Powell v. U-Haul International

Filing 16

DECISION AND ORDER granting Plaintiff's 13 Motion for Leave to amend; granting Defendant's 9 Motion to Dismiss as applied to the Amended Complaint and dismissing the Complaint in its entirety. Signed by Senior Judge Thomas J. McAvoy on 6/22/2011. (amt) [Pltf served via cert. mail]

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
-------------------------------TONYA POWELL,
Plaintiffs,
v.

3:10-cv-1531

U-HAUL INTERNATIONAL,
Defendants.
-------------------------------THOMAS J. McAVOY
Senior United States District Judge
DECISION and ORDER
Plaintiff Tonya Powell commenced the instant action against Defendant U-Haul
International asserting violations of the Electronic Fund Transfer Act, the Fair Debt Collection
Practices Act, the Social Security Act, her constitutional rights as secured by the due process
and equal protection clauses, and also asserting claims of conversion arising out of her rental
of a vehicle from Defendant.
By Decision and Order dated April 22, 2011, the Court granted Plaintiff’s motion to
proceed in forma pauperis and dismissed all of her claims as untimely except for the claim
asserted pursuant to Section 207 of the Social Security Act (“SSA”). Thereafter, Plaintiff
moved for leave to file an amended complaint to correct service upon the proper Defendant
and to withdraw all causes of action except the claim under the SSA. The Magistrate Judge
denied the motion for leave to amend because Plaintiff did not identify the correct defendant
she intended to name, did not need to file an amended complaint to withdraw the claims that
were previously dismissed, and failed to comply with N.D.N.Y.L.R. 7.1(a)(4). In the

meantime, Defendant filed the instant motion to dismiss pursuant to Fed. R. Civ. P. 12. In
response, Plaintiff filed another motion for leave to file an amended complaint. The Court will
now address these motions.
I.

FACTS
In March 2007, Plaintiff rented a truck from Defendant. Company policy required a

credit card to rent the truck. Although Plaintiff intended to pay for the truck in cash, in
accordance with the policy, she provided a debit card. Plaintiff claims she told Defendant’s
employee not to charge the card because she intended to pay in cash. Plaintiff rented the
truck for a period of several months and returned it in June 2007. A family member returned
the vehicle on behalf of Plaintiff and advised Defendant that Plaintiff wanted to make
payments for the balance until such time as the account was paid in full. In May, June, and
August 3, 2007, Defendant used Plaintiff’s debit card to secure the payments that were
owed. Plaintiff concedes that she owed the debt, that Defendant had a right to be paid for
the use of its vehicle, and that the rental agreement authorized Defendant “to go into your
checking account to automatically take monies from your account,” but nevertheless claims
that she did not authorize Defendant to take the monies using her debit card. It is further
claimed that the monies in her account consisted solely of benefits she received from Social
Security.
Plaintiff commenced an action against Defendant in small claims court. This action
was dismissed in favor of Defendant. Plaintiff contends that the decision of the small claims
court is faulty because the judge was biased as a result of Plaintiff “winning of a custody
case over him when he was a lawyer.”

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II.

DISCUSSION
a.

Plaintiff’s Motion to Amend

Plaintiff moves to file an amended complaint. The primary purpose of the proposed
amendment is to add Amerco as the purported proper Defendant. In the amended
complaint, Plaintiff appears to assert claims for breach of contract, a violation of N.Y.C.P.L.R.
§ 4544, a violation of 42 U.S.C. § 407(a) (section 207 of the SSA), unjust enrichment, and
the negligent infliction of emotional distress. The amended complaint does not assert claims
under the Electronic Funds Transfer Act or the Fair Debt Collection Practices Act.1 In her
motion to amend, Plaintiff also contends that she suffered from a disability that may toll the
statute of limitations.2 In light of the early posture of this case and the liberality with which
amendments are allowed under Fed. R. Civ. P. 15, the Court hereby GRANTS the motion to
amend. The Court will, therefore, address Defendant’s motion to dismiss as if directed to the
amended pleading.
b.

