Johnson v. Santander Consumer USA et al

Filing 26

ORDER ADOPTING REPORT AND RECOMMENDATIONS and Dismissing Case with prejudice signed by Judge John T. Fowlkes, Jr. on 5/10/18. (Fowlkes, J.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
______________________________________________________________________________
TIA JOHNSON,

)
)
Plaintiff,
)
)
v.
)
CASE No. 2:17-cv-02937-JTF-dkv
)
SANTANDER CONSUMER USA, and )
CFAM FINANCIAL SERVICES, LLC, )
)
Defendants.
)
______________________________________________________________________________
ORDER ADOPTING THE CHIEF MAGISTRATE JUDGE’S
REPORT AND RECOMMENDATION AND ORDER OF DISMISSAL
______________________________________________________________________________
Before the Court is Defendant Santander Consumer USA Inc.’s Rule 12(b)(6) Motion to
Dismiss that was filed on March 2, 2018.

(ECF No. 19). On March 21, 2018, Johnson

proceeding pro se filed a response to which Santander filed a reply on April 4, 2018. (ECF Nos.
20 & 21.) Pursuant to 28 U.S.C. § 1915(e)(2)(B), the matter was referred to the Chief Magistrate
Judge for screening and the administration of all pretrial matters. On February 9, 2018, the Chief
Magistrate Judge issued a report and recommendation that the Court grant Defendant’s Rule
12(b)(2) motion to refer the case back to the U.S. Bankruptcy Court and deny as moot the
12(b)(6) motion to dismiss. (ECF Nos. 7, 10 & 14). After notice by Santander that Plaintiff’s
bankruptcy case was dismissed on February 16, 2018, the Chief Magistrate Judge issued a
second and superseding report and recommendation on April 6, 2018. (ECF Nos. 18 & 18-1.) 1
To date, Plaintiff has not filed any objections within the fourteen days allowed in accordance
with Fed. R. Civ. P. 72(b)(2). For the following reasons, the undersigned Court finds that the
1

In re Tia Lashun Johnson, Debtor, Bk Court No. 17-30689-L

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Chief Magistrate Judge’s report and recommendation should be adopted in full and the case
dismissed with prejudice.
II. STANDARD OF REVIEW
Congress passed 28 U.S.C. § 636(b) “to relieve some of the burden on the federal courts
by permitting the assignment of certain district court duties to magistrates.”

See e.g. Baker v.

Peterson, 67 Fed. App’x. 308, 311, 2003 WL 21321184 (6th Cir. 2003) and Fed. R. Civ. P.
72(a). When a Magistrate Judge “submit[s] to a judge of the [district] court proposed findings of
fact and recommendations,” “any party may serve and file written objections to such proposed
findings and recommendations as provided by rules of court.” 28 U.S.C. § 636(b)(1)(B)-(C).
Courts are unwilling to abrogate basic pleading standards in pro se actions. Haines v. Kerner,
404 U.S. 519, 521 (1972) (per curiam); Wells v. Brown, 891 F.2d 591, 594 (6th Cir. 1989), reh’g
denied, (Jan. 19. 1990). While pro se litigants are not held to the same standard as licensed
attorneys, it is not the role of the court to speculate about the nature of their claims. Estelle v.
Gamble, 429 U.S. 97, 106 (1976) and Williams v. Curtin, 631 F.3d 380, 383 (6th Cir. 2011).
The Court may accept, reject, or modify, in whole or in part, any findings or
recommendations made by a Magistrate Judge. Id. A Court need not review any portion of the
recommendation to which a plaintiff does not specifically object and should adopt the findings
and rulings of a Magistrate Judge to which a specific objection is not filed. Thomas v. Arn, 474
U.S. 140, 149-52 (1985) and Brown, 47 F.Supp.3d at 674.
III. FINDINGS OF FACT
In her report and recommendation, the Chief Magistrate Judge sufficiently summarizes
that this action arises from Plaintiff’s purchase of a 2007 Chevrolet Tahoe from CarMax on or
about September 17, 2012. Plaintiff now attempts to set aside the transaction based on several

