Myles v. Rent-A-Center, Inc. et al
Filing
97
MEMORANDUM. Signed by Judge James K. Bredar on 7/19/2016. (bas, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CRAIG MYLES,
Individually and as Parent and Next
Friend of K.M. and A.M., minors,
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Plaintiffs
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v.
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RENT-A-CENTER, INC., et al.,
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Defendants
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CIVIL NO. JKB-15-300
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MEMORANDUM
Craig Myles brought an action on behalf of himself and his minor children, K.M. and
A.M. (collectively, “Plaintiffs”), in the Circuit Court of Maryland for Baltimore County,
accusing Rent-A-Center, Inc. (“RAC”) and Rent-A-Center East, Inc. (“RAC East”) (together,
“Defendants”) of negligence (Count I); breach of warranty (Count II); violation of the Maryland
Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law §§ 13-101 et seq. (Count III);
and common-law fraud (Count IV). Plaintiffs’ claims arise from a rental-purchase agreement
that Myles executed at a Towson, Maryland, Rent-A-Center store: Plaintiffs allege that (1)
Myles leased a purportedly merchantable couch at the store but (2) the couch was in fact infested
with bed bugs and (3) the infestation spread into Plaintiffs’ apartment, causing them physical and
emotional distress. On February 3, 2015, Defendants removed the action to this Court on
diversity grounds. (ECF No. 1.)
Now pending before the Court is Plaintiffs’ Motion for Partial Summary Judgment (ECF
No. 88) as to Defendants’ liability on Counts II and III. Also pending is Defendants’ Motion for
Summary Judgment (ECF No. 89) on all counts. The issues have been briefed, and no hearing is
required, see Local Rule 105.6 (D. Md. 2014). For the reasons explained below, Plaintiffs’
motion will be DENIED, and Defendants’ motion will be GRANTED IN PART and DENIED
IN PART.
I.
Factual Background1
On November 4, 2014, Plaintiff Myles visited a Rent-A-Center store, operated by RAC
East, located at 6969 Loch Raven Boulevard in Towson, Maryland. (ECF No. 89–3 at 1-2.)
Having recently moved into a new apartment, Myles found himself in need of a couch. (ECF
No. 92–2 at 7.) He had visited another furniture store and was feeling “a little sticker shocked.”
(Id.) While driving home, he noticed an Aaron’s rental store and a Rent-A-Center: he mentally
“[f]lipped a coin” and decided to stop by the Rent-A-Center. (Id.) Myles recalled that, once
inside, he met with a salesman named “Mike.” (Id.) Defendants have confirmed that a Mike
Boyd worked at the Loch Raven store in November 2014; although Boyd testified that he had no
recollection of assisting Myles on November 4 (ECF No. 92–3 at 4-5), the store manager, David
Johnston, testified that Boyd “very likely” assisted with the transaction (ECF No. 92–4 at 13).
According to Myles, “Mike” showed him the couch that he eventually agreed to lease—a
brown sectional sofa with three cushions, including a chaise. (ECF No. 92–2 at 8.) Myles
testified that the couch “looked nice” and appeared new, but for a small burn mark on the back of
one cushion; he added that “Mike” told him the couch was “really nice, in great condition,” and
1
At the summary-judgment stage, the facts and the inferences to be drawn therefrom are taken in the light most
favorable to the party opposing summary judgment. Scott v. Harris, 550 U.S. 372, 378 (2007); Iko v. Shreve, 535
F.3d 225, 230 (4th Cir. 2008). Because both parties here have moved for summary judgment, the Court has
evaluated each motion separately on its own merits “to determine whether either of the parties deserves judgment as
a matter of law.” Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (quoting Philip Morris Inc. v.
Harshbarger, 122 F.3d 58, 62 n.4 (1st Cir.1997)). Having analyzed the parties’ arguments and the relevant
authorities, the Court has determined that Defendants are partially entitled to judgment as a matter of law. Plaintiffs,
conversely, are not entitled to judgment at this time, as factual questions material to their claims remain in dispute.
Throughout this Memorandum, the Court identifies those factual questions and explains how their ultimate
resolution (at a forthcoming jury trial) will bear on the outcome of this litigation.
2
that he would “probably love it.” (Id.) Myles signed a rental-purchase agreement, which
provided for weekly payments of $29.99 with an early purchase option: the agreement further
specified that Myles could terminate without penalty at the end of any weekly rental term simply
by returning the couch to Rent-A-Center. (ECF No. 88–5.)
Myles took delivery of the couch on November 8, 2014. (ECF No. 92–2 at 9.) Within
two hours after the delivery, Myles spotted an insect crawling on the couch. (Id. at 14.) Through
Internet research, Myles concluded that the insect was a bed bug. (Id. at 11.) He attempted
several times that evening to call the Rent-A-Center store, but no one answered the phone. (Id.
at 12.) He then undertook self-help treatment measures: he sprayed his living room with a retail
bed-bug spray; he sprinkled diatomaceous earth on the couch cushions; and he set two chemical
foggers (“bug bombs”).
(Id. at 14.)
Fearful of spreading the infestation throughout his
apartment, Myles set up his “pallet” (a “comforter or several comforters [that] simulate a bed”)
“right in front of the couch,” and he slept there that night. (Id.) He received approximately ten
bites. (Id. at 18.)2
The following Monday, Myles contacted “Mike” at the Loch Raven store; “Mike”
expressed “disbelief” at the situation and indicated that Rent-A-Center would “send somebody
out to pick up the couch and come check it out.” (Id. at 19.) Later that day, a “lady and a
gentleman” visited Myles’s apartment; according to Myles, they “saw bed bugs on the couch.
