O'Neill et al v. Country Motors II Inc et al

Filing 22

RULING (see attached) granting Defendant Country Motors's 14 Consent Motion to Set Aside Entry of Default and granting Plaintiffs' 21 Motion for Leave to Amend Complaint. The entry of default against Country Motors is her eby set aside. The Clerk is directed to re-insert Country Motors as an active Defendant on the case docket. Consistent with this Ruling, Plaintiffs shall re-examine and/or edit their 21 -1 Amended Complaint with respect to the viability of certain claims before filing and serving it on Defendants on or before January 8, 2016. The parties shall thereafter confer and file a joint supplemental Rule 26(f) Report, as directed in the Ruling at page 29. Signed by Judge Charles S. Haight, Jr. on December 15, 2015.(Dorais, L.)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT

PEGGY O'NEILL and KELLY O'NEILL,
Civil Action No.
3:15 - CV - 1069 (CSH)

Plaintiffs,
v.
COUNTRY MOTORS, II, INC. d/b/a
BOB'S BUICK GMC OF MILFORD and
EXETER FINANCE CORP.,

DECEMBER 15, 2015

Defendants.

RULING ON DEFENDANT COUNTRY MOTORS'S CONSENT MOTION TO SET
ASIDE ENTRY OF DEFAULT AND PLAINTIFFS' MOTION TO AMEND
COMPLAINT
HAIGHT, Senior District Judge:
I. INTRODUCTION
On July 13, 2015, plaintiffs Peggy O'Neill and Kelly O'Neill ("Plaintiffs") commenced this
action against defendants Country Motors II, Inc. ("Country Motors") and Exeter Finance Corp.
("Exeter") (collectively "Defendants") relating to the purchase and sale of a motor vehicle, a 2012
Chrysler 200 LX (herein "Motor Vehicle" or "Chrysler"). Plaintiffs purchased the Motor Vehicle
from Country Motors on or about July 24, 2014, pursuant to a retail installment sales contract
("Contract"). Included in their Complaint, Plaintiffs allege that Country Motors violated the Truth
in Lending Act, 15 U.S.C. § 1601, et seq., the Credit Repair Organization Act, 15 U.S.C. § 1679, et.
seq., and the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a, et seq.
("CUTPA"). Plaintiffs also assert that Country Motors violated the Connecticut Retail Installment

1

Sales Finance Act ("RISFA"), Conn. Gen. Stat. § 36a-770, et seq., so that the Contract is subject to
rescission and/or revocation (due to fraudulent representations by Country Motors).
In addition, Plaintiffs allege that Exeter is liable as the assignee of the Contract and is thus
subject to Plaintiffs' claims against Country Motors (except the TILA claim). Plaintiffs also allege
that Exeter violated RISFA, Conn. Gen. Stat. § 36a-770, et seq. and the Connecticut Creditor
Collection Practices Act ("CCPA"), Conn. Gen. Stat. § 36a-645, et seq. Moreover, Plaintiffs assert
that Exeter violated Article 9 of the Uniform Commercial Code by failing to provide Plaintiffs with
proper notice following the repossession and resale of the vehicle.
On September 25, 2015, pursuant to Rule 55, Fed. R. Civ. P., Plaintiff filed a Motion for
Default Entry against Country Motors for "failure to file a responsive pleading to Plaintiffs'
Complaint within the time prescribed by the Federal Rules of Civil Procedure." Doc. 11. The Clerk,
as authorized and required by Rule 55(a), granted that motion because Country Motors "ha[d] failed
to plead or otherwise defend," Fed. R. Civ. P. 55(a). In fact, at that time, Country Motors had not
yet appeared in the action. Doc. 12.
Pending before the Court are two motions: (1) Country Motors's motion to set aside the
default entry [Doc. 14] and (2) the Plaintiffs' motion to amend the Complaint [Doc. 21]. First, with
respect to the default, counsel for Country Motors asks the Court to set aside the default for "good
cause," arguing that Country Motors's failure to appear was "not willful" and that Plaintiffs consent
to the granting of this motion. Doc. 14, at 2.1 Second, Plaintiffs request to amend their Complaint,
stating solely that "[t]his [proposed] amendment is being filed within the time parameter set forth
1

Defense counsel says in the text of her motion to set aside the default: "Counsel for the
plaintiffs consents to the granting of this motion." Doc. 14, at 2 (¶ A.6.). The motion was filed on
October 5, 2015; and Plaintiffs' counsel has not expressed disagreement with this assertion.
2

in the Joint Rule 26(f) Report of the Parties' Planning Meeting."2 Doc. 21, at 1. The Court resolves
both motions herein.

II. DISCUSSION
A.

Country Motors's Motion to Set Aside Default
1.

Standard to Set Aside Entry of Default - Fed. R. Civ. P. 55(c)

"A motion under Rule 55(c) to set aside an entry of default is addressed to the sound
discretion of the district judge." State Farm Mut. Auto. Ins. Co. v. Cohan, 409 F. App'x 453, 455 (2d
Cir. 2011) (quoting Marziliano v. Heckler, 728 F.2d 151, 156 (2d Cir.1984)). "Because the trial
judge is the person most familiar with the circumstances of the case and is in the best position to
evaluate the good faith and credibility of the parties, a reviewing court will defer to his decision
unless it is clearly wrong." State Farm, 409 F. App'x at 455 (citations omitted).
Under Federal Rule of Civil Procedure 55(c), "[t]he court may set aside an entry of default
for good cause." Although the rule does not define "good cause," the Second Circuit has "advised
district courts to consider three factors in deciding a Rule 55(c) motion: (1) whether the default was
willful; (2) whether the moving party has presented a meritorious defense; and (3) whether setting
aside the default would prejudice the party for whom default was awarded." State Farm, 409 F.
App'x at 455 (citing Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir.1993)). See also Pecarsky
v. Galaxiworld.com Ltd., 249 F.3d 167, 171 (2d Cir. 2001) ("When deciding whether to relieve a
party from default or default judgment, we consider the willfulness of the default, the existence of

2

In contravention to Local Rule 7(a), Plaintiffs have failed to submit a memorandum of law
in support of their motion to amend the Complaint. Counsel are advised that "[f]ailure to submit a
memorandum may be deemed sufficient cause to deny the motion." D. Conn. L. Civ. R. 7(a)(1).
3

a meritorious defense, and the level of prejudice that the non-defaulting party may suffer should
relief be granted.").
"Defaults are not favored, particularly when the case presents issues of fact, and doubts are
to be resolved in favor of a trial on the merits." Meehan v. Snow, 652 F.2d 274, 277 (2d Cir.1981)
(per curiam )(citing, inter alia, Klapprott v. United States, 335 U.S. 601, [615 ] (1949)). "While
courts are entitled to enforce compliance with the time limits of the Rules by various means," default
is viewed as an "extreme sanction," which should be treated as "a weapon of last, rather than first,
resort." Meehan, 652 F.2d at 277 (citations omitted). See also Enron Oil Corp., 10 F.3d at 96
("because defaults are generally disfavored and are reserved for rare occasions, when doubt exists
as to whether a default should be granted or vacated, the doubt should be resolved in favor of the
defaulting party").

