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

Filing 48

MEMORANDUM (Order to follow as separate docket entry) re 15 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by Borough of Wyoming, PA 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 Borough of Wyoming's
("Wyoming") motion to dismiss. (Doc. 15). This dispute arises out of
Defendants Wyoming and Bovani's Towing & Service Inc. (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 Wyoming's motion is DENIED .
I.

Background

Wyoming police routinely take custody of vehicles in the course of their
law enforcement duties. Wyoming uses Bovani's to regularly tow, store, and
eventually dispose of those vehicles. 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
-2-

justify their actions is unconstitutional. On April 10, 2023, Wyoming filed a
motion to dismiss Toyota's complaint for failure to state a claim . Wyoming '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 [Be// At/. Corp. v.]
Twombly, 550 U.S. 544 (2007) and Iqbal, a court reviewing the

-3-

sufficiency of a complaint must take three steps. First, it must
"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, wh ich 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.

-4-

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. Wyoming is a State Actor.

It is undisputed that Wyoming a borough incorporated under the law of
Pennsylvania is a state actor and as such is liable under §1983 for
constitutional violations like those alleged here.
B. Toyota has Alleged a Constitutionally Cognizable
Property Interest in the Vehicle.
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

- 5-

property interest protected by the Fourteenth Amendment"). Wyoming 's
seizure and retention of the car deprived Toyota of its collateral while the
collateral's value steadily depreciated . See Aston, 546 F. Supp. 3d 371 , 375
(E.D. Pa. 2021) ([v]ehicle remained at [the] impound yard, accruing storage
fees and depreciating in value.") Accordingly, when as here the Fourth
Amendment is applied through the Fourteenth Amendment, the property
interest asserted by Toyota is constitutionally cognizable.
Wyoming claims that Toyota cannot satisfy the Third Circuit's test to
establish that is had a "possessory interest" in the Vehicle but in doing so
overlooks or ignores the distinction between property and possessory
interests drawn in the authority it cites. True the Supreme Court has declined
to find a Fourth Amendment possessory interest in an item when "neither
ownership nor possession" of the item was shown. See United States v.
Miller, 425 U.S. 435, 440, (1976). But here ownership has been shown.

Accordingly, the Third Circuit test for possession is inapplicable.
C. Toyota has Stated a Plausible Fourth Amendment
Illegal 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
-6-

(1984). Toyota alleges meaningful interference with its possession of the
Vehicle. (Doc. 1 ~16). Specifically, Toyota alleges that Wyoming seized the
Vehicle without a warrant and the continued detention of the Vehicle was not
justified by any warrant exception. (Doc. 30 at 6). Wyoming argues it did act
pursuant to a valid warrant exception, but as Toyota correctly points out such
arguments are premature on a 12(b)(6) motion. (Id. at 13). Regardless
Toyota alleges that Wyoming's turnover of the Vehicle to Bovani's would not
be covered by any warrant exception making the execution of any otherwise
lawful seizure unreasonable under the Fourth Amendment. See Jacobsen
466 U.S. 109, 113 (1984) ([A] seizure lawful at its inception can nevertheless
violate

the

Fourth

Amendment

because

its

manner of execution

unreasonably infringes possessory interests protected by the Fourth
Amendment's prohibition .. .. "). Thus, Toyota has stated a plausible Fourth
Amendment illegal seizure claim.

-7-

D. Toyota has Stated a Plausible Fifth Amendment
Takings Clause 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). As
previously stated Toyota plausible alleges a property interest in the Vehicle
and it is undisputed Wyoming took that property without paying for it.
Wyoming claims that since this seizure was made pursuant to its police
power it is not subject to the Takings Clause. (Doc. 26 at 18). Specially it
argues that because the Vehicle was not used for a public purpose Toyota's
claim fails to check all the boxes of a § 1983 Fifth Amendment claim . (Doc.
41 at 4); See a/so Frein v. Pennsylvania State Police, 47 F.4th 247, 251 (3d
Cir. 2022) (A §1983 claim checks all the "Fifth Amendment boxes" where it
alleges that private property was seized without just compensation and used
for a public purpose.) However, Toyota argues that although the Vehicle was
not seized for a public purpose it was used for one, namely compensating

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.

-8-

Bovani's. (Doc. 30 at 21 ). Whether such use is a public purpose under Frein
is a factual question not appropriate for resolution at this stage of the
proceeding . Furthermore, adherence to state statutes as Wyoming claims it
and Bovani's did here does not automatically constitutionalize their actions.
This is especially true given that Toyota disputes the applicability of that
statute. (Id. at 24). Thus, Toyota has stated a plausible Fifth Amendment
Takings Clause Claim.
E. Toyota has Stated a Plausible Fourteenth Amendment
Due Process Violation.

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 alleged a property interest cognizable under the Fourteenth
Amendment as well as deprivation of that interest without pre or postdeprivation due process.
Wyoming contends that Toyota's pre-deprivation due process claims
fail since it wou ld have been impractical for it to provide notice and hearing
-9-

before towing the vehicle (Doc. 26 at 22). While this may be true, Toyota
rightfully points that the only cases involving motor vehicles Wyoming cites
in support of this proposition involve municipalities that afforded due process
protections post-deprivation. (Doc. 30 at 28). Thus, Toyota's due process
claims predicated on pre-deprivation procedural due process do not fail as a
matter of law.
Wyoming also contends that Toyota's post-deprivation due process
claims fail because it has access to state law remedies. (Doc. 26 at 27).
However, courts have found in this context that post-deprivation remedies
alone do not cure due process rights violation . In Aston, availability of postdeprivation remedies for vehicle lienholder did not cure township's violation
of lienholder's due process rights by failing to provide notice and opportun ity
to request a hearing until 25 days after seizing vehicle. 546 F. Supp. 3d at
383 (E.D. Pa. 2021 ). While the lienholder in Aston could have eventually
requested a hearing to dispute the vehicle was actually abandoned and if
successful wou ld have been spared towing and storage fees , that remedy
was still inadequate because the lienholder would not have recovered loses
caused by vehicle's depreciation. Id.
If such post-deprivation remedies are not an adequate substitute for
timely due process, then neither is the ability to sue after the fact in state
- 10 -

court. This is especially given Wyoming 's undisputed failure to provide any
notice let alone hearing to Toyota. Moreover, even if it was not true a plaintiff
need only show lack of adequate state law remedy in cases of 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. (Doc. 30 at 5). Thus, Toyota's due process claims predicated on
post-deprivation procedural due process do not fail as a matter of law and in
turn it has stated a plausible due process violation under the Fourteenth
Amendment.
F. Toyota has Stated a Plausible Claim under the
Declaratory Judgement Act.
Toyota has not challenged Wyoming's argument that Count IV of the
complaint seeking a declaratory judgment under 28 U.S.C. §2201 should be
dismissed because that statute does not provide an independent cause of
action. However, the cases cited by Wyoming in support of this proposition
dismissed declaratory judgment claims when those claims were the only
count or duplicative of other counts. (Doc. 26 at 32). Here Toyota's claim for
declaratory relief is neither its only claim or duplicative of its other claims. It's
- 11 -

a unique claim with a remedy not available under its other claims. Thus,
Toyota has stated a plausible claim under the declaratory judgment act.
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, Wyoming 's motion to dismiss is DENIED at this stage
of the proceedi ng. An appropriate order follows.

tates District Judge
DATE: November 9, 2023
23-0378-02

- 12 -