Toyota Motor Credit Corporation v. Borough of Wyoming, PA et al

Filing 46

MEMORANDUM (Order to follow as separate docket entry) re 14 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by Bovani's Towing & Service, Inc. Signed by Honorable Malachy E Mannion on 11/9/2023. (gg)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
NO. 3:23-cv-00377

TOYOTA MOTOR CREDIT
CORPORATION,

(JUDGE MANNION)

Plaintiff,
v.
BOROUGH OF WYOMING, PA
and BOVANl'S TOWING &
SERVICE, INC.
Defendants.
MEMORANDUM

Presently before the court is Defendant Bovani's Towing & Service,
Inc. ("Bovani's") motion to dismiss. (Doc. 14). This dispute arises out the
Defendants Borough of Wyoming ("Wyoming") and Bovani's allegedly
unconstitutional seizure of a 2017 Toyota Rav4 vehicle ("Vehicle"), in which
Plaintiff Toyota Motor Credit Corporation ("Toyota") holds a security interest
or lien. For the reasons stated below Bovani's motion is DENIED.
I.

Background

Wyoming uses Bovani's to regularly tow, store, and eventually dispose
of vehicles seized by its police in the course of their law enforcement duties.
Wyoming does not directly pay Bovani's for this service. Instead Bovani's
accepts possession of seized vehicles as payment for the services it
provides Wyoming. Bovani's then holds the seized vehicle until the owner

pays its towing and storage fees . If no one pays the fees on a given vehicle
Bovani 's sells that vehicle to recoup its expenses.
The Vehicle here was owned by Gerald T. Clisham ("Mr. Clisham") but
Toyota held a security interest and lien in the Vehicle entitling it to immediate
possession of the Vehicle by reason of default on its credit agreement with
Mr. Clisham. On or about August 28 , 2021, Mr. Clisham defaulted on his
agreement with Toyota , Wyoming took custody of the Vehicle, and Bovani 's
towed it away. On or about December 14, 2021 , 108 days later, Toyota
discovered the vehicle was being stored at Bovani 's. On December 15,
2021 , Toyota demanded Bovani 's release the Vehicle, but Bovani's refused
unless Toyota paid its towing and storage fees. Toyota did not pay the fees
and Bovani's did not release the Vehicle . Toyota was not given prior notice,
a hearing, or compensation by Wyoming or Bovani 's related to the Vehicle.
On March 2, 2023, Toyota filed a complaint against Wyoming and
Bovani's under 42 U.S.C §1983 alleging violations of its Fourth , Fifth, and
Fourteenth Amendment rights by both Defendants. Toyota also brought a
variety of state law causes of action against only Bovani's and seeks a
declaratory judgment that any law cited by either Wyoming or Bovani's to
justify their actions is unconstitutional. On April 5, 2023, Bovani's filed a

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motion to dismiss Toyota's complaint for failure to state a claim. Bovani's
motion has been fully briefed and is ripe for review.
II.

Legal Standard

A. Motion to Dismiss

In rendering a decision on a motion to dismiss, a court should not
inquire "whether a plaintiff will ultimately prevail but whether the claimant is
entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416
U.S. 232, 236 (1974); Nami v. Fauver, 82 F.3d 63, 66 (3d Cir. 1996). The
court must accept as true the factual allegations in the complaint and draw
all reasonable inferences from them in the light most favorable to the plaintiff.
Innis v. Wilson , 334 F. App'x 454, 456 (3d Cir. 2009) (citing Phillips v. Cnty
of Allegheny, 515 F.3d 224, 229 (3d Cir. 2008)).

However, "the tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal conclusions. "
Ashcroft v. Iqbal, 556 U.S. 662 , 678 (2009) ("Threadbare recitals of the

elements of a cause of action, supported by mere conclusory statements, do
not suffice.").
Under the pleading regime established by [Bell At/. Corp. v.]
Twombly, 550 U.S. 544 (2007) and Iqbal, a court reviewing the

sufficiency of a complaint must take three steps. First, it must
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"tak[e] note of the elements [the] plaintiff must plead to state a
claim. " Iqbal, 556 U.S. at 675, 129 S.Ct. 1937. Second, it should
identify allegations that, "because they are no more than
conclusions, are not entitled to the assumption of truth ." Id. at
679, 129 S.Ct. 1937. Finally, "[w]hen there are well-pleaded
factual allegations, [the] court should assume their veracity and
then determine whether they plausibly give rise to an entitlement
to relief. " Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.
Connelly v. Lane Const. Corp., 809 F.3d 780, 787-88 (3d Cir. 2016) (internal

citations, quotations and footnote omitted). Elements are sufficiently alleged
when the facts in the complaint "show" that the plaintiff is entitled to relief.
Iqbal, 556 U.S. at 679 (quoting FED.R.CIV.P. 8(a)(2)). At the second step,

the court distinguishes between legal conclusions, which are discounted in
the analysis, and allegations of historical fact, which are assumed to be true
even if "unrealistic or nonsensical ," "chimerical, " or "extravagantly fanciful. "
Iqbal, 556 U.S. at 681 . Deciding whether a claim is plausible is a "context-

specific task that requires the reviewing court to draw on its judicial
experience and common sense." Id.