42 U.S.C. § 407(a)

Plaintiff claims that Defendant violated 42 U.S.C. § 407(a), which is known as the
Social Security Anti-Alienation provision. That section provides that:
The right of any person to any future payment under this subchapter shall not be
transferable or assignable, at law or in equity, and none of the moneys paid or
payable or rights existing under this subchapter shall be subject to execution, levy,
attachment, garnishment, or other legal process, or to the operation of any
bankruptcy or insolvency law.

1

These w ere the claim s dism issed from the original C om plaint.

2

Plaintiff does not elaborate on how or why any m edical condition w ould justify the tolling of the
statute of lim itations or how long any disability lasted.
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By its plain terms, the statute says nothing about creditors charging a debit card, even if the
account on which the debit card is drawn is funded by monies paid under the Social Security
Act. See Washington State Dep’t of Soc. and Health Servs. v. Guardianship Estate of
Keffeler, 537 U.S. 371, 382 (2003) (“neither § 407(a) nor the Commissioner’s regulations
interpreting that provision say anything about ‘creditors.’”); Wojchowski v. Daines, 498 F.3d
99, 109 (2d Cir. 2007). Rather, the statute protects such funds from execution, levy,
attachment, garnishment, or other legal process. “Execution” refers to judicial enforcement
of a money judgment, usually accomplished by seizing and selling the judgment debtor’s
assets. See Black’s Law Dictionary 609 (8th ed. 2004). “Levy” refers to “[t]he legally
sanctioned seizure and sale of property.” Id. at 926. “Attachment” similarly refers to the
seizing of property to satisfy a judgment. Id. at 136. Thus, for example, § 407(a) prohibits a
Sheriff from seizing Social Security monies to satisfy a debt. “Garnishment” is a legal
proceeding whereby a court is asked “to order a third party who is indebted to or is bailee for
the debtor to turn over to the creditor any of the debtor’s property . . . held by that third party.”
Id. at 702. The statute clearly prohibits such a garnishment order with respect to Social
Security monies. As the Supreme Court has held “[t]hese legal terms of art refer to formal
procedures by which one person gains a degree of control over property otherwise subject to
the control of another, and generally involve some form of judicial authorization.” Keffeler,
537 U.S. at 383; see also Wojchowski v. Daines, 498 F.3d 99 (2d Cir. 2007).
Defendant’s obtaining payments from Plaintiff through the use of her debit card
(even if the monies in the account came from the Social Security Administration) does not
implicate any of the specifically mentioned legal procedures. Id. Thus, the issue is whether
the charging of Plaintiff’s debit card constitutes “other legal process” within the meaning of
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the statute. The Supreme Court has limited the phrase “other legal process” to things akin to
the “processes of execution, levy, attachment, and garnishment.” Keffeler, 537 U.S. at 385.
The Supreme Court has stated that the phrase would “at a minimum . . . seem to require
utilization of some judicial or quasi-judicial mechanism . . . by which control over property
passes from one person to another in order to discharge or secure discharge of an allegedly
existing . . . liability.” Id. This is in accord with the Social Security Commissioner’s own
understanding of the phrase. See https://secure.ssa.gov/apps10/poms.nsf/lnx/0202410200
(visited on June 16, 2011); https://secure.ssa.gov/apps10/poms.nsf/lnx/0202410001 (visited
on June 16, 2011) (defining legal process as “the means by which a court (or agency or
official authorized by law) compels compliance with its demand; generally, it is a court order);
Keffeler, 537 U.S. at 1026-26.
Here, in light of these definitions, it cannot be said that Defendant’s actions fall
within the proscriptions of the statute. Defendant did not utilize “legal process” to obtain
Plaintiff’s Social Security monies. See Sanford v. Standard Federal Bank, 2011 WL 721314,
at *7 (E.D. Mich. 2011) (bank’s use of SSI funds to offset an overdraft “does not constitute
the use of a judicial or quasi-judicial mechanism . . . [and] does not appear to involve any
legal process” and, therefore, does not implicate § 407(a)); Fortelney v. Liberty Assur. Co. of
Boston, — F. Supp.2d —, 2011 WL 1938174, at *19 (W.D. Okla. 2011). Accordingly, the
claim pursuant to § 407(a) must be dismissed.
c.

