Kaakyire v. King Buick GMC, LLC et al

Filing 80

MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 9/2/14. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
LATECHIA CHAMBERS, et al.
:
v.

:

Civil Action No. DKC 13-2347

:
KING BUICK GMC, LLC, et al.
:
MEMORANDUM OPINION
Numerous motions are pending and ready for resolution in
this putative class action civil RICO case, including: (1) a
motion to dismiss the federal claims or to abstain filed by
Defendants King Auto of Silver Spring LLC; King Buick GMC, LLC
(“King Buick GMC”); King Hagerstown Motors LLC; King Lincoln,
Inc.; King Vehicles, LLC; and King Volkswagen, LLC (ECF No. 34);
(2) a separate motion filed by King Buick GMC, LLC to dismiss
the claims in Counts I through VII of the amended complaint (ECF
No. 36); (3) a motion to dismiss or, in the alternative, for
summary judgment on Counts I through VII, filed by King Auto of
Silver Spring, LLC; King Hagerstown Motors LLC; King Lincoln,
Inc.; King Vehicles, LLC; and King Volkswagen, LLC (ECF No. 37);
(4) a motion to consolidate cases filed by Plaintiff Latechia
Chambers (ECF No. 63); (5) a motion for leave to file surreply
and supplemental Rule 56(d) Declaration filed by Plaintiff (ECF
No.

68);

and

(6)

a

motion

to

strike

three

notices

of

supplemental authority filed by Defendants (ECF No. 73).

The

issues have been fully briefed, and the court now rules, no
hearing being deemed necessary.

Local Rule 105.6.

For the

following reasons, Defendants’ motion to dismiss federal claims
or to abstain will be granted in part.

King Buick GMC’s motion

to dismiss will be granted in part, and the other Defendants’
motion

to

dismiss

or

for

summary

judgment

will

be

granted.

Plaintiff’s motion for leave to file surreply and supplemental
Rule 56(d) Affidavit and motion to consolidate cases will be
denied.

Defendants’ motion to strike Plaintiff’s notices of

supplemental authority will be denied.
I.

Background
This case traces its origin to March 17, 2011 and February

18, 2012, when Comfort Kaakyire and Latechia Chambers purchased,
respectively, a used 2008 Saturn Outlook and 2010 Dodge Caliber
from King Buick GMC.

(ECF No. 22 ¶ 18).

Ms. Kaakyire and Ms.

Chambers each executed a Buyer’s Order with King Buick GMC,
which did not indicate that these vehicles were prior short-term
rentals.

(See

ECF

No.

22-2).

Ms.

Kaakyire

instituted

a

putative class action lawsuit in the Circuit Court for Howard
County on January 13, 2013, and later transferred the case to
the Circuit Court for Montgomery County.

On May 14, 2013, Ms.

Kaakyire filed a first amended class action complaint in the
Circuit Court for Montgomery County, on behalf of herself and a
2

class of similarly situated consumers, alleging violations of
COMAR

11.12.01.14(M)(1)

due

to

King

Buick

GMC’s

failure

to

disclose the prior use of sold vehicles as short-term rental
vehicles.

This provision governs disclosure of former vehicle

use:
(1) Vehicles formerly used for a purpose
other than a consumer good shall be clearly
and conspicuously identified as to their
former use.
This includes, but is not
limited to, vehicles formerly used:
. . .
(f) As short-term rental vehicles.
COMAR 11.12.01.14(M)(1)(f).
On August 2, 2013, Ms. Kaakyire’s counsel filed a notice of
voluntary dismissal in the state court action, and subsequently
filed a class action complaint in this court on August 12, 2013
against

the

following

Defendants:

King

Buick

GMC;

and

King

Lincoln, Inc., King Auto of Silver Spring, LLC, King Vehicles,
LLC, King Hagerstown Motors LLC, and King Volkswagen, LLC (“the
Other Dealer Defendants”).
separate

motions

to

(ECF No. 1).

dismiss,

but

The Defendants filed

before

the

motions

were

adjudicated, Plaintiff filed an amended complaint on October 17,
2013, adding Latechia Chambers as a Named Plaintiff.
22).

(ECF No.

On October 22, 2013, Defendants tendered a Rule 68 Offer

of Judgment to Ms. Kaakyire, which she accepted.

(ECF No. 24).

On December 13, 2013, the undersigned entered judgment against
3

Defendants as to Ms. Kaakyire’s claims, and she was dismissed
from

the

lawsuit.

(ECF

No.

45).

Thus,

Latechia

Chambers

remains the only putative Named Plaintiff here.1
The amended complaint by Ms. Chambers against all of the
Defendants

states

that

Defendants

misrepresented

the

prior

short-term rental use of the vehicles sold to Plaintiff and
members of the putative class in a pre-printed space on the
Buyer’s Order specifically designed for the disclosure of this
information.

Although

Defendants

argue

that

Plaintiff

was

provided with a CarFax Report that revealed that the vehicle was
a prior short-term rental, there is a dispute about whether the
CarFax Report was provided to Plaintiff before she executed the
purchase documents and whether Plaintiff initialed the CarFax
Report

as

Defendants

indicate.

(See

ECF

No.

34-5,

at

2).2

Plaintiff alleges that Defendants failed to disclose to her and
members
vehicles

of

the

they

class

“clearly

purchased

were

and

conspicuously”

previously

used

as

that

the

short-term

1

Ms. Chambers will be referred to as “Plaintiff” throughout
the memorandum opinion.
2

Defendants include as an exhibit to their motion to
dismiss a copy of the Carfax Report for the 2010 Dodge Caliber
that Plaintiff purchased. In this document, the fact that this
car was a prior rental is shown as highlighted and Ms. Chambers
appears to have initialed the CarFax Report. (See ECF No. 34-5,
at 2). Ms. Chambers declares in an affidavit, however, that she
does “not recall anyone at the dealership showing her a Carfax
report or asking her to sign or initial it.” (See ECF No. 48-2,
at 33). She cannot verify whether the initials are hers.
4

rentals in violation of Maryland law.

The amended complaint

states:
[a]s
the
Maryland
Motor
Vehicle
Administration (“MVA”) recognized when it
enacted
COMAR
regulations
requiring
disclosure of prior short-term rental use,
[] buyers seek to avoid vehicles used for
short-term rentals because of the perception
and expectation that these vehicles are
driven hard by drivers who care little about
them, may not have been well or consistently
maintained, and more often are involved in
accidents than vehicles uses for personal,
family, and household purposes.
(ECF

No.

22

¶

3).

In

Plaintiff’s

view,

this

omission

was

intentional and part of a fraudulent scheme by King Buick and
the Other Dealer Defendants - to whom she refers collectively as
the “King Auto Group” - of selling used short-term rental cars
without
elsewhere

disclosing
clearly

their
and

origins

in

conspicuously.

the

Buyer’s

Plaintiff

Order

asserts

or
that

Defendants consistently failed to make the requisite disclosures
before consummating the sale transactions with car purchasers.
COMAR 11.12.01.14(A)(2) defines “clear and conspicuous” as:
a
statement,
representation,
or
term
different
from
other
statements,
representations or terms being made so as to
be readily noticeable to the person to whom
it is being disclosed either by its size,
sound, length of time, color, placement in
the advertisement, or the like.
Plaintiff maintains that “Defendants deliberately designed their
standard sales agreements in a manner calculated to not draw

5

attention to any disclosure of prior rental or other commercial
use.”

(ECF No. 22 ¶ 36).
Plaintiff asserts that the King Auto Group Defendants are

all separately incorporated businesses that associate together
as “King Auto Group,” as an association-in-fact, although there
is no formal, legal entity with that name.

These dealerships

jointly market and sell vehicles and develop form documents such
as

the

Buyer’s

Orders

used

at

each

dealership.

Plaintiff

asserts:
Defendants
have
an
agreement
to
work
together to market and sell used vehicles
and actively are doing so.
Defendants’
cross-marketing
and
commingling
and/or
sharing of inventory and Carfax reports is
evidence
of
their
cooperation,
joint
agreements, and use of common procedures and
documents to unlawfully sell such used
vehicles without the disclosure required by
Maryland law.
(ECF

No.

22

¶

49).

Plaintiff

believes

that

all

of

the

Defendants conspired to market and sell used vehicles without
disclosing to consumers that the vehicles were previously used
as

short-term

rentals.

(Id.

¶

45).

Plaintiff

states

that

Defendants King Lincoln, Inc. and King Vehicles, Inc. did not
sell prior short-term rental vehicles in their own name but
routinely sold these vehicles through “their King Auto Group coconspirators – King Buick, King Volkswagen, LLC, King Hagerstown

6

Motors, LLC or King Auto of Silver Spring, LLC.”

(Id. ¶ 44).

Plaintiff further contends:
[a]s part of its scheme to mislead customers
into believing that vehicles used for prior
short-term rentals were never put to such
use, King Auto Group dealerships further
agreed to employ, and from time to time did
employ, a form entitled “Disclosure of Prior
Vehicle Use for Dealership or Commercial
Purposes[.]” [] This form . . . is provided
to buyers only after they have signed the
sales agreement and thus become legally
bound to purchase a vehicle, does not
provide
the
“clear
and
conspicuous”
disclosure
of
prior
non-consumer
use
required by law.
(Id. ¶ 39).
vehicle

The amended complaint identifies fifteen additional

sale

transactions

over

a

two-year

period

in

which

Defendants King Volkswagen LLC, King Hagerstown Motors, LLC, and
King Auto of Silver Spring, LLC allegedly perpetrated the same
fraudulent

scheme

to

induce

short-term rental vehicles.

consumers

(Id. ¶ 43).

into

purchasing

prior

Plaintiff alleges that

she paid significantly more for her vehicle than it was worth
and was overcharged as a result of the scheme.
The amended complaint asserts the following counts: implied
warranty

of

merchantability

(count

I);

violations

of

the

Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. §§ 2301, et seq.
(count II) and the Maryland Consumer Protect Act (“MCPA”) (count
III); deceit by non-disclosure or concealment (count IV); unjust
enrichment (count V); negligent misrepresentation (Count VI);

7

breach of contract (count VII); and violations of the Federal
Racketeer Influence and Corrupt Organizations Act (“RICO”), 18
U.S.C.

§§

Defendants

1962(a),(c),
filed

and

separate

(d)

(counts

motions

to

VIII,

IX,

dismiss.

All

and

X).

of

the

Defendants filed a motion to dismiss the federal claims (RICO
and the MMWA) or, in the alternative, for abstention (ECF No.
34).

King

Buick

GMC

filed

a

addressing the non-RICO claims.

separate

motion

(ECF No. 36).

to

dismiss

The Other Dealer

Defendants filed a separate motion to dismiss or for summary
judgment on the non-RICO claims.
have been fully briefed.3

(ECF No. 37).

All the motions

On April 18, 2014, Plaintiff moved for

leave to file a surreply and submit a supplemental Rule 56(d)
Affidavit.

(ECF No. 68).

Plaintiff also moved to consolidate

this matter with another putative class action against the same
Defendants pending before the undersigned.

(See ECF No. 63).

Plaintiff filed multiple notices of supplemental authority (ECF
Nos. 50, 64, 71, 76).

Defendants moved to strike these notices,

deeming them as impermissible surreplies.

(ECF No. 73).4

3

On October 18, 2013, Plaintiff filed a motion to certify
the class, but requested that this motion be held in abeyance
pending adjudication of Defendants’ motion to dismiss. (ECF No.
23).
The undersigned issued a paperless order on November 4,
2013, holding the motion for class certification in abeyance.
(ECF No. 31).
4

Plaintiff has filed four notices of supplemental
authority.
(ECF Nos. 50, 64, 71, 76).
Defendants argue that
these notices of supplemental authority are improper because
8

II.

Standards of Review
A.
All

claims.
the

Motion to Dismiss
of

the

Defendants

move

to

dismiss

Plaintiff’s

RICO

King Buick GMC also filed a separate motion to dismiss

non-RICO

claims.

A

motion

to

dismiss

pursuant

to

Fed.R.Civ.P. 12(b)(6) tests the sufficiency of the complaint.
Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir.
2006).

A plaintiff’s complaint need only satisfy the standard

of Rule 8(a), which requires a “short and plain statement of the
claims

showing

that

Fed.R.Civ.P. 8(a)(2).
rather

than

a

blanket

the

pleader

is

entitled

to

relief.”

“Rule 8(a)(2) still requires a ‘showing,’
assertion,

of

entitlement

to

relief.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).

That

showing must consist of more than “a formulaic recitation of the
elements of a cause of action” or “naked assertion[s] devoid of
further factual enhancement.”

Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009) (internal quotation marks omitted).

they actually are surreplies consisting of addition arguments to
support Plaintiff’s opposition to Defendants’ motions and
concern
non-binding
authority.
Defendants
dispute
the
applicability of the cases Plaintiff submitted as supplemental
authority to the instant dispute and reargue the merits of their
own position.
Granting Defendants’ motion to strike would not
preclude the court from applying any existing precedent or
considering any other authority.
See Carter v. Astrue, Civ.
Action No. CBD-11-2980, 2013 WL 4461579, at *3 (D.Md. Aug. 19,
2013)
(denying
motion
to
strike
notice
of
supplemental
authority). Defendants’ motion to strike will be denied.
9

At this stage, the court must consider all well-pleaded
allegations in a complaint as true, Albright v. Oliver, 510 U.S.
266, 268 (1994), and must construe all factual allegations in
the

light

most

favorable

to

the

plaintiff,

see

Harrison

v.

Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.
1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134
(4th Cir. 1993)).

In evaluating the complaint, the court need

not accept unsupported legal allegations.

Revene v. Charles

Cnty. Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989).

Nor must it

agree with legal conclusions couched as factual allegations,
Iqbal, 556 U.S. at 678, or conclusory factual allegations devoid
of any reference to actual events, United Black Firefighters v.
Hirst,

604

F.2d

844

(4th

Cir.

1979);

see

also

Giacomelli, 588 F.2d 186, 193 (4th Cir. 2009).

Francis

v.

“[W]here the

well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has alleged,
but it has not ‘show[n] . . . that the pleader is entitled to
relief.’”
8(a)(2)).

Iqbal,

556

U.S.

at

679

(quoting

Fed.R.Civ.P.

Thus, “[d]etermining whether a complaint states a

plausible claim for relief will . . . be a context-specific task
that

requires

the

reviewing

experience and common sense.”

court

to

draw

on

its

judicial

Id.

Moreover, allegations of fraud – which Plaintiff raises in
both her RICO and state law claims – are subject to a heightened
10

pleading standard under Rule 9(b).

Harrison, 176 F.3d at 783.

Rule 9(b) states that “in alleging a fraud or mistake, a party
must state with particularity the circumstances constituting the
fraud

or

mistake.

Malice,

intent,

knowledge,

and

conditions of a person’s mind may be alleged generally.”

other
Such

allegations typically “include the ‘time, place and contents of
the false representation, as well as the identity of the person
making the misrepresentation and what [was] obtained thereby.’”
Superior

Bank,

F.S.B.

v.

Tandem

Nat’l

Mortg.,

Inc.,

197

F.Supp.2d 298, 313-14 (D.Md. 2000) (quoting Windsor Assocs.,
Inc. v. Greenfeld, 564 F.Supp. 273, 280 (D.Md. 1983)).

In cases

involving concealment or omissions of material facts, however,
meeting Rule 9(b)’s particularity requirement will likely take a
different form.

See Shaw v. Brown & Williamson Tobacco Corp.,

973 F.Supp. 539, 552 (D.Md. 1997) (recognizing that an omission
likely “cannot be described in terms of the time, place, and
contents of the misrepresentation or the identity of the person
making

the

misrepresentation”

(internal

quotations

omitted)).

The purposes of Rule 9(b) are to provide the defendant with
sufficient notice of the basis for the plaintiff’s claim, to
protect

the

defendant

against

frivolous

suits,

to

eliminate

fraud actions where all of the facts are learned only after
discovery, and to safeguard the defendant’s reputation.
Harrison, 176 F.3d at 784.

See

In keeping with these objectives,
11

“[a] court should hesitate to dismiss a complaint under Rule
9(b) if the court is satisfied (1) that the defendant[s were]
made aware of the particular circumstances for which [they] will
have to prepare a defense at trial and (2) that [the] plaintiff
has substantial prediscovery evidence of those facts.”
B.

Id.

Summary Judgment Standard

The Other Dealer Defendants move to dismiss or, in the
alternative,

for

summary

judgment

on

the

non-RICO

counts.

Summary judgment may be entered only if there is no genuine
dispute as to any material fact and the moving 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); Emmett v. Johnson,
532

F.3d

291,

297

(4th

Cir.

2008).

Summary

judgment

is

inappropriate if any material factual issue “may reasonably be
resolved in favor of either party.”

Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 250 (1986); JKC Holding Co. LLC v. Wash.
Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001).
“A party opposing a properly supported motion for summary
judgment ‘may not rest upon the mere allegations or denials of
[his]

pleadings,’

but

rather

must

‘set

forth

specific

showing that there is a genuine issue for trial.’”

facts

Bouchat v.

Balt. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir.
2003) (quoting former Fed.R.Civ.P. 56(e)).
proof

.

.

.

will

not

suffice
12

to

prevent

“A mere scintilla of
summary

judgment.”

Peters v. Jenney, 327 F.3d 307, 314 (4th Cir. 2003).

“If the

evidence is merely colorable, or is not significantly probative,
summary judgment may be granted.”
249-50 (citations omitted).

Liberty Lobby, 477 U.S. at

At the same time, the facts that

are presented must be construed in the light most favorable to
the party opposing the motion.

Scott v. Harris, 550 U.S. 372,

278 (2007); Emmett, 532 F.3d at 297.
III. Analysis
A.

RICO Claims

Plaintiff asserts three claims for racketeering pursuant
to RICO’s civil provision, 18 U.S.C. § 1964, which provides a
cause of action to “[a]ny person injured in his business or
property

by

reason

of

a

violation

5

of

[18

U.S.C.

§

1962].”5

Although the Other Dealer Defendants have raised standing
as an issue in their motion to dismiss or, in the alternative,
for summary judgment on the non-RICO claims, they have not
briefed the argument that Plaintiff lacks standing to assert
RICO claims against them in the motion to dismiss the federal
claims.
The sole mention of standing in Defendants’ motion to
dismiss the RICO counts is that Plaintiff lacks standing “to
assert RICO claims against the Unrelated Defendants because they
do not owe any legal duty to [her].”
(ECF No. 34-1, at 6).
Plaintiff need not allege that the Other Dealer Defendants owed
a legal duty to Ms. Chambers in order to state a civil RICO
claim, however. Furthermore, although King Buick GMC joins the
Other Dealer Defendants in their motion to dismiss the RICO
claims, the arguments made in the brief largely concern
Plaintiff’s failure to plead a civil RICO case against the Other
Dealer Defendants, not King Buick GMC.
13

Plaintiff alleges that all Defendants violated Section 1962(a),
(c), and (d).6
In order for a civil RICO claim to survive a Rule 12(b)(6)
motion to dismiss, plaintiff must allege “(1) conduct; (2) of an
enterprise;
Sedima,

(3)

through

S.P.R.L.

v.

a

Imrex

pattern;
Co.,

473

(4)

of

racketeering.”

U.S.

479,

496

(1985).

Plaintiff must additionally plead proximate cause, that is she
was injured in her business or property “by reason of” the RICO
violation.

Hemi Group, LLC v. City of New York, N.Y., 559 U.S.

1, 6 (2010).

Defendants argue that Plaintiff has failed to

allege: (1) a RICO enterprise separate and distinct from the
6

In relevant part, Title 18, Section 1962 states:
(a) It shall be unlawful for any person who
has received any income derived, directly or
indirectly, from a pattern of racketeering
activity . . . to use or invest, directly or
indirectly, any part of such income, or the
proceeds of such income, in acquisition of
any interest in, or the establishment or
operation
of,
any
enterprise
which
is
engaged in, or the activities of which
affect, interstate or foreign commerce.
(c) It shall be unlawful for any person
employed
by
or
associated
with
any
enterprise engaged in, or the activities of
which
affect,
interstate
or
foreign
commerce,
to
conduct
or
participate,
directly or indirectly, in the conduct of
such enterprise’s affairs through a pattern
of racketeering activity.
(d) It shall be unlawful for any person to
conspire to violate any of the provisions of
subsection (a), (b), or (c) of this section.
14

persons as required by Section 1962(c); (2) a RICO enterprise
separate and apart from the pattern of racketeering activity;
(3)

predicate

acts

of

racketeering;

(4)

a

pattern

of

racketeering activity; (5) effect on interstate commerce; (6) as
to

the

Section

1962(a)

claim,

investment

of

proceeds

from

racketeering activity; and (7) as to the Section 1962(d) claim,
lack

of

a

conspiracy

because

there

was

no

underlying

RICO

violation.7

7

Defendants argue that Plaintiff’s claims are routine
allegations of state tort law beyond the intended scope of the
RICO statute. (ECF No. 34-1, at 17-18).
Citing HMK Corp. v.
Walsey, 828 F.2d 1071 (4th Cir. 1987), Defendants assert that
Plaintiff attempts to turn her dispute “over application of the
MVA and COMAR regulations into a claim of ongoing criminal
activity[, which] would convert ordinary contract claims into
RICO actions and this is what the Fourth Circuit forbids.” (ECF
No. 34-1, at 18).
Walsey involved alleged misconduct of
developers in a land use dispute and did not amount to a pattern
of racketeering activity. Notably, the court observed:
[a]lthough we hold that no pattern exists in
the present case, we want to make clear that
the pattern requirement certainly does not
bar all RICO claims arising in the zoning
context. . . . We note that a plaintiff who
alleged pervasive involvement by a developer
in the political process through widespread
racketeering activity could indeed meet the
pattern requirement.
Walsey, 828 F.2d at 1075.
Thus, the fact that the instant
dispute arises in a commercial context does not, in and of
itself, take this case outside of the purview of RICO.
15

1.