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B. 42 U.S.C. §1983

42 U.S.C. §1983 is the vehicle by which private citizens may seek
redress for violations of federal constitutional rights committed by state
officials. To state a cause of action under §1983, a plaintiff must allege that:
(1) the conduct complained of was committed by persons acting under color
of state law; and (2) the conduct violated a right, privilege, or immunity
secured by the Constitution or laws of the United States. See Harvey v.
Plains Twp. Police Dep't, 421 F.3d 185, 189 (3d Cir. 2005).

Ill.

Discussion
A. Toyota has plausibly alleged Bovani's is a State Actor.

The question of state action turns on "whether there is such a close
nexus between the State and the challenged action that seemingly private
behavior may be fairly treated as that of the State itself." Kach v. Hose, 589
F.3d 626, 646 (3d Cir. 2009) (citation omitted).
A plaintiff may establish a nexus in one of three ways: (1) "the
private entity has exercised powers that are traditionally the
exclusive prerogative of the state"; (2) "the private party has
acted with the help of or in concert with state officials"; and (3)
"the [s]tate has so far insinuated itself into a position of

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interdependence with the acting party that it must be recognized
as a joint participant in the challenged activity. "
Mark v. Borough of Hatboro, 51 F.3d 1137, 1141 (3d Cir. 1995). Here Toyota

has argued Bovani's exercised a traditionally exclusive prerogative of the
state and acted under the mantle of state authority when it towed and stored
the Vehicle without its owners' permission. (Doc. 31 at 8-9). Bovani 's
rightfully claims that the towing of vehicles is not the exclusive prerogative of
the state. But towing of vehicles without their owner's permission is certainly
not a private act. Bovani's was only able to tow the Vehicle because it did so
with the help of Wyoming officials.
Toyota also alleges that Wyoming and Bovani's have a symbiotic or
interdependent relationship through which Wyoming depends on Bovani 's
for free vehicle towing and storage, and Bovani's depends on Wyoming for
a steady stream of cars on which it can collect towing and storage fees. (Id .
at 9). Such allegations have supported numerous §1983 actions against
private towing companies. See e.g. Mays v. Scranton City Police Oep 't, 503
F. Supp. 1255, 1258 (M.D. Pa. 1980) ("It is precisely because Gallucci['s
towing company] removed the car pursuant to state law, however, that
exposes him to liability under 42 U.S.C. §1983.") Thus, based on Plaintiff's
allegation Bovani's appears to have acted under color of state law and at this
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stage of the proceeding can be characterized as a state actor for § 1983
purposes.
B. Toyota has Pied a Plausible and Ripe Due Process Claim.

To make out a due process violation , a plaintiff must show the
deprivation of a cognizable property interest without constitutionally sufficient
process. See

Montanez

v.

Secretary Pennsylvania

Department of

Corrections, 773 F.3d 472, 482 (3d Cir. 2014 ). Central to the definition of due
process is the right to notice and the opportunity to be heard at a meaningful
time and meaningful place. Fuentes v. Shevin , 407 U.S. 67, 80 (1972).
Here Toyota has plausibly alleged a property interest cognizable under
the Fourteenth Amendment. See, Am. Honda Fin. Corp. v. Twp. of Aston,
546 F. Supp. 3d 371 , 379 (E.D. Pa. 2021) citing Ford Motor Credit Co. v.
NYC Police Dept. , 503 F.3d 186, 191 (2d Cir. 2007) (citing Mennonite Bd. of
Missions v. Adams, 462 U.S. 791, 798, (1983)) ("a security interest is
indisputably a property interest protected by the Fourteenth Amendment").
Toyota claims Bovani 's seizure and retention of the Vehicle impaired this
right by depriving it of the collateral for its lien while that collateral 's value
steadily depreciated . Bovani's counters that it lawfully obtained title under
Pennsylvan ia's Abandon Vehicle Statute, 75 Pa. C.S. §7305. Even if this

