Oliver et al v. ARS Ohio, LLC et al

Filing 22

Memorandum Opinion: Westlake Services, LLC's motion to dismiss and ARS Ohio LLC's motion for partial judgment on the pleadings are denied as to plaintiffs' Fair Debt Collection Practices Act claim (Count IV) and granted as to p laintiffs' Ohio Consumer Sales Practices Act and civil theft claims (Counts I and VIII). Plaintiffs' Ohio Consumer Sales Practices Act and civil theft claims are dismissed with prejudice. (Related Doc. Nos. 6 , 15 ). Judge Sara Lioi on 1/28/2019. (P,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

GEORGE OLIVER, et al.,

PLAINTIFFS,
vs.
ARS OHIO LLC, et al.,

DEFENDANTS.

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CASE NO. 5:18-cv-967

JUDGE SARA LIOI

MEMORANDUM OPINION

Before the Court are two motions: the motion of defendant Westlake Services, LLC
(“Westlake”) for partial dismissal (Doc. No. 6 [“Westlake Mot.”]), and the motion of defendant
ARS Ohio LLC (“ARS”) for partial judgment on the pleadings (Doc. No. 15 [“ARS Mot.”]). The
motions are opposed and fully briefed. (Doc. No. 13 [“Westlake Opp’n”]; Doc. No. 14
[“Westlake Reply”]; Doc. No. 17 [“ARS Opp’n”]; Doc. No. 19 [“ARS Reply”].) For the reasons
discussed herein, the motions are granted in part and denied in part.
I. BACKGROUND
All facts are taken from the allegations in the complaint, and, for the consideration of the
present motions, are presumed to be true. Plaintiffs, George and Maria Oliver, are the owners of
a 2008 dark blue Ford Edge. (Doc. No. 1-2 (Complaint [“Compl.”]) ¶ 16.) Plaintiffs financed the
vehicle through Friends and Family Credit Union. (Id.) At all times pertinent to this litigation,
plaintiffs were current with and not in default of their automobile loan. (Id. ¶ 32.)
Westlake is a California limited liability company, doing business in Ohio, and “is in the
business of providing automobile financing.” (Id. ¶¶ 6, 12.) ARS is an Ohio limited liability