RICO Enterprise

Defendants argue that Plaintiff has not properly alleged
the existence of a RICO enterprise.

Under 18 U.S.C. § 1962(c),

it is unlawful:
for any person employed by or associated
with any enterprise engaged in, or the
activities of which affect, interstate or
foreign commerce, to conduct or participate,
directly or indirectly, in the conduct of
such enterprise’s affairs through a pattern
of racketeering activity or collection of
unlawful debt.
“[T]o establish liability under § 1962(c) one must allege and
prove the existence of two distinct entities: (1) a ‘person’;
and (2) an ‘enterprise’ that is not simply the same ‘person’
referred to by a different name.”
Ltd.

v.

King,

533

U.S.

158,

161

Cedric Kushner Promotions,
(2001).

There

must

be

a

“person,” alleged to have violated Section 1962(c) and to be
liable to the claimant for damages, who is separate and distinct
from the “enterprise,” or tool, through which the RICO violation
occurred.

See Busby, 896 F.2d at 840-41.

individual or corporate entity.
be

multiple

persons

whose

A “person” can be an

18 U.S.C. § 1961(3).

association

with

the

There may
same

RICO

enterprise gives rise to multiple violations of Section 1962(c).
“Enterprise,” as set forth in 18 U.S.C. § 1961(4), “includes any
individual,

partnership,

corporation,

association,

or

other

legal entity, and any union or group of individuals associated

16

in fact although not a legal entity.”
characterized

by

“‘continuity,

identifiable structure.’”
(4th

1003

Cir.

1994)

unity,

A RICO enterprise is
shared

purpose

and

United States v. Fiel, 35 F.3d 997,

(citation

omitted).

An

“enterprise”

requires proof of three elements: (1) an ongoing organization;
(2) associates functioning as a continuing unit; and (3) the
enterprise is an entity “separate and apart from the pattern of
activity in which it engages.”

Proctor v. Metro. Money Store

Corp., 645 F.Supp.2d 464, 477-78 (D.Md. 2009).
Plaintiff argues that the King Auto Group constitutes an
association-in-fact

enterprise.

(ECF

No.

48,

at

76).

An

association-in-fact enterprise is not defined by a formal legal
structure, but is instead characterized by the association of
its members “for a common purpose of engaging in a course of
conduct.”
Unlike

United States v. Turkette, 452 U.S. 576, 583 (1981).

Section

1962(a),

Section

1962(c)

“envisions

the

enterprise as being different from, not the same as or part of,
the person” against whom recovery is sought.

New Beckley Mining

Corp. v. Int’l Union, United Mine Workers, 18 F.3d 1161, 1163
(4th Cir. 1994) (internal citations omitted).8

“For the purposes

of pleading, a corporation may be both a defendant ‘person’ and
8

The “distinctiveness” requirement is limited to Section
1962(c) claims; Section 1962(a) does not carry this requirement.
Busby v. Crown Supply, Inc., 896 F.2d 833, 841 (4th Cir. 1990)
(“[F]or a violation of Section 1962(a), the offender and the
enterprise need not be separate. They may be identical.”).
17

part of an association-in-fact enterprise.”

Crown Cork & Seal

Co. Inc. v. Ascah, No. 93-2933, 1994 WL 57217, at *4 (E.D.Pa.
Feb.

18,

1994).

To

be

organized,

an

association-in-fact

enterprise “need not have a hierarchical structure or a chain of
command; decisions may be made on an ad hoc basis and by any
number of methods.”
(2009).

On

the

Boyle v. United States, 556 U.S. 938, 948

other

hand,

“[v]ague

allegations

of

a

RICO

enterprise . . . lacking any distinct existence and structure”
will not survive dismissal.
Co.,

210

F.3d

696,

700

VanDenBroeck v. CommonPoint Mortg.

(6th

Cir.

2000),

abrogated

on

other

grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639
(2008).
Defendants argue that Plaintiff’s RICO allegations fail to
differentiate
thus

cannot

between
show

the

“person”

and

distinctiveness

the

under

“enterprise,”
Section

and

1962(c).

Defendants contend that Plaintiff has alleged an enterprise that
is “nothing more than the Defendants by a different name (‘King
Auto Group’).”

(ECF No. 34, at 20).

Defendants essentially

argue that because the “King Auto Group” is comprised of the
individual dealership Defendants, Plaintiff merely attempts to
refer to the “persons” by a different name.

As Judge Garbis

recently observed, however, in Bailey v. Atl. Automotive Corp.,
Civ. Action No. MJG-13-1243, 2014 WL 204262, at *17 (D.Md. Jan.
17,

2014),

“there

is

certainly
18

judicial

recognition

that

‘a

defendant may be both a person and a member of a collective RICO
enterprise’ without negating the distinctiveness requirement.”
(citing

In

re

Lupron

Mktg.

&

Sales

Practices

Litig.,

295

F.Supp.2d 148, 173 (D.Mass. 2003)); see also United States v.
Urban, 404 F.3d 754, 782 (3d Cir. 2005) (noting that a RICO
enterprise

“may

defendants

be

and

comprised

only

non-defendants.”).

of
As

defendants,
explained

or

in

of

Lupron,

“[t]he basic idea is that while one basketball player does not
constitute a team, an association of five players does, without
each losing his identity as a distinct person.”

Id.; cf. Eason

v. Merrigan, et al., No. Civ.A. DKC 2003-0933, 2004 WL 903756,
at

*2

(D.Md.

Apr.

28,

2004)

(“Plaintiff’s

RICO

claim

rests

entirely on the allegations that Defendant Merrigan carried out
his

racketeering

activity

Merrigan Enterprises, Inc.
law,

Defendant

defendant

Merrigan

and

the

through

the

Defendant

As stated, under Fourth Circuit case
Enterprise,

RICO

enterprise,

Inc.

enterprise.”).

cannot
As

be

will

both

be

a

seen,

Defendants’ argument that each dealership and the “enterprise”
are

not

sufficiently

distinct

under

Section

1964(c)

is

unavailing.
Defendants’

reliance

on

Gondel

v.

PMIG

1020,

LLC,

Civ.

Action No. CCB-08-1768, 2009 WL 248681 (D.Md. Jan. 22, 2009),
and

Myers

(E.D.Va.

v.

Sept.

Lee,
21,

No.

1:10cv131

2010)

is

(AJT/JFA),

misplaced.
19

In

2010

WL

Gondel,

3745632
2009

WL

248681, at *4, Judge Blake held that plaintiffs had not pled
distinctiveness

under

Section

1962(c)

because,

unlike

here,

“[n]owhere in [the] complaint d[id] plaintiffs [even] mention a
distinct

enterprise

associated

in

scheme.”

order

In

differentiate
complaint

with
to

carry

Gondel,

between

and

the

which

the

out

corporate

their

plaintiffs
individual

enterprise,

defendants and its agents.

the

alleged

did

comprised

racketeering

not

defendants
of

defendants

sufficiently
named

the

in

the

individual

See also Riverwoods Chappaqua Corp.

v. Marine Midland Bank, N.A., 30 F.3d 339, 344 (2d Cir. 1994)
(“by

alleging

a

RICO

enterprise

that

consists

merely

of

a

corporate defendant associated with its own employees or agents
carrying

on

the

regular

affairs

of

the

defendant,

distinctness requirement may not be circumvented.”).

the

Plaintiff

in Myers, 2010 WL 3745632, at *3, alleged that the “enterprise”
was

the

“Dahn

individuals

and

Organization,”
corporations

an

association

“acting

in

in

concert

fact
to

among

target,

control, and defraud its victims of their health, liberty, and
property for the financial benefit of the Dahn Organization and
its leader, Ilchi Lee.”

Importantly, in deciding that plaintiff

did not adequately distinguish between the “persons” and the
“enterprise,” the court noted that “nowhere in the [a]mended
[c]omplaint are there any allegations that the affairs of the

20

enterprise

are

defendants.”

any

different

from

the

affairs

of

the

Id. at *4.

Here, the amended complaint states that each Defendant is a
separately incorporated entity, has its own business location
and

employees,

and

that

through

“contractual

arrangement

and

joint management activity, formed an association-in-fact with
each other.”

(ECF No. 22 ¶ 253).

Plaintiff avers that “the

function of the King Auto Group association-in-fact enterprise
is to facilitate a fraudulent scheme of selling prior short-term
rental vehicles to consumers without the disclosures required by
Maryland law,” whereas each dealership Defendant is also engaged
in legitimate vehicle sale transactions.

(ECF No. 48, at 49).

Myers, 2010 WL 3745632, at *5, further noted that “[w]hile the
Dahn

Organization

enterprise,

may

[plaintiff]

qualify
must

as

still

an

association-in-fact

prove

these

defendants

participated in the conduct of enterprise’s affairs, not just
their own affairs.”

(internal citations omitted).

complaint

delineates,

to

different

dealership

Defendants

enterprise.

some

extent,
in

the

the

roles

The amended
played

by

association-in-fact

For instance, Plaintiff avers that Defendant King

Vehicles, Inc. and King Lincoln Inc. advertised prior rentals
for

the

other

Defendants

on

its

website

-

which

the

other

Defendants allegedly sold without the requisite prior short-term
rental disclosure - but did not sell the vehicles directly.
21

Defendant
which

King

Hagerstown

contradict

the

allegedly

furnishes

representations

CarFax

made

in

Reports

the

sales

agreements regarding prior short-term rental use of vehicles,
which Plaintiff alleges is part of Defendants’ fraudulent scheme
to conceal and misrepresent prior rental use of vehicles sold to
consumers.
Bailey,

2014

WL

204262,

also

addressed

the

question

of

distinctiveness of the “persons” and “enterprise” in the context
of Section 1962(c).

Bailey involved a putative class action

lawsuit

against

by

consumers

a

used

car

seller,

its

parent

corporation, and the parent’s other subsidiaries, alleging that
the

seller’s

failure

to

identify

cars

as

having

been

prior

short-term rentals violated, inter alia, RICO.

Unlike here,

however,

wholly

the

subsidiaries

dealer
of

defendants

Atlantic

also a named defendant.
dealer

defendants

consisting

of

subsidiaries.
“just

as

the

in

Automotive

Bailey

were

Corporation

owned

(“Atlantic”),

Plaintiff in Bailey alleged that the

formed

the

MileOne

parent

company,

Automotive

Atlantic,

and

enterprise,
all

of

its

Under those facts, Judge Garbis reasoned that

adequate

distinctiveness

may

be

missing

between

a

parent-person and a wholly owned subsidiary-enterprise (or vice
versa), it may also be lacking where the parent and its wholly
owned subsidiaries are both the ‘alleged persons’ and the sole
members of the association-in-fact enterprise.”
22

2014 WL 204262,

at *17 (emphasis added).

Judge Garbis found the allegations in

the second amended complaint inadequate to plead distinctiveness
under Section 1964(c).

He explained:

Heritage and the Other Dealer Defendants are
wholly
owned
subsidiaries
of
Atlantic.
Plaintiff alleges that Heritage and the
Other Dealer Defendants are all used car
dealerships
under
the
operation
and
ownership
of
Atlantic
and
that
these
commonly owned entities operate jointly and
associate together as MileOne Automotive to
sell used vehicles legitimately, as well as
fraudulently.
Id. at *18.
Unlike
requisite

in

Myers

showing

and

here.

Bailey,

Plaintiff

First,

the

has

made

the

are

not

Defendants

subsidiaries of a single dealership; according to the amended
complaint,

each

Defendant

is

an

independent

car

dealership.

Moreover, as Plaintiff explains, “[i]n contrast to the lack of
distinction between the ‘persons’ and ‘enterprise’ in [] Myers,
the King corporate Defendants joined together to form the King
Auto Group association-in-fact not just to conduct their own
separate

affairs

as

individual

car

dealerships,

but

to

facilitate a fraudulent scheme involving their co-conspirators.”
(ECF

No.

48,

complaint
dealership,

at

that
but

53-54).

each
also

Plaintiffs

Defendant

owned

associated

incorporated “King Auto Group.”

allege
and

together

in

operated
under

(ECF No. 22 ¶ 6).

23

the

amended
its

the

own
non-

The amended

complaint states that “[a]ll of the Defendants share the moniker
‘King’ in their corporate names and jointly hold themselves out
to the general public under the name King Auto Group.”
22 ¶ 6).

(ECF No.

Plaintiff further states that “Defendants conduct

business using [the King Auto Group] name and have established a
central

website,

http://www.KingAuto.com.”

(Id.

¶

7).

states

that

Plaintiff maintains that:
Through
their
association,
Defendants
developed and agreed upon the uniform and
systematic
scheme
described
herein
to
acquire and sell prior short-term rental
vehicles
to
consumers
without
the
disclosures required by Maryland law, with
misleading and fraudulent omissions and
representations concerning the history of
the used vehicles being sold, and with the
specific intent to deceive and defraud []
Plaintiff[] and members of the Class.
(Id.

¶

10).

“Defendants

The

were

amended

each

complaint

associated

with

further
the

enterprise

and

participated in its management and/or operation by directing its
affairs and/or by conducting business with each other and by
participating and assisting in the fraudulent scheme described
herein

to

acquire

and

sell

prior

short-term

rental

without the disclosures required by Maryland law.”

vehicles

(Id. ¶ 254);

see Mitchell Tracey v. First Am. Title Ins. Co., 935 F.Supp.2d
826, 843-44 (D.Md. 2013) (“the association’s common purpose was
to

charge

borrowers

inflated

and

24

illegal

fees,

to

defraud

members of the public and to give effect to the scheme described
by a distinct division of labor”) (internal citations omitted).
Although
members

to

“[a]n

organization

undertake

regular

cannot

corporate

join

with

activity

its

and

own

thereby

become an enterprise distinct from itself,” this is not the case
here.

Begala v. PNC Bank, Ohio, N.A., 214 F.3d 776, 781 (6th

Cir. 2000).

Here, Plaintiff alleges that the “King Auto Group”

is comprised of six different Defendant dealerships and performs
functions

beyond

its

ordinary

business

of

selling

cars.

Defendants’ argument that the amended complaint fails to allege
that the RICO enterprise has an existence separate and apart
from

the

pattern

of

racketeering

activity

in

which

it

was

engaged is belied by Plaintiff’s assertion that the enterprise
also engages in legitimate vehicles sales transactions.
No. 22 ¶ 126).

(ECF

Plaintiff similarly alleges that aside from

engaging in a scheme to conceal prior short-term rental use of
the

vehicles

forms

and

each

dealership

marketing

transactions.”

sold,

campaigns

for

“the

enterprise

legitimate

developed

vehicle

sales

(Id. ¶ 126 (emphasis added)); see Proctor, 645

F.Supp.2d at 480 (finding that the complaint alleged a pattern
of racketeering activity separate from the enterprise where the
complaint alleged that the enterprise “did not exist solely for
the purpose of engaging in predicate acts violative of RICO, but
the

enterprises

also

engaged
25

in

legitimate

real

estate

transactions

over

the

same

period

of

time”).

In

Mitchell

Tracey, 935 F.Supp.2d at 844, Judge Quarles found sufficient
plaintiffs’

allegation

that

defendant

and

its

title

agents

“deliberately overcharged and misappropriated amounts due for
the purchase of title insurance, in violation of Maryland law. .
. . Such unlawful acts are not conducted in the ordinary course
of business.”

Plaintiff similarly alleges that deceiving car

buyers is “not a part of any of the Defendants’ normal business
functions.”

(ECF No. 48, at 52).

Thus, viewing the pleadings

in the light most favorable to Plaintiff, she has alleged an
enterprise separate and distinct from the “person” and from the
racketeering activity.
2.

Pattern of Racketeering Activity

To show a “pattern of racketeering activity,” a plaintiff
must

“adequately

racketeering

plead

at

activity[.]”

least
Am.

two

predicate

Chiropractic

Assoc.

acts
Inc.

of
v.

Trigon Healthcare Inc., 367 F.3d 212, 233 (4th Cir. 2004) (citing
18 U.S.C. § 1961(5)).

Racketeering activity is defined under 18

U.S.C.

“any

number

§

1961(1),

of

as

enumerated

act

which

criminal

is

indictable”

provisions,

which

under

a

include

violations of 18 U.S.C. §§ 1341 (mail fraud), 1343 (wire fraud),
and

2314

(interstate

transport

26

of

money

converted

or

fraudulently obtained).

Plaintiff cites these three sections as

Defendants’ predicate acts.9
The federal mail and wire fraud statutes prohibit the use
of the mails or interstate wires in furtherance of schemes to
defraud.
a

18 U.S.C. §§ 1341, 1343.

plaintiff

defraud;

and

must
(2)

show:
the

(1)
use,

a

To plead mail or wire fraud,
scheme

disclosing

respectively,

of

interstate wires in furtherance of the scheme.

intent

to

mails

or

the

See Chisolm v.

9

To state a claim for interstate transport of money
converted or fraudulently obtained, she must, at a minimum,
allege how or when these interstate transports occurred.
See
Kerby v. Mortg. Funding Corp., 992 F.Supp. 787, 798 n.3 (D.Md.
1998) (disregarding an alleged predicate act based on nothing
more than a “bare allegation” of a violation). Plaintiff fails
to allege facts sufficient to show that Section 2314 is
applicable.
Plaintiff’s only allegation in the amended
complaint pertaining to Section 2314 states that:
Defendants on hundreds if not thousands of
occasions
transported,
transmitted,
and
transferred
in
interstate
or
foreign
commerce money of the value of $5,000 or
more, knowing the same to have been obtained
and/or taken by fraud, an artifice of fraud,
or by means of false or fraudulent pretenses
of representations in violation of 18 U.S.C.
§ 2314.
(ECF No. 22 ¶ 117). This conclusory allegation is insufficient
to plead a predicate act.
See, e.g., Robinson v. Fountainhead
Title Grp. Corp., 252 F.R.D. 275, 279 n.4 (D.Md. 2008)
(declining to consider predicate act premised on 18 U.S.C. §
2314 where plaintiff merely included a bare assertion that
defendants
engaged
in
multiple
instances
of
interstate
transports of money converted or fraudulently obtained in
violation of 18 U.S.C. § 2314, but did not explain how or when
these interstate transports occurred).
Accordingly, Plaintiff
fails to plead a predicate act pursuant to Section 2314.
27

TranSouth Fin. Corp., 95 F.3d 331, 336 (4th Cir. 1996).

In the

context of a RICO action, the mailings or wirings do not need to
contain the misrepresentations that defrauded the plaintiff, but
they

must

be

in

furtherance

of

the

fraudulent,

material

misrepresentation upon which the plaintiff justifiably relied to
her detriment.

Id. at 337; see also Day v. DB Capital Grp.,

LLC, Civil Action No. DKC 10-1658, at *10 (D.Md. Mar. 11, 2011).
Additionally, fraud allegations must state with particularity
“the

fraudulent

acts

that

form

the

alleged

pattern

racketeering activity” in accordance with Rule 9(b).

of

Menasco,

Inc. v. Wasserman, 886 F.2d 681, 684 (4th Cir. 1989) (quoting
Schreiber

Distrib.

Co.

v.

Serv-Well

Furniture

Co.,

806

F.2d

1393, 1400-01 (9th Cir. 1986)).
a.

Predicate Acts

Defendants argue that Plaintiff fails sufficiently to plead
mail and wire fraud because she cannot show that any Defendant
other than King Buick GMC owed a legal duty to Plaintiff and the
complaint also fails to identify any predicate acts of criminal
wire and mail fraud committed by each of these Other Dealer
Defendants.10

As to the legal duty argument, Plaintiff need not

plead that each Defendant owed her a legal duty in order to
plead a prima facie civil RICO claim.