(Id. at 20.)3 Myles claims he then spoke with “Mike” on the phone and that “Mike” told him a
third-party pest-control company, Terminix, would need to verify whether the bugs were
2
Myles’s young children, Plaintiffs K.M. and A.M., were staying with their godmother that weekend; however, they
returned to Myles’s apartment on November 10, and within a couple of days, the children had also suffered bed-bug
bites. (ECF No. 92–2 at 13.)
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The “lady,” Amber Blake Johnson, recalled that the “gentleman,” Dante Johnson, saw bed bugs; she admitted that
she did not see any. (ECF No. 89–8 at 6.) But Dante testified that he had no recollection of visiting Myles’s
apartment with Amber. (ECF No. 89–9 at 14-15.)
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attributable to Rent-A-Center. (Id.) Myles claims he “got a little bit nervous,” concerned that
Rent-A-Center would retrieve the sofa only to disclaim any liability: therefore, he told the store
employees to “just leave it here until Terminix comes.” (Id.)4
While Myles waited on Terminix, he hired a separate company—Home Paramount Pest
Control—to inspect his apartment. In a report dated November 11, 2014, Home Paramount
inspector Lewis Bellamy, Jr., noted that a “full bedbug inspection was done throughout the
house” and that “bedbugs were found only on the couch that was purchased from the rental
company.” (ECF No. 88–7 at 2.) Three days later, Terminix’s technician, Sonny Hall, inspected
the apartment; he found four adult bed bugs, seven eggs, and three nymphs on the “sofa/loveseat,”
but he found no further evidence of bed bugs in the apartment. (ECF No. 88–8 at 2.)
On November 18, 2014, following the Terminix inspection, Myles returned to the Loch
Raven store. He testified that “Mike” gave him a refund and told him that Rent-A-Center could
retrieve the couch; however, the store would not pay for pest treatment unless Myles executed a
release. (ECF No. 92–2 at 29.) Myles thought this proposition was “ludicrous,” and he told
“Mike” he would “just think about it.” (Id. at 30.) Myles further testified that (1) “Mike” told
him someone would be out to retrieve the couch within a couple of days but (2) no one from
Rent-A-Center ever collected the couch or otherwise contacted him. (Id.) David Johnston,
however, testified that his team attempted at least four times to retrieve the couch but that Myles
refused their assistance. (ECF No. 92–4 at 6-7.)
The ultimate disposition of the couch is somewhat unclear. Myles recalled that he
arranged for a “gentleman in [his] neighborhood that picks up things on eviction day” to remove
the couch. (ECF No. 92–2 at 30, 33.) Mike Boyd, however, testified that he and another
4
In this respect, Myles’s recollection differs somewhat from that of Amber Blake Johnson. According to Amber,
she and Dante Johnson were initially dispatched to inspect the couch; however, they could not actually retrieve the
couch until Terminix completed a separate inspection. (ECF No. 89–8 at 6.)
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Rent-A-Center employee called “Darnell” eventually retrieved the couch and “dumped it.” (ECF
No. 92–3 at 6.)
Whatever became of the couch, it is evidently no longer in Plaintiffs’
apartment—and by February 2015, after Myles hired a company called ABC Pest to steam-clean
the apartment, the infestation was seemingly resolved. (ECF No. 92–2 at 37.)
Myles brought suit in state court on December 22, 2014. (ECF No. 3.) Defendants
removed the action to this Court on February 3, 2015 (ECF No. 1), and they thereafter moved to
dismiss Counts III and IV (ECF No. 12). The Court denied that motion in an Order dated July 7,
2015 (ECF No. 19), and the case proceeded to discovery. Following the close of discovery,
Plaintiffs filed the pending Motion for Partial Summary Judgment (ECF No. 88); shortly
thereafter, Defendants filed their Motion for Summary Judgment (ECF No. 89). Both motions
are fully briefed and are ripe for decision.
II.
Standard of Review
When faced with cross-motions for summary judgment, the Court must consider each
motion separately on its own merits. Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003).
The Court will grant summary judgment to a party who demonstrates that (1) there is no genuine
dispute as to any material fact and (2) that party is entitled to judgment as a matter of law. Fed.
R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing predecessor to
current Rule 56(a)). No genuine issue of material fact exists if the opposing party fails to make a
sufficient showing on an essential element of its case as to which it would have the burden of
proof. Celotex Corp., 477 U.S. at 322-23. Moreover, the “mere existence of a scintilla of
evidence in support of the [opposing party’s] position” is insufficient to defeat a motion for
summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
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The facts themselves, and the inferences to be drawn therefrom, must be viewed in the
light most favorable to the party opposing summary judgment. Scott v. Harris, 550 U.S. 372,
378 (2007); Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008). Even so, the opponent may not rest
upon the mere allegations or denials of its pleading but must instead, by affidavit or other
evidentiary showing, set out specific facts showing a genuine dispute for trial. Fed. R. Civ. P.
56(c)(1). Supporting and opposing affidavits must be made on personal knowledge with such
facts as would be admissible in evidence and must affirmatively show the competence of the
affiant to testify to the matters stated therein. Fed. R. Civ. P. 56(c)(4).
III. Plaintiffs’ Claims as Against RAC
Defendants argue that RAC is entitled to summary judgment on all counts because Myles
entered a rental-purchase agreement with RAC East (a RAC subsidiary) but not with RAC itself.
(See ECF No. 89 at 26-27.) Appended to Defendants’ Motion for Summary Judgment is an
affidavit by Anthony Wagstaff, district manager for RAC East, in which Wagstaff avers that (1)
RAC East owned the couch at issue in this case; (2) RAC East operates the Loch Raven store,
while RAC has never operated that store; (3) RAC East employed the employees who worked at
the Loch Raven store during the relevant time period; and (4) RAC East (but not RAC) was party
to the rental-purchase agreement. (ECF No. 89–3 at 2.)