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alleged violations. (ECF 23-1 3-5.) Specifically, Plaintiff asserts that Defendants committed
various violations of the Truth in Lending Act (“TILA”), Regulation Z, the Odometer Act, Fraud
and Misrepresentation via the “deceptive use of a salesperson.” Plaintiff also asserts that her selfproduced promissory note, FTJB00002, discharged the debt. After review, the Court adopts the
Chief Magistrate Judge’s proposed findings of facts as the factual history of this case. See U.S. v.
Raddatz, 447 U.S. 667, 676 (1980) (In applying the de novo standard, Congress afforded the
district judge sound discretion to rely on the Magistrate Judge’s proposed findings and
determinations.)
IV. ANALYSIS
A. The Statute of Limitations Bars
The Chief Magistrate Judge initially recommends dismissal of Counts III, IV, V, VII and
IX as barred by the applicable statutes of limitations for these claims. Plaintiff reportedly
purchased the automobile on September 17, 2012 and subsequently filed her complaint in this
case on December 28, 2017, over five years later. The Chief Magistrate Judge concluded that
Plaintiff’s TILA and Regulation Z claims are governed by the one year statute of limitations in
15 U.S.C. § 1640(e). Therefore, she recommends dismissal of the TILA and Regulation Z claims
in Counts III, V, and VII, as untimely filed. Upon a de novo review, the claims are clearly barred
by the §1640(e) provision which indicates that “. . . any action under this section may be brought
in any United States district court, or in any other court of competent jurisdiction, within one
year from the date of the occurrence of the violation.” Purtle v. Eldridge Auto Sales, Inc., 91
F.3d 797, 800 (6th Cir. 1996).
Similarly, the Chief Magistrate Judge properly recommends dismissal of Count IV of
Plaintiff’s complaint based on the three year statute of limitations. The Court liberally construes

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Count IV as a purported claim of fraud and misrepresentation against Santander for receiving a
down payment from Plaintiff for the vehicle and including that amount in the total purchase
amount. Pursuant to Tenn. Code Ann. §§ 28-3-105(1) and (2), actions for injuries to persons or
real property and an action for the conversion of personal property must be commenced within
three years of the accruing event(s). Therefore, Plaintiff’s conversion claim is also barred by the
statute of limitations.
In her report and recommendation, the Chief Magistrate Judge correctly concludes that
Plaintiff’s claim in Count IX, for Defendant’s failure to provide a written odometer disclosure is
untimely and as such, should also be dismissed. A claim arising under the Odometer Act must
be filed no later than 2 years after the claim accrues. See 29 U.S.C. § 32710(b) and Scherber v.
Online Auctions, LLC, No.3:13CV530, 2014 WL 3908114 at *2 (N.D. Ohio July 3, 2014).
Therefore, this claim is also time barred.
B. Does Plaintiff’s Promissory Note Discharge the Debt?
The Chief Magistrate Judge recommends dismissal of Plaintiff’s assertion that the tender
of a non-legal promissory note discharged Plaintiff’s debt for the automobile purchase, Counts I
and VII, as frivolous. The Court agrees. A borrower may not absolve an obligation by attempting
to offer to pay the Defendant in a form other than U.S. currency. Sopp v. Deutsche Bank Nat.
Trust Co., No. 2:14-cv-01223, 2015 WL 136239 at *3 (S.D. Ohio 2015) and Marvin v. Capital
One, No. 1:15-cv-1310, 2016 WL 4548382 at *4 (W.D. Mich. Aug.16, 2016)(rejecting
conspiracy theories that “international” promissory notes are not legal tender and may not
discharge a mortgage or other debt.) Thus, Counts 1 and VII should also be dismissed.
C. FDCPA Claims- Count X
Count X in Paragraph Five, or the second Count X, of Plaintiff’s complaint asserts a Fair