10

Defendants refer to all of the Defendants, except for
King Buick GMC, as the “Unrelated Defendants.”
28

Defendants further argue that Plaintiff fails to specify
each Defendant’s role in the mail and wire fraud.

Fed.R.Civ.P

9(b) states that “[i]n alleging fraud . . . a party must state
with particularity the circumstances constituting fraud.”

Thus,

when mail and wire fraud are asserted as predicate acts in a
civil RICO claim, each must be pled with particularity required
by Rule 9(b).

See WW, LLC v. Coffee Beanery, Ltd., Civ. Action

No. WMN-05-3360, 2012 WL 3728184, at *10 (D.Md. Aug. 27, 2012).
Defendants state that Plaintiff’s “repeated reference, in bare
and conclusory fashion, to the ‘defendants’ generally refers to
all

of

the

different

Defendants,

without

identifying

which

Defendant allegedly committed any act of mail or wire fraud, or
made any fraudulent[] misrepresentation, or to whom.”
34-1,

at

26).

Defendants

assert

that

such

(ECF No.

generalized

allegations do not meet the heightened pleading standard of Rule
9(b)

required

for

civil

RICO

claims

premised

on

fraud.

Defendants in Superior Bank, F.S.B. v. Tandem Nat. Mortg., Inc.,
197 F.Supp.2d 298 (D.Md. 2000), posited the same argument, which
was

rejected.

Defendants

in

Superior

argued

that

plaintiff

failed to allege a “pattern of racketeering activity” against
them because the amended complaint did not allege that

each

defendant

committed

wire

fraud.

Judge

completely

separate

Garbis

without

specific

concluded

merit,

as
29

acts

of

mail

or

that

“[t]his

argument

is

section

1962(c)

includes

no

requirement that mail or wire be used by each defendant.”

197

F.Supp.2d at 323; see also Kerby v. Mortg. Funding Corp., 992
F.Supp. 787, 801 (D.Md. 1998) (“just as the plaintiffs do not
have to rely on the mail and wire communications themselves, but
only

on

the

misrepresentation

that

is

furthered

by

those

communications,[], the mails and wires do not have to be used by
each

defendant,

but

merely

in

furtherance

of

the

scheme.”).

More recently, Judge Quarles rejected this argument in Mitchell
Tracey, 935 F.Supp.2d at 845, involving a class action lawsuit
brought by homeowners against a title insurer alleging that the
insurer

and

insurance
Tracey,

its

agents

connected

935

with

F.Supp.2d

overcharged
refinancing.

at

845,

argued

homeowners
Defendant
that

for
in

title

Mitchell

plaintiffs

failed

sufficiently to plead mail and wire fraud because they did not
identify

the

representations,
speaker.

circumstances
including

the

surrounding
time,

place,

any
content,

Judge Quarles rejected this argument:
“A scheme to defraud means any deliberate
plan of action or course of conduct by which
someone intends to deceive or cheat another
or by which someone intends to deprive
another of something of value.”
Levine v.
First Am. Title Ins. Co., 682 F.Supp.2d 442,
462 (E.D.Pa. 2010).
Here, the [p]laintiffs
allege that First American’s title agents
made the initial contact with the consumer,
and
each
time,
they
“falsely
and
intentionally
misrepresented
to
their
customers that they would pay only the filed
or best rate for title insurance. . . . The
30

false
and

[p]laintiffs
further
allege
that
First
American and its title agents acted with the
intent
to
defraud:
specifically,
to
overcharge borrowers for title insurance,
“guarantee[ing] a stream of business” for
First American.
935 F.Supp.2d at 845.

Based on these allegations, Judge Quarles

concluded that plaintiffs in Mitchell Tracey had shown a scheme
to defraud.
Much like in Mitchell Tracey, at this juncture, Plaintiff’s
allegations
Plaintiff

are

sufficient

alleges

that

to

survive

“Defendants

a

motion

failed

to

to

dismiss.

disclose

and

intentionally concealed from Named Plaintiffs and the Class the
material fact that vehicles sold to them previously were used as
short-term rentals.”
“Defendants

all

(ECF No. 22 ¶ 4).

used

the

identical

Plaintiff asserts that
form

vehicle

sales

agreements[, which] included a space specifically designated for
the disclosure of the prior non-consumer use of the vehicles
being sold.”

(Id. ¶ 54).

Plaintiff asserts that despite this

disclosure built into the form, “each Defendant routinely failed
to use this space to identify the prior short-term rental use of
the vehicles it sold to retail buyers and knew the other King
Auto Group Defendants failed to do so as well.”

(Id. ¶ 55).

In

addition to the sale transaction on February 18, 2012, when King
Buick GMC allegedly failed to disclose to Ms. Chambers that the
vehicle she purchased was a prior short-term rental, the amended

31

complaint identifies fifteen (15) additional transactions over a
two-year

period,

in

which

King

Volkswagen,

King

Hagerstown

Motors, and King Auto of Silver Spring allegedly “failed to
disclose clearly and conspicuously the prior short-term rental
use of used vehicles sold” to consumers.
Capital

Grp.,

2011

WL

887554,

at

(Id. at 12-14); see DB

*12

(finding

sufficient

allegations regarding other victims of defendants’ scheme and
that the enterprise operated for at least two years and targeted
dozens

of

properties,

even

plaintiff were not alleged).
chart

in

the

amended

where

two

predicate

acts

toward

Specifically, Plaintiff includes a

complaint

identifying

the

approximate

vehicle sale date, a description of the vehicle (e.g.,
Volkswagen

Jetta

identification

S,

number

2008

Mazda6I),

(“VIN”).

The

and

amended

the

complaint

2008

vehicle
states

that King Lincoln and King Vehicles did not sell prior shortterm rental vehicles “in their own names but, rather, routinely
sold

these

vehicles

through

their

King

Auto

group

co-

conspirators – King Buick, King Volkswagen, LLC, King Hagerstown
Motors, LLC or King Auto of Silver Spring, LLC.”

(Id. ¶ 44).

Plaintiff asserts that King Lincoln and King Vehicles marketed
prior rentals to consumers and “other King Auto Group Defendants
consummated these sales on behalf of these two Defendants as
part

of

and

in

furtherance

of

Defendants’

conspiracy,

agreements, and aiding and abetting one another’s illegal acts.”
32

(Id.).

For purposes of a motion to dismiss, Plaintiff alleges

with sufficient specificity the Defendants’ involvement in the
alleged

scheme

previously

to

used

defraud
as

consumers

short-term

into

purchasing

rentals

by

vehicles

concealing

or

misrepresenting the fact that these vehicles were prior shortterm rentals from the Buyer’s Order.
Defendants also argue that the amended complaint “fails to
identify

any

fraudulent

mail

or

wire

sent

allegedly

by

the

Unrelated Defendants to Plaintiffs or anyone else in connection
with the purchase of their vehicles.”

(ECF No. 34-1, at 28).

Defendants argue that “the Complaint fails to identify how the
Unrelated

Defendants

allegedly

used

generic

mail

or

wire

to

further the alleged fraudulent scheme against the Plaintiff[]
(who

they

did

not

know

and

had

no

involvement)

so

constitute criminal mail and wire fraud under RICO.”
34-1, at 28).

as

to

(ECF No.

They argue that “[e]very commercial transaction

will inevitably require using the mail or wire system as part of
its ordinary business, but this does not establish criminal mail
fraud
(Id.).

or

the
As

requisite

explained

pattern

above,

of

however,

racketeering
“[t]o

be

activity.”

part

of

the

execution of the fraud . . . the use of the mails need not be an
essential element of the scheme.”
U.S. 705, 710 (1989).

Schmuck v. United States, 489

Instead, they need only be “incident to

an essential part of the scheme.”
33

Pereira v. United States, 347

U.S. 1, 8 (1954); see also In re Am. Honda Motor Co. Dealerships
Litig., 941 F.Supp. 528, 546 n.19 (D.Md. 1996) (stating that “a
mailing

need

only

be

scheme,

and

need

a

not

necessary
be

step

fraudulent

in

in

furtherance
and

of

of

a

itself.”).

Moreover, despite the high standard demanded by the Rule 9(b)
particularity requirement, in the context of RICO mail fraud,
the court may also consider the interplay of the more liberal
notice pleading standard of Rule 8, which simply requires “a
short and plain statement.”

Kerby v. Mortg. Funding Corp., 992

F.Supp. 787, 799 (D.Md. 1998); Coffee Beanery, 2012 WL 3728184,
at *10.

Courts have acknowledged the difficulty that arises in

pleading a RICO suit against multiple defendants – such as the
case here – and have determined that it is “not necessary that a
plaintiff elucidate every single detail of the alleged fraud.”
Coffee Beanery, 2012 WL 3728184, at *10; Mylan Labs., Inc. v.
Azko,

N.V.,

770

F.Supp.

1053,

1074-75

(D.Md.

1991).

These

courts have determined that, when balancing these rules,
[t]he most basic consideration in making a
judgment as to sufficiency of a pleading is
the determination of how much detail is
necessary to give adequate notice to an
adverse party and enable him to prepare a
responsive pleading.
Kerby, 992 F.Supp. at 800.
Plaintiff has alleged the predicate acts of mail and wire
fraud with sufficient particularity at this juncture.

34

Plaintiff

asserts

that

the

mailings

in

furtherance

of

the

fraudulent

scheme included: the mailing and distribution among Defendants
of

contracts,

form

sale

and

credit

agreements,

and

other

documents used in the transactions of Plaintiff and members of
the putative class.

(ECF No. 22 ¶ 102).

Plaintiff further

contends that:
Defendants and their co-conspirators on
hundreds if not thousands of occasions used,
and caused to be used, telephone, Internet
and other wire transmissions including, but
not limited to, use of the wires in the sale
of vehicles previously used as prior shortterm rental vehicles to Named Plaintiff[]
and members of the Class; in the emailing,
faxing and transmission by wire of documents
such as loan applications, vehicles sale and
financing contracts and other documents
related to the sale and financing of
vehicles
by
Defendants
to
potential
assignees in the transactions of Named
Plaintiff[] and Class members who financed
their vehicles with Defendants; in the
electronic registration and titling system
established with the MVA; and in the
marketing of their enterprise “King Auto
Group” and its vehicles on the Internet –
with
the
intent
to
defraud
and
in
furtherance of their scheme to defraud.
(Id. ¶ 103).
In Coffee Beanery, 2012 WL 3728184, at *11, Judge Nickerson
found persuasive that “[p]laintiffs have outlined the alleged
scheme to defraud, a time frame for the scheme, who was targeted
by

the

scheme,

the

contents

of

the

allegedly

fraudulent

communications that were sent using the mails and wires, and

35

what [d]efendants hoped to obtain through the scheme.”

Judge

Nickerson held that “[c]oupling these specific allegations with
the broader allegations that the [d]efendants used the mails as
part

of

the

franchisees
9(b).”

is

scheme

to

sufficient

defraud
to

meet

other
the

unnamed

potential

requirements

of

Rule

Here too, Plaintiff has outlined the alleged scheme to

defraud consumers by failing to disclose the prior short-term
rental use of vehicles sold by the Defendants, a time frame for
the

alleged

scheme.

scheme,

See,

e.g.,

and

the

role

Mitchell

of

Tracey,

mail
935

and

wires

in

the

F.Supp.2d

at

845

(finding sufficient allegations of mail and wire fraud where the
complaint alleged “specific dates when [defendant] used the mail
and electronic communication to further its scheme” and stated
that distributions of the profits were sent interstate).
Plaintiff further asserts that “on or before February 18,
2012, Defendants used the wires to advertise the vehicle sold to
Ms. Chambers on the Internet, “without the required clear and
conspicuous disclosure of this vehicle’s prior use as a shortterm rental required by Maryland law.”

(Id. ¶ 106).

Plaintiff

avers that in February 2012, “Defendants used the wires and/or
U.S. mail to submit a loan application, contract of sale, and
other documents related to the sale to a potential assignee for
the financing of Ms. [Chambers’s] prior but undisclosed short
term rental vehicle – namely Capital One Auto Finance.”
36

(Id. ¶

112).

Following the sale to Ms. Chambers, Defendants allegedly

used the mails to “submit the original documents relating to the
financing and sale of Ms. Chamber[s’s] vehicle to its assignee,
Capital One.”

(Id.).

Plaintiff

contends

“register

and

title

electronic

that
Ms.

registration

Defendants

used

Chamber[s’s]

and

titling

the

system.”

to

through

vehicle

wires

an

(Id.

¶

113).

Specifically, Defendants allegedly used the wires electronically
to transfer $587.95 of funds to the MVA in connection with Ms.
Chambers’s
sales

transaction

tax,

titling

on

and

February

18,

registration

2012,

fees.

for

payment

Defendants

of

also

allegedly used mails and wires to advertise and sell to putative
class members the vehicles previously used as short-term rentals
without

the

transactions

requisite

disclosure

Plaintiff

has

in

the

identified

in

including the date of the transaction.
also

¶

104

connection

(“Defendants
with

the

used

sale

the

of

fifteen
the

complaint,

(Id. ¶¶ 108, 114; see

Internet

hundreds

additional

if

and
not

the

wires

in

thousands,

of

vehicles sold to members of the class by providing a forum in
which

customers

could

search

for

and

receive

information

regarding vehicles offered for sale by Defendants, including the
prior rental vehicles sold by Defendants.”)).
avers that:

37

Plaintiff also

Defendants further used the wires to send
and
receive
purchase
orders,
retail
installment contracts, and other documents
among
their
co-conspirators,
funding
lenders, and other entities; to distribute
money among those entities; to transmit to
the
MVA
information
related
to
the
registration and titling of motor vehicles
purchased and sold by Defendants to Named
Plaintiff[] and members of the Class; to
transmit among the Defendants forms and
other
documents
used
in
the
sale
of
vehicles.
(Id.

¶

109).

Finally,

according

to

Plaintiff,

“Defendants

further used the wires to facilitate the operation of and to
operate

the

fraudulent

scheme

described

herein,

and

to

communicate with each [other] during the course of the scheme
through telephone calls, facsimiles, e-mail transmissions, and
wire transfers of money resulting from and in furtherance of the
fraudulent

scheme.”

(Id.

¶

116);

see,

e.g.,

Proctor,

645

F.Supp.2d at 474 (“[p]laintiffs have pleaded the predicate acts
of mail and wire fraud with particularity against the background
of a grand mortgage foreclosure rescue scam that involved the
sale and leaseback of [p]laintiffs’ properties from which [two
settlement agents] among others would siphon off and transfer
the equity illegally.”).
In Coffee Beanery, 2012 WL 3728184, Judge Nickerson found
sufficient
because

the

allegations

plaintiffs

surrounding

the

use

supporting

specifically
of

the

mails
38

mail

alleged
with

and

the

regard

wire

fraud

circumstances
to

fraudulent

statements

and

listed

fraudulently omitted.

the

material

facts

they

believed

were

Coffee Beanery, 2012 WL 3728184, at *11.

Judge Nickerson observed: [look to see if repetitive with prior]
Plaintiffs further provide the names of
seven other individuals who received through
the mails or wires copies of allegedly
fraudulently UFOCs dated from 2002 and
2003.[]
Plaintiffs
then
allege
with
particularity
the
fraudulent
misrepresentations and omissions contained
in Coffee Beanery’s UFOCs issued annually
from September 2003 to October 2011.[]
Making
all
inferences
in
favor
of
Plaintiffs, the Court can construe these
allegations to suggest that every potential
franchisee from 2002 until at least 2011 was
provided with a fraudulent UFOC, and that
the majority of the fraudulent UFOCs were
transmitted through the mail or wires.
Id.

Although the facts are less compelling here, Plaintiff

identifies
2011,

in

fifteen
which

additional

consumers

transactions

entered

into

between

sales

2010

and

agreements

for

vehicles as a result of Defendants’ fraudulent scheme to sell
prior

short-term

disclosures.
identifies

rental

For
the

vehicles

these

fifteen

approximate

vehicle

without

the

requisite

transactions,

Plaintiff

sale

date,

the

vehicle

description, VIN, and the Defendant dealership that consummated
the transaction.

(See ECF No. 48, at 41).

Plaintiff asserts

that mail and wire were used to send the loan documents and
financing

contracts

in

connection

with

the

fraudulent

transactions, to register and title the sold vehicles, and to

39

wire

funds

to

the

transactions.
mail

and

in

connection

with

(ECF No. 22 ¶¶ 111-114).

wire

consummating

MVA

use

the

were

allegedly

fraudulent

sale

vehicle

sale

These acts involving

made

of

the

in

the

connection

vehicles

to

with

induce

unaware consumers into purchasing prior short-term rentals.

See

VNA Plus, Inc. v. Apria Healthcare Grp., Inc., 29 F.Supp.2d
1253, 1263 (D.Kan. 1998) (noting that the requirements to plead
specific instances of mail or wire fraud is “relaxed where there
are

‘numerous

mailings

of

standardized

identical false representations.’”).

documents

containing

Plaintiff points out that

“[a]bsent their use of the mails and/or wires in connection with
the financing, registration and titling of the prior short-term
rentals

they

sold

pursuant

[to]

their

fraudulent

scheme,

Defendants would not have been able to consummate this scheme.”
(ECF No. 48, at 62 n.46).
Defendants

also

challenge

Plaintiff’s

RICO

allegations

insofar as they fail to demonstrate that the conduct of the
enterprise affected interstate commerce.

Defendants assert that

“the

that

gravamen

consists

of

of

Plaintiffs’

claim

Maryland-automobile

is

dealers,

the

‘enterprise’

licensed

by

the

Maryland MVA to sell cars in Maryland to two Maryland residents
in

a

manner

that

does

not

comply

with

the

Maryland

law

applicable to automobiles sales occurring solely in Maryland.”
(ECF No. 34-1, at 44).

Defendants are correct that Plaintiff
40

must plead the existence of a RICO enterprise whose activities
affected interstate commerce.
887554,

at

*13.

The

See DB Capital Group, 2011 WL

allegations

in

the

amended

complaint

concerning interstate commerce are sufficient at this stage of
the proceedings.

As Plaintiff summarizes in the opposition, she

“alleges the King Auto Group purchased previously used rental
vehicles out-of-state for sale in Maryland, wired and mailed
monies

from

Maryland

to

lenders

outside

of

Maryland

in

connection with financing of such vehicles, and uses the wires
and

mails

to

documents

forward

from

loan

Maryland

applications,

to

persons

contracts

outside

connection with the sales of such vehicles.”
n. 67) (emphasis in original).
that

“Defendants

and

King

of

and

other

Maryland

in

(ECF No. 48, at 78

Specifically, Plaintiff alleges

Auto

Group

were

engaged

in,

and

affected interstate commerce in that, inter alia, the vehicle
sales

that

are

consummated

in

the

subject

Maryland

of
using

the

scheme

vehicles

to

defraud

that

in

were
many

circumstances were purchased out-of-state for sale in Maryland.”
(ECF No. 22 ¶ 101).
funds

or

mailed

Plaintiff asserts that “Defendants wired

checks

from

Maryland

to

persons

outside

of

Maryland to pay for prior short-term rentals later sold within
Maryland.”

(Id.).

Plaintiff further avers that in February

2012, King Buick GMC used mails and/or wires to submit a loan
application, contract of sale, and other documents related “to
41

the

sale

to

a

Chamber[s’s]

potential

prior

but

assignee

for

undisclosed

the

prior

financing

of

short-term

Ms.

rental

vehicle” to Capital One Auto Finance, headquartered in Virginia.
(Id.

¶

112).

additional

Plaintiff

fifteen

transactions.

asserts

allegedly

a

similar

pattern

fraudulent

for

vehicle

the
sale

Finally, Plaintiff avers that “Defendants divvied

up their profits secured from selling prior short-term rental
vehicles sold in violations of the disclosure requirements under
Maryland law, and those profits – constituting far more than
$5,000 – were distributed through interstate commerce.”
118);

see

Mitchell

Tracey,

935

F.Supp.2d

at

845

(Id. ¶
(finding

sufficient allegations that “[d]istributions of the profits were
sent

interstate.”).

Drawing

all

inferences

in

favor

of

Plaintiff, the allegations in the amended complaint regarding
the

predicate

offenses

and

interstate

commerce

survive

dismissal.
b.

Pattern of Racketeering Activity

To state a plausible claim of a pattern of racketeering
activity, the plaintiff must allege facts establishing “that the
racketeering predicates are related and that they amount to or
pose a threat of continued criminal activity.”
Nw.

Bell

Tel.

Co.,

492

U.S.

229,

239

Cf. H.J. Inc. v.