company that is “in the automotive involuntary repossession business.” (Id. ¶¶ 5, 13.) It is
undisputed that plaintiffs “never had a contract with Westlake,” and “have never had any
association or business relationship with either Westlake or ARS.” (Id. ¶¶ 32, 33.)
On March 30, 2017, Maria Oliver drove her Ford Edge to her place of employment in
Canton, Ohio and parked the vehicle in the parking lot. When she left work that evening, she
noticed that the vehicle was missing from the lot. Concerned, she immediately called the local
police department to report that her vehicle had been stolen. (Id. ¶ 17.) The police dispatcher
advised her that an investigation would be conducted. Twenty minutes later, a responding police
officer contacted Maria and advised her that the vehicle had been involuntarily repossessed by
ARS because the vehicle’s previous owner, Willy Perry, was delinquent on payments. 1 (Id. ¶¶
18, 19.)
Over the next several days, George Oliver attempted to contact ARS but was unable to
speak with anyone about the repossession of the Ford Edge. (Id. ¶¶ 24, 25.) On April 3, 2017,
George Oliver visited the local police station and spoke with an officer who had spoken with an
ARS representative. The officer conveyed to Mr. Oliver that Westlake had directed ARS to
repossess the vehicle. (Id. ¶ 26; see id. ¶ 13.) Inasmuch as the vehicle had been improperly
repossessed, the officer instructed the ARS representative to make arrangements for plaintiffs to
recover their vehicle at a Ford dealership. (Id. ¶¶ 22, 26.) Upon retrieving the vehicle, plaintiffs
According to the complaint, plaintiffs “never had a contract with Westlake, let alone had a financing agreement
related to their vehicle go into default. Nonetheless, Westlake falsely labeled [p]laintiffs as being in a contractual
default, thus triggering the wrongful repossession of [p]laintiffs’ vehicle.” (Id. ¶ 33.)
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discovered that it had been damaged by ARS when it had been towed away from Maria Oliver’s
employer’s lot. (Id. ¶¶ 28-30.) As a result of improper towing, the vehicle sustained “damage to
the transmission, significant front-end damage, and other significant” damages. (Id. ¶ 31.)
On March 27, 2018, plaintiffs brought suit in the Stark County Court of Common Pleas
against Westlake and ARS. Plaintiffs’ complaint raises the following causes of action against
defendants: violation of the Ohio Consumer Sales Practices Act (“OCSPA”); wrongful
repossession; conversion; negligence; trespass to chattels; violation of the Fair Debt Collection
Practices Act (“FDCPA”); bailment; and civil theft. On April 27, 2018, the defendants removed
the action to federal court on the basis of federal question jurisdiction. (Doc. No. 1 (Notice of
Removal) ¶ 3.)
II. STANDARD OF REVIEW
Westlake brings its motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure,
and ARS relies on Rule 12(c). The standard of review for a motion for judgment on the pleadings
under Rule 12(c) is the same as for a motion to dismiss under Rule 12(b)(6). E.E.O.C. v. J.H.
Routh Packing Co., 246 F.3d 850, 851 (6th Cir. 2001) (citing Grindstaff v. Green, 133 F.3d 416,
421 (6th Cir. 1998)). A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the
pleading. Davis H. Elliot Co., Inc. v. Caribbean Util. Co., Ltd., 513 F.2d 1176, 1182 (6th Cir.
1975). All allegations of fact by the non-moving party are accepted as true and construed in the
light most favorable to that party. See Grindstaff, 133 F.3d at 421 (citing Meador v. Cabinet for
Human Res., 902 F.2d 474, 475 (6th Cir. 1990)). The Court, however, “need not accept as true
legal conclusions or unwarranted factual inferences.” Mixon v. Ohio, 193 F.3d 389, 400 (6th Cir.
1999) (citing Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987)). Nor is the
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Court required to accept as true complaint allegations that are contradicted by public records and
other evidentiary materials of which the Court may take judicial notice. See Moody v.
CitiMortgage, Inc., 32 F. Supp. 3d 869, 874-75 (W.D. Mich. 2014) (“court may disregard
allegations in the complaint if contradicted by facts established by exhibits attached to the
complaint[]”); see also Williams v. CitiMortgage, Inc., 498 F. App’x 532, 536 (6th Cir. 2012)
(“if a factual assertion in the pleadings is inconsistent with a document attached for support, the
Court is to accept the facts as stated in the attached document[]”).
The sufficiency of the pleading is tested against the notice pleading requirements of Fed.
R. Civ. P. 8(a)(2), which provides that a complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to relief[.]” Although this standard is liberal, “[t]o
survive a motion to dismiss, 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 is facially plausible “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. (citing Twombly, 550 U.S. at 556). If the plaintiff has not
“nudged [his] claims across the line from conceivable to plausible, [the] complaint must be
dismissed.” Twombly, 550 U.S. at 570.
III. DISCUSSION
In their dispositive motions, defendants each seek dismissal of plaintiffs’ first (OCSPA),
sixth (FDCPA), and eighth (civil theft) causes of action.

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A.

FDCPA Claim

Because plaintiffs’ claim under the FDCPA, 15 U.S.C. § 1692 et seq., provides this Court
with jurisdiction, the Court begins with defendants’ arguments relative to this federal statute.
Specifically, ARS argues that plaintiffs cannot make out a claim under the FDCPA because they
do not meet the statutory definition of “consumer.” (ARS Mot. at 156.2) Westlake insists that
dismissal of plaintiffs’ federal claim is warranted because it is not a “debt collector” as defined
by the FDCPA. (Westlake Mot. at 76-77.) The Court takes each argument in turn.
The FDCPA defines “consumer” as “any natural person obligated or allegedly obligated
to pay any debt.” 15 U.S.C. § 1692a(3). Because the complaint specifically provides that
plaintiffs never had any association or business relationship with either defendant, ARS argues
that plaintiffs cannot establish that they were ever obligated or allegedly obligated to pay any
debt to defendants. (ARS Mot. at 156-57.) While plaintiffs allege that they are “consumers”
under the FDCPA (see Compl. ¶ 8), ARS maintains that plaintiffs fail to support this legal
conclusion with factual allegations that would demonstrate that, as between themselves and
defendants, they are “consumers.”
Such a conclusion, however, is not necessarily fatal to plaintiffs’ FDCPA claim. It is true
that relief under certain provisions of the FDCPA is only available to “consumers.” For example,
in Montgomery v. Huntington Bank, 346 F.3d 693, 696 (6th Cir. 2003), the plaintiff brought suit
under three sections of the FDCPA—§§ 1692c, 1692d, and 1692e. As to those three sections, the
court found that “relief is limited to ‘consumers’ . . . under § 1692c.” In reaching this conclusion,
the Court observed that “§ 1692c ‘appears to be the most restrictive of the FDCPA’s