“It is well settled that ‘[a] corporation exists as a legal entity separate and distinct from its
corporate shareholders.’” Ademiluyi v. PennyMac Mortg. Inv. Tr. Holdings I, LLC, 929 F. Supp.
2d 502, 515 (D. Md. 2013) (alteration in original) (quoting Cancun Adventure Tours, Inc. v.
Underwater Designer Co., 862 F.2d 1044, 1047 (4th Cir. 1988)). “Therefore, ‘[u]nder the
doctrine of limited liability, a shareholder—including a corporate parent–may not be held liable
for the acts of a corporation.’” Id. (alteration in original) (emphasis added) (quoting Allen v.
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Bank of Am. Corp., Civ. No. CCB-11-33, 2011 WL 3654451, at *4 (D. Md. Aug. 18, 2011)); see
also United States v. Bestfoods, 524 U.S. 51, 61 (1998) (“It is a general principle of corporate
law deeply ‘ingrained in our economic and legal systems’ that a parent corporation . . . is not
liable for the acts of its subsidiaries.” (citation omitted)).
Of course, there are analytical
mechanisms through which a tort plaintiff can attempt to pin liability on a parent corporation,
e.g., through veil piercing or by establishing the existence of an actual-agency relationship with
respect to the allegedly tortious conduct. However, Plaintiffs here advance no such argument:
rather, they contend that RAC, “regardless of actual ownership or operation of the Towson RAC
store, could be found liable to Plaintiffs on an apparent agency theory.” (ECF No. 94 at 17.)
Under Maryland law, the “doctrine of apparent agency can be expressed in three
elements”: (1) the apparent principal must have created or acquiesced in “the appearance that an
agency relationship existed”; (2) the plaintiff must have “believe[d] that an agency relationship
existed and rel[ied] on that belief in seeking the services of the apparent agent”; and (3) the
plaintiff’s “belief and reliance” must have been “reasonable.”
Bradford v. Jai Med. Sys.
Managed Care Org., Inc., 93 A.3d 697, 707 (Md. 2014). The doctrine of apparent agency thus
includes both subjective and objective elements:
[A] plaintiff must show that the plaintiff subjectively believed that an . . . agency
relationship existed between the apparent principal and the apparent agent, and
that the plaintiff relied on that belief in seeking [services] from the apparent agent.
But the plaintiff must also show that the apparent principal created or contributed
to the appearance of the agency relationship and that the plaintiff’s subjective
belief was “justifiable” or “reasonable” under the circumstances—an objective
test.
Id.
In this case, there is some evidence from which a reasonable jury could conclude that
RAC created or acquiesced in the appearance of an agency relationship. The Loch Raven store
was evidently branded simply as a Rent-A-Center store (not as a Rent-A-Center East store); the
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rental-purchase agreement identifies “Rent-A-Center” as lessor; and Plaintiffs’ counsel notes in
his brief that the store lacked any conspicuous disclaimers (though, unhelpfully, counsel fails to
supply an affidavit or any admissible evidence in support of this statement). Given that the
“existence of an agency relationship is a factual matter,” Jackson v. 2109 Brandywine, LLC, 952
A.2d 304, 322 (Md. Ct. Spec. App. 2008), the Court might have been inclined to reserve the
question of apparent agency for the jury—that is, had Plaintiffs adduced evidence corresponding
to the second and third elements of the test.
But Plaintiffs adduced no such evidence. Indeed, there is nothing in Myles’s deposition
that would suggest he selected the Loch Raven store in reliance on RAC. Nor did he supply an
affidavit, a declaration, or any other evidence tending to show any such reliance. Rather, in
explaining why he visited the Loch Raven store on November 4, 2014, Myles testified that he
spotted the store—as well as an Aaron’s rental store—while driving home from another furniture
store; that he “didn’t have any intention of stopping anywhere else”; and that he “just had the
thought in [his] mind to stop in.” (ECF No. 92–2 at 7.) Myles further testified that, in choosing
between Rent-A-Center and Aaron’s, he mentally “[f]lipped a coin”; he added that Rent-ACenter was “on the right side of the road, so it was just easier,” but there was “[n]o particular
logic behind it.” (Id.) This is not the testimony of an individual who selected a retailer in
conscious reliance on the brand:
this is the testimony of an individual who was wholly
indifferent to the brand and merely dropped by the store on a whim. But the burden is on
Plaintiffs to provide a sufficient evidentiary basis from which a jury could find that each element
of the apparent-agency doctrine is satisfied: they have not done so here.
DiFederico v. Marriott International, Inc., 130 F. Supp. 3d 986 (D. Md. 2015), is
instructive. In that case, Judge Titus of this District rejected plaintiffs’ attempt to impute liability
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for an alleged wrongful-death tort occurring at the Marriott Islamabad Hotel to Marriott
International, Inc., the global franchisor. In addressing apparent agency, Judge Titus explained
that there was no evidence the decedent “made his decision to stay at the Hotel as a result of the
existence of the Marriott brand or his reliance upon the adequacy of Marriott’s security
procedures.” Id. at 992-93. Thus, even had Judge Titus “embrace[d] the view of those cases that
allow a recovery on the basis of apparent authority or agency by estoppel,” there was no “factual
basis in this case upon which such a recovery could be made.” Id. at 993; cf. Stenlund v.
Marriott Int’l, Inc., Civ. No. GJH-14-1544, 2016 WL 1203749, at *9 (D. Md. Mar. 22, 2016)
(“[U]nder Maryland law, the fact that [hotel] used [international franchisor’s] trade name and
trademarks . . . would not satisfy the objective element required to demonstrate the existence of
an apparent agency.”). But see Crinkley v. Holiday Inns, Inc., 844 F.2d 156, 167 (4th Cir. 1988)
(finding sufficient evidence to support submission of apparent-agency theory to jury where, inter
alia, wife testified that she and her husband had previously stayed at Holiday Inns and that they
used a Holiday Inn directory to locate another motel after they learned that their preferred
Holiday Inn was fully occupied, and where husband testified that he “did not know the difference
between a franchise inn and a company owned inn” and “would be greatly surprised to find out
that Holiday Inns was not involved in the operation” of the motel at issue).