2.

Analysis

In analyzing a motion to set aside default, the Court may consider equitable factors such as
"whether the failure to follow a rule of procedure was a mistake made in good faith and whether the
entry of default would bring about a harsh or unfair result." Enron Oil Corp., 10 F.3d at 96. With
respect to the result, "good cause" and the criteria for setting aside a default "should be construed
generously," as a "reflection of [the Second Circuit's] oft-stated preference for resolving disputes on
the merits." Id. at 95-96 (citing, inter alia, Meehan, 652 F.2d at 277).
"A motion to vacate a default is subject to a less rigorous standard than [the 'excusable
neglect' standard which] applies to a Rule 60(b) motion to vacate a default judgment." Am. Alliance
Ins. Co., Ltd. v. Eagle Ins. Co., 92 F.3d 57, 59 (2d Cir.1996) (citing Meehan, 652 F.2d at 276). See

4

also State Farm, 409 F. App'x at 456 (Second Circuit "analyzed [defendants'] claims under Rule
55(c)'s more forgiving standard for setting aside an administrative default")(emphasis added); New
York v. Green, 420 F.3d 99, 109 (2d Cir. 2005) (Under Rule 55(c), "a default may be vacated for
'good cause shown,' a less rigorous standard than applies under Rule 60(b)."). When a district court
has erroneously applied the more vigorous standard of Rule 60(b) to consider vacating a default,
versus a default judgment, the Second Circuit has held that such an error "requires reversal."
Meehan, 652 F.2d at 276.
Applying the three relevant factors supplied by the Second Circuit with respect to "good
cause" in considering a Rule 55(c) motion, the Court first examines whether Country Motors's
default was "willful" – i.e., whether Country Motors's failure to appear and plead was motivated by
"bad faith, or at least something more than mere negligence." Am. Alliance Ins. Co., Ltd., 92 F.3d
at 60. Nicole C. Chomiak, counsel for Country Motors, has asserted that "Country Motors'[s]
failure to appear was not willful." Doc. 14, at 2. She represents that she "was retained by Country
Motors" and "immediately filed an appearance on behalf of Country Motors" the day after the default
was entered. Id. Where there is no evidence that "bad faith" led to Country Motor's default, the
Court finds no grounds to declare the default willful.
Second, "[t]o satisfy the criterion of a 'meritorious defense,' the defense need not be
ultimately persuasive at this stage." Am. Alliance Ins. Co., Ltd., 92 F.3d at 61. See also State Farm,
409 F. App'x at 456 ("[i]n order to make a sufficient showing of a meritorious defense in connection
with a motion to set aside a default, the defendant need not establish his defense conclusively," but
rather present facts that would constitute a defense). In the case at bar, Country Motors's newly
retained counsel, Chomiak, is currently in the process of gathering sufficient facts to respond to the
5

Complaint. She presently asserts, however, that at a minimum her client will defend the case by
denying the claims. Doc. 14, at 4. In addition, Chomiak participated in the Rule 26(f) Conference,
albeit informally given her client's defaulted state, and declared in the Joint Rule 26(f) Report [Doc.
20] that "Country Motors denies any and all claims, including those for any and all damages, made
by the Plaintiffs" and "further reserves its right to assert any and all defenses when it responds to the
Complaint." Doc. 20, at 3. Country Motors clearly intends to defend in this action by denying that
it violated any of the laws cited in Plaintiffs' claims and by preserving its right to raise various
defenses. In the particular circumstances of this case – at a preliminary stage in the proceedings (i.e.,
preceding substantial, if any, discovery) and where Plaintiffs consent to the motion to set aside
default – the Court will construe the second prong liberally to allow Country Motors's denial of the
claims to demonstrate that it will attempt to present a meritorious defense.3
Third, "[t]he final factor that a court must consider in determining whether to set aside a
default is the potential that doing so would result in prejudice to the non-defaulting party." State
Farm, 409 F. App'x at 456. In the case at bar, there will be minimal prejudice to Plaintiffs if Country
Motors is allowed to participate in this action. Not only is the case in its early stages – with
Plaintiffs' request to amend the Complaint pending – but Plaintiffs have apparently consented to the
default being set aside. Doc. 14, at 2 (¶ A.6). It thus follows that there has been no showing that
prejudice will result if the default is set aside.
Based on analysis of all three factors, the Court finds "good cause" to set aside entry of
default against defendant Country Motors.
3

The Court's narrow holding regarding a meritorious defense in this case should not be
construed broadly to suggest that a simple denial of the claims asserted will generally suffice to
fulfill the Second Circuit's second prong to set aside default.
6

B.

Plaintiffs' Motion For Leave to Amend Complaint
1.

Standard to Amend Complaint - Fed. R. Civ. P. 15

Plaintiffs have moved for leave to amend their Complaint, asserting that the "amendment is
being filed within the time parameter set forth in the Joint Rule 26(f) Report of the Parties' Planning
Meeting." Doc. 21, at 1. The parties have jointly stated on the case record that "[t]he Plaintiffs
should be allowed until December 15, 2015, to file motions to join additional parties and to file
motions to amend the pleadings." Doc. 20, at 7. In consequence, Plaintiffs have filed their motion
in accordance with the parties' agreement regarding the permissible period to move to amend the
pleadings. The parties' agreement regarding time to file the motion does not, however, preclude the
Court's application of Rule 15, Fed. R. Civ. P., to determine whether the particular proposed
amendment will be permitted.
Pursuant to Rule 15(a)(1), "[a] party may amend its pleading once as a matter of course
within: (A) 21 days after serving it, or (B) if the pleading is one to which a responsive pleading is
required, 21 days after service of a responsive pleading or 21 days after service of a motion under
Rule 12(b), (e), or (f), whichever is earlier." Plaintiffs filed their Complaint in July 2015, more than
twenty-one days before moving to amend in November 2015. Also, defendant Exeter answered the
Complaint on October 13, 2015 – twenty-three (23) days before Plaintiffs sought leave to amend on
November 5, 2015.4 Doc. 18, 21. Although "an answer to a complaint" is by definition a "pleading"
under Federal Rule 7(a)(2) of Civil Procedure, Exeter's answer was filed more than twenty-one days
4