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All page numbers refer to the page identification number generated by the Court’s electronic docketing system.
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provisions.’” Id. (quoting Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, 649 n.1 (6th Cir.
1994)). It reached a different conclusion as to the other sections. Noting that § 1692d explicitly
provided for relief for any person harassed or oppressed in the collection of a debt, and further
noting that § 1692e protected against any false or misleading methods of debt collection and that
§ 1692k(a) permits enforcement of that section by any person who is harmed by a debt collector,
the court concluded that these provisions collectively demonstrate that any aggrieved party may
bring suit under §§ 1692d and 1692e.3 Id. at 697.
Relying on similar logic, including the inclusiveness of § 1692k(a), “many courts from
other circuits have held that standing under section 1692f is not limited to ‘consumers’ and
instead extends to anyone aggrieved by a debt collector’s unfair or unconscionable collection
practices.” Aviles v. Wayside Auto Body, Inc., 49 F. Supp. 3d 216, 228 (D. Conn. 2014)
(quotation marks omitted, collecting cases). In Aviles, one of the plaintiffs was the niece of the
debtor, who was present when a repossession agency used allegedly unconscionable tactics to
repossess the debtor’s vehicle. The court found that the niece had standing as an aggrieved
person to assert a claim under § 1692f, noting that such a conclusion “serves the aim of
eliminating unfair or unconscionable collection practices which may injure third parties.” Id. A
similar result is warranted here. A finding that plaintiffs have standing to bring a claim under §
1692f is consistent with both the language of the FDCPA and the stated goal of protecting third

Section 1692k(a) provides, in part, that “except as otherwise provided by this section, any debt collector who fails
to comply with any provision of this subsection with respect to any person is liable to such person[.]” 15 U.S.C. §
1692k(a) (emphasis added).
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parties from unconscionable debt collection practices.4
Nevertheless, Westlake argues that, because it is not a “debt collector” under the
FDCPA—and was not engaged in debt collection practices—the FDCPA claim must still fail.
The FDCPA defines a “debtor collector” as “any person who uses any instrumentality of
interstate commerce . . . in any business the principal purpose of which is the collection of any
debts, or who regularly collects or attempts to collect . . . debts owed or due or asserted to be
owed or due another.” 15 U.S.C. § 1692a(6). Neither Westlake nor ARS are debt collectors
because Westlake was attempting to collect on its own debt. See Montgomery, 346 F.3d at 699
(noting that “Huntington Bank was an actual, original, consumer creditor of Montgomery’s
mother collecting its account, and, as such, was exempted from the statutory definition of a ‘debt
collector’”). Section 1692a(6)(F)(ii) contains an exception for creditors attempting to collect on
debts owed to them. Id. Likewise, those who are enlisted to assist in the enforcement of such a
security interest—such as repossession agencies like ARS—are also generally excluded from the
reaches of the FDCPA. See, e.g., id. (“As a repossession agency, Silver Shadow, likewise, does
not fall within the definition of a ‘debt collector.’”); see Jordan v. Kent Recovery Servs. Inc., 731
F. Supp. 652, 659-60 (D. Del. 1990) (finding that the repossessing of a car is not the action of a
debt collector and falls outside the protection of the FDCPA).