Here, as in DiFederico (and unlike in Crinkley), there is no factual basis from which a
reasonable jury could conclude that Myles chose the Loch Raven store in reliance on the RAC
brand—or for any reason other than pure convenience (and a desire for a cheap sofa). Since
Defendants have produced unrefuted evidence showing that RAC has no direct ties to the Loch
Raven store, and since Plaintiffs have failed to advance a cognizable apparent-agency theory,
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RAC is entitled to JUDGMENT AS A MATTER OF LAW on each count in Plaintiffs’
Complaint and will be TERMINATED from these proceedings.
IV. Plaintiffs’ Fraud Claim as Against RAC East (Count IV)
In Count IV, Plaintiffs contend that Defendants “concealed the bed bug infestation and
represented that the Couch was of good quality, merchantable and fit for its ordinary and
intended use” so as to induce Myles to “apply for and accept a Rental-Purchase Agreement for
the Couch.” (ECF No. 3 ¶ 88.) Further, Plaintiffs contend that Defendants were “aware that the
Couch was not, in fact, of good quality” but was instead “infested with bed bugs,” or,
alternatively, that Defendants “deliberately failed to perform an inspection with the conscious
purpose to avoid learning the truth about the infestation.” (Id. ¶¶ 89-90.) Plaintiffs conclude that
this alleged intentional concealment amounted to fraudulent misrepresentation/nondisclosure.
Under Maryland law, a plaintiff seeking to prove fraud must show that
(1) the defendant made a false representation to the plaintiff, (2) the falsity of the
representation was either known to the defendant or the representation was made
with reckless indifference to its truth, (3) the misrepresentation was made for the
purpose of defrauding the plaintiff, (4) the plaintiff relied on the misrepresentation
and had the right to rely on it, and (5) the plaintiff suffered compensable injury as
a result of the misrepresentation.
Hoffman v. Stamper, 867 A.2d 276, 292 (Md. 2005). Moreover, the plaintiff must prove each of
these elements with clear-and-convincing evidence. Price v. Berman’s Auto., Inc., Civ. No.
14-763-JMC, 2015 WL 5720429, at *4 (D. Md. Sept. 28, 2015); see also Cunney v. Patrick
Commc’ns, LLC, Civ. No. JKB-13-2519, 2016 WL 3227994, at *12 (D. Md. June 13, 2016)
(explaining that, while at the summary-judgment stage the Court must view the facts in the light
most favorable to the nonmoving party, the Court “must nevertheless consider the plaintiff’s
ultimate evidentiary burden in determining whether there is a genuine issue of material fact to
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hold over for trial” and must therefore “view the evidence presented through the prism of the
substantive evidentiary burden” (quoting Anderson, 477 U.S. at 254)).
While Plaintiffs may well believe that RAC East has treated them unfairly, and while
RAC East may ultimately be held to answer for negligence (a point discussed in detail in Part V,
infra), Plaintiffs have utterly failed to adduce evidence tending to show that RAC East’s agents
knowingly or recklessly deceived them. On the contrary, the record is clear that these employees
aimed (however successfully or unsuccessfully) to deliver furniture free of pests.
For instance, David Johnston, who served as store manager during the relevant time
period, explained that the store’s “standard operating procedure” is to clean previously rented
items within 24–48 hours of their return: employees vacuum the furniture and spray it with
STERIFAB®, a bactericide/sanitizer. (ECF No. 92–4 at 5-6.) Johnston added that he personally
inspected every piece of furniture that came back to the store and that if there was “even a hint”
of bed-bug activity, “it was off to the dump.”
(Id. at 17-18.)
Johnston also noted that
pest-control technicians visited the Loch Raven store on a monthly basis to check for any
evidence of insects. (Id. at 22.)
Jason Parrott, a sales manager, echoed Johnston’s testimony: Parrott explained that the
store has a “24-hour policy” pursuant to which all returning furniture “has to be cleaned and
sanitized.” (ECF No. 89–5 at 7.) Parrott noted that store employees use STERIFAB®, which is
“supposed to kill any and all types of germs or . . . any debris.” (Id. at 8.) Parrott also described
the manner in which employees would retrieve merchandise in response to customer complaints
about bed bugs: he explained that they would take the suspect merchandise “right to the dump”
and would thereafter “do the full fumigation and [STERIFAB®] the whole vehicle before . . .
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do[ing] anything else.” (Id. at 18.) “We just want to make sure,” Parrott testified, “that it’s no
possible way that we can transfer the issue to something else.” (Id.)
Similarly, Mike Boyd testified that if an item of furniture was believed to be infested with
bed bugs, employees would pick it up and bring it back to the loading dock for David Johnston’s
evaluation; typically thereafter, they would “put it . . . back onto the truck, and . . . take it out to
the dump . . . [and thereafter] bring the truck back and bomb the truck overnight. Then [they
would] go out the next morning and spray it down with [STERIFAB®].” (ECF No. 92–3 at 7.)
Anthony Wagstaff, the district manager, added that employees would first spray suspect
merchandise with STERIFAB® and then dispose of it: “[W]hether it’s treated or not,” he
remarked, “it’s trash to us. Once it’s . . . discovered to have bed bugs, we consider it trash. It’s
junk. There’s no reason for us to try to recycle that to put it back out for rent.” (ECF No. 89–7
at 5.) Dante Johnson, a customer account representative, had a slightly different understanding
of the store’s policy: he testified that, rather than transporting an infested item to the junkyard,
the company would “wind up giving it to [the customer],” ostensibly to avoid any infestation in
the company’s trucks.