(1989)

(reversing

a

12(b)(6) dismissal of a RICO complaint and discussing what a
plaintiff

in

a

RICO

case

must
42

show

to

prove

a

pattern

of

racketeering activity).
the

predicate

acts

be

With respect to the requirement that
“related,”

the

Fourth

Circuit

has

explained that “[t]he relationship criterion may be satisfied by
showing

that

the

criminal

acts

‘have

the

same

or

similar

purposes, victims, or methods of commission, or are otherwise
interrelated

by

distinguishing

isolated events.’”
Emp’t

of

Am.

characteristics

and

are

not

Anderson v. Found. for Advancement, Educ. &

Indians,

155

F.3d

500,

505-06

(quoting H.J. Inc., 492 U.S. at 240).

(4th

Cir.

1998)

Plaintiff alleges that

Defendants’ acts were “related, as they had the similar purpose
of concealing and affirmatively misrepresenting the prior rental
history of vehicles sold to Defendants’ customers, and they used
the same methods of commission by concealment and affirmative
misrepresentation.”

(ECF No. 22 ¶ 124).

fifteen other vehicle sale transactions.

Plaintiff identifies
In Coffee Beanery,

2012 WL 3728184, at *12, Judge Nickerson found sufficient to
satisfy the relationship requirement the following allegations:
Plaintiffs
allege
that
all
of
the
representations were made for the express
purpose of inducing [p]laintiffs, and other
potential franchisees, to investee in Coffee
Beanery café franchises, and that the scheme
involved providing the same fraudulent UFOCs
and making the same false representations to
franchisees
in
support
of
this
end.
Essentially, as alleged, the predicate acts
of mail and wire fraud were perpetrated an
uncounted number of times against the same
type of victim in a nearly identical manner.
In the context of a motion to dismiss, the
43

Court finds these allegations sufficient to
satisfy the relationship requirement.
Plaintiff here also alleges that the predicate acts of mail and
wire fraud were perpetrated on at least fifteen other occasions
with separate consumers in an effort to induce them to purchase
vehicles

that

dealership

Defendants

did

not

previously used as prior short-term rentals.

disclose

were

Accordingly, the

relatedness element is satisfied.
Defendants

also

argue

that

Plaintiff’s

allegations

insufficient to meet the continuity-of-activity requirement.

are
A

plaintiff can fulfill the continuity-of-activity requirement by
establishing either a closed or open-ended pattern.
492

U.S.

at

241.

A

“closed-ended”

pattern

of

H.J. Inc.,
racketeering

activity involves a course of related predicate acts during a
substantial period of time which naturally comes to a close,
while an open-ended pattern involved conduct “that by its nature
projects into the future with a threat of repetition.”
Beanery, 2012 WL 3728184, at *12 (citing

Coffee

Whitney, Bradley &

Brown, Inc. v. Kammermann, 436 F.App’x 257, 259 (4th Cir. 2011)).
Plaintiff’s amended complaint suggests that she attempts to
establish

an

open-ended

pattern.

Specifically,

Plaintiff

asserts that King Auto Group is an association-in-fact that “has
continued as a unit, with a core membership, over a substantial
period

of

time,

exceeding

five

44

years,

and

is

an

ongoing

organization established for an economic motive.”
231).

(ECF No. 22 ¶

Defendants assert that the amended complaint fails to

plead facts demonstrating a threat of continuing future criminal
conduct for essentially two reasons.

First, Defendants argue

that there is no criminal activity at all because the prior
short-term
which

rental

Defendants

disclosure
maintain

was

made

Plaintiff

in

the

CarFax

received

along

Report,

with

the

Buyer’s Order and which indicated that the vehicle she bought
was previously used as a short-term rental.
38).

This

whether

argument

Plaintiff

consummated

the

is

unpersuasive

received

the

transaction

at

this

CarFax

is

a

(ECF No. 34-1, at
point

Report

before

she

fact,

and

disputed

inappropriate to resolve on a motion to dismiss.

because

(See ECF No.

48-2, at 33, Declaration of Latechia Chambers (“I do not recall
anyone at the dealership showing me a Carfax report or asking me
to sign or initial it, though I do recall signing quite a few
documents wherever the King rep put an “x” mark next to a line
for my signature, but the Carfax report was NOT one of those
documents” (emphasis in original)).
Second,
continuing

Defendants

future

argue

criminal

that

conduct

there
or

is

that

no
the

threat

of

pattern

of

racketeering activity is open and ongoing because on May 14,
2013, the State of Maryland promulgated its own disclosure form
to

be

used

by

motor

vehicle

dealers
45

-

Disclosure

of

Former

Vehicle Use Form, VR-460.

(See ECF No. 34-7).

Defendants argue

that:
[i]n so doing, the MVA conclusively put an
end to Plaintiff[’s] erroneous theory that
disclosure of a vehicle’s prior rental
history on a ‘separate document[,]’ signed
by the customer, somehow violates COMAR, or
that Maryland law requires that the prior
use disclosure must be on the Buyer’s Order,
or sales agreement, or in bold, or in super
large print as alleged in their Complaint.
(ECF No. 34-1, at 40).

As Plaintiff points out, though, her

RICO claims are based on Defendants’ alleged scheme to defraud,
not

just

an

alleged

violation

of

COMAR

or

an

MVA

bulletin.

Furthermore, Defendants’ argument assumes that the dealership
Defendants

accused

of

fraudulent

misrepresentations

and

concealment will cease this alleged conduct and use this new
form.

Defendants further argue that the conduct attributed to

the RICO enterprise lasted less than eighteen months, which is
insufficient to establish continuity for RICO pattern purposes.
Although Defendants are correct to note that the Fourth Circuit
has expressed reservations about RICO claims where the predicate
acts are mail and wire fraud, see GE Inv. Private Placement
Partners II v. Parker, 247 F.3d 543, 549 (4th Cir. 2001), as
Judge Blake explained in Friedler, M.D., et al. v. Cole, Jr., et
al., No. Civ.A. CCB-04-1983, 2005 WL 465089, at *9 (D.Md. Feb.
28,

2005),

“determining

commonsensical,

whether

fact-specific

a

inquiry,
46

pattern
not

a

exists

is

mechanical

a
one

determined solely by the number of predicate acts over a given
time

period.”

(internal

citations

omitted).

Rather,

the

critical inquiry is whether the predicate acts demonstrate the
kind of relatedness and continuity that distinguish widespread
fraud

threatening

long-term

criminal

activity

from

fraud not properly subject to RICO’s penalties.
National

Capital

F.Supp.2d

468,

Park

476

and

(D.Md.

Planning
2002)

Comm’n

(explaining

ordinary

The Marylandv.

Boyle,

that

the

203

Fourth

Circuit emphasizes that “the heightened civil penalties of RICO
‘are reserved for schemes whose scope and persistence set them
above the routine’” (quoting HMK Corp. v. Walsey, 828 F.2d 1071,
1074 (4th Cir. 1987))).
The

Fourth

Circuit

has

identified

several

factors

consider when determining whether a RICO pattern exists.

to

These

factors, including, “the number and variety of predicate acts
and

the

length

of

time

over

which

they

were

committed,

the

number of putative victims, the presence of separate schemes,
and the potential for multiple distinct injuries,” should be
considered along with “all the facts and circumstances of the
particular case – with special attention to the context in which
the predicate acts occurred.”
1179,

1185

(4th

Cir.

1988),

Brandenburg v. Seidel, 859 F.2d
overruled

on

other

grounds

Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (1996).
facts

as

pled

in

the

amended
47

complaint

are

by
The

readily

distinguishable from cases where courts have found the alleged
pattern of racketeering activity - consisting only of acts of
mail

and

wire

fraud

–

insufficient

to

present

the

sort

of

“ongoing unlawful activities whose scope and persistence pose a
special threat to social well-being.”

For instance, in Menasco,

Inc. v. Wasserman, 886 F.2d 681, 684 (4th Cir. 1989), the court
found

that

continuity

plaintiffs’
prong

of

allegations

RICO’s

pattern

failed

to

satisfy

requirement.

The

the
court

noted:
Defendants’ actions were narrowly directed
towards a single fraudulent goal.
They
involved a limited purpose: to defraud
Menasco, Inc. and Lucky Two, Inc. with
respect to their oil interests.
They
involved but one perpetrator: Wasserman.
They involved but one set of victims:
Menasco and Lucky Two.
Finally, the
transaction took place over approximately
one year.
Clearly, these acts do not
constitute ‘ongoing lawful activities whose
scope and persistence pose a special threat
to social well-being.’
[International Data
Bank, Ltd. v. Zepkin, 812 F.2d 149, 155 (4th
Cir. 1987).]
(emphasis added).

Here, unlike in Menasco, Plaintiff does not

allege that the fraudulent scheme was only directed at her.
Instead,

Plaintiff

alleges

that

King

Auto

Group

enterprise

undertook a scheme to defraud consumers into purchasing vehicles
that

were

previously

used

as

short-term

rentals,

but

which

disclosure was not made clearly and conspicuously as required
under Maryland law.
48

In Bailey, 2014 WL 204262, at *19, Judge Garbis held that
there was no viable claim of a pattern of racketeering activity
because

Plaintiff

fraudulent

“alleged

conduct

directed

only

one

instance

her.”11

at

Judge

of

specific

Garbis

further

found insufficient “the conclusory general assertion that the
[d]efendants engaged in numerous acts of mail and/or wire fraud
by concealing the former short-term rental use of vehicles from
purchasers other than Bailey.”

Id.

Unlike in Bailey, Plaintiff

specifies fifteen transactions – in addition to Ms. Chambers’s
transaction – in which members of the enterprise are alleged to
have

engaged

stated,

in

predicate

Plaintiff

acts

that

injured

consumers.

As

in

the

amended

complaint

the

includes

approximate vehicle sale date, a vehicle description, and VIN.
(See ECF No. 22 ¶ 43).
Defendants

carried

out

The amended complaint alleges that
their

scheme

to

defraud

in

repeated consumer transactions between 2010 and 2012.

numerous
(See ECF

No. 48, at 58); HMK Corp. v. Walsey, 828 F.2d 1071, 1075 (4th
Cir. 1987) (“In a private, commercial context, the fact that a
scheme spans many years might constitute powerful support for
the finding of a pattern of racketeering activity.”); Orteck
Intern. Inc. v. TransPacific Tire & Wheel, Inc., Civ. Action No.
11

Judge Garbis stated, however, that plaintiff can
reinstate the RICO claim in the event that discovery as to the
viable claims yields evidence adequate to support a plausible
claim of a pattern of racketeering activity.
49

DKC 2005-2882, 2006 WL 2572474, at *18 (D.Md. Sept. 5, 2006)
(noting

that

“similar

fraudulent

schemes

employed

against

multiple victims by the same defendant may be found to satisfy
the related and continuous elements and therefore show a pattern
of racketeering activity”); cf. Grant v. Shapiro & Burson, LLC,
871

F.Supp.2d

462,

475

(D.Md.

2012)

(dismissing

RICO

claim

because the complaint failed to allege any specific fraudulent
conduct outside of that directed to the plaintiff); Davis v.
Wilmington Fin., Inc., No. PJM 09-1505, 2010 WL 1375363, at *4
(D.Md.
alia,

Mar.
the

26,

2010)

allegations

(dismissing
of

RICO

racketeering

claim
in

the

because,
complaint

inter
were

“limited solely to Plaintiffs and their mortgage transaction”).
Defendants

argue

that

Plaintiff’s

claims

“boil[]down

to

a

contract dispute between a licensed automobile dealership (King
Buick GMC) and [] customers who do not believe the disclosure
they signed was sufficient enough,” (ECF No. 34-1, at 39), but
Plaintiff asserts in the amended complaint that she did not
receive any disclosure regarding her vehicle being used as a
prior short-term rental.

Moreover, as discussed supra, whether

Plaintiff signed any disclosure is a disputed fact inappropriate
to consider on a motion to dismiss.
In Friedler, 2005 WL 465089, at *12, Judge Blake determined
that the predicate acts, consisting mainly of mail and wire
fraud, failed to establish a RICO pattern.
50

Unlike here, the

complaint in Friedler described a fraudulent scheme spearheaded
by a single defendant and “narrowly targeted to misappropriate
the

plaintiffs’

plaintiffs

investments.”

had

alleged

a

Judge

more

Blake

widespread

noted

that

scheme,

“[i]f

involving

various predicate acts and other offenders and victims, then the
fraud they suffered would more closely resemble the kind that
“rises above the routine” and “poses a threat to social wellbeing.”
scheme

Id.

Here, Plaintiff has alleged a widespread fraud

involving

various

victims,

which

–

at

this

stage

-

suggests a continuing pattern of racketeering activity.

See,

e.g.,

RICO

Superior

pattern

Bank,

requirement

197

F.Supp.

satisfied

at

324
over

where

(finding
thirty

the

defendants

coordinated a mortgage flipping scheme involving twenty-three
transactions); Thomas v. Ross & Hardies, 9 F.Supp.2d 547, 555
(D.Md. 1998) (finding a RICO pattern existed where defendants
directed

a

broad,

open-ended

scheme

to

homeowners through a mortgage scheme).

recruit

and

defraud

Ultimately, Plaintiff

will need significantly more proof to establish RICO violations,
but viewing the pleadings in the light most favorable to her,
she has pled adequate facts for the Section 1962(c) claims to
proceed based on a pattern of racketeering activity.
3. Proximate Cause
The parties also disagree over the means by which Plaintiff
may

satisfy

RICO’s

proximate

cause
51

requirement

in

a

class

action.

To state a claim under civil RICO, a plaintiff is

required to show that a RICO predicate offense “not only was a
‘but for’ cause of his injury, but was the proximate cause as
well.”
268

Holmes v. Sec. Investor Protection Corp., 503 U.S. 258,

(1992).

evaluated

Proximate

in

light

of

cause
its

for

RICO

common-law

purposes

should

foundations;

be

proximate

cause thus requires “some direct relation between the injury
asserted and the injurious conduct alleged.”
is

“too

remote,”

“purely

insufficient. Id. at 271.

contingent,”

or

Id.

A link that

“indirec[t]”

is

As the United States Supreme Court

made clear in Hemi, 559 U.S. at 12, “in the RICO context, the
focus

is

on

the

directness

conduct and the harm.”

of

the

relationship

between

the

See also Anza v. Ideal Steel Supply

Corp., 547 U.S. 451, 461 (2006) (“[w]hen a court evaluates a
RICO claim for proximate causation, the central question it must
ask

is

whether

the

alleged

violation

led

directly

to

the

plaintiff’s injuries.”).
The

fraudulent

conduct

alleged

here

is

the

misrepresentation and concealment of the rental history of the
vehicles sold to Plaintiff and other consumers in violation of
Maryland

law.

Plaintiff’s

alleged

injury

was

that

she

was

overcharged for the vehicle because the vehicle was sold falsely
as a former consumer car.

(ECF No. 22 ¶ 249); Bailey, 2014 WL

204262, at *15 (holding that plaintiff has alleged a cognizable
52

RICO

injury

where

plaintiff

alleged

that

“she

suffered

the

claimed loss at the moment of purchase in reliance upon the
false representation that she was not buying a former short-term
rental vehicle.”).

Plaintiff asserts that:

[a]s a direct and proximate result of
Defendants’
negligent
statements,
representations, and omissions of material
fact . . . Plaintiff[] and Class members
were induced, ab initio, to enter into sales
agreements for vehicles with Defendants,
paid significantly more for their vehicles
than
these
vehicles
were
worth,
and
otherwise were harmed.
(ECF No. 22 ¶ 209).

Unlike in Hemi, where the Supreme Court

found that “[m]ultiple steps [] separate the alleged fraud from
the

asserted

injury,”

there

is

a

sufficiently

direct

relationship between the wrongful conduct here and the alleged
injury.
York

Hemi, 559 U.S. 1, involved a lawsuit by the City of New

against

individuals.

out-of-state

cigarette

retailers

and

affiliated

The United States Supreme Court held - on readily

distinguishable facts - that the city failed to establish the
proximate cause element of a civil RICO claim.
City,

Hemi

residents

committed
and

fraud

failing

to

information to the State.

by

selling

submit

the

According to the

cigarettes
required

to

city

customer

Without the reports from Hemi, the

State could not pass on the information to the City.

Some of

the customers legally obligated to pay the cigarette tax to the
City failed to do so.

Because the City did not receive the
53

customer

information,

the

City

could

customers had failed to pay the tax.

not

determine

which

Thus, plaintiff argued

that the City was injured in the amount of the portion of back
taxes that were never collected.

On these facts, the Supreme

Court concluded that the City’s theory of causation was far too
indirect.

The Court noted that:
the conduct directly responsible for the
City’s harm was the customers’ failure to
pay
their
taxes.
And
the
conduct
constituting the alleged fraud was Hemi’s
failure to file Jenkins Act reports.
Thus,
[], the conduct directly causing the harm
was distinct from the conduct giving rise to
the fraud.

559 U.S. at 11 (emphasis added).

Unlike in Hemi, the conduct

giving rise to the harm here (failure to disclose prior shortterm rental use) is the same conduct that gave rise to the
fraud.
Defendants assert that Plaintiff fails to allege that she
detrimentally relied on any fraudulent mail or wire sent by the
Unrelated Defendants, “or the specific harm directly caused to
them as a result of the predicate acts allegedly committed by
each Unrelated Defendant.”

(Id. at 32).

Defendants essentially

argue that because Plaintiff only dealt with King Buick GMC, she
cannot

show

reliance

in

connection

with

the

Other

Defendants with which she did not transact business.

Dealer

As Judge

Nickerson stated in Robinson v. Fountainhead Title Grp. Corp.,

54

Civ.

No.

WMN-03-3105,

2009

WL

539882,

at

*2

(D.Md.

Mar.

3,

2009), “a RICO claim predicated on mail fraud is based on the
fraudulent
mailing.”

scheme

rather

than

on

a

particular

fraudulent

See also Bridge v. Phoenix Bond & Indemnity Co., 553

U.S. 639, 648 (2008) (“[u]sing the mail to execute or attempt to
execute a scheme to defraud is indictable as mail fraud, and
hence a predicate act of racketeering under RICO, even if no one
relied on any misrepresentation.”).
Other

Dealer

Defendants

are

Plaintiff alleges that the

participants

scheme to defraud her and other consumers.

in

the

fraudulent

Thus, Plaintiff need

not have relied on any specific fraudulent mailing or wire by
the Other Dealer Defendants in order to assert a civil RICO
claim in a putative class action predicated on mail and wire
fraud.

Defendants

maintain

that

“[t]here

is

no

direct

relationship between the Plaintiff[’s] alleged injury and any
alleged

fraudulent

Defendants,”

thus

(emphasis added).

mail

or

Plaintiff

wire
cannot

sent
show

by

the

Unrelated

reliance.

(Id.)

But “[p]laintiff need only show reliance on

the scheme, not necessarily on any particular fraudulent mailing
or

misrepresentation.”

Robinson

v.

Fountainhead

Corp., 257 F.R.D. 92, 95 (D.Md. 2009).

Title

Grp.

Here, the injury as

alleged by Plaintiff, was caused by the fraudulent scheme – that
all

of

the

Defendants

allegedly

facilitated

-

of

concealing

prior short-term rental use of the vehicles they were selling.
55

Judge

Messitte’s

reasoning

in

Biggs

v.

Eaglewood

Mortg.

LLC, 636 F.Supp.2d 477, 479 (D.Md. 2009), applies here:
Bridge did not eliminate reliance as an
element of a RICO claim predicated on mail
fraud. The Supreme Court was presented with
a situation where the plaintiffs themselves
had
not
received
or
relied
upon
misrepresentations made by defendants, but
had relied on misrepresentations defendants
made to others.
See Bridge, 128 S.Ct. at
2139.
What the Court held was that, even
though plaintiffs had not themselves relied
on
the
misrepresentations
made
by
defendants, they properly asserted a claim
because
first-party
reliance
is
not
a
required element of a RICO claim predicated
on mail fraud. See Id. at 2145. The Court
was careful to note, however, that “none of
this is to say that a RICO plaintiff who
alleges injury by reason of a pattern of
mail fraud can prevail without showing that
someone
relied
on
the
defendant’s
misrepresentations.”
Id. at 2144 (internal
quotations omitted).
(emphasis

added).

Here,

Plaintiff

has

alleged

that

she

justifiably relied on the misrepresentation made in the Buyer’s
Order,

which

encompassed

the

alleged

scheme

involving

“Defendants’ concealments, failures to disclose and affirmative
misrepresentations concerning the prior rental use of the used
vehicles

they

transactions.”

purchased

when

they

consummated

their

(ECF No. 22 ¶ 176); Busby v. Crown Supply, Inc.,

896 F.2d 833, 840 (4th Cir. 1990) (“We think the plaintiff has
alleged causation.

Whether he will be able to prove it at trial

is not a question on which we express any view.

