Ross et al v. Quality Homes of McComb, Inc. et al
ORDER granting in part 9 Motion to Dismiss; granting in part 27 Motion to Dismiss; and ORDERING Plaintiffs, within ten days from entry of this Order, to show cause to this Court why it should not dismiss Count I, Count II, Count III, Count IV, Count VI, and Count VII, to the extent it alleges claims under the MCPA, with prejudice.Signed by Honorable David C. Bramlette, III on November 16, 2017 (JBR)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EARL ROSS, et al.
CAUSE NO. 5:17-cv-46-DCB-MTP
QUALITY HOMES OF MCCOMB, INC., et al.
OPINION AND SHOW CAUSE ORDER
This cause is before the Court on Motions to Dismiss [Doc.
Nos. 9, 27] filed by Joey Harbin, an employee of the manufacturer
of the Plaintiffs’ mobile home, and U.S. Bank, N.A., the bank that
financed the Plaintiffs’ mobile home purchase. Having considered
the motions, the Plaintiffs’ responses, and applicable statutory
and case law, and being otherwise fully informed in the premises,
the Court finds as follows:
transporter, financier, retail-seller, and an employee of the
“uninhabitable.” The Court compelled the buyers to arbitrate their
manufacturer’s employee and the financier now move to dismiss the
misrepresented the home’s condition, breached fiduciary duties,
and violated consumer protection and unfair trade practices laws.
On October 17, 2014, Plaintiffs Earl and Maxcine Ross (the
“Rosses”) bought a manufactured home made by Defendant Platinum
(“Quality”), a McComb-based retail-seller [Doc. No. 1, ¶VI].1 U.S.
Bank, N.A. (“U.S. Bank”) financed the purchase [Doc. No. 1, ¶VI].
Quality’s lot in McComb [Doc. No. 1, ¶VIII]. That same day, the
Rosses inspected the home and found it deficient: it contained “a
gap in the celling where the roof did not come together,” and
“sheetrock [that] had fallen from the wall in the living room”
[Doc. No. 1, ¶IX]. The inspection also revealed an unpleasant
chemical odor [Doc. No. 1, ¶VIII].
Hoping to swap the home for another, the Rosses visited
Quality on November 15, 2014 [Doc. No. 1, ¶ XII]. On the visit,
the Rosses overheard a phone conversation during which Defendant
Harbin, a Platinum manager, said “I am not coming down there to
As a part of the purchase, the Rosses signed a “Platinum Homes, LLC.
Limited Warranty” containing a provision requiring the parties to mediate or
arbitrate. The Court found that the Rosses, Platinum, and Quality were
contractually obligated to resolve their dispute by arbitration [Doc. No. 40].
The Court further found it unnecessary to stay the remainder of this suit
pending arbitration [Doc. No. 40].
Ultimately, Quality refused to exchange the home for another [Doc.
No. 1, ¶XIII].
Next, the Rosses called U.S. Bank hoping to rescind their
loan contract with U.S. Bank [Doc. No. 1, ¶XV]. In late December
2014, the Rosses spoke with a U.S. Bank employee, explained the
problems with the home, and asked to rescind the contract [Doc.
No. 1, ¶XV]. U.S. Bank declined [Doc. No. 1, ¶XV].
On April 20, 2017, the Rosses sued Harbin and U.S. Bank for
(1) breach of fiduciary duties; (2) breach of contract; (3) breach
of the implied covenant of good faith and fair dealing; (4)
negligent misrepresentation; (7) violations of the Magnuson-Moss
Warranty Act (“MMWA”), 15 U.S.C. § 2301 et seq., the Truth in
Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., the Mississippi
Consumer Protection Act (“MCPA”), MISS. CODE ANN. § 75-24-5; (8)
slander; and (9) civil rights violations under 42 U.S.C. § 1983.
In response, Harbin and U.S. Bank moved to dismiss for failure
to state any claims upon which relief can be granted. See FED. R.