(ECF No. 89–9 at 7.)
But Johnson’s understanding of furniture
preparation was similar to that of Johnston and Parrott: “[M]ost of the time,” he testified, “if it’s
not new merchandise, I refurbish it even before it goes into the stock room. . . . What I do is I
take [the furniture] and I spray it down, you know, make sure I clean[] it real good, and then I
put it in the stock room. . . . But if it’s not rent-ready,” he added, “I don’t load it up. I have to
find something else, so I call another store to . . . replace it.” (Id. at 5.) Amber Blake Johnson
described in greater detail the process by which Rent-A-Center employees inspect furniture for
insects, and in particular for bed bugs: “We look for any type of droppings . . . or their shells, or
any little bugs . . . . We look for them in the cracks. We look for them on the surface, in the
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corners, under the flaps, under the cushions, in the zipper parts. We unzip[] the cushions. . . . We
inspect the whole couch.” (ECF No. 89–8 at 6.)
Indeed, Plaintiffs’ own expert entomologist, Paul J. Bello, testified that Rent-A-Center’s
documents “support . . . that they are supposed to be delivering bed bug free furniture.” (ECF
No. 89–10 at 33.) “Look at what their policies and procedures are and what they are talking
about,” he advised. “Those are efforts to deliver pest free furniture.” (Id.) Bello further opined
that it is “irrefutable” that Rent-A-Center aims to provide “bed bug free items.” (Id.) Elsewhere
in his deposition, Bello testified: “I think if you look at their documents that they provided as
their policies and procedures they are, in fact, trying to deliver zero bed bugs.” (Id. at 38.)
In response to this wealth of evidence tending to undercut Plaintiffs’ fraud theory,
Plaintiffs present two counterarguments. First, they posit that a jury could find that Rent-ACenter employees (1) performed an inspection and (2) detected at least one bed bug but (3)
elected to rent the couch to Myles anyway.
Plaintiffs base their conjecture on deposition
segments in which David Johnston and Dante Johnson opined that Rent-A-Center employees are
trained to spot bed bugs and would have detected bugs if, in fact, such bugs appeared on the
merchandise within hours of delivery. (ECF No. 94 at 9.) Plaintiffs also cite Johnston’s
admission that he was very profit-oriented. (Id. at 10.) As for Johnston’s and Johnson’s puffery,
that is at most a scintilla of evidence that is dwarfed by all deponents’ express testimony that
they would never intentionally supply an infested piece of furniture and by Bello’s testimony that
Rent-A-Center’s policies are designed to prevent infestation.5 And as for Johnston’s profit
admission, here Plaintiffs grossly misconstrue Johnston’s testimony. In fact, Johnston explained
5
Moreover, read in context, Johnston’s point was that the team would have discovered bed bugs had the couch in
fact been infested, and therefore, Johnston believes that the infestation was a preexisting condition in Plaintiffs’
apartment. (ECF No. 92–4 at 18-19.) As discussed below, the Court is not in a position to determine the source of
the infestation at the summary-judgment stage.
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that his bonus structure was based on profit and that many of his customers were return
customers: “That was a huge amount of our business that was return business, followed closely
by referrals. I knew that if I sold a piece knowingly bad to somebody that I wouldn’t get the
return business and I wouldn’t get the referral business. I was very, very much oriented on
making money.” (ECF No. 92–4 at 12.) In other words, Johnston perceived that the best way to
achieve profit was to supply quality merchandise and win customer trust.
Plaintiffs’ second argument is weaker still: they suggest that, “[n]otwithstanding RAC’s
policy to inspect for bed bugs . . . no inspection was actually performed.” (ECF No. 94 at 10.)
Further, Plaintiffs speculate, “RAC understood the risk that previously rented furniture could
contain bed bugs,” and a “jury could infer that a failure to perform an inspection of a previously
leased couch constitutes willful ignorance.” (Id. at 11.) Plaintiffs base their speculation on a
highly selective interpretation of RAC’s claim files. (See ECF No. 94–16.) But these claim files
shed little light on the company’s commitment (or lack thereof) to bed-bug prevention and
remediation. Of the thirty-nine claim files included in the summary-judgment record (reporting
claims arising from transactions at stores across Maryland during a period just shy of fourteen
months),6 seventeen claims were denied in situations in which the customers filed their initial
complaints months after taking delivery of RAC’s merchandise: the company can hardly be
faulted for declining to settle such stale claims, and the mere fact that the claims were presented
is not evidence of a raging bed-bug pandemic at Rent-A-Center. Another seven claims were
denied either because Terminix found no evidence of bed-bug activity or because Terminix could
not determine whether the bed bugs constituted a preexisting condition. Three additional claims
6
According to Paul Bello’s supplemental report, Defendants actually produced eighty-three claim files. (See ECF
No. 94–7 at 2.) The supplemental report includes a spreadsheet with very brief summaries of the claims, but
Plaintiffs only produced thirty-eight files for the Court’s inspection (some of which files are plainly incomplete).
Defendants produced one additional file, corresponding to the single claim (apart from Plaintiffs’) pertaining to the
Loch Raven store during the relevant period.
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were closed due to lack of interest by the customer. Thus, over two-thirds of the claims in the
summary-judgment record cannot seriously be construed as supporting Plaintiffs’ theory that RAC
willfully fails to inspect its furniture; the remaining claims present at most a mixed narrative.7
No reasonable jury could find, on the basis of this record, clear-and-convincing proof
that RAC East’s agents knowingly or recklessly made false representations to Myles (with the
requisite fraudulent intent). RAC East is therefore entitled to JUDGMENT AS A MATTER OF
LAW on Count IV.
Furthermore, because Count IV is the only count containing a
punitive-damages allegation, Plaintiffs’ claim for punitive damages is necessarily DISMISSED.