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Debt Collection Practice Act (“FDCPA”) claim for Santander’s failure to validate the debt in
response to her “notice of dispute debt” dated November 14, 2017. (ECF No. 1, 10 ¶ 5.) The
Chief Magistrate Judge concluded that this claim lacks merit for purposes of the FDCPA, as
Santander does not qualify as a debt collector under 15 U.S.C. § 1692a (4), (6). At the time of
Johnson’s purchase of the Tahoe from CarMax and before her default on the note, Santander
owned and serviced the debt that was directly owed to Santander. Secondly, at the time of the
default, Santander no longer owned the loan as the contract had been sold to CFAM in
September 2017. Accordingly, any responses owed to her written requests for debt validation
should have been addressed to CFAM. See Henson v. Santander Consumer USA, Inc., 137 S.Ct.
1718, 1723 (2017) (under 15 U.S.C. § 1692a(4), a debt collector is a creditor to whom the debt is
owed). Therefore, the Chief Magistrate Judge correctly concludes that this claim lacks merit and
should be dismissed.
D. The Fraud and Misrepresentation Claims-Count II
The report and recommendation concludes that the alleged fraud and misrepresentation
claims in Count II should be dismissed pursuant to Fed. Civ. P. 9 and Fed. Rule Civ. P 12(b)(6).
The Chief Magistrate Judge finds this portion of Plaintiff’s complaint fails to meet the
heightened Rule 9 pleading standard; lacks any specific facts to support these claims; does not
identify any misleading or fraudulent statements; or name the party or parties who allegedly
made them. The Court agrees. Even liberally construing the complaint, Count II falls short of
satisfying any of the five elements needed to establish a fraud claim. Thompson v. Bank of
America, 773 F.3d 741, 752 (6th Cir. 2014) and Bovee v. Coopers & Lybrand C.P.A., 272 F.3d
356, 361 (6th Cir. 2001).

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E. Claim of Consumer Confidential Data Violation – Count VI
Regarding Count VI, the Chief Magistrate Judge simply recommends dismissal of this
Count as lacking enough information to provide adequate notice to Santander of the actual claim
alleged. The Court agrees. Without more, Plaintiff merely provides that “[t]he defendant
disclosed to plaintiff information and did have the consent of plaintiff to electronically pass
plaintiff information to defendant CFAM Financial Services another banking institution.” (ECF
No. 1, 7). The Court assumes that Plaintiff attempted to aver that without her consent, some of
her private data was shared by Santander to CFAM. The Court cannot create a claim that has not
been spelled out in a pro se party’s pleading. Brown v. Matauszak, 415 F. App’x 608, 613 (6th
Cir. 2011). Thus, Count VI should also be dismissed.
F. Violation of Ultra Vires Claim – Count X
In the report and recommendation, the Chief Magistrate Judge concludes that Plaintiff’s
claim that the Retail Installment Contract violated the doctrine of ultra vires is without merit and
should be dismissed. She suggests that because the Retail Installment contract was between
Johnson and seller CarMax, Plaintiff’s arguments regarding Defendants Santander and CFAM
fail a matter of law. The Defendants in this action were not parties to the original contract and as
such, did not contract or attempt to contract beyond their respective authority. Johnson v.
Villages of Bennington Property Owners Conservancy, No. 2:17-cv-02260-JTF-egb, 2018 WL
555250, at *3 (W.D. Tenn. Jan. 25, 2018).
G. Joint Claims Against CFAM – Counts II and X
The Court agrees that Plaintiff indirectly alleges claims in Counts II and X against both
of the named Defendants. As such, the Court incorporates the discussion above in reference to
Santander as equally applicable to CFAM. The Court finds for the same reason, the claims of

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fraud, misrepresentation and FDCPA violations should be dismissed.

CONCLUSION
Upon a de novo review of the report and recommendation, the Court finds that the Chief
Magistrate Judge properly recommended sua sponte dismissal of this case pursuant to 28 U.S.C.
§ 1915(e)(2). Moreover, Plaintiff has failed to file any timely objections to the report and
recommendation. Accordingly the case is ordered dismissed with prejudice pursuant to Fed. R.
Civ. P. 12 (b)(6).
IT IS SO ORDERED on this 10th day of March, 2018.

s/John T. Fowlkes, Jr.
JOHN T. FOWLKES, JR.
UNITED STATES DISTRICT JUDGE

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