The Court calculates the period of days in accordance with Federal Rule 6(a) of Civil
Procedure. Accordingly, the Court excludes the day of the event that triggers the period (file date
for Answer, 10/13/2015), counts all intermediate days (including Saturdays and Sundays); and
includes the last day of the period (file date for motion to amend, 11/5/2015). See Fed. R. Civ. P.
6(a)(1)(A)-(C) (captioned "Computing and Extending Time; Time for Motion Papers").
7

before the motion to amend was filed. Plaintiffs' present motion to amend is therefore not governed
by Rule 15(a)(1) so that the motion may not be granted as a "matter of course."
Pursuant to Rule 15(a) (2), Fed. R. Civ. P., if not permitted to amend as a matter of course,
"a party may amend its pleading only with the opposing party's written consent or the court's leave"
and "[t]he court should freely give leave when justice so requires." No written consent has been
provided by Exeter, the only defendant in the action at the time the motion to amend was filed.
Therefore, the decision of whether to grant leave to amend is entrusted to the district court's
discretion, as guided by the last sentence of Rule 15(a)(2), which instructs that justice be done.5
Specifically, "[i]n the absence of any apparent or declared reason—such as undue delay, bad
faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, futility of the amendment, etc.—the leave sought should, as the rules require, be 'freely
given.'" Foman v. Davis, 371 U.S. 178, 182 (1962). See also Milanese v. Rust-Oleum Corp., 244
F.3d 104, 110 (2d Cir. 2001) ("Leave to file an amended complaint 'shall be freely given when
justice so requires,' Fed. R. Civ. P. 15(a), and should not be denied unless there is evidence of undue
delay, bad faith, undue prejudice to the non-movant, or futility.").

2.

Factual Allegations in Support of Claims

In reviewing the Plaintiffs' proposed Amended Complaint, the Court must analyze Plaintiffs'
5

With respect to amendments other than those which may be made a matter of course,
Rule 15(a)(2), Fed. R. Civ. P., provides in full:
(2) Other Amendments. In all other cases, a party may amend its pleading only with
the opposing party's written consent or the court's leave. The court should freely give
leave when justice so requires.
8

factual allegations in support of its claims to determine whether justice requires that the Court give
leave to amend or whether amendment would be improper or futile. Plaintiffs allege that prior to
July 24, 2014, plaintiff Peggy O'Neill received telephone calls from a salesman named Walter
Pettway of Country Motors. Doc. 21-1, ¶ 10. Pettway repeatedly informed Peggy that "he had a lot
of good deals on automobiles and he convinced her to go to the dealership to look at cars." Id. On
July 24, 2014, Peggy went to Country Motors's dealership to meet with Pettway and view the
available cars for sale. Id., ¶ 11. Plaintiff Kelly O'Neill arrived at the dealership later in the day.
Id.
On July 24, 2014, Walter showed Peggy a used 2012 Chrysler 200 LX. Id., ¶ 12. After
allegedly detaining Plaintiffs at the dealership for approximately six hours, Pettway informed Peggy
and Kelly of a sale price that "was good for that day only." Id., ¶ 13. Plaintiffs assert that the time
limit for the sale price was "a false and deceptive statement, because Country Motors and other
dealerships routinely sell comparable vehicles for significantly less than the price that [this Motor]
Vehicle was sold to Plaintiffs." Id.
Country Motors then "prepared and presented Plaintiffs with a retail installment sales
contract ("Contract") for the purchase of the [Motor] Vehicle." Id., ¶ 14. The Contract indicated a
cash price of $17,200 even though the Chrysler had a NADA Retail [V]alue of approximately
$14,575."6 Id., ¶¶ 15-16. Plaintiffs traded in their 2000 Dodge Intrepid towards the purchase of the
6

The Court takes judicial notice that "NADA" stands for "National Automobile Dealers
Association" in this context. According to an internet blog on automobiles and their sales,
"[s]pokespeople for the 74-year-old NADA guide say their book is superior to the others because the
NADA book is the official data guide issued strictly for dealer members of the National Automobile
Dealers Association (NADA) trade group, and it has access to totally exclusive data, such as dealer
retail sales, and it analyzes additional data from more than 500,000 various points of sale and other
market data." See http://www.autoblog.com/2007/06/22/best-blue-book/ .
9

Chrysler and received a "trade-in allowance of $3,500," which was "significantly greater than the true
value of the Dodge Intrepid, which was approximately $500." Id., ¶¶ 17-18. In consequence,
Country Motors allegedly "inflated" the purchase price of the Chrysler. Id., ¶ 18. According to
Plaintiffs, "[t]he retail installment [sales] contract contained an itemization of the amount financed
that did not accurately reflect the true cost of the [Motor] Vehicle or the true allowance for the
Dodge Intrepid." Id., ¶ 19. Moreover, the Contract specified that "Plaintiffs made a cash
downpayment [sic] of $500, even though Plaintiffs had paid only $100 at the time they signed the
Contract." Id., ¶ 20.
Country Motors then allegedly "advanced $400 to Plaintiffs to enable them to get a check
in that amount to demonstrate payment in full of the down payment to [defendant] Exeter." Id., ¶ 21.
The "pick-up payments for the down payment were [allegedly] incorrectly included as part of the
down payment" and "not included in the schedule of payments." Id., ¶ 22. At the time of the sale,
Kelly had an income of "less than $1,200 per month," id., ¶ 23; and "Plaintiffs had housing rental
expenses of $1,600 per month."7 Id., ¶ 24.
In the proposed Amended Complaint, Plaintiffs allege, upon "information and belief," that
Country Motors submitted a credit application to Exeter that "falsely stated that Kelly was earning
$1,833 per month in income and that their monthly housing rental expense was only $250."8 Id.,

7

It is unclear what income, if any, Peggy may have had at the time of the sale. The original
Complaint states that she had "income of $1,571 per month in pension and social security benefits."
Doc. 1, ¶ 23. However, the proposed Amended Complaint removes this financial information
completely, fully omitting paragraph 23.
8

In the original Complaint, the Plaintiffs also alleged that Country Motors falsely stated on
the credit application to Exeter that "Peggy was receiving $2,069 per month from pension and
[S]ocial [S]ecurity benefits." Doc. 1, ¶ 26. It is not known why, but Plaintiffs deleted this
information from the proposed Amended Complaint, leaving only the allegations of falsehood on
10