V.
Plaintiffs’ Remaining Claims as Against RAC East (Counts I–III)
Apart from their fraud claim, Plaintiffs accuse Defendants of negligence; breach of
express warranty and of the implied warranty of merchantability, Md. Code Ann., Com. Law
§§ 2A-210, -212;8 and violation of the MCPA. None of these counts require Plaintiffs to prove
scienter;9 moreover, these claims are measured by the conventional preponderance-of-the-
7
Some of these claims resulted in settlement; others were treated as mere reports, as the customers did not seek
compensation. One claim apparently resulted in litigation, the outcome of which is unclear.
8
In their memorandum in support of their Motion for Partial Summary Judgment, Plaintiffs also allude to the
implied warranty of fitness for a particular purpose, Md. Code Ann., Com. Law § 2A-213. (See ECF No. 88–1 at 4.)
However, Plaintiffs neither explain how RAC East’s agents “ha[d] reason to know of any particular purpose for
which the [couch] [was] required” nor describe how their planned use for the couch differed from the ordinary use
of such furniture. Consequently, Plaintiffs’ claim seems to fit more naturally under § 2A-212 (merchantability) than
under § 2A-213 (fitness). See Ford Motor Co. v. Gen. Accident Ins. Co., 779 A.2d 362, 375 (Md. 2001) (“[T]he
particular purpose must be distinguishable from the normal use of the goods; [t]he purpose must be peculiar to the
buyer as distinguished from the ordinary or general use to which the goods would be put by the ordinary buyer.”
(internal quotation marks and citations omitted)); accord Montgomery v. CSX Transp., Inc., Civ. No. SAG-14-1520,
2015 WL 770470, at *5 (D. Md. Feb. 20, 2015); Casey v. Geek Squad Subsidiary Best Buy Stores, L.P., 823 F.
Supp. 2d 334, 359 (D. Md. 2011).
9
At several points in their summary-judgment papers, Defendants suggest that Count III (Plaintiffs’ MCPA count)
requires proof of fraudulent intent. (See ECF Nos. 89 at 22 & 92 at 8.) In fact, the MCPA makes actionable a range
of misrepresentations, both fraudulent and nonfraudulent. See Luskin’s, Inc. v. Consumer Prot. Div., 726 A.2d 702,
718 (Md. 1999) (explaining that, while subsection (9) of Md. Code Ann., Com. Law § 13-301 requires proof of
scienter, subsections (1) and (3) do not). The Court is aware that several older cases from this District suggest that
the defendant’s actual knowledge of a material defect is an element of an MCPA claim. These cases rely on a subset
of Maryland cases involving the rental-housing market, in which cases Maryland courts have acknowledged that the
MCPA does not reach misrepresentations relating to defects arising after a lease is executed (ostensibly because
landlords might lack notice of such defects). E.g., Richwind Joint Venture 4 v. Brunson, 645 A.2d 1147, 1158-59
(Md. 1994), overruled in part by Brooks v. Lewin Realty III, Inc., 835 A.2d 616 (Md. 2003). In general, however,
15
evidence standard, and as such, they are easier to prove (and more likely, for that reason, to
survive summary judgment). Having reviewed the parties’ arguments, the Court has concluded
that neither RAC East nor Plaintiffs are entitled to summary judgment on Counts I–III: critical
fact questions remain in dispute, and these questions cannot be resolved at the Rule 56 stage.
The first such critical question is perhaps the most elemental: did the infestation giving
rise to Plaintiffs’ Complaint originate in the subject couch, or was it a preexisting condition in
Plaintiffs’ apartment? The evidence corresponding to this question seemingly favors Plaintiffs’
position: aside from Myles’s testimony that he first discovered a bed bug “within a couple of
hours” after the couch’s delivery (ECF No. 92–2 at 11), two third-party inspectors—Lewis
Bellamy, Jr., of Home Paramount and Sonny Hall of Terminix—contemporaneously reported
finding bed bugs on the couch (but nowhere else in the apartment). (See ECF Nos. 88–7 & 88–
8.) In his deposition, Bellamy testified that he “looked on the couch and found a couple bed
bugs on the couch itself” but that he did not see any bed bugs in the bedrooms. (ECF No. 92–6
at 7.) As for Hall, he affirmed that the infestation was “not a preexisting condition”; that he
thoroughly inspected the entire apartment; and that the only evidence of bed bugs was on the
couch. (ECF No. 92–5 at 8-9.) And while Plaintiffs’ expert, Paul Bello, did not actually inspect
the couch, upon reviewing photographic and video evidence, he opined that the couch likely
contained as few as twenty and as many as 100 bed bugs, nymphs, and eggs at the time of
delivery. (ECF No. 89–10 at 49.)
Maryland courts have held that to “to incur liability, [defendants] [do] not have to know of the falsity of their
representations. Nor must they have . . . the intent to deceive their purchasers in order to violate the [M]CPA.”
Hartford Accident & Indem. Co. v. Scarlett Harbor Assocs. Ltd. P’ship, 674 A.2d 106, 136 (Md. Ct. Spec. App.
1996), aff’d, 695 A.2d 153 (Md. 1997); accord Consumer Prot. Div. v. Morgan, 874 A.2d 919, 970 (Md. 2005);
Kamara v. Shapiro Brown & Alt, LLP, No. 0471, 2016 WL 1064432, at *10 n.7 (Md. Ct. Spec. App. Mar. 17,
2016); McCormick v. Medtronic, Inc., 101 A.3d 467, 493-94 (Md. Ct. Spec. App. 2014); cf. Reed v. Bank of Am.