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was true, Bovani's still does not explain how that transfer would extingu ish
Toyota's lien and in turn its property interest in the vehicle.
Likewise , Toyota has plausibly alleged the deprivation of its property
without sufficient process. Bovani 's claims Toyota received notice under
§7305 on February 1, 2022, 157 days after the Vehicle was towed , but
Toyota claims it did not receive notice until March 15, 2022 , 199 days after
the Vehicle was towed. (Doc. 31 at 19). Regardless other courts in
Pennsylvania have found far shorter delays constituted due process
violations. See Aston, 546 F. Supp. 3d 371 (E.D. Pa. 2021) (Township's
failure to provide lienholder with notice and opportunity to request hearing
until 25 days after seizing vehicle violated lienholder's rights to due
process.")
Bovani's further claims that Toyota's due process claim is not ripe for
review because it did not avail itself of the administrative remedies available
under §7305. (Doc. 27 at 10). But again , other courts in Pennsylvania have
found that post-deprivation remedies in this context do not cure due process
rights violations. See Aston, 546 F. Supp. 3d at 383 (E.D. Pa. 2021 ).
Moreover, Toyota claims that §7305 is inapplicable because a vehicle
seized by law enforcement is not abandoned. (Doc. 31 at 18). Either way a
plaintiff need only show lack of adequate state law remedy in cases of
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random and unauthorized deprivations by individuals. Revell v. Port Auth. of
New York, New Jersey, 598 F.3d 128, 138 (3d Cir. 2010) (emphasis added)

(citing Hudson v. Palmer, 468 U.S. 517 at 533 (1984). Here Toyota asserts
that the alleged due process violation happened as part of Defendants
pattern and practice. (Id. at 3). Thus, given Toyota's property interest in the
vehicle and the lack of any timely notice let alone hearing afforded to it by
Bovani's regarding its interference with that interest, Toyota has pied a
plausible and ripe due process violation .
C. Toyota

has

Pied

a

Plausible

Fourth

Amendment

Unreasonable Seizure Claim.

Under the Fourth Amendment a "seizure" of property occurs when
there is some meaningful interference with an individual's possessor
interests in that property." United States v. Jacobsen, 466 U.S. 109, 113
(1984 ). Toyota alleges meaningful interference with its possession of the
Vehicle. (Doc. 1 ,I 16).

Specifically, it alleges that both the initially

warrantless seizure of the Vehicle and holding of it for longer than required
to effectuate the purpose of the warrantless stop were unreasonable under
the Fourth Amendment. (Doc. 31 at 11) Bovani's contends without citing any
authority that its adherence to state law defeats these claims. (Doc. 43 at 6).
But adherence to state law alone does not automatically legitimize its actions
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under the constitution . See United States v. Premises Known as 608 Taylor
Ave. , 584 F.2d 1297, 1302 (3d Cir. 1978) ("[T]he government may not by

exercising its power to seize, effect a De facto forfeiture by retaining the
property seized indefinitely .... "); See a/so Rosemont Taxicab Co. v.
Philadelphia Parking Auth., 327 F. Supp. 3d 803 (E .D. Pa. 2018) (Vehicle

owner established prima facia violation of the search and seizure clauses
under §1983 , where it was undisputed that parking authority seized vehicles
without a warrant and with no pre-deprivation notice or hearing.) Thus,
Toyota has pied a plausible claim of unreasonable seizure under the Fourth
Amendment.
D. Toyota has Pied a Plausible Fifth Amendment Takings
Claim. 1
A property owner has an actionable Fifth Amendment takings claim
when the government takes their property without paying for it, and thereafter
may bring their claim in federal court under § 1983. See Knick v. Twp. of
Scott, Pennsylvania , 139 S. Ct. 2162, 204 L. Ed . 2d 558 (2019). See a/so
Tyler v. Hennepin Cnty. , Minnesota , 598 U.S. 631 , (2023) (Government's

retention of the money remaining after disputedly abandoned property was
1

Since Toyota acknowledges that it never intended to bring a Fifth
Amendment Due Process Claim , the court will not address the plausibility of
that claim .
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sold was a classic taking for which taxpayer was entitled to just
compensation).

As previously stated , Toyota has plausibly pied that

Bovani's is a state actor, and it has a cognizable property interest in the
Vehicle. Additionally, regardless of the validity of Bovani's fees , under Tyler
Toyota has a plausible claim to just compensation for the difference between
the fees and value of the Vehicle. Thus, Toyota has also stated a plausible
claim under the Takings Clause of the Fifth Amendment.
E. The Court Retains

Supplemental

Jurisdiction

over

Toyota's State Law Claims.

Since the court has not dismissed Toyota's federal claims it retains
supplemental jurisdiction over Toyota's state law causes of action .
IV.

Conclusion

For the reasons stated above, there appears to be numerous material
factual matters that remain in dispute and will be aided by additional
discovery. Therefore , Bovani's motion to dismiss is DENIED at this stage of
the proceed ing. An appropriate order follows.

tates District Judge
DATE: November 9, 2023
23-0378-01

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