¶ 25. Furthermore, Country Motors allegedly "provided Exeter with a false list of references
containing names of individuals that Plaintiffs do not know." Id., ¶ 26. Country Motors allegedly
"forged Plaintiffs' signatures to that reference list." Id. Country Motors then "obtained approval
from Exeter to accept assignment of the Contract." Id., ¶ 27. Plaintiffs assert that Exeter's approval
was "obtained based upon fraudulent and false credit information that was submitted to Exeter by
Country Motors, the false references, and Country Motor's false statements regarding the value of
the [Motor] Vehicle, the value of the trade-in, and the amount being paid as a down payment." Id.,
¶ 28.
Plaintiffs allege that "Exeter would not have approved the transaction if it knew of Plaintiffs'
actual income and expenses." Id., ¶ 29. "[O]n that basis, Plaintiffs allege that Country Motors
submitted false credit information to Exeter," id., which resulted in their approval "for a transaction
that [Plaintiffs] could not afford," id., ¶ 30.
After the sale, Exeter sought verification from Peggy "that she had made a $500 [down]
payment" and she admitted that she had "only paid $100 of the down payment at the time she signed
the Contract." Id., ¶ 31. According to Plaintiffs, Country Motors advanced $400 in cash to them,
and Plaintiffs returned the money to Country Motors so that it "could falsely document [for] Exeter
that the entire $500 deposit had been paid." Id., ¶ 32. Country Motors then failed to assign the title
of or register the Chrysler to Plaintiffs until receiving Exeter's confirmation that it would purchase
the retail installment sales contract, which occurred several weeks after July 24, 2014, the contract
date. Id., ¶ 33. Because of this delay in extending credit to Plaintiffs, there was a "significant

the application regarding Kelly O'Neill's income per month and the monthly rent for housing. Doc.
21-1, ¶ 25.
11

understatement of the Annual Percentage Rate." Id., ¶ 34. After Plaintiffs were ultimately unable
to make the monthly payments for the Chrysler, it was repossessed by Exeter in early November
2014. Id., ¶ 35.
Exeter allegedly failed to provide notice of the intended disposition of the Motor Vehicle as
required by Conn. Gen. Stat. § 36a-785(d) and by Article 9 of the Uniform Commercial Code. Id.,
¶ 36. Afer disposing of the Motor Vehicle, Exeter allegedly sent Plaintiffs a notice dated January
16, 2015, captioned "Explanation of Calculation of Deficiency," in which Exeter "failed to state the
gross proceeds of the sale, failed to credit the account for the fair market value of the vehicle, and
improperly asserted entitlement to the costs of resale." Id., ¶ 37.

3.

Examination of Plaintiffs' Claims under Foman
a. Claims Against Country Motors

In accordance with Foman, it is incumbent on the Court to consider the potential futility of
the proposed amendments in making its Ruling herein. In the proposed Amended Complaint [Doc.
21-1], the Court discerns only two changes Plaintiffs seeks to make to the original Complaint: (1)
the removal of paragraph 23 from the original Complaint (which alleges that, at the time of
purchase, Peggy had income in the amount of $1, 571 per month in pensions and social security
payments) and (2) the removal of the portion of paragraph 26 in the original Complaint that alleges
that Country Motors included in its credit application the false statement that "Peggy O'Neill was
receiving $2,069 per month from pension and social security benefits." Plaintiffs provide no
explanation for removal of these financial details from the Complaint so the Court has no basis to
determine Plaintiffs' reasoning in excising these amounts. Perhaps counsel for Plaintiffs is still

12

gathering and verifying the figures regarding Peggy's monthly pension and Social Security income.
At this preliminary stage of the proceedings, such financial details may be ascertained during
discovery.9 At this juncture, the Court refrains from deciding whether vel non the absence of these
particular financial details will help or impede success on Plaintiffs' claim. Rather, the Court will
examine each count in the proposed Amended Complaint (without plaintiff Peggy O'Neill's specific
monthly income) to determine whether, as stated, it sets forth a facially plausible claim for relief.
If so, leave to file the proposed Amendment Complaint will not be futile and the action may
proceed.
At the outset, applying the Foman standard to the case at hand, the Court finds that there is
no evidence that the proposed Amended Complaint is the product of any undue delay or bad faith.
Also, because this case remains in its early stages and Exeter has not objected, there is no evidence
that there will be any undue prejudice to Exeter or to Colony Motors if amendment of the Complaint
is allowed at this time.
Next, as set forth supra, the Court examines the prospect of futility with respect to the claims,
as set forth in the proposed Amended Complaint. Although leave to amend must be freely given
under ordinary circumstances, denial is proper where the proposed amendment would be "futile."
Foman, 371 U.S. at 182. An amendment is considered "futile" if the amended pleading fails to
state a claim or would be subject to a successful motion to dismiss on some other basis. See, e.g.,
S.S. Silberblatt, Inc. v. East Harlem Pilot Block, 608 F.2d 28, 42 (2d Cir.1979); Freeman v. Marine
Midland Bank–New York, 494 F.2d 1334, 1338 (2d Cir.1974). See also Wilson-Richardson v.
Regional Transit Serv., Inc., 948 F.Supp.2d 300, 306 (W.D.N.Y. 2013) ("I conclude that no
9

The Court notes that Defendants have not objected to the proposed Amended Complaint.
13

amendment of the complaint would be sufficient to salvage claims which are undisputedly
unexhausted and untimely, and/or over which the Court lacks jurisdiction"). For example, a
proposed amendment would be futile if it destroyed the Court's subject matter jurisdiction, asserted
claims which are time-barred by the relevant statutes of limitation, or failed to state a claim.
In evaluating potential futility of the proposed amendments, the Court notes at the outset that
in both the original and amended complaints, the Court has "federal question" subject matter
jurisdiction pursuant to 28 U.S.C. § 1331 because there are claims arising under federal statutes, such
as the Truth in Lending Act and the Credit Repair Organization Act. Furthermore, the Court may
exercise "supplemental jurisdiction over all other claims that are so related to claims in the action
within such original jurisdiction that they form part of the same case or controversy . . . ." 28 U.S.C.
§ 1367. Moreover, even the shortest relevant statutes of limitation – one year for claims arising
under the Truth in Lending Act and under the Creditors' Collection Practices Act, Conn. Gen. Stat.
§ 36a-648 (d) – were met when Plaintiffs filed their action within one year following the occurrence
of the alleged violation. Because the transaction at issue was consummated on July 24, 2014, all
causes of action appear facially timely.10
Having resolved that the Court has subject matter jurisdiction and the claims appear timely,
the Court will examine whether the proposed Amended Complaint fails to state any facially plausible
10

See, e.g., Credit Repair Organization Act, 15 U.S.C. § 1679i (5-year limitation period
commencing on date of violation); CUTPA, 42 Conn. Gen. Stat. § 42-110g(f) (3-year statute of
limitations); breach of contract, Conn. Gen. Stat. § 52-576(a) ("[n]o action for an account, or on
any simple or implied contract, or on any contract in writing, shall be brought but within six years
after the right of action accrues...."). See also Hales v. HSBC Bank U.S.A., N.A., 347 F. App'x 698,
699 (2d Cir. 2009) (applying three-year statute of limitations for violation of Article 9 of the U.C.C.
– for "an action to recover upon a liability, penalty, or forfeiture created or imposed by statute.")
(quoting Banca Commerciale Italiana v. N. Trust Int'l Banking Corp., 160 F.3d 90, 93-94 (2d
Cir.1998)).
14

claims.
1.