Home Loans, Civ. No. PJM 13-3265, 2016 WL 3218720, at *9 (D. Md. June 10, 2016) (“Claims involving
misrepresentations or false statements to consumers which are actionable under the MCPA may not necessarily
constitute common law fraud. The MCPA bars a much broader range of ‘unfair or deceptive trade practices,’ [and]
many MCPA claims do not require scienter on the part of the defendant[.]” (footnotes omitted) (citations omitted)).
16
In their memorandum accompanying their Motion for Summary Judgment, Defendants
reference an “expert witness who will testify at trial that bed bugs more likely than not came
from Plaintiffs’ apartment, and not the Couch rented from RAC.” (ECF No. 92 at 2.) Assuming
this assertion is true, the Court is puzzled by Defendants’ choice not to place an expert report or
some other statement by this purported expert into the summary-judgment record: under Rule
56(c), a party “asserting that a fact cannot be or is genuinely disputed” must generally support
that assertion with material in the nature of admissible evidence. Relatedly, while Defendants
proffer David Johnston’s testimony that Terminix advised him that (1) they could not confirm
the source of the infestation and (2) Myles prevented their technician from inspecting the entire
residence, such testimony is inadmissible hearsay and is directly contradicted by Sonny Hall’s
testimony that he inspected the entire apartment. (Compare ECF No. 92–4 at 19, with ECF No.
92–5 at 9.) See Greensboro Prof’l Fire Fighters Ass’n, Local 3157 v. City of Greensboro, 64
F.3d 962, 967 (4th Cir. 1995) (explaining that hearsay evidence is “neither admissible at trial nor
supportive of an opposition to a motion for summary judgment”); see also Henslee v. FNU
Singleton, No. 1:13-cv-90-FDW, 2015 WL 4920260, at *4 n.1 (W.D.N.C. Aug. 18, 2015)
(“While at the summary judgment stage evidence need not be submitted in a form that would be
admissible at trial, ‘[n]onetheless, the content or substance of the evidence must be admissible.’”
(alteration in original) (citation omitted)).
However, Defendants also highlight Hall’s testimony that the couch he inspected “was
beige, possibly beige, and it looked more like a loveseat type sofa. It wasn’t a real large sofa, to
the best of [his] recollection.” (ECF No. 92–5 at 15.) This testimony is potentially more
problematic for Plaintiffs, because the subject couch is a brown sectional with three cushions
including a chaise. Moreover, Myles acknowledged that he had a second, smaller sofa in his
17
apartment: as he described it, “[i]t’s one . . . cushion, and it just—it’s folded—it’s two cushions,
but they’re together. So when it folds out . . . that one cushion separates into two . . . .” (ECF
No. 92–2 at 5.) Myles admitted that this small couch, which he kept for his children, would
“qualify” as a loveseat if it was bigger. (Id.) Additionally, neither Hall nor Bellamy could
definitively identify a photograph of the subject couch. (See ECF Nos. 92–5 at 20 & 92–6 at 9.)
This is not altogether surprising: these technicians, who may well view hundreds of pieces of
furniture every year, were deposed in March 2016, roughly sixteen months after their inspections
at Plaintiffs’ apartment. Nevertheless, based on the evidence in the record, a reasonable jury
could conceivably conclude that the source of the infestation is uncertain, and were a jury to so
conclude, RAC East could not be held liable for negligence, breach of warranty, or violation of
the MCPA: the onus is on Plaintiffs to prove their claim, which (in this case) necessarily
requires Plaintiffs to prove that the bed bugs came from RAC East’s couch.
Even if a jury concludes that the infestation originated in the subject couch, there remains
a second critical fact question: did Myles’s own negligence contribute to his injuries? Under
Maryland law,
“a plaintiff’s own conduct may constitute a bar to recovery if that plaintiff is
determined . . . to also be guilty of negligence which was a direct contributing
cause of the injury.” Likewise, in a breach of warranty claim, a plaintiff who uses
a product with knowledge of its defect contributes to any ensuing injury from use
of the product and is barred from recovery.
Cantrell v. Wirtgen Am., Inc., Civ. No. CCB-07-2778, 2011 WL 915324, at *11 (D. Md. Mar.
15, 2011) (alteration in original) (citations omitted). Myles acknowledged in his deposition that
he placed his pallet “right in front of the couch,” ostensibly so that he would not spread the
insects throughout his apartment. (ECF No. 92–2 at 14.) He also admitted that he could have
laid his pallet parallel to the couch against the opposing wall so that he would have been further
18
away from the bed bugs. (Id. at 16.) Nevertheless, he slept alongside the couch, and he
sustained ten bites that first night. (Id.) A jury might find Myles’s explanation about containing
the infestation reasonable; a jury could alternatively conclude, however, that Myles behaved
unreasonably, particularly by choosing to sleep so close to the couch. If a jury were to draw that
latter conclusion, Myles would presumably be barred from recovering for his injuries under the
contributory-negligence doctrine.10
Defendants suggest that Myles’s knowledge of the infestation “extended to his children,
who were not initially home with him, but who . . . Myles brought back to his home on
November 10, 2014.” (ECF No. 89 at 19.) According to Defendants, Plaintiffs A.M. and K.M.,
“through their father, assumed the risk of personal injury by entering a home and encountering a
Couch they knew, through their father, contained bed bugs.” (Id.) Here, the Court disagrees
with Defendants: pursuant to Md. Code Ann., Cts. & Jud. Proc. § 10-910, in an “action on
behalf of an infant to recover for death, personal injury, or property damage[,] the negligence of
the parent or custodian of the infant may not be imputed to the infant.” Although Maryland
courts have left open the possibility that a parent’s negligence could be so severe as to displace
the negligence of the underlying tortfeasor, such circumstances are extraordinary and rare.
Compare Caroline v. Reicher, 304 A.2d 831, 834 (Md. 1973) (“[I]t is only in the somewhat
extraordinary situation where the parent’s negligence is such as to constitute an independent and
superseding cause of the child’s injuries, that the dormant negligent act of another is
discharged.”), with Halliday v. Sturm, Ruger & Co., 770 A.2d 1072, 1080 n.4 (Md. Ct. Spec.