CIV. P. 12(b)(6).
To overcome Defendants’ motions, the Rosses must plead a
“plausible” claim for relief. Body by Cook, Inc. v. State Farm
Mut. Auto. Ins., 869 F.3d 381, 385 (5th Cir. 2017) (citing Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
A claim is “plausible” if it contains factual content that
allows the Court to reasonably infer that Defendants Harbin and
U.S. Bank are liable for the misconduct alleged. Edionwe v. Bailey,
860 F.3d 287, 291 (5th Cir. 2017) (citing Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009)).
Accepting all well-pleaded allegations as true, and viewing
them in the light most favorable to the Rosses, Gines v. D.R.
Horton, Inc., 699 F.3d 812, 816 (5th Cir. 2012), the Court analyzes
the Complaint count-by-count to determine whether it states any
plausible claims against Harbin and U.S. Bank.
Count I – Breach of Fiduciary Duty
The Complaint alleges Defendants “had a duty to act in the
best interest of Plaintiffs,” and breached that duty by “providing
misleading information or concealing information” [Doc. No. 1, p.
11]. The source of the putative duty is “the business relationship
. . . for the purchase of a manufactured home” [Doc. No. 1, p.
To plead a claim for breach of fiduciary duty, the Rosses
must allege that Defendants (1) owed them a fiduciary duty; and
(2) breached that duty. Merchants & Planters Bank of Raymond v.
Williamson, 691 So. 2d 398, 403 (Miss. 1997).
A contractual relationship, standing alone, does not create
a fiduciary duty. Allstate Life Ins. Co. v. Parnell, 292 Fed. App’x
264, 270 (5th Cir. 2008) (per curiam). But a fiduciary duty arises
if (1) the activities of the parties go beyond their operating on
their own behalf; (2) the parties have a common interest and profit
from the activities of each other; (3) the parties place trust in
one another; and (4) one party has control over the other. Univ.
Nursing Assocs., PLLC v. Phillips, 842 So. 2d 1270, 1275 (Miss.
2003) (en banc) (internal citations omitted).
Count I fails to state a plausible breach of fiduciary duty
claim. Besides failing to allege that either Defendant owes the
Rosses a fiduciary duty, the Complaint alleges no facts which,
viewed in the Rosses’ favor, could impose a fiduciary duty upon
Harbin or U.S. Bank. See Strickland v. Broome, 2017 WL 4707032, *2
(S.D. Miss. Oct. 19, 2017) (plaintiff failed to plead facts
relationship that could supply a fiduciary duty is the “business
relationship . . . for the purchase of a manufactured mobile home”
[Doc. No. 1, p. 11]. That “business relationship” was with Platinum
and Quality – not with Harbin and U.S. Bank.
Count II – Breach of Contract
Although styled “breach of contract,” Count II merely rehashes Count I’s allegations.
The Rosses do not allege
contracted with Harbin or U.S. Bank; instead, they reference
“enter[ing] into a business relationship with Defendant” [Doc. No.
1, p. 11].
To state a claim for breach of contract, the Rosses must
allege the existence of a contract and a breach. Business Commc’n,
Inc. v. Banks, 90 So. 3d 1221, 1225 (Miss. 2012); see also Hammonds
v. Lennep, No. 1:09-CV-642-LG-RHW, 2009 WL 3418546, at *2 (S.D.
Miss. Oct. 20, 2009) (breach of contract claim dismissed for lack
of a contract between plaintiff and defendant).
Count II fails to state a plausible breach of contract claim
because the Rosses fail to allege that either U.S. Bank or Harbin
breached any contract.
Count III – Breach of the Implied Covenant of Good Faith
The Rosses allege Defendants breached the duty of good faith
and fair dealing by “evading the spirit of the [mobile home
purchase] contract by sending a home not agreed upon” [Doc. No. 1,
Under Mississippi law, “all contracts contain an implied
enforcement.” Gen. Motors Acceptance Corp. v. Baymon, 732 So. 2d
262, 269 (5th Cir. 1999) (internal citations and quotation marks
omitted); see also Ware v. U.S. Bank Nat’l Assoc., No. 3:13CV387DPJ-FKB, 2014 WL 12642116, at *2 (S.D. Miss. Apr. 15, 2014)
(plaintiff cannot plead a claim for breach of the implied covenant
of good faith and fair dealing against a party with whom it has no
Count III fails to state a plausible claim for breach of the
implied covenant of good faith. The Rosses have not identified a
contract breached by either Harbin or U.S. Bank and, therefore,
cannot plead a breach of implied covenant of good faith claim
against either Defendant. See Ware, 2014 WL 12642116, at *2.
