 2; and Allen Brothers' Motion to Dismiss (ECF No. 32) filed on February 9, 2018. Plaintiffs Trenisa Anderson and Marcus Anderson have responded in opposition, and Defendants have filed a reply brief. For the reasons set forth below, Defendants' Motion is GRANTED.


         This case involves an automobile transaction gone wrong. In November 2014 Plaintiff Trenisa Anderson contracted for a 2005 Chrysler 300 from J.R.'s Auto Sales in Union City, Tennessee. While Plaintiffs maintain that Ms. Anderson purchased the car, Defendants respond that the transaction was a lease. The Amended Complaint alleges that Plaintiff signed some documents related to a purchase of the vehicle and other documents related to a lease of the vehicle. (Am. Compl. ¶ 28.) The documents stated that the vehicle's value was $10, 995.00 with a gross capitalized cost of $15, 697.50. (Id. ¶ 20.) The parties' agreement called for Plaintiff to make an initial payment of $169.56 and then 129 bi-weekly payments in the amount of $169.50. (Id. ¶ 23.) Plaintiff traded a 1998 Ford Expedition as part of the transaction. (Id. ¶ 19.)

         J.R.'s Auto Sales assigned its agreement with Ms. Anderson to Hopkins Investments II. (Id. ¶ 26.) As part of the paperwork she signed, Ms. Anderson signed a document titled the “Payment Protection System (GPS).” (Id. ¶ 30.) The document stated that Ms. Anderson agreed to have a GPS device installed on the automobile for the purpose of ensuring that she “made [her] payments on time and in accordance with the Retail Installment Sales Agreement.” (Id. ¶ 31.) Plaintiff took delivery of her vehicle and made timely payments through August 30, 2015. (Id. ¶ 37.) Plaintiff's payments were accepted by Hopkins Investments II and/or J.R. Allen, and her payments made with her credit card were processed by Allen Brothers. (Id. ¶ 36.)

         In early September 2015, an unknown agent of one of the Defendants notified Plaintiff that she was delinquent in her payments. (Id. ¶ 38.) Plaintiff denied that she was behind in her payments and spent several days attempting to contact Defendants to clarify the status of her account. (Id. ¶ 39.) Then on September 14, 2015, while Plaintiff's son, a college student, was using the car in Murfreesboro, Tennessee, an agent of one Defendant remotely disabled the vehicle, which was parked in a Wal Mart parking lot at the time. (Id. ¶ 40.) According to Plaintiff, Defendants provided her with no notice of this action and otherwise failed to comply with the procedures described in the agreement between Plaintiff and J.R. Auto Sales. (Id. ¶¶ 41-42.) After continuing to attempt to resolve the dispute but without success, Plaintiff notified Defendants on September 19, 2015, that she was cancelling her insurance coverage for the auto and notified Defendants that the disabled vehicle was still parked in the Wal Mart parking lot. (Id. ¶ 46.) The car continued to sit in the same location for nearly a month. (Id. ¶ 49.)

         On February 6, 2016, an unknown agent of Hopkins Investments II swore out a criminal complaint against Ms. Anderson, affirming that the remote GPS tracking system was no longer working and that the vehicle could not be located. (Id. ¶ 50.) A warrant was issued for Ms. Anderson's arrest on the charge of theft over $10, 000, a Class C felony. (Id. ¶ 51.) Defendants subsequently recovered the car and leased or sold it to another individual in May 2016. (Id. ¶ 54.) Even though Defendants regained possession of the car, Defendants did not notify law enforcement. (Id. ¶ 55.) The warrant therefore remained active, and Ms. Anderson was arrested on the charge in September 2016, despite the fact that the car continued to be sold more than one time after it left her custody and control. (Id. ¶ 56-58.) The charge against Ms. Anderson was dismissed on September 29, 2016. (Id. ¶ 59.) The Amended Complaint alleges that Defendants regularly use similar practices against other customers as part of their normal business operations.

         Plaintiffs filed their suit on September 4, 2017, and an Amended Complaint on November 21, 2017. The Amended Complaint alleges a class action on behalf of

all individuals who contracted with one or more of the Defendants, and tendered payments to them, and 1) the Defendant(s) sought to bring criminal charges after breach of a contract; 2) failed to abide by the requirements of the Fair Debt Collection Practices Act, federal or state law in the manner and method of collection on the debt; 3) Defendants sought collection from an individual in such way that constitutes harassment, wrongful repossession, or resulted in injury to the individual; 4) Defendants failed to abide by Tennessee law in the repossession and resale of a leased vehicle; or 5) Defendants failed to abide by Tennessee law in the terms of the lease agreement.

In a series of numbered counts, the Amended Complaint alleges the following causes of action against Defendants: the violation of 42 U.S.C. § 1983 for Plaintiff Trenisa Anderson's false arrest and conspiracy; torts under Tennessee law of wrongful arrest/wrongful imprisonment; tortious conspiracy; the intentional infliction of emotional distress; the violation of the federal Fair Debt Collection Practices Act; violations of several Tennessee statutes; wrongful trover/conversion; loss of consortium; and breach of contract.

         In their Motion to Dismiss, Defendants Hopkins Investments II, J.R. Allen, and Allen Brothers argue that the Amended Complaint fails to state any of the claims against these Defendants. Defendants first contend that Plaintiff cannot hold them liable under 42 U.S.C. § 1983 because Defendants are not state actors and the Amended Complaint fails to allege with particularity the existence of any conspiracy under § 1983. Defendants next argue that they are creditors, and not “debt collectors” for purposes of the Fair Debt Collection Practices Act. As for Plaintiffs' claims under Tennessee law, Defendants argue that the Amended Complaint fails to allege essential elements of each cause of action. Plaintiffs have responded in opposition. Concerning Ms. Anderson's § 1983 claims, Plaintiffs argue that Defendants' business practices were the moving force behind the deprivation of Ms. Anderson's constitutional rights. As for her FDCPA claims, Plaintiffs stress that none of the moving Defendants were parties to the contract between Ms. Anderson and J.R. Auto Sales. Issues of fact remain over whether Defendants were creditors or “debt collectors” for purposes of the FDCPA. Plaintiffs go on to argue the sufficiency of their pleadings as to each of their claims under Tennessee law. Defendants have filed a reply, restating most of the arguments they presented in their opening brief.


         A defendant may move to dismiss a claim “for failure to state a claim upon which relief can be granted” under Federal Rule of Civil Procedure 12(b)(6). When considering a Rule 12(b)(6) motion, the Court must treat all of the well-pleaded allegations of the pleadings as true and construe all of the allegations in the light most favorable to the non-moving party. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Saylor v. Parker Seal Co., 975 F.2d 252, 254 (6th Cir. 1992). However, legal conclusions or unwarranted factual inferences need not be accepted as true. Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987). “To avoid dismissal under Rule 12(b)(6), a complaint must contain either direct or inferential allegations with respect to all material elements of the claim.” Wittstock v. Mark a Van Sile, Inc., 330 F.3d 899, 902 (6th Cir. 2003).

         Under Rule 8 of the Federal Rules of Civil Procedure, a complaint need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Although this standard does not require “detailed factual allegations, ” it does require more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal,556 U.S. 662, 681 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). See also Reilly v. Vadlamudi, 680 F.3d 617, 622 (6th Cir. 2012) (quoting Twombly, 550 U.S. at 555). In order to survive a motion to dismiss, the plaintiff must allege facts that, if accepted as true, are sufficient “to raise a right to relief above the speculative level” and to “state a claim to relief that is plausible on its face.” Twombly, 550 ...

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