Truth In Lending Act

Plaintiffs first assert that Country Motors violated the Truth in Lending Act ("TILA"), 15
U.S.C. § 1601, et seq. "The primary purpose of TILA is to promote the informed use of credit."11
Frazee v. Seaview Toyota Pontiac, Inc., 695 F. Supp. 1406, 1407-08 (D. Conn. 1988) (citing 15
U.S.C. § 1601). Specifically, Congress enacted TILA "to assure a meaningful disclosure of credit
terms so that the consumer will be able to compare more readily the various credit terms available
to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and
unfair credit billing and credit card practices." 15 U.S.C. § 1601(a). See, e.g., Aubin v. Residential
Funding Co., LLC, 565 F. Supp. 2d 392, 394-95 (D. Conn. 2008). The Act thus "requires creditors
to disclose credit terms in a uniform manner" and include "all additional mandatory charges imposed
by the creditor . . . in the computation of the finance charge." Frazee, 695 F. Supp at 1407-08
(citing Mourning v. Family Publications Serv., 411 U.S. 356, 364 (1972)). Furthermore, "[s]ince
TILA is a remedial statute, it is interpreted strictly in favor of the consumer." 695 F. Supp. at 1408.
In the case at bar, Plaintiffs assert that Country Motors violated TILA by failing to accurately
11

The TILA explicitly states that "Congress finds that economic stabilization would be
enhanced and the competition among the various financial institutions and other firms engaged in
the extension of consumer credit would be strengthened by the informed use of credit." 15 U.S.C.A.
§ 1601. The statute then continues:
The informed use of credit results from an awareness of the cost thereof by
consumers. It is the purpose of this subchapter to assure a meaningful disclosure of
credit terms so that the consumer will be able to compare more readily the various
credit terms available to him and avoid the uninformed use of credit, and to protect
the consumer against inaccurate and unfair credit billing and credit card practices.
15 U.S.C. § 1601.
15

calculate the amount of their loan so that Plaintiffs were unable to determine whether they could
responsibly purchase the Motor Vehicle. In particular, Country Motors allegedly took the following
actions which were violative of TILA: (1) failure "to include the deferred $400 within the schedule
of payments" and false inclusion of the $400 as part of the down payment," Doc. 21-1, ¶ 39;
(2) "overstatement of the Annual Percentage Rate" due to "failure to assign title of the [Motor]
Vehicle to Plaintiffs and . . . failure to register the Vehicle to them at the time of sale," id., ¶ 40; and
(3) failure to "accurately itemiz[e] the amount financed in that [Country Motors] added the amount
over-allowed on Plaintiffs' trade-in vehicle to the purchase price of the [Motor] Vehicle," id., ¶ 41.
Plaintiff states that each of these alleged violations caused them to suffer damages "because they did
not realize that the purchase price of the [Motor] Vehicle was increased on account of the
over-allowance on the trade-in," id., ¶ 42. In other words, Country Motors's alleged failure to
provide Plaintiffs with the accurate terms of the loan to buy the Motor Vehicle prevented Plaintiffs
from knowing the actual amount financed.
I find that the allegations presented by Plaintiffs state a plausible claim to relief for violation
of TILA under the requisite test set forth by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662
(2009) ("Iqbal"). "To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 566 U.S. at 678
(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This pleading standard creates
a "two-pronged approach," Iqbal, 556 U.S. at 679, based on "[t]wo working principles." Id. at 678.
First, although a complaint need not include detailed factual allegations, it must provide
"more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. Second, "[w]hen
there are well-pleaded factual allegations, a court should assume their veracity and then determine
16

whether they plausibly give rise to an entitlement to relief." Id. at 679. Accepting Plaintiffs' wellpleaded allegations regarding the conduct of Country Motors in compiling the credit application to
Exeter, I find that there are sufficient facts to allow the "Truth in Lending Act" claim to proceed as
facially "plausible."

2. Credit Repair Organization Act
Plaintiffs next assert that Country Motors "violated 15 U.S.C. § 1679b(a)(1), which prohibits
any person from making any statement that is untrue or misleading with respect to any consumer’s
credit worthiness, credit standing, or credit capacity to any person to whom the consumer has applied
or is applying for an extension of credit."12 Doc. 21-1, ¶ 45. The Amended Complaint is rife with

12

The Credit Repair Organization Act provides in relevant part:
No person may–
(1) make any statement, or counsel or advise any consumer to make
any statement, which is untrue or misleading (or which, upon the
exercise of reasonable care, should be known by the credit repair
organization, officer, employee, agent, or other person to be untrue or
misleading) with respect to any consumer's credit worthiness, credit
standing, or credit capacity to–
(A) any consumer reporting agency (as defined in
section 1681a(f) of this title); or
(B) any person –
(i) who has extended credit to the
consumer; or
(ii) to whom the consumer has
applied or is applying for an extension
of credit . . . .

15 U.S.C. § 1679b.
17

allegations of untrue and/or misleading assertions that Country Motors made when submitting
Plaintiffs' credit application to Exeter. All of these false assertions impacted Plaintiffs' credit
worthiness, standing, and/or capacity with respect to their credit application regarding the purchase
of the Chrysler. For example, Plaintiffs allege that the amount of Kelly's monthly income was
misrepresented to Exeter as $1,833 per month when it was really $1,200 per month, Doc. 21-1,
¶¶ 23, 25; Country Motors misrepresented to Exeter the amount of down payment the Plaintiffs paid
as $500 when it was really $100, id., ¶ 31 ; and Country Motors supplied a false list of references
for Plaintiffs to Exeter, id., ¶ 26. Such facts alleged by Plaintiffs, especially County Motors's
allegedly purposeful inaccuracies in Plaintiffs' credit application, are sufficient to state a "plausible
claim to relief" under the Credit Repair Organization Act pursuant to Iqbal.

3. Violation of the Connecticut Unfair Trade Practices Act ("CUTPA")
In their third claim, Plaintiffs state that Country Motors failed to assign title and to register
the Chrysler to Plaintiffs at the time of sale. Plaintiffs allege that these failures violated Conn.
Gen. Stat. § 14-62, constituting a per se violation of CUTPA pursuant to Conn. Agency Reg.
§ 42-110b-28(b)(23).13 Doc. 21-1, ¶ 48.
13

Section 42-110b-28(b)(23) of the Regulations of Connecticut State Agencies provides:

"It shall be an unfair or deceptive act or practice for a new car dealer or a used car
dealer to violate any provision of a federal or state statute or regulation concerning
the sale or lease of motor vehicles.”
Conn. Agency Reg. § 42-110b-28(b)(23). See, e.g., Tirado v. Ofstein, No. HHDCV054014648S,
2008 WL 902506, at *16 (Conn. Super. Ct. Mar. 14, 2008) (where defendant car dealer had violated
TILA and RISFA, the court found that the defendant had "engaged in unfair and deceptive acts in
commerce or trade in connection with this transaction in violation of CUTPA").