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In its reply brief, ARS argues for the first time that the FDCPA claim should be dismissed against it because
plaintiffs allege that ARS was acting under instructions from Westlake. (ARS Reply at 178-80.) “The Sixth Circuit’s
longstanding rule is that issues raised for the first time in a reply brief are considered waived.” Dykes v. Marshall,
No. 1:14-CV-1167, 2016 WL 1059618, at *3 (W.D. Mich. Mar. 17, 2016) (citing Tranter v. Orick, 460 F. App'x
513, 515 (6th Cir. 2012); Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 553 (6th Cir. 2008)). The Court will not
consider this argument at this time but will permit ARS to revisit this issue on summary judgment, at which time
plaintiffs will have the opportunity to respond.

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There is an exception to the general rule that repossession actions do not qualify for
protection under the FDCPA. Section 1692f(6) prohibits the following:
Taking or threatening to take any nonjudicial action to effect dispossession or
disablement of property if (A) there is no present right to possession of the
property claimed as collateral through an enforceable security interest; (B) there is
no present intention to take possession of the property; or (C) the property is
exempt by law from such dispossession or disablement.
15 U.S.C. § 1692f(6). Pertinent to the present motions, § 1692f(6) provides for FDCPA
protection when the alleged repossession action is taken when there is no present right to
possession of the property. See also Montgomery, 346 F.3d at 700-01 (“except for purposes of §
1692f(6), an enforcer of a security interest, such as a repossession agency, does not meet the
statutory definition of a debt collector under the FDCPA”); Jordan, 731 F. Supp. at 659
(similar).
Here, plaintiffs have alleged that they financed their vehicle through a third-party and that
they were current in their payments under their financing agreement. (Compl. ¶¶ 16, 32.) They
have further alleged that they never entered into a financing agreement with Westlake; that
Westlake “falsely labeled [p]laintiffs as being in contractual default, thus triggering the wrongful
repossession[;]” that plaintiffs have never had any business relationship or association with
defendants; and that, therefore, defendants did not “possess[] the legal right or authority to
repossess” the vehicle. (Id. ¶¶ 22, 32, 33.) The Court finds that these allegations adequately state
a claim for relief under § 1692f(6) because, taken together, they allege that defendants had no
present right to repossess the vehicle. See, e.g., Vantu v. Echo Recovery, LLC, 85 F. Supp. 3d
939, 944 (N.D. Ohio 2015) (noting that it was alleged that the security enforcer “had no right to
present possession of the collateral” because he breached the peace and finding that “its conduct
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(if true) violated the FDCPA”). While these allegations may not find support in discovery, and
defendants may also be entitled to affirmative defenses that ultimately defeat this claim, they are
sufficient at this stage in the proceedings.5 Accordingly, defendants’ motions, to the extent they
seek dismissal of plaintiffs’ FDCPA claim, are DENIED.
B.