Negligent Infliction of Emotional Distress

Plaintiff also asserts a claim for the negligent infliction of emotional distress. This
claim must be dismissed because: (1) it is beyond the applicable three year statute of
limitations, see N.Y.C.P.L.R. § 214; and (2) assuming the claim is timely, the Complaint fails
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to plausibly state a claim. There are insufficient allegations that Defendant created an
unreasonable risk of bodily harm to Plaintiff, that Defendant’s conduct was a substantial
factor in bringing about any injuries to Plaintiff, that any injuries were the consequences
resulting from Plaintiff’s contemporaneous observation of serious physical injury or death
inflicted by defendant’s conduct on a member of plaintiff’s immediate family in her presence,
or that Defendant engaged in extreme or outrageous conduct. Vieira v. Honeoye Cent. Sch.
Dist., 756 F. Supp.2d 302, 310 (W.D.N.Y. 2010). Accordingly, this claim is dismissed.
d.

Claim Pursuant to N.Y.C.P.L.R. § 4544

Plaintiff also appears to assert a claim under N.Y.C.P.L.R. § 4544, complaining that
certain language in the agreement with Defendant did not use a sufficiently large font.
Section 4544 is a state statute governing the admissibility into evidence of certain contracts
or agreements involving consumer transactions. Provisions of contracts that are not of a
sufficiently large font are inadmissible. Id. The statute does not provide a private cause of
action and is otherwise inapplicable in this court. See Zucherman ex rel. Zuckerman v.
Camp Laurel, 2008 WL 4386837, at *1 (S.D.N.Y. 2008) (“this provision of the C.P.L.R. is
evidentiary in nature and consequently is not applicable in a federal court sitting in diversity”);
Mickle v. Christie’s, Inc., 214 F. Supp.2d 430, 432 (S.D.N.Y. 2002) (holding that § 4544 is a
procedural rule of evidence that is not binding on a federal court). This claim is, therefore,
dismissed.
e.

Breach of Contract

Liberally construing Plaintiff’s pro se pleading, it appears she may be asserting a a
claim of breach of contract. As Plaintiff concedes, however, she owed money to Defendant,
Defendant was entitled to be paid, and the agreement authorized Defendant to obtain
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monies through the use of her debit card. Plaintiff also does not identify any agreement
Defendant may have violated or any damages caused by any alleged breach of contract.
Accordingly, the Amended Complaint does not plausibly state a claim for breach of contract.
f.

Unjust Enrichment

A liberal reading of Plaintiff’s papers in support of her memorandum of law also
suggests she may be asserting an unjust enrichment claim. Any such claim must be
dismissed because Plaintiff concedes that she obtained use of Defendant’s truck, she was
obligated to pay for the truck, and Defendant was entitled to be paid the amounts its obtained
through the use of her debit card. Thus, it cannot be said that Defendant benefitted at
Plaintiff’s expense and that equity and good conscience require restitution.
g.

All Other Claims

With respect to any other claims, Plaintiff “does not disagree with the court’s
decision to dismiss the causes of action with the exception of (Sec. 407(a)).” Dkt. 13, Att. 2
at p.7. Accordingly, Plaintiff has abandoned those claims. It also appears that Plaintiff has
not sued the correct entity and that the newly intended party, AMERCO, may not be the
correct Defendant.
III.

CONCLUSION
For the foregoing reasons, Plaintiff’s motion for leave to amend is GRANTED.

Upon consideration of Defendant’s motion to dismiss as applied to the Amended Complaint,
the motion is GRANTED and the Complaint is DISMISSED in its entirety.
IT IS SO ORDERED.

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Dated:June 22, 2011

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