Further, the factual allegations said to amount to a breach “sending a home not agreed upon” – do not apply to Harbin, a
manager of the home’s manufacturer, and U.S. Bank, the Rosses’
Count IV – Fraudulent Misrepresentation
The Rosses’ misrepresentation allegations are conclusory.
Without identifying a misrepresentation, the Rosses allege that
“Defendants failed to complete his [sic] contractual agreement”
[Doc. No. 1, p. 13]. The Rosses further allege that the unspecified
misrepresentation “was purposely designed to deceive Plaintiffs
into believing that Defendant was furnishing the agreed upon home
at a fair price” [Doc. No. 1, p. 13].
To plead a claim for fraudulent misrepresentation, the Rosses
ignorance of the truth; (5) the speaker’s intent that it should be
acted on by the hearer and in the manner reasonably contemplated;
(6) the hearer’s ignorance of its falsity; (7) the hearer’s
reliance on its truth; (8) the hearer’s right to rely thereon; and
(9) the hearer’s consequent and proximate injury. Holland v.
Peoples Bank & Trust Co., 3 So. 3d 94, 100 (Miss. 2008).
Because fraudulent misrepresentation is a form of fraud, the
constituting fraud. FED. R. CIV. P. 9(b). Indeed, Federal Rule of
Civil Procedure 9(b) applies to “all averments of fraud, whether
they are part of a fraud claim or not.” Lone Star Ladies Inv. Club
v. Schlotzsky’s Inc., 238 F.3d 363, 368 (5th Cir. 2001). Compliance
with Rule 9(b) requires a plaintiff to “specify the statements
contended to be fraudulent, identify the speaker, state when and
where the statements were made, and explain why the statements
were fraudulent.” Flaherty & Crumrine Preferred Income Fund v. TXU
Corp., 565 F.3d 200, 207 (5th Cir. 2009) (quoting Williams v. WMX
Techs., Inc., 112 F.3d 175, 177 (5th Cir. 1997)).
misrepresentation claim. First, the Complaint does not allege a
specific misrepresentation. Second, it does not “identify the
speaker, state when and where the statements were made, and explain
why the statements were fraudulent.” Flaherty, 565 F.3d at 207.
Third, it lacks an allegation that the Rosses justifiably relied
on a misrepresentation. See Holland, 3 So. 3d at 100.
Count V – Unconscionability
The Rosses allege that Defendants’ conduct, as described in
paragraphs I - XVI of the Complaint, amounts to “unconscionable
practices . . . under the Uniform Commercial Code and related
statutes” [Doc. No. 1, p. 14].
Unconscionability is a defense to enforcement of a contract,
Arrington, 145 So. 3d 608, 614 (Miss. 2014). Because a claim for
damages on the basis of “unconscionability” is not a cognizable
theory, Count V fails to state a plausible claim for relief. See
Shandong Yinguang Chem. Indus. Joint Stock Co. v. Potter, 607 F.3d
1029, 1032 (5th Cir. 2010) (theory must be cognizable for complaint
to present “plausible” right to relief); Ramming v. United States,
281 F.3d 158, 161 (5th Cir. 2001) (per curiam) (same).
Count V’s “unconscionability” claim is not a “claim” at all.