56

Rather, we are

deciding whether this aspect of the complaint survives a Rule
12(b)(6) motion, and we confine ourselves to the allegations of
the complaint”).
Defendants’ argument that Plaintiff’s alleged injuries were
caused by her own conduct is also unpersuasive.

Defendants

argue that “Plaintiff[’s] alleged injury occurred either because
[she] ignored or failed to read the CarFax Report [she] signed
which clearly discloses five times that it was a prior rental
vehicle.”

(ECF No. 34-1, at 34).

Thus, the argument goes:

Plaintiff[] here cannot logically or legally
contend that the absence of the “x” on the
line on the Buyer’s Order fraudulently
induced [her] to buy the vehicle, but that
the presence of this fact disclosed five
times in the Carfax Report [she] received
and signed at the same time, acknowledging
that [she] knew the very fact [she] claim[s]
was
omitted,
does
not
negate
this
inducement.
(Id. at 35).

As explained supra, the Carfax Report was not

attached to the complaint, but to Defendants’ motion to dismiss
the

federal

claims.

Although

as

a

general

rule

extrinsic

evidence should not be considered at the 12(b)(6) stage, the
Fourth

Circuit

has

held

that

when

a

defendant

attaches

a

document to its motion to dismiss, “a court may consider it in
determining

whether

to

dismiss

the

complaint

[if]

it

was

integral to and explicitly relied on in the complaint and [if]
the plaintiffs do not challenge its authenticity.”

57

Phillips v.

LCI Int’l Inc., 190 F.3d 609, 618 (4th
added).

Here,

Plaintiff

challenges

Cir. 1999) (emphasis

the

authenticity

of

the

CarFax Report and disputes ever having received or signed the
version Defendants provide.

She states in an affidavit that she

“do[es] not recall anyone at the dealership showing [her] a
Carfax report or asking [her] to sign or initial it.”
48-2, at 33).
the

word

(ECF No.

She further avers that she does not recall seeing

“rental”

circled

“or

any

blue

highlighting

document received at the King dealership.”

(Id.).

on

any

Defendants

cite American Chiropractic Ass’n, 367 F.3d at 234, as holding
that

“plaintiff’s

insufficient
justifiably

as

allegations

a

of

matter
on

relied

of

isolated

an

law

mail

and

because

wire

he

omission

fraud

could

in

the

not

were
have

agreement

where he received another document attached to the agreement
that

disclosed

the

very

(ECF No. 34-1, at 35).
contest

the

fact

he

claims

was

misrepresented.”

In that case, however, plaintiff did not

authenticity

of

the

defendant included with the motion.

additional

documents

that

Such is not the case here.

Accordingly, drawing all inferences in favor of Plaintiff,
the proximate cause element is met at this stage.
f. Section 1962(a) Claim
Defendants argue that Plaintiff has not pled a violation of
Section 1962(a).

To allege a violation of Section 1962(a), a

plaintiff must show: (a) receipt of income from a pattern of
58

racketeering activity, and (b) the use or investment of this
income in an enterprise.

See Busby, 896 F.2d at 837.

Plaintiff asserts that “[t]hrough the use of this illegal
and fraudulent scheme, and through their efforts to operate and
maintain the enterprise . . . and to facilitate the sale of
prior

short-term

rental

vehicles

without

the

disclosures

required by Maryland law, Defendants have been able to retain
money that is rightfully payable to [] Plaintiff[] and Class
members.”

(ECF No. 22 ¶ 245).

Defendants

have

retained

Plaintiff further alleges that

these

illegally

gained

funds

and

reinvested and used those funds in their operations in violation
of 18 U.S.C. § 1962(a).
“Defendants

each

(Id. ¶ 246).

previously

acquired

Plaintiff avers that
illicit

funds

through

similar fraudulent operations involving mail and wire fraud . .
.

and

they

used

these

proceeds

to

continue

investing in and operating King Auto Group.”
247).

their

scheme

by

(ECF No. 22 ¶

Plaintiff further asserts that “[t]hrough Defendants’ use

of the illegal and fraudulent scheme of selling prior short-term
rental
law,

vehicles

and

without

through

their

the

disclosures

efforts

to

required

operate

and

by

Maryland

maintain

the

enterprise described herein . . . Defendants have been able both
to maintain the enterprise and to profit from it at the expense
of Named Plaintiff[] and the Class.”

59

(Id. at 248).

These conclusory allegations are insufficient to assert a
RICO violation under Section 1962(a).

Section 1962(a) prohibits

a person from receiving income from a pattern of racketeering
activity

and

then

using

that

income

enterprise engaged in commerce.
18 F.3d at 1165.
an

in

the

operation

of

an

See New Beckley Mining Corp.,

Plaintiff asserts that the King Auto Group is

association-in-fact.

Defendants

argue

that

“Plaintiff[]

make[s] no allegation about the manner in which the alleged
enterprise
Complaint

received
is

money

devoid

of

or

how

any

they

factual

used

it

.

allegations

.

.

[t]he

showing

the

manner in which profits allegedly received by the Defendants
were then used to acquire any interest or invest in the [King
Auto Group].”

(ECF No. 34-1, at 42).

Plaintiff alleges that

she and other consumers were significantly overcharged for the
vehicles

sold

to

them,

and

that

the

money

from

the

alleged

fraudulent scheme to sell the vehicles without proper disclosure
was invested in the enterprise.
the

Defendants

used

She also states that “[e]ach of

proceeds

derived

from

a

pattern

of

racketeering activity under 18 U.S.C. §§ 1961(1) and (5) to
acquire an interest in, establish, and operate the enterprise.”
(ECF No. 22 ¶ 226).
Without

any

conclusions,

the

motion

to

factual

support

allegations

dismiss.

are

Plaintiff

to

insufficient

does

60

buttress

not

allege

these
to
how

legal

survive
much

a
was

invested or the contours of the reinvestment of the funds into
the King Auto Group operation.
situations

where

an

Section 1962(a) applies only in

enterprise

is

an

object

or

goal

of

the

racketeering activity, not a tool to carry out the racketeering
activity.

See Eason, 2004 WL 903756, at *1.

In In re Am. Honda

Motor Co., Inc. Dealerships Relations Litig., 941 F.Supp. 528,
548-49 (D.Md. 1996), plaintiff offered two allegations of “use
or investment” of racketeering proceeds, including: “(1) that
corrupt

Honda

received

to

executives
obtain

used

the

ownership

bribes

interests

and
in

kickbacks

existing

they

or

new

dealerships, and (2) that Honda received income in that it was
able

to

pay

manufacturers,

its

executives

substantially

and

that

used

Honda

this

less

income,

than

directly

indirectly to finance its sales and allocation network.”
548-49.

other
or

Id. at

Judge Motz found the allegations sufficient to sustain

a claim under Section 1962(a).

He reasoned that the “investment

use” injury pleading requirement
[r]equires allegations under section 1962(a)
to be supported by distinct allegations of
how the use or investment of illicit income
played a causative role.
Similarly, the
rule against “reinvestment” allegations is
not a per se rule that the use of proceeds
from predicate acts chargeable under section
1962(c) can never support a separate claim
under section 1962(a).
Instead, this rule
requires only that plaintiffs do more than
allege
that
income
received
from
one
predicate act was used in the operation of
an enterprise.
61

Id.

at 549. (emphases added).

Without any specific details

about how proceeds from the alleged racketeering activity were
used

to

establish

or

operate

the

King

Auto

Group,

the

allegations in the amended complaint do not present a plausible
claim that Defendants violated Section 1962(a).

Accordingly,

this claim will be dismissed against all Defendants.
4. Section 1962(d)
Plaintiff

also

alleges

a

violation

of

Section

1962(d),

which states, in relevant part, that “[i]t shall be unlawful for
any

person

to

conspire

to

violate

any

of

the

subsection (a), (b), or (c) of this section.”

provisions

of

Defendants argue

that “[s]ince the Complaint fails to allege any substantive RICO
claim

under

1962(c),

Plaintiffs’

conspiracy

claim

under

18

U.S.C. § 1962(d) alleged in Count X fails as a matter of law.”
(ECF No. 34-1, at 43).
discussed

supra,

See also Walters, 684 F.3d at 439.

Plaintiff’s

claims

for

substantive

As
RICO

violations under Section 1962(c) can proceed at this stage, thus
this argument is without foundation.
Plaintiff’s
reason, however.

Section

1962(d)

claim

fails

for

a

different

A RICO conspiracy claim “requires that the

plaintiff allege and later prove that the defendants knew of the
RICO violations of the enterprise and agreed to facilitate those
activities.”

Proctor,

645

F.Supp.2d

62

at

483.

Judge

Titus

reasoned in Proctor, 645 F.Supp.2d at 483, also a class action
alleging civil RICO violations: “[l]ike other conspiracies, a
defendant who agrees to do something illegal and opts into or
participates in a conspiracy is liable for the acts of his coconspirators

even

if

the

defendant

did

not

conspire with respect to a particular act.”

agree

to

do

or

However, “[b]ecause

the core of a RICO civil conspiracy is an agreement to commit
predicate acts, a RICO civil conspiracy complaint, at the very
least, must allege specifically such an agreement.”

Hecht v.

Commerce Clearing House, Inc., 897 F.2d 21, 25 (2d Cir. 1990).
The amended complaint contains the following allegations:
Defendants associated together under the
King Auto Group moniker to advertise and
jointly market themselves, purchased used
vehicles that previously had been used as
rental vehicles, used and agreed to use
misleading form documents in the course of
their sales of used vehicles, and agreed to
conceal from, and not to disclose to,
purchasers the prior rental use of vehicles
to advance each Defendant’s independent
personal gain and individual financial stake
in its respective corporation and in the
conspiracy.
(ECF No. 22 ¶ 160).

Plaintiff further asserts that “Defendants

reached an agreement or understanding to conceal from, and fail
to disclose to, [] Plaintiff[] and the Class material facts
concerning
sold.”

the
(Id.

prior
¶

short-term

177).

rental

Plaintiff

use

avers

of
that

the

vehicles

“Defendants

participated in this fraudulent scheme and worked in combination
63

with each other . . . to facilitate and engage in a conspiracy
to deceive and defraud” Plaintiff and members of the class.
(Id.).

Plaintiff also alleges that “Defendants conspired with

each other to engage in the various activities set forth herein,
agreed to participate in the operation of the conspiracy and
scheme to defraud Named Plaintiff[] and Class members, and aided
and abetted one another in these activities, all as proscribed
by Maryland law.”

(Id. ¶ 79).

These allegations are insufficient to show a violation of
Section 1962(d).
conspiracy

law,

“As compared with an allegation under general
the

objective

of

a

RICO

violation of a substantive RICO provision.”
Atlanta,

195

B.R.

156,

169

(N.D.Ga.

conspiracy

is

the

Marshall v. City of

1996).

As

the

Fourth

Circuit reasoned in Walters, 795 F.Supp.2d at 355, “[t]o plead a
violation

of

§

1962(d),

a

plaintiff

must

allege

that

‘each

defendant agreed that another coconspirator would commit two or
more acts of racketeering.’”

(citing Proctor, 645 F.Supp.2d at

477)); Coffee Beanery, Ltd., 2012 WL 3728184, at *15 (same).
The

allegations

contained

in

the

amended

complaint

do

not

plausibly lead to an inference that each dealership Defendant
agreed that another coconspirator would commit predicate acts.
Mere

conclusory

allegations

that

all

Defendants

generally

conspired or helped each other violate Section 1962(a) or (c) is
insufficient.

See, e.g., In re American Honda Motor Co., 965
64

F.Supp. at 723 (“simply assisting in the effectuation of the
RICO scheme is not alone sufficient to bring a defendant within
the

ambit

of

regarding

§

when

1962(d).”).
such

an

Plaintiff

agreement

contours of any such agreement.

was

provides
entered

no

details

into

or

the

As Judge Motz explained in In

re American Honda Motor Co., Inc., id., “[i]f the defendant has
not

himself

necessary

committed

predicate

(expressly

or

(or

acts,

impliedly)

directed
he
that

must

the
at

someone

commission
least
else

do

of)

have

the

agreed

so.”

The

allegations fail to provide notice to Defendants as to how they
conspired under Section 1962(d).

Accordingly, this claim will

also be dismissed against all Defendants.
B. Abstention
Defendants argue, in the alternative, that the court should
abstain from exercising jurisdiction pursuant to the doctrine
set forth in Burford v. Sun Oil Co., 319 U.S. 315 (1943).

As

the Fourth Circuit explained in Martin v. Stewart, 499 F.3d 360,
364 (4th Cir. 2007):
Burford
permits abstention when federal
adjudication
would
unduly
intrude
upon
complex
state
administrative
processes
because either: (1) there are difficult
questions
of
state
law
.
.
.
whose
importance transcends the result in the case
then at bar; or (2) federal review would
disrupt
state
efforts
to
establish
a
coherent policy with respect to a matter of
substantial public concern.

65

(internal marks omitted).

Defendants argue that the State of

Maryland has a strong interest in having the issues decided in
state court.

Defendants explain that “[f]or more than 50 years,

the Maryland legislature has set forth a comprehensive scheme
with

detailed

provisions

regulating

the

sale

of

automobiles,

which requires restrictive licensing from the state in order to
do business.”
that

(ECF No. 34-1, at 45-46).

Maryland’s

legislative

legislature

and

regulatory

has

Defendants contend

developed

scheme

a

involving

comprehensive
the

disclosure

requirements for automobile dealers selling cars in the State of
Maryland.

Thus,

Defendants

believe

that

“the

Maryland

legislature and the MVA have a strong interest in retaining the
power to govern the types of disclosure required to comply with
COMAR to ensure dealer accountability in the context of consumer
transactions.”

(Id. at 46-47) (internal citations omitted).

Defendants
abstention.

do

not

Plaintiff

offer

compelling

alleges

that

reasons

Defendants

to

support

engaged

in

a

fraudulent scheme by failing to disclose to consumers the prior
short-term

rental

history

of

the

vehicles

that

systematically selling, in violation of Maryland law.
Plaintiff

disputes

this

point,

Defendants

maintain

they

were

Although
that

the

prior short-term rental history of the vehicle was disclosed to
Plaintiff in a separate document – namely, the CarFax Report –
and that she acknowledged receipt by signing the CarFax Report
66

in

multiple

places.

Defendants

do

not

identify

difficult

questions of state law whose importance transcends the results
of the case at bar.

In any event, federal courts frequently

apply state law principles in resolving disputes.

Moreover, the

mere presence of a complex state or local regulatory scheme does
not mandate abstention.

See New Orleans Pub. Serv., Inc. v.

Council of New Orleans, 491 U.S. 350, 361 (1989).

As Judge

Quarles reiterated in Haak Motors LLC v. Arangio, 670 F.Supp.2d
430,

433-34

(D.Md.

2009),

“[a]bstention

doctrines

constitute

extraordinary and narrow exceptions to a federal court’s duty to
exercise the jurisdiction conferred on it.”

(quoting Martin v.

Stewart, 499 F.3d 360, 363 (4th Cir. 2007)).

As Plaintiff points

out, this case does not involve the proceedings or orders of a
Maryland administrative agency.

Although Defendants argue that

the Department of Transportation in the State of Maryland has
vested the MVA with the authority to interpret and enforce the
disclosure

provisions

in

COMAR

11.12.01.14(M)(1),

Defendants

fail to identify how federal review would disrupt Maryland’s
efforts to establish a coherent policy concerning a matter of
substantial

public

concern.

Moreover,

the

fact

that

Judge

Garbis recently adjudicated Bailey, 2014 WL 204262 - a putative
class action against car sellers alleging the same violations
asserted

here

–

further

counsels

67

against

Burford

abstention.

Accordingly, Burford abstention is inapplicable given the facts
of the case.
C. Standing to Sue the Other Dealer Defendants for the NonRico Claims
The

Other

Dealer

standing to sue them.

Defendants

argue

that

(ECF No. 37-1, at 32).12

Plaintiff

lacks

The Other Dealer

Defendants contend that “Plaintiff[] ha[s] no standing to assert
claims against the Unrelated Defendants, who did not sell them
any vehicle, who owed them no duty, and with whom they have
utterly

no

connection.”

(Id.

at

33).

Although

Plaintiff

acknowledges that she had no commercial dealings with the Other
Dealer

Defendants,

conspired
Plaintiff[]

with
and

she

each
Class

asserts

other

“in

members”

that
the
and

all

of

the

Defendants

transactions

are

thus

liable

of

Named

for

the

alleged violations.

12

As mentioned supra, the Other Dealer Defendants have not
argued that the undersigned lacks standing over the RICO claims
either in their initial motion to dismiss the federal claims or
in their reply brief.
They first raise standing as the very
last argument in their motion to dismiss or, in the alternative,
for summary judgment.
(See ECF No. 37-1, at 32).
They state
that “[s]ince the Plaintiffs fail to allege any legal duty owed
to them by any of the [Other Dealer] Defendants, they have no
standing to assert these claims against them,” presumably
referencing the state law claims briefed in the motion to
dismiss or for summary judgment.
Notably, the Other Dealer
Defendants argue in their motion to dismiss the federal claims
that the court lacks subject matter jurisdiction over the MMWA
claim; they do not raise standing as an issue as to the RICO
claims in the same motion.
68

Standing is a threshold jurisdictional requirement.

See

Central Wesleyan College v. W.R. Grace & Co., 6 F.3d 177, 188
(4th Cir. 1993) (“standing is a jurisdictional issue, and courts
should attempt to resolve such issues as soon as possible.”).
The Supreme Court has consistently required that a litigant have
“standing” to challenge the action sought to be adjudicated in
federal court.
have

standing,

Valley Forge, 454 U.S. at 471.
a

plaintiff

must

demonstrate

“In order to

some

actual

or

threatened injury as a result of the putatively illegal conduct
of the named defendant, and must show that the injury can be
fairly traced to the challenged action and that the injury is
likely to be redressed by a favorable decision.”

Herlihy v.

Ply-Gem Industries, Inc., 752 F.Supp. 1282, 1290 (D.Md. 1990);
see also Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91
(1979).

“The constitutional limits on standing result in the

elimination of a claim in which the plaintiff has failed to make
out

a

case

defendant.”

or

controversy

between

himself

Herlihy, 752 F.Supp. at 1290.

and

the

As the Supreme Court

noted:
That a suit may be a class action . . . adds
nothing to the question of standing, for
even named plaintiffs who represent a class
“must allege and show that they personally
have been injured, not that injury has been
suffered by other unidentified members of
the class to which they belong and which
they purport to represent.”

69

named

Lewis

v.

Casey,

518

U.S.

343,

357

(1996)

(alteration

in

original) (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S.
26, 40 n. 20 (1976)).
Judge Garbis reasoned in Bailey, 2014 WL 204262, at *3,
that

“[t]he

Circuit
action

has

United

States

echoed

this

context,

it

Court

outlook,
‘is

of

Appeals

stating

essential

for

that
that

in

the

Fourth

the

class

named

class

representatives demonstrate standing through a requisite case or
controversy between themselves personally and’ each defendant.”
(emphasis added) (quoting Cent. Wesleyan Coll. v. W.R. Grace &
Co., 6 F.3d 177, 188 (4th Cir. 1993)); Lieberson v. Johnson &
Johnson Consumer Co., Inc., 865 F.Supp.2d 529, 537 (D.N.J. 2011)
(holding that the plaintiff lacked standing to pursue putative
class

action

claims

of

consumer

fraud

against

a

baby

bath

product manufacturer as to any products the named plaintiff did
not allege she used or purchased).
putative

class

may

assert

claims

The fact that members of the
against

the

Other

Dealer

Defendants does not confer standing on Plaintiff to sue the
Other Dealer Defendants.

As noted in Miller v. Pacific Shore

Funding, 224 F.Supp.2d 977, 995-96 (D.Md. 2002), “[a]bsent a
contractual

relationship

with

any

of

these

defendants,

the

plaintiffs cannot possibly show that their injuries, such as
they have suffered, are traceable to the conduct of any of these

70

defendants.

.

.

.

Their

categorization

of

their

suit

as

a

putative class action in no way cures this defect.”
Plaintiff

argues

that

“a

conspiracy

[among

all

of

the

Defendants] confers standing with respect to each Defendant.”
(ECF No. 48, at 107).

Her theory is that the Other Dealer

Defendants are liable as co-conspirators with King Buick GMC
because

all

of

the

Defendants

reached

an

agreement

and/or

understanding concerning the written disclosures to be made to
Named Plaintiff and members of the putative class and regularly
concealed the fact that the vehicles they sold were prior shortterm rentals, in violation of Maryland law.

In a situation

where a named plaintiff did not deal directly with the named
defendants,
aspect

of

conspiracy.”