18

Plaintiffs further allege that "Country Motors' conduct, as aforedescribed [sic], was unfair
and deceptive and in violation of CUTPA, in that it has engaged in a predatory sale of a vehicle to
consumers who could not afford payment, and it has facilitated this transaction through credit
application fraud and forgery." Id., ¶49. In consequence, "Plaintiffs have [allegedly] suffered an
ascertainable loss of money or property in that they have lost their $500 downpayment, they have
lost their trade-in vehicle, and their credit has suffered significant harm." Id., ¶ 50.
Under CUTPA, Conn. Gen. Stat. § 14-62, "[e]ach sale [of a motor vehicle] shall be
evidenced by an order properly signed by both the buyer and seller, a copy of which shall be
furnished to the buyer when executed, and an invoice upon delivery of the motor vehicle," both of
which shall contain, inter alia, the make of the vehicle, year of the model, the amount of the deposit,
and the cash selling price. Conn. Gen. Stat. § 14-62(a). Furthermore, under this provision of
CUTPA, "[n]o dealer licensed under the provisions of section 14-52 shall sell any used motor vehicle
without furnishing to the buyer, at the time of sale, a valid certificate of title . . ." Id., § 14-62(d).
It is clear from these provisions alone that, at the very least, Plaintiffs have alleged facts
sufficient to support a CUTPA violation for Country Motors's failure to furnish a correct invoice and
valid certificate of title for the Chrysler at the time of sale. There is no need for further analysis of
additional CUTPA violations at this time in that Plaintiffs have alleged a facially plausible CUTPA
claim on multiple grounds, including, inter alia, violation of TILA. See, e.g., Cheshire Mortgage
Serv., Inc. v. Montes, 223 Conn. 80, 105 (1992) (plaintiff's violation of TILA "constituted a violation
of CUTPA").

19

4. Revocation of Acceptance or Rescission of Contract
Finally as to Country Motors, Plaintiffs allege that said dealership "violated [the Retail
Installment Sales Financing Act] RISFA by its violations of TILA," which entitles Plaintiffs to "a
rescission of the Contract and to a return of the amounts paid for the [Motor] Vehicle, and to an
order that no deficiency is owing." Doc. 21-1, ¶ 55. Alternatively, Plaintiffs allege that they are
entitled "to revoke acceptance of the Motor Vehicle pursuant to Conn. Gen. Stat. § 42a-2-721 due
to fraud and material misrepresentation by Country Motors." Id., ¶ 56.
Plaintiffs have alleged that the contract for purchase of the Chrysler was a retail installment
sales contract under the provisions of Connecticut's Retail Installment Sales Finance Act ("RISFA"),
Conn. Gen. Stat. § 36a-770. Moreover, with respect to rescission, Plaintiffs allege that Country
Motors has violated TILA, which also constitutes violation of RISFA.14

See, e.g., Sterling v.

Farran & Ezedine, LLC, No. 3:10 CV 1119 WWE, 2011 WL 219697, at *3 (D. Conn. Jan. 20,
2011) ("A violation of TILA also constitutes a violation of RISFA.") (citing Tirado v. Ofstein, 2008
Conn. Super. LEXIS 667, at *38, 2008 WL 4416098 (Conn. Super. Ct. Mar. 14, 2008)). Under
RISFA, a seller is required "to return the buyer's purchase price in toto when he has delivered
nonconforming goods under circumstances that afford a buyer a right to reject or to revoke
acceptance." Barco Auto Leasing Corp. v. House, 202 Conn. 106, 115 (1987).
Pursuant to Conn. Gen. Stat. § 36a-771 of RISFA, "[e]very retail installment contract shall
be in writing, shall contain all the agreements of the parties and shall be completed as to all essential
14

For example, Plaintiffs alleged that "Country Motors violated TILA by failing to include
the deferred $400 within the schedule of payments and by falsely including it as part of the down
payment." Doc. 21-1, ¶ 39. Country Motors also allegedly misstated the Annual Percentage Rate
and failed to accurately itemize the amount financed by adding an excessive ("over-allowed")
amount on Plaintiffs' trade-in vehicle. Id., ¶¶ 40-41.
20

provisions prior to the signing of the contract by the retail buyer." Moreover, § 36a-771 provides
that "[e]very retail installment contract for the purchase of consumer goods subject to section
36a-774 and this section shall set forth the information required to be disclosed under sections
36a-675 to 36a-685, inclusive . . ." (e.g., correct annual percentage rate or finance charge).
If, as Plaintiffs allege, the Contract failed to contain the requisite key provisions, there may
have been a violation of both TILA and RISFA A proper remedy for violation of RISFA includes
rescission. Under the UCC, "[r]escission is utilized as a term of art to refer to a mutual agreement
to discharge contractual duties," for example when one party has materially breached the terms of
the contract, "cancellation for breach and avoidance on the grounds of infancy or fraud." Black's Law
Dictionary (10th ed. 2014.) If the important terms of the Contract were fraudulent or purposefully
omitted, Plaintiffs have alleged a plausible claim for rescission.
As to the possibility of revocation, Plaintiffs' claim is less clear. The Uniform Commercial
Code regarding sales is the law of the state of Connecticut and provides a buyer with the right to
revoke acceptance of non-conforming goods. Under the UCC, in Connecticut, when a buyer
justifiably revokes acceptance, he may cancel the contract and recover so much of the purchase price
as has been paid. Conn. Gen. Stat. § 42a-2-711(1). However, to justify revocation in Connecticut
the buyer must, pursuant to Conn. Gen. Stat. § 42a-2-608, prove one of following conditions: (1)
a nonconformity which substantially impairs the value to the buyer; (2) acceptance (a) with discovery
of the defect, if the acceptance is on the reasonable assumption that the nonconformity will be cured,
or (b) without discovery of the defect, when the acceptance is reasonably induced by the difficulty
of discovery or the seller's assurances; (3) revocation within a reasonable time after a nonconformity
was discovered or should have been discovered; and (4) revocation before any substantial change
21

occurs in the condition of the goods which is not caused by their own defects. See, e.g., Conte v.
Dwan Lincoln Mercury, Inc., 172 Conn. 112, 120-21 (1976). "Revocation of acceptance is possible
only where the non-conformity substantially impairs the value of the goods to the buyer." Conte,
172 Conn. at 120-21. For this purpose the test is not what the seller had reason to know at the time
of contracting, but rather "whether the non-conformity is such as will in fact cause a substantial
impairment of value to the buyer though the seller had no advance knowledge as to the buyer's
particular circumstances." Id. at 121 (citing Uniform Commercial Code § 2-608, comment).
In the case at bar, there is no allegation that the Chrysler was "defective" or otherwise
possessed a "nonconformity" that caused a substantial impairment of value to the buyers. Rather,
the problems Plaintiffs have alleged relate solely to the financial terms of the purchase. Under the
facts presented, there does not appear to be a plausible "revocation claim." The Court need not
decide definitively whether this count fails to state a revocation claim for purposes of futility,
however, because, as set forth supra, there are other claims against Country Motors, including
possible rescission, that this Court finds facially plausible under Iqbal.15

b.