10
Myles’s conduct could also be characterized as assuming the risk of injury. However, the contributory-negligence
and assumption-of-risk doctrines overlap considerably, and the outcome here would be the same: Myles would be
barred from recovering for his injuries. See Poole v. Coakley & Williams Constr., Inc., 31 A.3d 212, 224 (Md.
2011) (“Contributory negligence defeats recovery because it is a proximate cause of the accident which happens, but
assumption of the risk defeats recovery because it is a previous abandonment of the right to complain if an accident
occurs.” (citation omitted)).
19
App. 2001) (“The relevant inquiry is ‘whether what occurred reasonably was to have been
anticipated as a result of . . . the defendant’s acts or omissions . . . .’” (alterations in original)
(citation omitted)). Myles’s conduct, in bringing his dependent children back to their home, does
not constitute an “independent and superseding cause” of their injuries: a lessor that rents out
infested consumer merchandise can properly be charged with foreseeing the risk that members of
the lessee’s household will sustain bites.
Assuming, then, that a jury finds that the bed bugs were attributable to the RAC East
sofa, Myles himself could nevertheless be barred from recovering on Counts I and II due to his
personal negligence,11 but his children would not be barred simply because he brought them back
to their home. However, should the jury find that (1) RAC East offered to remove the couch
from Plaintiffs’ apartment and (2) Myles refused, all Plaintiffs will be precluded from recovering
for injuries solely attributable to the ongoing presence of the couch pursuant to the doctrine of
avoidable consequences.12 See Royal Ins. Co. of Am. v. Miles & Stockbridge, P.C., 133 F. Supp.
2d 747, 757 (D. Md. 2001) (“Under Maryland law, a party . . . ha[s] a duty to mitigate damages
under the doctrine of avoidable consequences.” (citing Sergeant Co. v. Pickett, 401 A.2d 651,
652 (Md. 1979))), reconsideration granted on other grounds, 138 F. Supp. 2d 695 (D. Md.
2001); Jones v. Malinowski, 473 A.2d 429, 435 (Md. 1984) (“Our cases . . . recognize the
doctrine of ‘avoidable consequences’ in tort actions—the duty to minimize damages—denying
recovery of any damages that could have been avoided by reasonable conduct on the part of the
plaintiff.”); Restatement (Second) of Torts § 918 (Am. Law Inst. 1979) (“[O]ne injured by the
11
Although a plaintiff’s contributory negligence may bar recovery on a common-law negligence or breach-ofwarranty theory, Maryland courts have not clarified whether contributory negligence is an affirmative defense to an
MCPA claim for personal injury. See Benik v. Hatcher, 750 A.2d 10, 34 n.4 (Md. 2000) (Rodowsky, J., dissenting).
12
In so holding, the Court acknowledges that the jury may struggle, as a practical matter, to determine the extent to
which the ongoing presence of the couch contributed to or worsened Plaintiffs’ injuries. Indeed, questions of
causation and timing can prove thorny, but that is precisely why these questions are properly reserved for a jury to
sort out in light of trial testimony rather than for the Court to resolve on summary judgment.
20
tort of another is not entitled to recover damages for any harm that he could have avoided by the
use of reasonable effort or expenditure after the commission of the tort.”).
Unfortunately, the Court cannot conclusively determine from this record whether/when
Myles declined RAC East’s offer. Myles himself testified that he told the RAC East crew who
visited his apartment on November 10, 2014, to leave the couch in his apartment until Terminix
completed its inspection. (ECF No. 92–2 at 20.) However, Amber Blake Johnson (one of the
crew members) recalled that she and Dante Johnson, another crew member, told Myles they
could not remove the sofa until Terminix reported back to RAC East. (ECF No. 89–8 at 6.) The
record is further muddled by contrary statements about RAC East’s subsequent attempts to
retrieve the sofa. According to Myles, “Mike” had promised (but failed) to have the couch
removed on November 17, 2014; Myles further testified that (1) he spoke with “Mike” on
November 18, 2014; (2) “Mike” represented that someone would pick up the couch within a
couple of days; but (3) Myles never heard back (though Myles also admitted that he never
attempted to contact the store again). (ECF No. 92–2 at 28-30, 33.) However, David Johnston
testified that his team “tried at least four times” to pick up the couch but that Myles “refused to
return it.” (ECF No. 92–4 at 6-7.) And Jason Parrott testified that Myles initially refused to
surrender the couch as he “wanted to wait until Terminix came and did the inspection” and that
the RAC East crew “came out a few times after that, and he wasn’t available, so [they] never
picked the couch up.” (ECF No. 89–5 at 19.) As noted above, it is not even clear what
ultimately became of the couch: Mike Boyd averred that he and “Darnell” collected the couch
and “dumped it” (ECF No. 92–3 at 6), whereas Myles insisted that he arranged for a gentleman
in his community to remove it (ECF No. 92–2 at 30). All of these factual inconsistencies will
require jury analysis: they cannot be resolved on summary judgment. But assuming this case
21
actually proceeds into a trial posture, the parties are on notice that the Court will instruct the jury
not to award any damages to Plaintiffs for injuries that could have been avoided, provided the
jury finds that RAC East offered to remove the couch and Myles declined.
VI. Conclusion
For the foregoing reasons, an Order shall enter DENYING Plaintiffs’ Motion for Partial
Summary Judgment (ECF No. 88); GRANTING IN PART and DENYING IN PART
Defendants’ Motion for Summary Judgment (ECF No. 89); and TERMINATING Defendant
RAC from these proceedings.
DATED this 19th day of July, 2016.
BY THE COURT:
/s/
James K. Bredar
United States District Judge
22
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