OCSPA Claim

The OCSPA “provides a private cause of action, permitting consumers to seek relief
against suppliers who have violated the act.” Rose-Gulley v. Spitzer Akron, Inc., No. 21778, 2004
WL 1736982, at *3 (Ohio Ct. App. Aug. 4, 2004) (citing Ohio Rev. Code § 1345.09). The act
defines a “consumer” as “a person who engages in a consumer transaction with a supplier.” Ohio
Rev. Code § 1345.01(D). A “supplier” refers to “a seller, lessor, assignor, franchisor, or other
person engaged in the business of effecting or soliciting consumer transactions, whether or not
the person deals directly with the consumer.” § 1345.01(C). A “consumer transaction” means “a
sale, lease, assignment, award by chance, or other transfer of an item of goods, a service, a
franchise, or an intangible, to an individual for purposes that are primarily personal, family, or
household, or solicitation to supply any of these things.” § 1345.01(A). Defendants maintain that
plaintiffs’ OCSPA claim fails because none of these definitions applies to the parties here.
The complaint is clear that plaintiffs did not engage in a commercial transaction with
defendants. “Ohio courts have . . . explicitly required that the consumer transaction occur
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Plaintiffs also argue that they have set forth a claim under § 1692f(6) because they have alleged that defendants
“breached the peace” when they repossessed the Ford Edge. (Compl. ¶ 70.) Under Ohio law, “a security-interest
enforcer loses its right to present possession of the collateral if it breaches the peace.” Vantu, 85 F. Supp. 3d at 943
(citing Ohio Rev. Code § 1309.609(B)(2)). The complaint does not set forth any factual allegations to support the
legal conclusion that defendants breached the peace, and plaintiffs affirmatively assert that the vehicle was taken
from a parking lot without their knowledge. (See Compl. ¶ 17.) See, e.g., Leighty v. Am. Can Credit Union, No.
44496, 1982 WL 2574, at *5 (Ohio Ct. App. Dec. 9, 1982) (Plaintiff failed to sufficiently plead that the repossession
of his vehicle amounted to a breach of the peace, under Ohio Rev. Code § 1309.609(B)(2), because the allegations
demonstrated that he and his wife were “unaware that the car ha[d] been removed from their driveway[.]”)
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between the supplier and the consumer.” Riley v. Supervalu Holdings, Inc., No. C-050156, 2005
WL 3557399, at *3 (Ohio Ct. App. Dec. 30, 2005). For this reason, plaintiffs are not consumers
and there was no commercial transaction. See Hayes v. Asset Recovery Mgmt. Grp., Ltd., No.
3:10CV1098, 2011 WL 3566851, at *1 (N.D. Ohio Aug. 12, 2011) (“The only ‘transaction’
between the plaintiff and the defendants involved their efforts to collect debts she did not owe.
Such ‘transactions’ are outside the OCSPA.”), partially vacated to include ruling on common
law claims by 2011 WL 68177789 (N.D. Ohio Dec. 28, 2011); Rose-Gulley, 2004 WL 1736982,
at *3 (noting that a consumer seeking relief must have engaged in a consumer transaction with a
supplier, the court held that the plaintiff “ha[d] failed to present any evidence suggesting that she
was engaged in a consumer transaction with [defendant] with respect to the vehicle at issue in
this case”); see also Wallace v. Sunstar Acceptance Corp., Nos. C-990390, C-990424, 2000 WL
569565, at *3 (Ohio Ct. App. May 12, 2000) (finding the OCSPA inapplicable to action
challenging the repossession of a vehicle). Defendants’ motions, to the extent they seek the
dismissal of plaintiffs’ OCSPA claim, are GRANTED.
C.

Civil Theft Claim

Both defendants also argue that plaintiffs’ civil theft claim is fatally flawed.6 The Court
agrees. Ohio Rev. Code § 2913.43(A) provides that “[n]o person, by deception, shall cause
another to execute any writing that disposes of or encumbers property, or by which a pecuniary
obligation is incurred.” Ohio Rev. Code § 2307.60(A)(1) provides for damages for “[a]nyone
injured in person or property by criminal acts[.]” However, beyond the conclusory allegations

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The complaint also purports to raise a common law claim of conversion. (Compl. ¶¶ 52-57.) The Court makes no
determination as to the viability of that claim.

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that defendants committed “theft crimes” under Ohio Rev. Code § 2913.43, the complaint fails to
allege any facts that would support a claim under this statute for civil damages. (See Compl. ¶
83.) There are no allegations that either defendant caused plaintiffs to execute a writing that
disposes of or encumbers their vehicle. Moreover, the complaint specifically provides that the
Ford Edge was eventually returned to plaintiffs upon discovery that the vehicle was no longer
owned by Willy Perry. (Compl. ¶¶ 26-27.) Defendants’ motions, to the extent they seek
dismissal of the civil theft claim, are GRANTED. For the same reasons, plaintiffs’ request for
damages resulting from defendants’ alleged “theft crimes” under Ohio Rev. Code § 2307.60 is
DENIED. (See id. ¶ 85.)
IV. CONCLUSION
For the foregoing reasons, Westlake’s motion to dismiss and ARS’ motion for partial
judgment on the pleadings are DENIED as to plaintiffs’ FDCPA claim (Count IV) and
GRANTED as to plaintiffs’ OCSPA and civil theft claims (Counts I and VIII). Plaintiffs’
OCSPA and civil theft claims are DISMISSED with prejudice.
IT IS SO ORDERED.

Dated: January 28, 2019
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE

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