Amendment would be futile; therefore, the Court dismisses Count V
Count VI – Negligent Misrepresentation
The substance of Count VI is difficult to discern because the
Rosses do not say which Defendant allegedly misrepresented what
[Doc. No. 1, pp. 14-15]. For example, the Rosses allege that
“Defendants” falsely represented that the Rosses would receive “a
2015 Platinum mobile home similar to the model home displayed” on
the lot [Doc. No. 1, p. 14]. With equal opacity, the Rosses allege
that “Defendants did not rescind the contract after the Plaintiffs
requested [sic] to do so” [Doc. No. 1, p. 14].2
To plead a claim of negligent misrepresentation, the Rosses
must allege: (1) a misrepresentation or omission of a fact; (2)
materiality; (3) the defendant failed to exercise that degree of
diligence and expertise the public is entitled to expect of such
a person; (4) the Rosses reasonably relied on the misrepresentation
or omission; and (5) the misrepresentation caused the Rosses
damages. Horace Mann Life Ins. Co. v. Nunaley, 960 So. 2d 455, 461
manufacturer of the mobile home. None of the allegations contained
in Count VI could conceivably be directed to Harbin. And the only
statements: “Defendants misrepresented the financial arrangements”
and “Defendants did not rescind the contract” [Doc. No. 1, p. 14].
2 The Rosses also allege that “Defendants” misrepresented the “financial
arrangements” and the “cost of the requested upgrades and transportation fees”
[Doc. No. 1, p. 14].
The latter is not a misrepresentation and, with regard to the
misrepresentation was negligent.
Count VII - Consumer Protection Laws
The Rosses allege that “Defendants” engaged in unfair or
deceptive trade practices, including “fail[ing] to inform the
plaintiffs of the condition of the manufactured home,” “fail[ing]
negotiations” [Doc. No. 1, p. 15]. Again, the Rosses do not specify
which conduct applies to which Defendant. The Rosses cite TILA,
the MMWA, and the MCPA, but fail to link any factual allegation to
any requirement of any statute.
Truth in Lending Act (TILA)
TILA requires a “creditor” to disclose information to the
person obligated on a “consumer credit transaction.” 15 U.S.C. §
1631(a).3 The creditor must make the TILA-required disclosures
before “consummating” the transaction 12 C.F.R. § 226.17(b). A
3 A “creditor” is “[a] person who regularly extends consumer credit.” 12
C.F.R. § 226.2(17)(i). A “consumer” is “a cardholder or natural person to whom
consumer credit is offered or extended.” 12 C.F.R. § 226.2(11).
226.2(a)(13); see also Lea v. Buy Direct, L.L.C., 755 F.3d 250,
253 (5th Cir. 2014).
Two types of TILA claims are relevant here: rescission claims
and disclosure claims. Rescission claims must be brought within
three years after the date of consummation of the transaction. 15
U.S.C. § 1635(f). Disclosure claims, on the other hand, must be
brought within one year of the “violation.” 15 U.S.C. § 1640(e);
McCrimmon v. Wells Fargo Bank, N.A., 516 Fed. App’x 372, 375 (5th
Cir. 2013) (per curiam). A “violation” occurs when the transaction
is consummated. Moor v. Travelers Ins. Co., 784 F.2d 632, 633 (5th
Cir. 1986) (citing In re Smith, 737 F.2d 1549, 1552 (11th Cir.
1984) (Wisdom, J.)).
Count VII fails to state a plausible TILA claim. The Complaint
omits the factual allegations necessary to show that TILA applies.
For example, the Rosses do not allege that any defendant is a
“creditor” to which TILA’s requirements apply. In fact, Defendant
Harbin, as a manager of Platinum, is assuredly not a “creditor”
under TILA. Further still, the Rosses do not clarify which contract
they fault “Defendants” for declining to rescind.
But the deficiencies extend beyond the Complaint’s sparse
factual allegations. Even if properly pleaded, the Rosses could
not rescind the purchase money mortgage contract with U.S. Bank
transaction” to which no right to rescind attaches. See 15 U.S.C.
§ 1635(e)(1). And any non-disclosure claim, even if properly
pleaded, would be time-barred because the purchase money mortgage
that is presumably the subject of the TILA-related allegations was
consummated in 2014, more than one-year from the date the Rosses
sued. See 15 U.S.C. § 1640(e).
Amendment of Count VII’s TILA allegations would be futile.
Any TILA disclosure claim is time-barred; any rescission claim is
precluded by the “residential mortgage transaction” exemption.
Magnuson-Moss Warranty Act (MMWA)
The MMWA standardizes consumer product warranties and imposes
liability upon warrantors who fail to comply with a warranty.
