McNickles v. Rainbow Chrysler Dodge Jeep of McComb, LLC et al

Filing 17

MEMORANDUM OPINION AND ORDER granting 6 Motion to Dismiss; granting 12 Motion for Joinder (collectively "Joint Motion to Dismiss 6 12 ". Plaintiff's claims under TILA are dismissed with prejudice. Plaintiff's remaining state law claims are dismissed without prejudice for lack of subject matter jurisdiction. Signed by District Judge Keith Starrett on 2/12/16 (scp)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
DOROTHY McNICKLES

PLAINTIFF

v.

CIVIL ACTION NO. 5:15-CV-88-KS-MTP

RAINBOW CHRYSLER DODGE JEEP
OF McCOMB, LLC, and CAPITAL ONE AUTO
FINANCE, a Division of CAPITAL ONE,
NATIONAL ASSOCIATION

DEFENDANTS

MEMORANDUM OPINION AND ORDER
This matter is before the Court on the Motion to Dismiss Plaintiff’s Complaint [6] and
Motion for Joinder [12] (collectively “Joint Motion to Dismiss [6][12]”) filed by Defendants Capital
One Auto Finance and Rainbow Chrysler Dodge Jeep of McComb, LLC. After considering the
submissions of the parties, the record, and the applicable law, the Court finds that the Joint Motion
to Dismiss [6][12] is well taken and should be granted. Plaintiff’s federal Truth-in-Lending Act
claim will be dismissed with prejudice. All remaining state law claims will be dismissed without
prejudice for lack of subject matter jurisdiction.
I. BACKGROUND
Plaintiff Dorothy McNickles (“Plaintiff”) filed this action on September 10, 2015, against
Defendants Capital One Auto Finance (“COAF”) and Rainbow Chrysler Dodge Jeep of McComb,
LLC (“Rainbow”) (collectively “Defendants”). In her Complaint [1], Plaintiff brings a federal claim
under the Truth-in-Lending Act (“TILA”), 15 U.S.C. §§ 1601, et seq., and four claims under
Mississippi law for negligence, breach of contract, and violations of the Mississippi Motor Vehicle
Sales Finance Law, MISS. CODE ANN. §§ 63-19-1, et seq., and the Mississippi Motor Vehicle Title
Law, MISS. CODE ANN. §§ 63-21-1, et seq. This Court has jurisdiction over the TILA claim under

28 U.S.C. §§ 1331, 2201, and 2202, and 15 U.S.C. § 1640. The Court’s jurisdiction over the state
law claims rests in its supplemental jurisdiction under 28 U.S.C. § 1367.
On December 10, 2011, Plaintiff and Rainbow entered into a consumer credit transaction for
the purchase of a used 2010 Chevrolet Cobalt (the “Vehicle”). This transaction was memorialized
in the Retail Installment Contract (“Contract”) [1-1]. COFA was not a party to the Contract [1-1]
and was not listed as a creditor. On April 7, 2014, Plaintiff received a letter from COFA, stating that
it had bought the Contract [1-1] from Rainbow and advising her that the incorrect Vehicle
Identification Number (“VIN”) was listed on the Contract [1-1]. (See Letter [1-7].)
Plaintiff made payments under the Contract [1-1] until November 2014.1 The Vehicle was
briefly repossessed by COFA on February 23, 2015, and returned to Plaintiff on February 24, 2015.
On March 6, 2015, parties executed the Amendment to Retail Installment Contract (“Amendment”)
[1-8], which corrected the VIN and explicitly stated that “ [e]xcept as amended . . ., the Contract is
ratified, adopted, approved and confirmed in all respects and remains in full force and effect.” The
Vehicle was repossessed again in April 2015.
COFA filed its Motion to Dismiss Plaintiff’s Complaint [6] on October 13, 2015. Rainbow
filed its Motion for Joinder [12] on November 18, 2015. The Court requested more briefing on the
Joint Motion to Dismiss [6][12] in its Order [14] on January 5, 2016. Parties have submitted the
requested briefing, and the Court is now ready to rule.
II. DISCUSSION
A.

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Standard of Review

In her Complaint [1], Plaintiff claims she made 35 monthly payments “from January 24,
2012 to November 24, 2012.” The Court assumes this is a typo and should read “from January
2012 to November 24, 2014.”

To withstand a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id.; see also In re Great Lakes
Dredge & Dock Co., 624 F.3d 201, 210 (5th Cir. 2010) (“To be plausible, the complaint’s ‘[f]actual
allegations must be enough to raise a right to relief above the speculative level.’”) (quoting
Twombly, 550 U.S. at 555). “[W]hen a successful affirmative defense appears on the face of the
pleadings, dismissal under Rule 12(b)(6) may be appropriate.” Miller v. BAC Home Loans
Servicing, L.P., 726 F.3d 717, 726 (5th Cir. 2013) (quoting Kansa Reins. Co. v. Cong. Mortg. Corp.
of Tex., 20 F.3d 1362, 1366 (5th Cir. 1994)).
B.