“a

plaintiff

standing

may

be

through

able

to

satisfy

sufficient

the

injury

allegations

of

See Cent. Wesleyan Coll., 6 F.3d at 188 (“[w]hile

allegations of conspiracy among parties with whom a plaintiff
did not directly deal may confer standing upon the plaintiff to
sue the nondealing parties,[], the Supreme Court has emphasized
that indirectness of injury, though not fatal to standing, ‘may
make

it

substantially

more

difficult

to

meet

the

minimum

requirement of Art. III,’ Warth v. Seldin, 422 U.S. 490, 505
(1975).”); Brown v. Cameron-Brown Co., 652 F.2d 375, 378 (4th
Cir. 1981) (“[w]e are in full accord with the district court
that when plaintiffs alleged injury as a result of a conspiracy
71

in

which

the

non-dealing

defendants

participated,

plaintiffs

have alleged standing to sue the non-dealing defendants.”).
Plaintiff
conspiracy.

has

not

adequately

pled

the

existence

of

a

A civil conspiracy is “‘a combination of two or

more persons by an agreement or understanding to accomplish an
unlawful act or to use unlawful means to accomplish an act not
in itself illegal, with the further requirement that the act or
the means employed must result in damages to the plaintiff.’”
Hoffman v. Stamper, 385 Md. 1, 24 (2005) (citation omitted)
(emphasis

added).

The

key

question

in

assessing

whether

a

conspiracy theory has been adequately pled is whether there is
adequate factual support for the existence of an agreement to
conspire.

DB Capital Grp., 2011 WL 887554, at *6; Brady v.

Livingood,

260

F.Supp.2d

94,

104

(D.D.C.

2004).

A

clear

agreement to conspire is necessary because the “[i]ndependent
acts of two wrongdoers do not make a conspiracy.”

Murdaugh

Volkswagen, Inc. v. First Nat. Bank of South Carolina, 639 F.2d
1073,

(4th

1076

Cir.

1981).

Detrimental

to

Plaintiff’s

conspiracy claim here is the requirement that “plaintiff must
set

forth

more

agreement.”

than

just

conclusory

allegations

Brady, 360 F.Supp.2d at 104.

of

[the]

The complaint should

include factual allegations that provide an indication of when
and

how

defendants

the

agreement

was

brokered

specifically

were

parties
72

and
to

how

the

each

of

agreement.

the
DB

Capital

Group,

2011

WL

887544,

at

*6;

Acosta

Orellana

v.

CropLife Int’l, 711 F.Supp.2d 81, 113-14 (D.D.C. 2011).
Here, the dealerships Defendants are separate businesses.
Plaintiff asserts that:
Defendants
reached
an
agreement
and/or
understanding
concerning
the
written
disclosures to be made to Named Plaintiff[]
and the Class in connection with their
vehicle purchases and failed to make the
written disclosures required by Maryland law
in furtherance of their conspiracy for their
own personal gain, advantage and profit,
resulting
in
legal
damage
to
Named
Plaintiff[] and Class.
(ECF

No.

22

¶

208).

She

further

asserts

that

“Defendants

conspired among themselves, by agreement and understanding, to
engage in the unlawful acts and omissions described herein.”
(Id. ¶ 5).
agreement

Plaintiff provides no details as to when such an
was

reached

or

the

contours

of

the

agreement.

Furthermore, Plaintiff does not reference when King Buick GMC
met

or

communicated

conspiracy.
conspiracy

with

other

members

of

the

alleged

Cf. DB Capital Grp., 2011 WL 887544, at *7 (finding
allegations

sufficient

where

plaintiff’s

complaint

referenced specific instances when alleged co-conspirators met
and engaged in acts to defraud plaintiff).

Plaintiff attempts

to show standing over the Other Dealer Defendants on the premise
that

the

Other

Dealer

Defendants

similarly

defrauded

consumers who are members of the putative class.

73

other

This is not a

true

conspiracy.

conspiracy
jointly

among

Plaintiff’s
the

marketing

Defendants

and

selling

allegations
include:

vehicles

(1)

supporting

and

the

a

dealerships

developing

form

documents such as the Buyer’s Order used at each dealership; (2)
using the same forms and same allegedly deceptive practices to
misrepresent

the

prior

rental

use

of

the

vehicles

sold

to

consumers; (3) marketing each other’s used vehicles on their
websites; (4) agreeing to offer CarFax Reports on used vehicles
owned by other Defendants; (5) agreeing to jointly advertise and
advertising

for

sale

identical

vehicles

with

the

identical

vehicle identification numbers simultaneously on more than one
Defendant’s website; and (6) referring customers to each other’s
websites.

(ECF No. 48, at 33-35).

The fact that the Defendants

marketed and advertised the same vehicles, used the same sales
agreements without making the allegedly requisite disclosure,
and offered CarFax Reports in connection with vehicles owned by
Other

Dealer

Defendants

suggests

concerted

action,

not

conspiracy; indeed, the plausible inference from the allegations
contained in the amended complaint as to civil conspiracy is
that

the

Other

Dealer

Defendants

violated

Maryland

law

with

respect to disclosures regarding a vehicle’s prior use in the
same way as King Buick GMC through concerted action.
The

analysis

instructive.

in

Herlihy,

752

F.Supp.

at

1290,

is

That case involved a putative class action by a
74

group

of

plywood

homeowners

products,

against

alleging

manufacturers

that

the

of

fire

products

retardant

were

defective.

The court reasoned:
Nowhere in the complaint is there an
allegation that a named plaintiff suffered
any injury or damage because of the wrongful
act or conduct of a named defendant. Rather
than relying on any allegation in the
complaint of a specific injury [caused by a
named defendant], plaintiffs contend that
they have standing to sue under a so-called
“concert of action” theory.
Plaintiffs
argue that a defendant may be liable for an
injury caused by the product of another if
the
plaintiff
can
prove
that
multiple
defendants acted tortuously pursuant to a
common plan or design.
[]
Plaintiffs
contends that they have sufficiently alleged
in this case a concert of action and that
therefore they have standing to sue the six
named defendants.
Id.

The court rejected this argument, noting that Maryland law

does

not

concert

recognize
of

action.

a

cause
Here,

of

action

although

based

upon

Plaintiff

an

uses

alleged

the

word

“conspiracy” in the amended complaint, the factual allegations
support the inference of concerted action among the Defendants,
which does not confer standing.

Indeed, the amended complaint

alleges that “when King Buick failed to disclose and concealed
from [] Ms. Chambers the prior rental use of the vehicle[] [she
was] purchasing, it did so as part of a conspiracy, scheme and
concerted action in which all of the Defendants participated
with their knowledge and consent, as well as with the aid and

75

encouragement of one another.”

(ECF No. 22 ¶ 60; see also ¶ 16

(“The King Auto Group entities named as Defendants acted in
concert to accomplish, and jointly benefitted from, the scheme
described herein.”)); Sprint Nextel Corp. v. Simple Cell, Inc.,
Civil No. CCB-13-617, 2013 WL 3776933, at *5 (D.Md. July 17,
2013) (“[t]he mere involvement or encouragement of lies made by
others is neither sufficient to maintain a fraud action under
Maryland law, . . . nor specific enough to maintain a claim
under Rule 9(b).”).
The allegations are insufficient to show a conspiracy among
all of the Defendants.

In Acosta, 711 F.Supp.2d at 114, the

court dismissed a civil conspiracy claim because the plaintiff
failed

to

provide

any

factual

support

that

the

defendant

CropLife had an agreement with the other defendants and found
that it was just as likely that they were acting independently
with

a

common

motivation

or

goal.

This

is

the

case

here.

Moreover, the Other Dealer Defendants submit an affidavit from
Gerard Ceresini, the Controller of King Buick GMC, in which he
stated that the Other Dealer Defendants “had no involvement in
the sale of this vehicle to [] Ms. Chambers, or the disclosures
given, or not given, by King Buick GMC to them.”
¶

11).

He

further

declares

that

“[t]here

was

(ECF No. 37-7
no

agreement

between King Buick GMC and these Unrelated Dealerships relating
to the sale of . . . the 2010 Dodge Caliber SX2 to Ms. Chambers
76

to make, or not to make, any disclosures regarding prior rental
car history of the vehicle purchased by them.”

(Id. ¶ 12).

He

also contends that “King Buick GMC is not involved in the manner
or method in which the Unrelated Dealerships purchase or sell
their own used car inventory.”

(Id. ¶ 13); (see also id. ¶¶ 14-

16).

Buick

He

states

that

“King

GMC,

like

most

Maryland

automobile dealer, even competing dealerships, advertise their
inventory on common ‘websites’ and they do not share profits or
expenses with one another.”
Defendants
employee

also

of

submit

King

Buick

an

(Id. ¶ 17).
affidavit

GMC,

with

from

The Other Dealer
Jason

personal

Carroll,

knowledge

of

an
the

transaction involving the sale of the vehicle to Ms. Chambers.
(See ECF No. 37-8).

He states that the Other Dealer Defendants

had “no involvement in the sale of this vehicle to Ms. Chambers,
or the disclosures for this vehicle.

. . . I did not know what

forms, documents, practices or methods were being used by these
other 4 automobile dealerships to disclose, or not to disclose,
prior short term rentals to their customers.”

(Id. ¶ 5).

Other

existence

Dealer

agreement

Defendants

among

the

against Plaintiff.

explicitly

Defendants

to

deny

the

commit

any

unlawful

The

of

an

acts

(See ECF No. 55, at 21 (“Chambers’ entire

conspiracy theory also fails because it is not factually or
logically plausible . . . The problem with her theory is that it
is untrue.”); Higdon v. Lincoln Nat. Ins. Co., Civ. Action No.
77

ELH-13-2152,

2014

WL

1630210,

at

*3

(D.Md.

Apr.

21,

2014)

(noting that a factual challenge to subject matter jurisdiction
asserts that the jurisdictional allegations of the complaint are
not true and the court is entitled to decide disputed issues of
fact

with

respect

to

subject

matter

jurisdiction);

Kerns

United States, 585 F.3d 187, 192 (4th Cir. 2009) (same).
from

conclusory

Defendants,

the

allegations
allegations

of

in

a

the

conspiracy

amended

Aside

among

complaint

v.

do

the
not

explain how the Other Dealer Defendants were involved in the
scheme that defrauded Plaintiff in her purchase of the vehicle.
Accordingly,
Defendants

there
and

is

Counts

no
I

standing
through

VII

over

the

against

Other
them

Dealer
will

be

dismissed.13

13

In Bailey, 2014 WL 204262, at *4, also a putative class
action against dealership Defendants with nearly identical
facts,
Judge
Garbis
stated
that
the
complaint
included
allegations “that present a plausible claim that Heritage, the
Other Dealer Defendants, and Atlantic acted in concert pursuant
to an agreement to accomplish an unlawful purpose of selling
prior rental cars without disclosing that information to
customers, one of whom was Bailey, who sustained damage as a
result.” Judge Garbis thus concluded that named plaintiff would
have a valid conspiracy claim against the other dealer
defendants “if it were not for the fact that Heritage and each
of the Other Dealer Defendants was a 100%-owned subsidiary of
Atlantic.” Judge Garbis did not undertake extensive analysis as
to which allegations in the complaint he found sufficient to
establish the existence of an agreement among the defendants to
confer standing.
He did not need to because he found the
intracorporate conspiracy doctrine barred the claims against the
other non-dealing defendants.
78

D. Subject Matter Jurisdiction over the Magnuson-Moss
Warranty Act (Count II)
Defendants

assert

that

this

court

lacks

subject

matter

jurisdiction over the MMWA claim because the amended complaint
fails to allege any amount of damages and, even if it did,
Plaintiff and members of the class still could not plausibly
allege
(ECF

$50,000

No.

34-1,

in
at

damages

under

16-17).

their

separate

Defendants

further

MMWA

claims.

argue

that

Plaintiff cannot meet the jurisdictional “100-named plaintiff”
requirement under 15 U.S.C. § 2301(d)(3)(C).
A plaintiff may file a MMWA suit for damages for certain
breach of warranty obligations in either state or federal court.

Plaintiff submitted a Notice of Supplemental Authority on
April 30, 2014, alerting the undersigned to an order issued in
the Circuit Court for Baltimore County related to another class
action, Buie v. Antwerpen Motorcars, Ltd., Case No. C-13-12341,
that alleges that a group of automobile dealerships failed to
disclose the prior short-term rental use of vehicles offered for
sale.
(See ECF No. 71).
Plaintiff asserts that the Antwerpen
Auto Group Defendants included all nine of the Antwerpen dealers
as defendants, but named plaintiffs’ transactions were with only
three of those entities. (ECF No. 71, at 2). Plaintiff submits
a two-page order from the Circuit Court for Baltimore County.
The order states that “[t]he facts alleged here, in Plaintiffs’
Amended Complaint, are sufficient to establish the existence of
a civil conspiracy, and thus sufficient to establish the
standing of these [p]laintiffs to sue these [d]efendants.” (ECF
No. 71-1, at 1).
This order, of course, is not binding
precedent on this court.
Moreover, the court did not explain
its reasoning.
Accordingly, the undersigned does not find these decisions
controlling on the issue of standing against the Other Dealer
Defendants in this matter.
79

15

U.S.C.

§

2301(d)(1).

Such

a

suit,

however,

is

not

appropriately brought in a United States district court:
(A) If the amount in controversy of any
individual claim is less than the sum or
value of $25;
(B) If the amount in controversy is less
than the sum or value of $50,000 (exclusive
of interests and costs) computed on the
basis of all claims to be determined in this
suit; or
(C) If the action is brought as a class
action, and the number of named plaintiffs
is less than one hundred.
15 U.S.C. § 2310(d)(3); Misel v. Mazda Motor of Am., Inc., 420
F.App’x 272, 273-73 (4th Cir. 2011).

Here, Latechia Chambers is

the only putative Named Plaintiff and it does not appear that
the jurisdictional requirement is met.

Plaintiff maintains that

“where an alternate basis for federal jurisdiction exists – as
where violations of a federal statute such as RICO have been
alleged

–

federal

Magnuson-Moss
plaintiffs

and

jurisdiction

may

claim,

irrespective

the

jurisdictional

Magnuson-Moss claims.”

of

be
the

amount

maintained
number
at

over
of

issue

a

named
in

the

(ECF No. 48, at 82).

The court has subject matter jurisdiction over the MMWA
claim because one of the RICO counts will not be dismissed at
this time.
F.Supp.2d

As Judge Ellis reasoned in Barnes v. West, Inc., 249
737,

739

(E.D.Va.

2003),

“MMWA

claims

that

cannot

independently be heard in federal court owing to the absence of
80

the

requisite

amount

in

controversy,

can

still

be

heard

in

federal court in circumstances where supplemental jurisdiction
is

properly

exercised

under

28

U.S.C.

§

1367.”

In

such

circumstances – as here – the amount in controversy and “100
named

plaintiff”

requirements

are

no

obstacles

to

the

claim

being heard in federal court because the court can exercise
supplemental jurisdiction over the MMWA claim provided another
jurisdictional basis exists.

See Chavis v. Fidelity Warranty

Servs., Inc., 415 F.supp.2d 620, 623 (D.S.C. 2006) (“many courts
have

allowed

Magnuson-Moss

federal
claims

jurisdiction
that

fail

to

to

be

maintained

conform

to

the

over
strict

limitations of § 2301(d)(3) when an alternate basis for federal
jurisdiction exists.”).

Defendants’ argument assumes that the

RICO claims will be dismissed, but at this stage, the Section
1962(c) claim can proceed.

Because the RICO claim provides an

alternative

basis,

jurisdictional

there

is

subject

matter

jurisdiction over the MMWA claim.
E. The MMWA and Implied Warranty of Merchantability
Claims (Counts I & II)
Plaintiff asserts a claim for breach of implied warranty of
merchantability and seeks relief under both federal law, the
MMWA, and state law: Section 2-314 of the Uniform Commercial
Code, as codified at Md. Code Ann. § 2-314.
Plaintiff’s

claims

for

breach

81

of

implied

Resolution of
warranty

of

merchantability

and

violation

principles of state law.

of

the

MMWA

turns

largely

on

Carlson v. Gen. Motors Corp., 883 F.2d

287, 291 (4th Cir. 1989); Laing v. Volkswagen of Am., Inc., 180
Md.App. 136 (2008); Ingram v. Auto Palace, Inc., No. BPG-092660,

2012

WL

5077633,

at

*4

(D.Md.

Oct.

17,

2012)

(“[t]he

Fourth Circuit has recognized that the Magnuson-Moss Warranty
Act

operates

warranting

of

in

conjunction

consumer

with

state

products.”).

In

law
a

to

regulate

Maryland

the

warranty

action, the plaintiff must show that a warranty existed, that
the product did not conform to the warranty, and that the breach
proximately caused the injury or damage.
Corp., 397 Md. 108 (2007).
governs

actions

asserting

The Maryland Uniform Commercial Code
breaches

warranties for transactions in goods.
Law § 2-102.

Lloyd v. Gen. Motors

of

express

or

implied

See Md. Code Ann., Com.

Section 2-314(1) states that “a warranty that the

goods shall be merchantable is implied in a contract for their
sale if the seller is a merchant with respect to goods of that
kind.”

The code further explains that “goods to be merchantable

must be at least such as (a) pass without objection in the trade
under the contract description; . . . and (c) are fit for the
ordinary purposes for which such goods are used.”

§ 2-314(2).

Here, Plaintiff invokes Section 2-314(2)(a), alleging that:
[u]nder
both
a
consumer’s
reasonable
expectations
as
well
as
trade
quality
standards, a vehicle with a prior rental
82

history
that
is
not
clearly
and
conspicuously disclosed cannot pass without
objection in the trade under the contract
description and simply is not merchantable
under Maryland law.
A significant segment
of the buying public would object to
purchasing a used vehicle previously used as
a short-term rental vehicle.
(ECF No. 22 ¶ 134).

Defendants argue that absent allegations of

any physical defect in the vehicle sold to Plaintiff, there can
be

no

cause

of

action

for

breach

of

merchantability or violation of the MMWA.

implied

warranty

of

(ECF No. 36, at 15).

There is a long history of applying the implied warranty of
merchantability

in

the

used

car

context.

Jones

v.

Koons

Automotive, Inc., 752 F.Supp.2d 670, 685 (D.Md. Nov. 5, 2010).
Even so, most – if not all – of these cases contemplate physical
defects

in

automobiles

reasonable consumers.

that

offend

the

expectations

of

Indeed, the Fourth Circuit has construed

the implied warranty to reach only those defects:
The difficulty is that, so far as these
plaintiffs
are
concerned,
GM’s
diesel–
equipped cars have served the traditionally
recognized purpose for which automobiles are
used.
Since cars are designed to provide
transportation, the implied warranty of
merchantability is simply a guarantee that
they will operate in a safe condition and
substantially free of defects.
Thus, where
a
car
can
provide
safe,
reliable
transportation, it is generally considered
merchantable.
Carlson v. Gen. Motors Corp., 883 F.2d 287, 297 (4th Cir. 1989).
Carlson

rejects

the

argument

that
83

the

implied

warranty

of

merchantability is meant to protect mere consumer expectations
that a product holds its value, absent some tangible defect so
substantial

as

to

render

the

automobile

virtually

useless.

Carlson, 883 F.2d at 298; Ingram, 2012 WL 5077633, at *9 (“[t]he
implied

warranty

vehicle

will

safe

of

operate

transportation.

merchantability
effectively
.

.

.

warrants

and

There

is

will
no

both

provide

that

the

reasonably

evidence,

however,

establishing that a vehicle’s inability to pass state inspection
is equivalent to a finding of a vehicle’s inoperability.”).
In

Koons,

752

F.Supp.2d

at

685,

plaintiff’s

claim

for

breach of the implied warranty of merchantability was dismissed
on nearly identical facts as here.

Plaintiff argues that “[i]n

Koons, this Court concluded a buyer did not state a claim for
breach

of

the

Implied

Warranty

of

Merchantability

where

the

buyer alleged the dealer failed to disclose the vehicle’s rental
history because the vehicle was not ‘unfit for use.’”
48, at 89).

(ECF No.

Plaintiff mischaracterizes the holding in Koons.

To the contrary, the plaintiff in Koons, 752 F.Supp.2d at 685,
alleged a breach of the implied warranty of merchantability, “as
the 2007 Pontiac G6 would not pass without objection in the
trade because the contract description [did not] include a clear
and conspicuous disclosure that [the Pontiac G6] had previously
been used as a short-term rental.” (internal citations omitted).
This

argument

was

rejected,

however,
84

because

there

was

no

suggestion that the car had any physical defect or was otherwise
functionally useless.

Plaintiff argues that the fact that “a

dealer will not accept a trade-in vehicle from a buyer without
first obtaining a signed statement from the buyer certifying,
among other things, the existence of any former rental use of a
trade-in establishes that accurate disclosure of prior use is
needed for a vehicle to ‘pass without objection in the trade.’”
(ECF No. 48, at 88).