Claims Against Exeter
1.

Assignee under Contract

Turning to the claims against defendant Exeter for analysis under Foman, Plaintiffs first
allege that Country Motors assigned the retail installment sales contract to Exeter and thus Exeter
"is subject to Plaintiffs' claims against Country Motors (excluding the claim under the TILA)." Doc.

15

Plaintiffs are urged to revisit the potential viability, or lack thereof, of their revocation
claim prior to filing their proposed Amended Complaint. Failure to remove any causes of action
which fail to state a claim may result in time-consuming, costly Rule 12(b)(6) motion practice.
22

21-1. "A split of authority has developed in the Connecticut Superior Courts regarding whether an
assignee is liable for the conduct of an assignor." Deutsche Bank Nat. Trust Co. v. Medina, No.
FSTCV085006907S, 2011 WL 383943, at *5 (Conn. Super. Ct. Jan. 10, 2011). "[A]n assignee of
a contract takes it subject to all defenses which might have been asserted against the assignor"; but
"does not take it subject to affirmative claims against the assignor arising from the assignor's prior
conduct without express assumption of such liability by the assignee." City of Hartford v.
McKeever, 139 Conn. App. 277, 286 (2012)(quoting Fairfield Credit Corp. v. Donnelly, 158 Conn.
543, 548 (1969)).16
The Connecticut Appellate Court "has recognized that although 'an assignee generally does
not assume the original responsibilities of the assignor, [it] may be liable . . . for [its] failure to
perform obligations of the assignor which [it] has assumed.'" Brett Stone Painting & Maint., LLC
v. New England Bank, 143 Conn. App. 671, 689-90 (2013) (quoting Hartford v. McKeever, 139
Conn.App. at 285). See also 6A C.J.S. 513, Assignments § 118 (2004) (obligations of assignor "are
imposed on the assignee where he or she assumes them"). Put simply, "where it is clearly the intent
of the parties, the assignee also succeeds to the obligations of the contract." Id., at § 94, p. 485.
It is unclear in the allegations of Plaintiffs' Amended Complaint whether Exeter expressly
assumed liability for Country Motors's prior conduct under the Contract. The allegations suggest
that Country Motors may have actually misled Exeter regarding County Motors's performance in
creating the Contract. See, e.g., Doc. 21-1, ¶¶ 27-29 (Exeter's approval "to accept assignment of the
Contract . . . was obtained based upon fraudulent and false credit information that was submitted to

16

Aff'd (with criticisms), 314 Conn. 255 (2014).
23

Exeter by Country Motors," including "false references," "false statements regarding the value of the
[Motor] Vehicle, the value of the trade-in, and the amount being paid as a down payment."); id.,
¶ 32 ("Country Motors advanced $400 cash to Plaintiffs, which they in turn repaid to Country
Motors, so that Country Motors could falsely document to Exeter that the entire $500 deposit had
been paid."). If, for example, Exeter was misled or induced by fraud into accepting assignment of
the Contract, Exeter may have a defense against liability under the Contract. However, if Exeter
made a sweeping assumption of the Contract and all liability thereunder, and if Country Motors is
liable to Plaintiffs, Plaintiffs may have a plausible claim under the theory of assignment. At this
point, this claim appears inadequately pled in that it lacks the key element of an express assumption
by Exeter of Country Motors's obligations and liability under the Contract.17

2.

RISFA

Due to Exeter's failure to comply with the "Foreclosure" provisions of RISFA, set forth at
Conn. Gen. Stat. § 36a-785, Plaintiffs claim they are "entitled to 25% of the amount paid under the
Contract, or $1,000, plus an order that there is no deficiency owed by them." Doc. 21-1, ¶ 61. In
the "Factual Allegations" section of the Amended Complaint, Plaintiffs assert that Exeter
repossessed the Chrysler and "Plaintiffs did not receive a notice of intended disposition of the
[Motor] Vehicle from Exeter." Id., ¶¶ 35-36. "[O]n that basis, [Plaintiffs] allege that Exeter did not
provide them with a notice of intended disposition to the Plaintiffs as required by Conn. Gen. Stat.
§ 36a-785(d) . . . ." Id., ¶¶ 35-36.
Section 36a-785(b) of RISFA provides that the holder of a retail installment sales finance
17

See n. 15, supra (noting that Plaintiffs may wish to reconsider filing a potentially nonviable claim to avoid having to oppose a Rule 12(b)(6) motion).
24

contract, in this case Exeter, may serve upon the retail buyers, personally or by registered or certified
mail, a notice of intention to retake the goods on account of the buyer's default. Although notice is
not a mandatory requirement, if the holder elects to send notice, it must be served "[n]ot less than
ten days prior to the retaking" of the goods, in this case the Vehicle.

18

See, e.g., Hunter v. Am.

Honda Fin. Corp., No. CV 99 0587409, 2000 WL 422195, at *1 (Conn. Super. Ct. Apr. 4, 2000).
In the case at bar, Plaintiffs allege that they did not receive a notice of intended disposition
of the Motor Vehicle until after its disposition. Doc. 21-1, ¶¶ 36-37. Specifically, "[f]ollowing the
disposition of the Vehicle, Exeter sent Plaintiffs a written notice dated January 16, 2015 captioned
'Explanation of Calculation of Deficiency' in which it failed to state the gross proceeds of the sale,
failed to credit the account for the fair market value of the vehicle, and improperly asserted
entitlement to the costs of resale." Id., ¶ 37. Such a failure to account for the proceeds of the sale
of the goods (i.e., the Chrysler) is also a violation of the statute. See Conn. Gen. Stat. § 36a-785(e)
(mandating that "[w]ithin thirty days of the resale" the contract holder provide the retail buyer with
a "written statement itemizing the disposition of the proceeds"). Under the circumstances alleged
– where Plaintiffs assert that they were neither informed of Exeter's intent to repossess nor later
received written itemization of the disposition of the resale proceeds – Plaintiffs have stated a
facially plausible claim for relief under various provisions of RISFA

3.