TILA Violations

Plaintiff argues that both the Contract [1-1] and the Amendment [1-8] violated the Truth-inLending Act (“TILA”), 15 U.S.C. §§ 1601, et seq., and the regulations promulgated pursuant
thereto, 12 C.F.R. Part 1026 (Regulation Z). The deficiencies of these documents are not apparent
from a plain reading of the Complaint [1]. However, from Plaintiff’s submissions in response, it is
clear to the Court that she cannot state a claim for relief under TILA for either document.
Defendants argue that any claim under TILA Plaintiff may have had for the Contract [1] is
barred by the applicable statute of limitations. All claims for violations of TILA must be brought
within one year of the occurrence of the violation. 15 U.S.C. § 1640(e). Plaintiff contends the
Contract [1-1] violated TILA by not listing COFA as a creditor and by listing the wrong VIN for the
Vehicle. Even assuming that these arguments have merit and that Plaintiff may be entitled to have
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the statutory period tolled until the date she had actual knowledge of both of these errors, the latest
Plaintiff’s TILA claim could have accrued was April 7, 2014, when she was informed by COFA that
the VIN number was incorrect. (See Letter [1-7].) This means that the latest deadline she could
have possibly had to file her TILA claim was April 7, 2015. Plaintiff did not file her Complaint [1]
until September 10, 2015. Therefore, any TILA claim she may have had for the Contract [1] is timebarred, and Defendants’ Joint Motion to Dismiss [6][12] will be granted as to this claim.
Additionally, there are no TILA disclosure requirements applicable to the Amendment [1-9].
TILA requires certain disclosures be made by a creditor for each “consumer credit transaction”
made, with some exceptions inapplicable to this case. 15 U.S.C. § 1631(a); see also Lea v. Buy
Direct, L.L.C., 755 F.3d 250, 252-53 (5th Cir. 2014). Regardless of whether the Amendment [1-9]
is a second contract, it is clear that it is not a second consumer credit transaction, as no second loan
was made and its only purpose is to correct the VIN in the original Contract [1-1]. See Black's Law
Dictionary (10th ed. 2014) (defining consumer credit transaction as “[a] transaction by which a
person receives a loan to buy consumer goods or services”). Plaintiff’s obligations under the
Contract [1-1] did not change with the Amendment [1-9],2 nor was her loan modified in any way.
Therefore, because the Amendment [1-9] was not a consumer credit transaction, no disclosure
requirements apply to it under TILA, and Plaintiff’s claim under TILA with regards to this document

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Plaintiff argues her obligations did change under the Amendment [1-9] because a different
property was described and it made her payments due to COFA, instead of Rainbow as in the
original Contract [1-1]. However, from the exhibits attached to her Complaint [1], it is clear that
she was previously obligated to make payments to COFA under the assignment of the Contract
[1-1]. Furthermore, as the incorrect VIN belonged to a vehicle which she never possessed and
there was always an understanding that the Vehicle in her possession was the collateral securing
the Contract [1-1], the correcting of the VIN did not substantially change the loan enough so as
to make the Amendment [1-9] a second consumer credit transaction.
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must fail. Defendants’ Joint Motion to Dismiss [6][12] will therefore be granted as to Plaintiff’s
TILA claim and it will be dismissed with prejudice.
C.

State Law Claims

The Court’s jurisdiction over the remaining state law claims is based in its supplemental
jurisdiction under 28 U.S.C. § 1367. When the single federal claim is dismissed at an “early state”
of litigation, as it has been in this action, there is “a powerful reason to choose not to continue to
exercise jurisdiction.” Parker & Parsley Petroleum Co. v. Dresser Indus., 972 F.2d 580, 585 (5th
Cir. 1992) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 351, 108 S. Ct. 614, 98 L.Ed.2d
720 (1988)). “Our general rule is to dismiss state claims when the federal claims to which they are
pendent are dismissed.” Id. (citing Wong v. Stripling, 881 F.2d 200, 204 (5th Cir. 1989)).
Therefore, as the federal TILA claim been dismissed in this action, the Court will dismiss without
prejudice all remaining state law claims for want of subject matter jurisdiction.
III. CONCLUSION
IT IS THEREFORE ORDERED AND ADJUDGED that Defendants’ Joint Motion to
Dismiss [6][12] is granted. Plaintiff’s claim under TILA are dismissed with prejudice. Plaintiffs’
remaining state law claims are dismissed without prejudice for lack of subject matter jurisdiction.
SO ORDERED AND ADJUDGED this the 12th day of February, 2016.

s/ Keith Starrett
UNITED STATES DISTRICT JUDGE

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