Walton v. Rose Mobile Homes LLC, 298 F.3d 470, 472 n. 3 (5th Cir.
products.” A “consumer product” includes “any tangible personal
property which is distributed in commerce and which is normally
used for personal, family, or household purposes.” 15 U.S.C. §
Count VII fails to state a plausible MMWA claim. The Complaint
does not allege that the mobile home the Rosses purchased is a
“consumer product,” nor that any Defendant is a “warrantor.” See
15 U.S.C. §§ 2301(3) (defining “consumer”), 2301(1) (defining
“consumer product”), and 2301(5) (defining “warrantor”). In fact,
the allegations of the Complaint belie any contention that either
Harbin or U.S. Bank could be construed a “warrantor” in context.
Although the Rosses do not specify the “consumer product” of which
they complain, the only candidate is the mobile home itself.
Neither U.S. Bank nor Harbin is in a position to warrant anything
relative to the quality or condition of the mobile home. Like many
of the counts in the Complaint, the MMWA allegations appear to be
directed towards Platinum and Quality – not Harbin and U.S. Bank.
To the extent Count VII attempts to allege an MMWA claim, the
Court dismisses the claim with prejudice. Amendment would be futile
because the Rosses cannot allege facts showing that U.S. Bank or
Harbin was a “warrantor” with regard to the manufactured home. See
15 U.S.C. § 2301(5).
Mississippi Consumer Protection Act (MCPA)
The MCPA creates liability for “unfair or deceptive trade
practices in or affecting commerce.” MISS. CODE ANN. § 75-24-5(1);
In re Miss. Medicaid Pharm. Average Wholesale Price Litig., 190
So. 3d 829, 841 (Miss. 2015).
manufacturer[s], or producer[s], of a method, act or practice
prohibited by” the MCPA. MISS. CODE ANN. § 75-24-15(1); see also
Humphrey v. Citibank NA, No. 2:12-CV-148M-V, 2013 WL 5407195, at
*7 (N.D. Miss. Sept. 25, 2013) (dismissing complaint which failed
“manufacturer,” or “producer” under the Act). Before suing under
the MCPA, plaintiffs must “first ma[ke] a reasonable attempt to
resolve any claim through an informal dispute settlement program
approved by the Attorney General.” MISS. CODE. ANN. § 75-24-15(2).
Count VII fails to state a plausible MCPA claim. First, it is
unclear which Defendant’s conduct the Rosses contend is “unfair”
manufactured home[,] . . . failed to rescind the contract[,] . .
. and participated in bad faith negotiations” [Doc. No. 1, p. 15].
The Rosses fail to tie any of these allegations to the MCPA’s
thirteen examples of “unfair” and “deceptive” practices. See MISS.
CODE ANN. § 75-24-5(2). Second, the Rosses fail to allege that they
attempted to resolve their claims through an informal dispute
resolution program, as the MCPA requires. See MISS. CODE. ANN. § 7524-15(2); see also Cole v. Chevron USA, Inc., 554 F. Supp. 2d 655,
668 (S.D. Miss. 2007) (dismissing MCPA claim for failure to attempt
to resolve claim by informal dispute resolution program).
Counts VIII and IX – Slander and Civil Rights Violations4
The Rosses allege Harbin slandered them, violated their civil
rights, and caused them emotional distress when Harbin called them
“niggers” during a phone conversation with a Quality employee [Doc.
No. 1, pp. 8, 15-16].
To plead a slander claim, a plaintiff must allege “(1) a false
unprivileged publication to a third party; (3) fault amounting to
at least negligence on the part of the publisher; and (4) either
actionability of the statement irrespective of special harm or the
existence of special harm caused by the publication.” Brothers v.
Winstead, 129 So. 3d 906, 928 (Miss. 2014).
Slander is an intentional tort with a one-year statute of
limitations. See MISS. CODE ANN. § 15-1-35; Nygaard v. Getty Oil
Co., 918 So. 2d 1237, 1240 (Miss. 2005).