Plaintiff asserts that “[]otherwise, it

would not be common practice in the automobile industry for car
dealers to require buyers trading in their used vehicles to
provide such information.”

(Id. at 89).

Plaintiff cites no

case law from this district to support this contention.

In

Bailey, 2014 WL 204262, at *11, Judge Garbis noted that:
[t]he Maryland appellate courts have not yet
addressed directly whether a vehicle can be
considered non-merchantable under §2-314(2)
in the absence of a claim that the car
suffers from some tangible defects (i.e., a
design or manufacturing defect) or has some
concrete physical problem that renders it of
a lesser quality than other cars of the same
contract description.
Judge Garbis stated that “[t]he Court doubts – in the absence of
Maryland
there

precedent

would

implied

be

a

warranty

supporting
valid

of

[plaintiff’s]

claim

based

upon

merchantability.”

a

position
violation

Although

Judge

–

that
of

an

Garbis

ultimately decided not to dismiss this claim because he found
viable

the

other

claims

premised
85

on

the

same

facts,

the

undersigned

declines

to

keep

the

implied

warranty

of

merchantability and MMWA claims on this basis.
Plaintiff

has

including

a

Court

for

submitted

transcript

Baltimore

a

notice

from

City

a

of

supplemental

proceeding

(Case

the

Circuit

03-C-13-008147),

No.

another

putative class action against dealerships.
In

ruling

on

a

motion

to

dismiss

the

before

authority,

(See ECF No. 64-1).
implied

warranty

of

merchantability claim in that case, Judge Stringer Jr. decided
to follow Judge Garbis’s lead, stating: “I am just going to do
what Judge Garbis did and said, since the rest of it I’ll allow
to go forward, I’ll let that to go forward, too.”

(Id. at 8).

The undersigned, however, sees no reason to depart from the
holding in Koons on nearly identical facts.
Discovery
Action

Creek

No.

(dismissing

Children’s

09-0140,

2011

warranty

Museum
WL

of

of

826806

See also Renauer v.

Washington,
(D.Md.

Inc.,

Mar.

merchantability

7,

claims

Civ.
2011)
where

“[p]laintiffs have not identified any defects in the slide that
would

constitute

a

breach

of

the

implied

warranty

of

merchantability nor have they provided any evidence to show how
defects

in

Accordingly,

the

slide

were

Plaintiff’s

the

claims

cause
for

of

the

breach

[]
of

injuries.”).
the

implied

warranty of merchantability and violation of the MMWA will be
dismissed.

86

F.

Negligent Misrepresentation (Count VI)

Plaintiff asserts a negligent misrepresentation claim.

She

alleges that:
Defendants negligently omitted and failed to
disclose
the
material
facts
that
the
vehicles sold to Named Plaintiff[] and the
Class previously had been used as short-term
rental vehicles, negligently misrepresented
that the vehicles sold to them previously
were
used
for
consumer
purposes
only,
negligently misrepresented the condition,
quality and standard of the vehicles, [and]
negligently failed to disclose that the
price of the vehicles did not accurately
reflect their value.
(ECF

No.

22

¶

200).

To

state

a

claim

for

negligent

misrepresentation under Maryland law, Plaintiff must show:
(1) the defendant, owing a duty of care to
the plaintiff, negligently asserts a false
statement; (2) the defendant intends that
his statement will be acted upon by the
plaintiff; (3) the defendant has knowledge
that the plaintiff will probably rely on the
statement, which, if erroneous, will cause
loss
or
injury;
(4)
the
plaintiff,
justifiably, takes action in reliance on the
statement; and (5) the plaintiff suffers
damage proximately caused by the defendant’s
negligence.
Lloyd v. Gen. Motors Corp., 397 Md. 108, 136 (2007).
King

Buick

GMC

argues

that

Plaintiff

fails

to

state

a

negligent misrepresentation claim because King Buick GMC did not
make any misrepresentations or omissions.

King Buick maintains

that it disclosed to Plaintiff in a CarFax Report in multiple
87

places that the vehicle she was purchasing was a prior shortterm

rental.

King

Buick

GMC

further

asserts

that

because

Plaintiff received the CarFax Report which disclosed that the
vehicle was previously used as a short-term rental, she could
not have justifiably relied on any alleged misrepresentations in
the Buyer’s Order.

It includes as an exhibit to its motion to

dismiss a copy of a CarFax Report allegedly furnished to Ms.
Chambers, showing that the word “rental” is highlighted in blue
and Ms. Chambers’s initials are contained next to this purported
disclosure.

(See ECF No. 36-5).

There are several problems with King Buick GMC’s arguments.
First, King Buick GMC has moved to dismiss.

As indicated above,

as a general rule, extrinsic evidence should not be considered
at the 12(b)(6) stage.

The Fourth Circuit has held that “when a

defendant attaches a document to its motion to dismiss, “a court
may consider it in determining whether to dismiss the complaint
[if]

it

complaint

was

integral

and

authenticity.”
(4th Cir. 1999).

[if]

to
the

and

explicitly

plaintiffs

do

relied
not

on

in

the

challenge

its

Phillips v. LCI Int’l Inc., 190 F.3d 609, 618
Here, Plaintiff challenges the authenticity of

the CarFax Report provided by King Buick GMC as an exhibit.
Ms. Chambers declares:
I understand that King has filed a motion
with the Court which tells the Court that it
has a copy of a Carfax report for my car and
88

claims that I initialed it in two places. .
. . I do not recall anyone at the dealership
showing me a Carfax report or asking me to
sign or initial it, though I do recall
signing quite a few documents wherever the
King rep put an “x” mark next to a line for
signature, but the Carfax report was NOT one
of those documents.
(ECF No. 48-2, at 33) (emphasis added).

Plaintiff avers that

she “further understand[s] that King has told the Court that the
word

‘rental’

was

circled

and

highlighted

Carfax report was presented to [her].
(Id.).

in

blue

when

the

This cannot be true.”

Accordingly, to the extent King Buick GMC maintains that

Plaintiff

could

representations

in

not
the

have

justifiably

Buyer’s

Order

given

relied
the

on

any

conflicting

information in the CarFax Report, this argument is unavailing at
this stage of the proceedings because Plaintiff disputes the
authenticity of the CarFax Report that King Buick GMC proffers.14

14

In her affidavit, Ms. Chambers also states:
King put a copy of various documents in an
envelope for me to take home.
Upon
returning home with the car, I sometime
later looked at what was in the envelope.
When I did, I was surprised to find a
folded-up copy of a Carfax report among my
documents.

(ECF No. 48-2, at 33). Plaintiff submits the CarFax Report that
she allegedly received in the envelope from King Buick GMC,
which is not initialed and the disclosure regarding the
vehicle’s prior use as a short-term rental is not highlighted
(unlike the CarFax Report that Defendant proffers). (Id. at 3638).
Thus, the authenticity of the CarFax Report that King
Buick GMC provides is disputed.
89

The amended complaint states that King Buick negligently omitted
and

failed

to

disclose

altogether

that

the

Plaintiff was a prior short-term rental.

vehicle

sold

to

(ECF No. 22 ¶ 200).

The amended complaint further states that she relied on the
false

representation

and

omission

in

the

Buyer’s

Order

by

entering into a sales agreement for a vehicle that was of a
lesser value and quality than that represented by King Buick
GMC.

(Id.

favorable

¶

204).

to

Viewing

Plaintiff,

the

she

facts

has

in

the

stated

a

light

most

negligent

misrepresentation claim against King Buick GMC.
King Buick relies on American Chiropractic, 367 F.3d at
235, for the proposition that where plaintiff receives another
document attached to the agreement that discloses the very terms
she

claims

were

misrepresented

or

omitted,

negligent misrepresentation or fraud.

she

cannot

claim

The facts of American

Chiropractic are readily distinguishable.

In that case, the

Fourth Circuit held that plaintiff could not have relied on a
misrepresentation by defendant because, unlike here, there was
no dispute that plaintiff received the second document with the
pertinent disclosure.

Here, Plaintiff alleges that she did not

receive a document before she purchased the vehicle from King
Buick GMC that disclosed that the car was a prior short-term
rental.

In Jones, 752 F.Supp.2d at 686, the undersigned denied

defendant’s motion to dismiss the negligent misrepresentation
90

claim where plaintiff alleged that defendant failed to disclose
the

prior

use

of

a

purchased

vehicle

as

a

daily

rental.

Accordingly, the negligent misrepresentation claim against King
Buick GMC will not be dismissed at this time.
G.

Deceit by Non-Disclosure or Concealment (Count IV)

Count IV of the complaint alleges deceit by non-disclosure
or

concealment.

This

count

“comprises

distinct, claims sounding in fraud.”

two

similar,

yet

Bourgeois v. Live Nation

Entm’t, Inc., Civ. Action No. ELH-12-cv-00058, 2014 WL 936841,
at *32 (D.Md. Mar. 10, 2014); Fegeas v. Sherrill, 218 Md. 472,
476 (1958) (“Concealment and non-disclosure are closely related
and in any given situation usually overlap.”).

The elements of

fraudulent concealment are:
(1) the defendant owed a duty to the
plaintiff to disclose a material fact; (2)
the defendant failed to disclose that fact;
(3) the defendant intended to defraud or
deceive the plaintiff; (4) the plaintiff
took action in justifiable reliance on the
concealment; and (5) the plaintiff suffered
damages as a result of the defendant’s
concealment.
Blondell v. Littlepage, 413 Md. 96, 119 (2010).
cause

of

action,

concealment

must

have

been

“‘To create a
intentional

and

effective – the hiding of a material fact with the attained
object of creating or continuing a false impression as to that
fact.

The affirmative suppression of the truth must have been

with intent to deceive.’”

Fegeas, 218 Md. at 476-77 (citation
91

omitted).

With respect to active suppression or concealment of

facts, fraudulent concealment “is any statement or other conduct
which prevents another from acquiring knowledge of a fact, such
as diverting the attention of a prospective buyer from a defect
which otherwise, he would have observed.”
138.

Lloyd, 397 Md. at

A claim for deceit by nondisclosure “requires only that

the defendant remain silent about, or omit, facts.”
Md. at 38 n.11.

Lloyd, 397

The non-disclosed fact must be material, which

means it must be one on which a reasonable person would rely in
making a decision.

Sass v. Andrew, 152 Md.App. 406, 430 (2003).

Like a claim for fraudulent concealment, a claim for deceit by
nondisclosure will only lie if “the defendant had a duty to
disclose.”

Id; Bourgeois, 2014 WL 936841, at *33.

Maryland

ordinarily does not impose a general duty on every party to a
transaction to disclose facts to the other party.
Md.App. at 430.

Sass, 152

Maryland law also recognizes that, though, even

where there is no duty to disclose, a person who suppresses or
conceals

facts

that

materially

qualify

other

representations

that person has made may be found liable for fraud.
Maryland

State

Dental

Ass’n,

155

Md.App.

556,

567

Hogan v.
(2004).

Claims of fraud must be pled with particularity, as noted above.
Unlike the negligent misrepresentation claim, this claim
requires Plaintiff to plead scienter.
that

it

did

not

make

any

King Buick GMC argues

intentionally
92

false

statement

or

conceal anything from Plaintiff because it clearly disclosed in
the CarFax Report the prior short-term rental use of the vehicle
it sold to Ms. Chambers.

(See ECF No. 36-1, at 23-24).

King

Buick GMC avers that “[b]y providing Plaintiff[] with the CarFax
Report,

with

disclosing

the

that

‘Title

[her]

History’

vehicle

was

and
a

‘Ownership

prior

History’

rental

in

five

different places, King Buick GMC intended to and did in fact
accurately disclose the true title history of the vehicle before
it was sold.”
to

guidance

(ECF No. 36-1, at 23-24).
from

the

Maryland

MVA

King Buick GMC points

stating

that

disclosures

regarding a vehicle’s prior use do not need to be made on the
Buyer’s

Order

document.

and

the

disclosure

can

be

made

on

a

separate

(See ECF No. 36-6, at 2 (MVA Bulletin, Aug. 25,

2011)); Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th
Cir.

2009)

(in

consider

matters

Maryland

MVA

reviewing
of

states

motions

public
that

to

record).
“[t]he

MVA

dismiss,
The
does

the

guidance
not

document must contain the required disclosures.

court

may

from

the

limit

which

Best practices

are to provide disclosure in a writing that is attached to the
sales order and may be attached to the [retail installment sales
contract] if there is one.”
2013)).

(Id. at 3 (MVA Bulletin, June 21,

King Buick GMC further contends that Plaintiff cannot

show justifiable reliance because she knew or is presumed to
have known that the vehicle was a prior rental by looking at the
93

CarFax Report she “signed which disclosed this fact in five
different places.”

(ECF No. 36-1, at 27).

Plaintiff counters

that King Buick GMC’s own contract “told Ms. Chambers she should
rely

on

no

representation

outside

the

four

corners

of

her

Buyer’s Order, including on any documents – like a Carfax – not
signed by the dealer.”

(ECF No. 48, at 97).

Specifically, the

Buyer’s Order Ms. Chambers executed stated: “I (we) understand
that

there

are

no

other

agreements,

express

warranties

or

representations, except as stated above and on the back, and I
(we) agree to the terms of this agreement.”
2).

Plaintiff

asserts

that

King

(ECF No. 22-2, at

Buick

GMC

fraudulently

concealed the fact that the vehicle Ms. Chambers purchased was a
prior short-term rental by failing to disclose this fact on the
Buyer’s Order in the designated space therein designed to put
consumers on notice of the vehicle’s prior use.
This claim will not be dismissed at this time.
dispute

whether

Ms.

Chambers

received

a

CarFax

The parties
Report

in

connection with her transaction and, if she did, at what point
(before or after the purchase transaction was consummated) it
was provided and whether Ms. Chambers signed it.

On a motion to

dismiss, Plaintiff’s allegations in the amended complaint must
be credited given that she disputes the authenticity of the
CarFax Report that King Buick GMC submits.

According to the

amended complaint, when King Buick GMC sold to Plaintiff the
94

used

2010

Dodge

Caliber

on

February

18,

2012,

it

failed

to

disclose to her that this vehicle had been used as a short-term
rental.

She asserts that by concealing the prior short-term

rental use of the vehicle, King Buick GMC intended to induce her
to purchase a less desirable and less valuable vehicle and to
pay more for the vehicle than it was worth.
182).

(ECF No. 22 ¶¶ 175,

Defendant argues that Plaintiff cannot show that King

Buick GMC intended to conceal the prior short-term rental use of
the

vehicle

Plaintiff

as

part

certainly

of
has

a

scheme

to

to

make

this

defraud
showing

her.

Although

to

ultimately

prevail on this claim, at this stage, intent, knowledge, and
other conditions of a person’s mind may be alleged generally.”
United States ex rel. Palimieri v. Alpharma, Inc., Civ. Action
No. ELH-10-1601, 2014 WL 1168953, at *7 (D.Md. Mar. 21, 2014).
King Buick GMC relies on McGraw v. Loyola Ford, Inc., 124
Md.App.

560,

579

(1990),

to

support

the

argument

that

the

omission in the Buyer’s Order does not “vitiate the dealer’s
affirmative act of timely disclosing that the vehicle was a
prior rental in the CarFax Report.”
citation omitted)).

(ECF No. 56, at 8 (internal

Unlike here, in McGraw, 124 Md.App. at 580,

it was “uncontroverted that, at the time of the transaction,
[plaintiff] was expressly informed that the vehicle had been
used as a ‘demo.’”

The court in McGraw, id., reasoned:

95

Indeed, during his deposition, appellant
admitted that Loyola Ford told him prior to
signing the first buyer’s order that it was
a demonstrator vehicle.
[Plaintiff] also
knew that the car had been driven 6,161
miles, and the dealer noted the exact
mileage on the same form that erroneously
described
the
vehicle
as
“new.”
In
addition, the first buyer’s order form was
replaced with a second form a few days
later,
before
the
transaction
was
consummated. On the second form, the dealer
correctly described the vehicle as a demo.
(emphasis

added).

Thus,

the

facts

of

McGraw

are

readily

distinguishable, as Plaintiff alleges that King Buick GMC did
not make the requisite disclosure regarding the vehicle’s prior
rental

use

Plaintiff’s
juncture.
of

the

9(b).

before

she

allegations

consummated
must

be

the

accepted

transaction
as

true

–
at

and
this

Plaintiff has identified the time, place, and content

false

representation,

which

is

sufficient

under

Rule

Accordingly, Count IV against King Buick GMC will not be

dismissed at this time.
H.

Maryland Consumer Protection Act (“MCPA”) (Count III)

Count III of the amended complaint alleges violations of
the

MCPA.

practices.”

The

MCPA

prohibits

Md.

Code

Ann.,

Com.

“unfair
Law,

or
§

deceptive

13-301.

The

trade
MCPA

proscribes fourteen categories of unfair or deceptive practices,
including “any . . . [f]alse . . . or misleading oral or written
statement, visual description, or other representation of any
kind which has the capacity, tendency, or effect of deceiving or
96

misleading

consumers”

and

“any

.

.

.

[f]ailure

to

state

a

material fact if the failure deceives or tends to deceive.”
Private

parties

“suffered

an

who

bring

identifiable

a

suit

loss,

must

establish

measured

by

the

that

they

amount

the

consumer spent or lost as a result of his or her reliance on the
sellers’ misrepresentation.”

Green v. Wells Fargo Bank, N.A.,

Civ. Action No. DKC 12-1040, 2014 WL 360087, at *3 n.3 (D.Md.
Jan. 31, 2014).

Plaintiff’s claim alleging violations of the

MCPA is also subject to the heightened pleading standard of Rule
9(b).

See Green, 2014 WL 360087, at *2; Dwoskin v. Bank of Am.,

N.A., 850 F.Supp.2d 557, 569 (D.Md. 2012).
King Buick GMC makes three arguments to contest Plaintiff’s
ability to plead an MCPA claim: (1) King Buick GMC did not make
any false statement; (2) there was no justifiable reliance; and
(3) Plaintiff fails to meet MCPA’s “actual injury” requirement.
The first two arguments have already been addressed and rejected
in

the

context

of

the

negligent

misrepresentation

claims, and the same logic applies here.

and

fraud

As for the third

argument, King Buick GMC argues that Plaintiff has not alleged
that she sold her vehicle and suffered any actual injury or
loss.

King

Buick

GMC

further

avers

that

Plaintiff

has

not

alleged that she has “spent a dime on any repair or has been
unable to use [her] vehicle at any time over the past 2½-3
years.”

(ECF No. 36-1, at 35).
97

Plaintiff asserts that as a

result of the misrepresentations regarding the vehicle’s prior
short-term

rental

use,

she

suffered

injury

because

she

was

overcharged and paid significantly more for the vehicle than it
was worth.

(ECF No. 22 ¶ 180).

The amended complaint further

states that Plaintiff was denied the opportunity to decline to
purchase vehicles known to have been used previously for shortterm

rentals.

(Id.

¶

129).

In

the

opposition,

Plaintiff

asserts that “Ms. Chambers [] suffered an actual economic loss
at the time [she] paid for [her] vehicle[],” because she paid
more

for

the

overcharged).

vehicle

than

it

was

worth

(i.e.,

she

was

(ECF No. 48, at 103).

Plaintiff has not adequately pled injury with respect to
the MCPA violation.
injury

under

the

identifiable.”

“[I]n order to articulate a cognizable
[MCPA],

the

injury

Lloyd, 397 Md. at 143.

must

be

objectively

A complaint adequately

pleads loss, for instance, when it points to some amount that it
would “take to remedy the loss [the plaintiff] incurred as a
result of the respondents’ alleged deceptive trade practices.”
Id. at 150.

Jones, 752 F.Supp.2d at 684, is directly on point.

As discussed supra, the plaintiff in Jones also alleged that
defendant violated the MCPA by failing to disclose that the 2007
Pontiac G6 was previously used as a short-term rental.

The

undersigned concluded that the complaint in that case did not
point to any “cost of remedy” or any other actual harm with
98

respect to defendant’s alleged concealment of the car’s prior
use as a rental car.
would

not

significant

have
price

Plaintiff in Jones merely stated that she

purchased

the

car

concessions.”

or

Here

“would
too,

have

demanded

Plaintiff

asserts

that she paid significantly more for the vehicle than it was
worth and was thus overcharged, allegations similar to those in
Jones.

In dismissing the MCPA claim in Jones, the undersigned

reasoned that “[a] hypothetical price concession is simply not
the

type

of

tangible

injury

appropriately

recognized

in

a

private MCPA action, as virtually any misrepresentation could
support such a claim of ‘injury.’”

In Jones – much like here –

plaintiff did not allege that she incurred additional repair
costs because of the car’s prior use.