CCPA Claim and UCC Claim

In the final counts of Plaintiffs' complaint, they assert, respectively, that (1) Exeter's January
18

Pursuant to RISFA, Conn. Gen. Stat. § 36a-785, the notice of the contract holder's
intention to repossess "shall state the default and the period at the end of which such goods will be
retaken, and shall briefly and clearly state what the retail buyer's rights under this subsection will be
in case such goods are retaken."
25

16, 2015 notice contained false statements regarding the amount of any deficiency that could be
claimed against Plaintiffs under the Connecticut Creditor Collection Practices Act ("CCPA"), Conn.
Gen. Stat. § 36a-648; and (2) Exeter failed to comply with post-repossession notice of disposition
of collateral requirements under Article 9 of the UCC, entitling Plaintiffs to monetary damages.
Doc. 21-1, ¶¶ 63-64, 66.
Under § 36a-648 of the CCPA, a creditor may not use any "abusive, harassing, fraudulent,
deceptive or misleading representation, device or practice to collect or attempt to collect a debt in
violation" of the Act's provision or else "shall be liable to a person who is harmed by such conduct."
The statutory award in damages includes (1) "actual damages sustained, (2) "if such person is an
individual, additional damages as the court may award, not to exceed one thousand dollars," and (3)
"in the case of any successful action to enforce liability" under the CCPA, "costs of the action and,
in the discretion of the court, a reasonable attorney's fee." Conn. Gen. Stat. § 36a-648 (a).
Plaintiff has alleged that the Chrysler was repossessed and sold without proper accounting
by Exeter, which in essence may have resulted in a fraudulent practice to collect the debt Plaintiffs
owed on the sales contract. Construing the facts in a manner most favorable to Plaintiffs, they have
alleged sufficient facts to support a facially plausible CCPA claim.
Finally, with respect to Article 9 of the UCC, Plaintiffs assert that Exeter is liable to the
Plaintiffs for failure to comply with the post-repossession notice of disposition of collateral
requirements under Article 9 of the UCC, Conn. Gen. Stat. § 42a-9-101, et seq. Doc. 21-1, ¶ 66.
With respect to damages, Plaintiffs allege that "Exeter is liable to Plaintiff[s] for the finance charge
of $9,245.30 plus 10% of the $15,098.62 amount financed, for a total of $10,755.16." Id.
Article 9 of the UCC provides that "a secured party shall apply or pay over for application
26

the cash proceeds of disposition under section 42a-9-610" in a specified manner. Conn. Gen. Stat.
§ 42a-9-615(a). Moreover, "Section 9-616 requires a secured party in a consumer-goods transaction
to provide a debtor with a notification of how it calculated a deficiency at the time it first undertakes
to collect a deficiency." Conn. Gen. Stat. § 42a-9-101. If such provisions are not followed, as
Plaintiffs have alleged, and "the collateral is consumer goods," the injured party or "debtor" "may
recover for [the secured party's] failure in . . . an amount not less than the credit service charge plus
ten per cent of the principal amount of the obligation or the time-price differential plus ten per cent
of the cash price." Conn. Gen. Stat. § 42a-9-625(c)(2)
In the case at bar, as set forth supra, Plaintiffs have pled facts indicating that Exeter failed
to comply with the post-possession notice requirements of Article 9 of the UCC. Doc. 21-1, ¶¶ 3637. Consequently, Plaintiffs have calculated their prospective damages under the statute as the
finance charge on the purchase plus 10% of the principal amount of the purchase. Plaintiffs have
alleged a facially plausible claim for recovery under Article 9 of the UCC.

III. CONCLUSION
For the foregoing reasons, Country Motors's "Consent Motion to Set Aside Entry of Default"
[Doc. 14] is GRANTED. Pursuant to Federal Rule 55(c) of Civil Procedure, the Court finds "good
cause" to set aside entry of default against defendant Country Motors. Applying the Second Circuit's
relevant factors for setting aside entry of default, Country Motors has demonstrated that its default
was not wilful. In particular, Country Motors's immediate retention of counsel upon learning of
default and prompt entry into the case thereafter evidence Country Motors's intention to participate
in the action in good faith. In addition, counsel for Country Motors asserts that her client intends

27

to defend vigorously in this action (i.e., to present a meritorious defense). Most importantly,
Plaintiffs will suffer no prejudice by the Court's setting aside entry of default at this preliminary stage
of the proceedings – especially where Plaintiffs consent to the granting of Country Motors's motion.
Accordingly, the entry of default against Country Motors is hereby set aside. The Clerk is directed
to re-insert Country Motors as an active Defendant on the case docket.
Also, Plaintiffs' "Motion For Leave to Amend Complaint" [Doc. 21] is GRANTED in the
interests of justice under Rule 15(a)(2), Fed. R. Civ. P. As Plaintiffs suggest, the proposed
"amendment [was] filed within the time parameter set forth in the Joint Rule 26(f) Report of the
Parties' Planning Meeting," Doc. 21, at 1. Furthermore, despite expiration of the requisite 21-day
period to respond, Defendants have filed no objection to the motion. See D. Conn. L. Civ. R.
7(a)(1).
As set forth supra, "[i]n the absence of any apparent or declared reason—such as undue
delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, futility of the amendment, etc.—the leave sought should, as the rules require, be 'freely
given.'" Foman v. Davis, 371 U.S. 178, 182 (1962). In the case at bar, there is no evidence of undue
delay or bad faith. This is Plaintiffs' first request to amend the complaint, rather than a repeated
request. In addition, having reviewed the claims set forth in the proposed Amended Complaint, the
Court finds no reason to believe that allowance of the amendment will either unduly prejudice the
Defendants or be futile in effect. As to each Defendant, there are multiple claims with facial
plausibility under Iqbal. The Amended Complaint thus contains "sufficient factual matter, accepted
as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 566 U.S. at 678 (quoting
28

Twombly, 550 U.S. at 570).
Plaintiffs are advised to re-examine and/or edit their Amended Complaint with respect to the
viability of certain claims before filing and serving it on Defendants on or before January 8, 2016.19
Defendants shall e-file their answers or responses "within 14 days after service of the amended
pleading" or risk default. See Fed. R. Civ. P. 15(a)(3). Within fourteen (14) days thereafter, the
parties shall once again meet and confer in a parties' planning meeting to ascertain whether there are
any necessary changes to be made in their Rule 26(f) Report [Doc. 20]. Within fourteen (14) days
following the conference, the parties must file a joint supplemental Rule 26(f) Report, requesting
proposed amended deadlines, if any, in light of the Rulings herein and the case's current status.
It is SO ORDERED.
Dated: New Haven, Connecticut
December 15, 2015

/s/Charles S. Haight, Jr.
CHARLES S. HAIGHT, JR.
Senior United States District Judge

19

See nn. 15, 17, supra.
29