Any slander claim is time-barred. The cause of action accrued
on November 15, 2014, when Harbin is alleged to have called the
Rosses “niggers” [Doc. No. 1, p. 8]. The Rosses sued on April 20,
Count IX is styled “emotional distress” but modified with a parenthetical
indicating that the Rosses perceive the source of liability to be § 1983.
Because “emotional distress” is not a cause of action, and the Rosses have not
pleaded facts from which the Court can discern whether they intend to sue for
anything other than civil rights violations – i.e., negligent infliction of
emotional distress or intentional infliction of emotional distress - the Court
considers only the Rosses’ civil rights claims under § 1983.
2017 — over one-and-a-half years beyond the expiration of the oneyear statute of limitations. See, e.g., E.E.O.C. v. Southern Pub.
Co., 732 F. Supp. 682, 683 (S.D. Miss. 1988) (dismissing slander
claim as time-barred). The Rosses do not allege that Defendants
fraudulently concealed or otherwise prohibited them from pursuing
the slander claim. Amendment would be futile; therefore, the
Rosses’ slander claim is dismissed with prejudice.
42 U.S.C. § 1983
To plead a § 1983 claim, the Rosses must allege that a person
acting under color of law deprived them of a federal right.
Priester v. Lowndes Cty., 354 F.3d 414, 420 (5th Cir. 2004). Where
the plaintiffs seek to hold a private citizen liable under § 1983,
as the Rosses aim to do here, the plaintiff must allege that the
citizen conspired with state actors. Id. at 420.
The Rosses fail to state a § 1983 claim against Harbin and
U.S. Bank. First, no state action is apparent from the Rosses’
complaint. See Ford v. Harris Cty. Med. Soc., 535 F.2d 321, 32223 (5th Cir. 1976) (per curiam) (affirming dismissal of § 1983
claim for failure to plead state action); Lyons v. Chase Home
Lending, 2011 WL 4907084, *7 (N.D. Tex. Sept. 1, 2011) (dismissing
§ 1983 claim for failure to plead state action). Indeed, the Rosses
do not allege that Harbin – a private citizen – conspired with any
state actor. Second, use of a racial slur, standing alone, does
not violate a federal right. See Williams v. Bramer, 180 F.3d 699,
706 (5th Cir. 1999) (“[U]se of a racial epithet, without harassment
or some other conduct that deprives the victim of established
rights, does not amount to an equal protection violation.”); Bender
v. Brumley, 1 F.3d 271, 274 n. 4 (5th Cir. 1993) (verbal abuse
alone does not constitute a § 1983 violation).
To the extent Counts VII and IX attempt to allege a § 1983
claim, the Court dismisses the claim with prejudice. Amendment
would be futile because the Rosses cannot allege facts showing
that U.S. Bank or Harbin was a state actor, or that either
Defendant conspired with a state actor, or that U.S. Bank or Harbin
violated any federally-protected right.
Viewing the facts and drawing the inferences in the nonmovant Plaintiffs’ favor, the Court finds that the Complaint states
no plausible claim against any Defendant.
The Court finds that the Rosses cannot cure by amendment their
failure to state claims on Count V, Count VIII, Count IX, and Count
VII, to the extent it alleges claims under TILA and the MMWA.
Therefore, those Counts are dismissed with prejudice.
The Court further finds that the Rosses’ Complaint fails to
convey the information the Court needs to determine whether the
defects inherent in Count I, Count II, Count III, Count IV, Count
VI, and Count VII, to the extent it alleges claims under the MCPA,
are curable and, therefore, whether dismissing those Counts with
prejudice is warranted.
IT IS HEREBY ORDERED that the Plaintiffs have ten days from
entry of this Order to show cause to this Court why it should not
dismiss Count I, Count II, Count III, Count IV, Count VI, and Count
Defendants Joey Harbin [Doc. No. 9] and U.S. Bank, N.A. [Doc. No.
27] are GRANTED IN PART as to Count V, Count VIII, Count IX, and
Count VII, to the extent it alleges claims under TILA and the MMWA,
and those Counts are DISMISSED WITH PREJUDICE.
SO ORDERED this the 16th day of November, 2017.
/s/ David Bramlette_________
UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?