Cf. Barry v. EMC Mortg.

Corp., No. DKC 10-3120, 2012 WL 3595153, at *8 (D.Md. Aug. 17,
2012) (plaintiff sufficiently pled damages under the MCPA when
he incurred penalties, lost credit opportunities, and emotional
distress as a result of the defendant’s MCPA violations); Lloyd
v. Gen. Motors Corp., 397 Md. 108, 149 (2007) (“it is clear that
the petitioners have alleged facts constituting a loss [under
the MCPA].

Particularly, the petitioners allege that, as a

result of the respondents’ misrepresentation or omission, they
suffered a loss, measured by the amount it will cost them to
repair the defective seatbacks.”).

99

Plaintiff argues in the opposition that she suffered an
actual economic loss on the date of the transaction because she
was overcharged for the vehicle and paid significantly more for
her vehicle.

Plaintiff specifies in the opposition that she

does not assert that she suffered damages on the basis of “a
diminished post-sale value of the vehicles, lost profits, or any
other speculative future loss.”
684

(“[n]or

caused

any

does

[plaintiff]

diminution

in

(Id.); Jones, 752 F.Supp.2d at
allege

the

that

the

concealed

of

the

car.”).

value

fact
The

allegations here mirror those in Jones with respect to the MCPA
claim,

warranting

dismissal.

Accordingly,

the

MCPA

claim

against King Buick GMC will be dismissed.15
I.

Breach of Contract (Count VII)

Plaintiff asserts that King Buick GMC’s failure to disclose
the prior short-term rental use of the 2010 Dodge Caliber in the
Buyer’s Order constituted a breach of contract.

“To prevail in

an action for breach of contract, a plaintiff must prove that
the defendant owed the plaintiff a contractual obligation and
15

Plaintiff submitted a Rule 56(d) Affidavit with its
opposition.
Rule 56(d) allows the court to deny summary
judgment or delay ruling on the motion until discovery has
occurred if the “nonmovant shows by affidavit or declaration
that, for specified reasons, it cannot present facts essential
to justify its opposition.” Fed.R.Civ.P. 56(d). Here, only the
Other Dealer Defendants moved for summary judgment on Counts I
through VII.
King Buick GMC moved to dismiss.
Because the
motion filed by the Other Dealer Defendants will be granted on
standing grounds, Plaintiff’s Rule 56(d) request will be denied
as moot.
100

that the defendant breached that obligation.”

Carroll Co. v.

Sherwin-Williams Co., 848 F.Supp.2d 557, 563 (D.Md. 2012).

King

Buick GMC argues that the breach of contract claim should be
dismissed.
term

in

It contends that Plaintiff fails to identify any

the

sales

contract

which

King

Buick

GMC

failed

perform and how it breached any contractual term.

to

Plaintiff

counters that King Buick GMC breached the contract by expressly
representing on Ms. Chambers’s contract that her vehicle had no
prior

short-term

rental

use.

“As

a

result,

regardless

of

whether or not King Buick was required to address the prior
short-term rental use of Ms. Chambers’s vehicle of her Buyer’s
Order, it did so, thereby making prior use of the vehicle a
material term of the contract.”

(ECF No. 48, at 104).

Thus,

Plaintiff concludes that “[w]hen King Buick delivered to Ms.
Chambers a vehicle previously used for short-term rentals, it
breached

its

promised

–

contract
a

description.”

vehicle

by

failing

which

to

sell

comported

her

with

the
the

vehicle
contract

(ECF No. 48, at 104).

The breach of contract claim will be dismissed.

As noted

in RRC Northeast, LLC v. BAA Maryland, Inc., 413 Md. 638, 655
(2010), “[i]t is well-established in Maryland that a complaint
alleging a breach of contract ‘must of necessity allege with
certainty

and

definiteness

facts

showing

a

contractual

obligation owed by the defendant to the plaintiff and a breach
101

of that obligation by defendant.’”

(quoting Continental Masonry

Co., Inc. v. Verdel Constr. Co., Inc., 279 Md. 476, 480 (1977))
(emphasis

in

original).

Moreover,

in

considering

the

sufficiency of a complaint alleging breach of contract, “any
ambiguity or uncertainty in the allegations is to be construed
against the pleader.”

RRC Northeast, 413 Md. at 655.

Here,

Plaintiff does not identify which contract provision Defendant
purportedly
failure

to

constituted

breached.
identify
a

Instead,
the

material

Plaintiff

vehicle

breach

as

of

a

the

posits

that

short-term
contract.

the

rental
In

the

opposition, Plaintiff cites no case-law to support this claim
against King Buick GMC, namely that an omission on this sort in
a

contract

can

constitute

a

breach.

The

amended

complaint

states that King Buick GMC materially breached the contract by
failing to sell the vehicle promised and selling a used vehicle
that failed to comport with the description of the vehicle.
vehicle

promised

was

Plaintiff received.

a

2010

Dodge

Caliber,

which

is

The
what

Moreover, as King Buick GMC points out,

“[t]he sales contract[] expressly state[d] the material terms
agreed to by the parties including the make, model and year of
the vehicles purchased, the sales price and the amount of all of
the taxes, charges, etc. to be paid.”
Plaintiff

has

not

explained

how

(ECF No. 36-1, at 36).

failure

to

identify

in

the

Buyer’s Order that the 2010 Dodge Caliber was a prior short-term
102

rental

constituted

obligation.

a

material

breach

of

King

Buick

GMC’s

King Buick GMC avers that Plaintiff has not alleged

that the vehicle failed to operate properly or as indicated in
the Buyer’s Order.

The fact that the Buyer’s Order contained a

space for the rental use disclosure does not necessarily make
prior rental use a material term, and Plaintiff has pointed to
no authority to suggest otherwise.
tort, not in contract.

Plaintiff’s claim sounds in

Moreover, the single assertion in the

amended complaint that King Buick GMC did not exercise good
faith in performing its contractual obligation is conclusory and
insufficient for Plaintiff to satisfy its pleading burden on the
breach of contract claim.

See, e.g., Barry, 2011 WL 2669436, at

*7 (“Count III does not identify EMC’s obligations under the
Deed

of

Trust

or

state

when

or

how

these

obligations

were

breached.

The vague assertion that EMC’s conduct ‘was in bad

faith’

not

is

sufficient.”).

Accordingly,

the

breach

of

contract claim will be dismissed.
J.

Money Had and Received/Unjust Enrichment (Count V)

Plaintiff
from

King

Buick

alleges
GMC’s

an

unjust

collection

enrichment
of

payment

claim,
for

stemming

Plaintiff’s

vehicle “in amounts that exceeded the represented value of the[]
vehicles.”

(ECF No. 22 ¶ 185).

Plaintiff asserts that by doing

so, King Buick GMC came into possession of money to which it had
no right.
103

In its motion to dismiss, King Buick includes a paragraph
arguing that the unjust enrichment claim should be dismissed
because
(ECF

there

No.

is

36-1,

an
at

express
37).

contract

“In

governing

Maryland,

a

this

claim

action.

of

unjust

enrichment, which is a quasi-contract claim, may not be brought
where the subject matter of the claim is covered by an express
contract between the parties.”

Janusz v. Gilliam, 404 Md. 524,

537 (2008) (quotation marks omitted);

see also FLF, Inc. v.

World Publ’ns, Inc., 999 F.Supp. 640, 642 (1998) (“It is settled
law

in

Maryland,

and

elsewhere,

that

a

claim

for

unjust

enrichment may not be brought where the subject matter of the
claim is covered by an express contract between the parties.”).
“Generally, courts are hesitant to deviate from the principle of
the rule and allow unjust enrichment claims only when there is
evidence of fraud or bad faith, there has been a breach of
contract or a mutual rescission of the contract, when rescission
is

warranted,

or

when

the

address a subject matter.”

express

contract

does

not

fully

Cnty. Com’rs of Caroline Cnty. v. J.

Roland Dashiell & Sons, Inc., 358 Md. 83, 101 (2000).
Here, the amended complaint alleges fraud.

Moreover, the

Federal Rules of Civil Procedure allow parties to plead claims
in the alternative.
state

as

regardless

many
of

See Fed.R.Civ.P. 8(e)(2) (“A party may also

separate

claims

consistency

and

or

defenses

whether

104

as

based

the
on

party
legal

has
[or]

equitable

grounds.”).

King

Buick

GMC

has

not

argued

Plaintiff failed to state a claim for unjust enrichment.

that
Thus,

dismissing the unjust enrichment claims now would be premature.
See, e.g., RaceRedi Motorsports, LLC v. Dart Mach., Ltd., 640
F.Supp.2d 660, 666 (D.Md. 2009) (declining to dismiss unjust
enrichment claim pled in the alternative where contract terms
remained in dispute).
K. Plaintiff’s Motion for Leave to File Surreply and
Supplemental Rule 56(d) Declaration
Plaintiff moved for leave to file a surreply and to file a
supplemental Rule 56(d) Declaration.
otherwise

ordered

permitted

to

be

by

the

filed.”

Court,
Local

(ECF No. 68).

surreply
Rule

memoranda

105.2(a).

“Unless
are

not

Although

a

district court has discretion to allow a surreply, surreplies
are generally disfavored.

Chubb & Son v. C.C. Complete Servs.,

LLC, 919 F.Supp.2d 666, 679 (D.Md. 2013).

A surreply may be

permitted “when the moving party would be unable to contest
matters

presented

to

the

opposing party’s reply.”

court

for

the

first

time

in

the

Khoury v. Meserve, 268 F.Supp.2d 600,

605 (D.Md. 2003) (citation omitted).

By contrast, “[a] motion

for leave to file a surreply may be denied when the matter
addressed in the reply is not new.”

Marshall v. Capital View

Mut. Homes, No. RWT-12-3109, 2013 WL 3353752, at *3 (D.Md. July
2, 2013).

105

Here,

to

support

her

request,

Plaintiff

objects

to

the

arguments made in the Other Dealer Defendants’ motion to dismiss
or for summary judgment regarding King Buick GMC’s inspection of
its sales files and arguments made regarding the percentage of
rental vehicles sold in the last three years and the disclosures
made.

(See ECF No. 55-6).

The Other Dealer Defendants also

submitted as exhibits to their motion to dismiss or for summary
judgment, redacted versions of customer files purporting to show
that

disclosures

regarding

prior

rental

use

were

made.

Plaintiff objects to these filings and argues that “[t]he King
Defendants’ Replies raise, for the first time, the subject of an
allegedly

‘comprehensive

review

and

inspection

of

its

files involving the prior rentals sold to consumers.’”
6).

Plaintiff

customers,

asserts

including

representations

and/or

that
a

“without
review

concealments

discovery

of
on

the

their

sales

(Id. at

from

these

disclosures,

buyer’s

orders,

Plaintiff[] [is] unable to document whether the disclosures made
to these customers had a tendency or capacity to mislead or
deceive these customers in violations of the Maryland Consumer
Protection Act.”

(ECF No. 68, at 5).

Plaintiff argues that

“[s]hould these buyer’s orders contain a misrepresentation or
concealment of the prior short-term rental use of the vehicles
sold . . . any subsequent purported ‘disclosure’ of the rental
history of the vehicle on a document such as a Disclosure of
106

Former Vehicle Use form or Carfax report given to the buyer is
immaterial because the earlier misrepresentation on the buyer’s
order violates the CPA and a later alleged disclosure fails to
cure it.”

(Id.).

There are several problems with Plaintiff’s arguments.
an

initial

summary

matter,

judgment

the

only

Other

Dealer

addressed

the

Defendants’
non-RICO

motion

claims,

and

As
for
as

discussed supra, Plaintiff lacks standing to assert these claims
against the Other Dealer Defendants.16

Thus, the undersigned did

not consider the arguments made by the Other Dealer Defendants
regarding the merits of the claims in Counts I through VII as to
the

Other

analysis

Dealer

Defendants.

above,

the

Moreover,

undersigned

did

as

evident

not

by

consider

the
the

supplemental exhibits filed by the Other Dealer Defendants to
show that King Buick GMC and Other Dealer Defendants largely
made the requisite disclosures to consumers.
were

irrelevant

viability

of

at

each

this
claim

stage

for

asserted

purposes
in

the

These arguments
of

deciding

amended

the

complaint.

Thus, a surreply would be wholly unnecessary and the motion will
be denied.
Plaintiff’s

request

to

file

a

supplemental

Rule

56(d)

affidavit from Richard Gordon, counsel for Plaintiff in this

16

King
judgment.

Buick

GMC

moved

to

107

dismiss,

not

for

summary

matter,

will

Defendants’

also

motion

be
to

denied.
dismiss

First,
or

for

the

summary

Other

Dealer

judgment

was

granted on standing grounds, not on the merits of the claims
against them.
moot.

In

Thus, Plaintiff’s initial Rule 56(d) request is
any

event,

the

information

contained

in

this

supplemental affidavit largely attempts to refute the statistics
provided by the Other Dealer Defendants regarding the number of
short-term

rental

purchasers.

vehicles

sold

and

disclosures

made

to

For instance, Mr. Gordon states in the supplemental

affidavit that:
one of the more compelling reasons why
Plaintiff[]
require[s]
discovery
from
Defendants before responding to Defendants’
Motion for Summary Judgment is because,
based
on
Plaintiff’s
investigation,
it
appears that Defendants have provided this
Court with materially inaccurate information
about the number of prior short-term rentals
they have sold.
(ECF

No.

68-4

declarations

¶

from

18).
three

Plaintiff
purchasers

also
alleging

seeks
that

to

submit

they

were

unaware at the time of purchase that the vehicles they were
buying were prior short-term rentals.

These arguments fail for

the same reason that a surreply is unnecessary.

The claims

addressed in the motion to dismiss or for summary judgment will
be dismissed against the Other Dealer Defendants for lack of
standing,

and,

in

any

event,

the

issues

raised

in

the

supplemental affidavit are irrelevant to resolving the non-RICO
108

claims (which are the only claims on which the Other Dealer
Defendants

have

moved

for

summary

judgment).

Accordingly,

Plaintiff’s motion will be denied.
L.

Plaintiff’s Motion to Consolidate Cases

Fed.R.Civ.P. 42 gives the court broad discretion to make
decisions about how to most efficiently and economically try
cases on its docket while providing justice to the parties.

The

rule states that the court may consolidate actions that involve
a common question of law or fact.

Fed.R.Civ.P. 42(a).

Plaintiff urges the undersigned to consolidate the instant
lawsuit with another putative class action, Michelle Clay et al.
v. King Buick GMC LLC, et al., Case No. 1:14-cv-00811-DKC (“the
Clay Lawsuit”), also pending before the undersigned.
No. 63-1).
the

same

(See ECF

The Clay Lawsuit is a putative class action against
dealership

Defendants,

alleging

a

fraudulent

scheme

among these Defendants based on their failure to disclose the
prior short-term rental use of vehicles to consumers.

Plaintiff

asserts that the two lawsuits involve identical defendants, rely
on virtually the same facts, and assert the same counts, with
the

exception

of

an

additional

count

warranty asserted in the Clay Lawsuit.

for

express

breach

of

Plaintiff further argues

that the Clay Lawsuit is based on seemingly-overlapping factual
and legal issues and the required document discovery from the
Defendants will be virtually identical in both lawsuits.
109

(Id.

at 6).

Plaintiff believes that consolidating both lawsuits will

generate substantial economies for the court and the parties and
prevent

inconsistent

factual

and

legal

determinations

in

the

event the two actions are separately adjudicated.
All of the Defendants filed a motion opposing the request
to

consolidate

the

two

actions.

Although

Plaintiff

cited

Fed.R.Civ.P. 42 as the basis for her motion to consolidate,
Defendants

joinder

of

parties - in framing their arguments against consolidation.

In

any

rely

event,

on

Fed.R.Civ.P.

Defendants

offer

20

-

governing

compelling

arguments

against

consolidation.
Defendants argue that:
Chambers seeks to indirectly amend her
Complaint, which she cannot do without leave
of court, by trying to improperly ‘join’ the
individual
claims
of
three
unrelated
plaintiffs[] against different defendants
involving separate transactions occurring
over a three year period in the Clay
Lawsuit[], and then improperly joining them
with Chambers’ claim involving her purchase
of her vehicle from King Buick GMC in the
Chambers Lawsuit.
(ECF No. 65, at 4).

Specifically, in the Clay Lawsuit, there

are three putative Named Plaintiffs.

Michelle Clay alleges that

in 2010, she purchased her vehicle from Hagerstown Ford for
$8,000;

Veronica

Blake

Weinberger

alleges

that

in

2011,

she

purchased her vehicle from Kia of Silver Spring for $15,034.66;
and Agnita Kote alleges that in 2012, she purchased her vehicle
110

from King Volkswagen for $10,841.

Defendants point out that Ms.

Chambers and the three Plaintiffs in the Clay Lawsuit received
different disclosures regarding the prior short-term rental use
in each transaction with a different dealership Defendant.

For

instance, Defendants include as an exhibit to their opposition a
copy

of

a

Disclosure

of

Former

Vehicle

Use

Form

from

King

Hagerstown Motors to Michelle Clay, showing that the “short term
rental vehicle” box is checked, highlighted, and the form is
signed by Michelle Clay.

(ECF No. 65-1, at 2).

As Defendants

point out, “the same disclosure document was not signed by each
Plaintiff.

To

the

contrary,

the

prior

rental

disclosures

provided by King Buick GMC to their customers differ from those
provided by the [Other Dealer] Defendants who have different
sales

contracts,

properly

disclosure

disclosing

customers.”

(ECF

“Plaintiff[’s]

the

No.

65,

counsel

has

documents

prior
at

and

rental
13).

made

the

procedures

history

Defendants
nuances

for

to

their

argue

that

between

the

different types of written disclosures the cornerstone of their
claims.”

(Id. at 30).

Furthermore, Defendants state that each

Plaintiff dealt with different salespeople at each dealership.
Also compelling is Defendants’ argument that the terms of
the sales agreements with each Plaintiff differ in important
respects.

For instance, Agnita Kote – a Plaintiff in the Clay

Lawsuit – executed a sales contract with King Volkswagen.
111

Her

contract contains a binding arbitration clause.
65-2, at 2).

(See ECF No.

Moreover, the integration clause in Ms. Kote’s

Buyer’s Order is different from the Buyer’s Order Ms. Chambers
executed with King Buick GMC.

Specifically, the integration

clause in Ms. Kote’s contract states that “any other documents
signed by Purchaser in connection with the transaction comprise
the entire and complete agreement.”

(Id.).

Furthermore, Ms.

Kote’s contract contains a “waiver of jury trial” provision, not
included in other agreements.
Defendants’
logistical

argument
nightmare

that
with

The undersigned finds persuasive
consolidation

different

would

plaintiffs

“create
each

a

raising

unique factual and legal issues that will have to be analyzed
one at a time.”

(ECF No. 65, at 31).

The two lawsuits are

quite obviously similar on their face, but there are important
factual differences that counsel against consolidation.
Although analyzed in the context of joinder, the reasoning
in Saval v. BL Ltd., 710 F.2d 1027, 1031 (4th Cir. 1983), applies
here.

The court noted:
The cars were purchased at different times,
were driven differently, and had different
service
histories.
Quite
probably,
severance would have been required in order
to keep straight the facts pertaining to the
separate automobiles.

Moreover, Plaintiff is operating under the premise that all of
the claims in the instant lawsuit will survive dismissal; but

112

for

the

reasons

explained

supra,

this

is

not

the

case.

Accordingly, to consolidate the two cases where some of the
claims against the Other Dealers Defendants and King Buick GMC
will

be

dismissed

here

would

only

involved proceedings in this action.

complicate

the

already

To the extent Plaintiff is

worried that maintaining two separate actions would result in
inconsistent adjudication, the fact that the two cases are both
before the undersigned reduces the risk that the undersigned
would decide differently identical issues in the two cases.

Of

course, nuances in the law and facts in each proceeding may
require different results.
Accordingly, the motion to consolidate the two actions will
be denied at this time.
IV.

Conclusion
For the foregoing reasons, the motion to dismiss the RICO

claims

in

part.

Claims under Section 1962(a) and (d) will be dismissed.

King

Buick

filed

GMC’s

by

all

motion

granted in part.

of

to

Defendants

dismiss

the

will

be

non-RICO

granted

claims

will

be

The MMWA, breach of the implied warranty of

merchantability, MCPA, and breach of contract claims will be
dismissed.

The Other Dealer Defendants’ motion to dismiss or

for summary judgment on the non-RICO claims will be granted.
Plaintiff’s

motions

to

consolidate

and

for

leave

to

file

a

surreply and a supplemental Rule 56(d) Affidavit will be denied.
113

Defendants’

motion

to

strike

authority will also be denied.

the

notices

of

supplemental

A separate order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

114