Sharp v. Memphis Bonding Company, Incorporated, et al
Filing
45
ORDER granting 36 Plaintiff's Motion for Leave to File a response to Defendants' July 23, 2018 Motion to Dismiss; and denying 37 Defendants' Motion to Dismiss and/or Motion for Judgment. Signed by Judge Samuel H. Mays, Jr on 2/12/2018.
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
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KEVIN SHARP,
Plaintiff,
v.
MEMPHIS BONDING CO., INC.;
GEORGE A. HITT; TRACY VAN
PITTMAN; and WENDY BENTON,
Defendants.
No. 2:18-cv-02143-SHM-tmp
ORDER
Before the Court are two motions.
The first is Plaintiff
Kevin Sharp’s September 27, 2018 Motion for Leave to File a
Response
to
Defendants’
Motion
to
Dismiss.
Defendants responded on October 5, 2018.
(ECF
No.
(ECF No. 39.)
36.)
Sharp
has not moved for leave to reply under Local Rule 7.2(c) and
the time to do so has passed.
The second is Defendants’ October 5, 2018 Renewed Motion
to Dismiss and/or Motion for Judgment.
(ECF No. 37.)
Sharp
has not responded.
For the following reasons, Sharp’s Motion for Leave to
File a Response to Defendants’ Motion to Dismiss is GRANTED and
Defendants’
Renewed
Judgment is DENIED.
Motion
to
Dismiss
and/or
Motion
for
I.
Background
Sharp filed his First Amended Complaint on June 25, 2018.
(ECF No. 21.)
23, 2018.
Defendants filed their Motion to Dismiss on July
(ECF No. 27.)
Complaint
on
August
27,
Sharp filed his Motion to Amend
2018,
the
day
Defendants’ Motion to Dismiss was due.
his
response
(ECF No. 30.)
to
Sharp
argued that the Court should grant leave to amend his First
Amended
Complaint
“[b]ecause
the
identity
of
[a
previously
unknown] fictitious party [had] been revealed.”
(Id. at 138.) 1
Sharp
First
identified
Complaint.
no
other
change
to
the
Amended
Sharp “request[ed] that [the] Motion to Amend be
accepted in lieu of filing a response to the Motion to Dismiss”
because the Motion to Dismiss would “be moot if the relief
requested
filed.)”
The
is
granted
(and
the
Second
Amended
Complaint
is
(Id.)
Magistrate
Judge
granted
Complaint on September 12, 2018.
Sharp’s
Motion
(ECF No. 32.)
to
Amend
The Magistrate
Judge relied on Sharp’s representation that the only difference
between the Second and First Amended Complaint would be the
naming of the previously unknown fictitious party.
166-67.)
(“The
proposed
Second
Amended
(See id. at
Complaint
merely
identifies by name a defendant who was previously listed as a
Jane Doe in the original complaint. . . . Because the Motion to
1
Unless otherwise noted, all pin cites for record citations are to the
“PageID” page number.
2
Amend Complaint seeks to identify a fictitious party, the court
finds that the Motion to Amend is well-taken and is therefore
GRANTED.”).
The Magistrate Judge noted that “the Motion to
Amend Complaint does not address the substance of the arguments
raised in the Motion to Dismiss” and that “the parties will be
informed regarding what impact, if any, the Second Amended
Complaint
will
have
on
the
pending
Motion
separate order from the District Judge.”
to
(Id.)
Dismiss
by
Sharp filed
his Second Amended Complaint on September 13, 2018.
(ECF No.
33.)
On September 13, 2018, the Court entered an Order to Show
Cause why Defendants’ July 23, 2018 Motion to Dismiss should
not
be
granted.
(ECF
No.
34.)
The
Court
found
that,
“[b]ecause the issues raised in Defendants’ Motion to Dismiss
remain relevant to the Second Amended Complaint, Defendants’
Motion is not moot.”
(Id. at 189-90.)
Sharp fourteen days to respond to the Order.
The Court afforded
(Id. at 190.)
Sharp filed a response to the Order to Show Cause on
September 27, 2018.
(ECF No. 35.)
Sharp argued that the
Second Amended Complaint mooted Defendants’ Motion to Dismiss
because Defendants -– and, implicitly, the Magistrate Judge and
the Court -- “failed to notice in their reading of the Second
Amended Complaint [] that the identification of the fictitious
party was not, in fact, the only amendment made by [Sharp].”
3
(Id. at 192.)
The Second Amended Complaint “added another
violation” of the Truth in Lending Act (the “TILA”): “failing
to provide the disclosure of the right to rescission of a
consumer credit transaction which is secured by the obligor’s
principal dwelling under 15 U.S.C. § 1635 (for which Plaintiffs
[sic] exercise their right of rescission).”
Sharp
argued
Defendants’
that
Motion
this
newly
because,
alleged
“unlike
the
(Id. at 192.)
violation
other
mooted
violations
averred by [Sharp], . . . [it] expires three (3) years after
the
date
of
transaction”,
thereby
addressing
Defendants’
argument that the TILA claim “should be dismissed because the
statute of limitations has expired.”
(Id. at 193) (emphasis in
original).
On September 27, 2018, Sharp also filed a Motion for Leave
to File a Response to Defendants’ Motion to Dismiss.
(ECF No.
36.)
the
Although
Sharp
reiterated
his
argument
that
new
allegation in the Second Amended Complaint mooted the Motion to
Dismiss, (id. at 196), he “request[ed] until September 27, 2018
to respond to Defendants’ Motion to Dismiss”, (id. at 197).
Sharp attached his response to Defendants’ Motion to Dismiss to
his Motion for Leave to File a Response.
(ECF No. 36-1.)
Sharp noted that his response “relies on the First Amended
Complaint . . . .”
(Id. at 200.)
4
On October 5, 2018, Defendants filed a Renewed Motion to
Dismiss and/or Motion for Judgment.
(ECF No. 37.)
Defendants
argue that, “[r]egardless of [Sharp’s] last second Motion for
Permission
to
Respond
to
Defendants’
Motion
to
Dismiss”,
dismissal is warranted because Sharp’s response to the Court’s
September 13, 2018 Order to Show Cause “does not address the
issue of why [Sharp’s] [First Amended] Complaint should not be
dismissed
for
failure
to
respond
Dismiss.”
(ECF No. 38 at 227, 230.)
to
Defendants’
Motion
to
Defendants interpret the
Court’s September 13, 2018 Order as affording Sharp only an
opportunity to show good cause for his untimely response, not
an
opportunity
deadline.
II.
to
file
his
response
by
the
fourteen-day
(Id. at 229 n.1.)
Analysis
Sharp’s addition of another claimed TILA violation in the
Second Amended Complaint does not moot Defendants’ Motion to
Dismiss.
Sharp confuses two different statutes of limitation
for two different remedies: rescission and damages.
has a three-year statute of limitations.
Rescission
15 U.S.C. § 1635(f)
(“An obligor’s right of rescission shall expire three years
after the date of consummation of the transaction or upon the
sale of property, whichever occurs first . . . .”)
Damages for
failing to disclose the right to rescission has a one-year
statute of limitations.
Fifteen U.S.C. § 1640 provides that
5
“any creditor who fails to comply with any requirement imposed
under this part . . . including any requirement under section
1635 . . .
with
person . . . .”
respect
to
any
person
is
liable
Id. § 1640(a) (emphasis added).
to
such
Section 1640
further provides that “any action under this section may be
brought . . . within one year from the date of the occurrence
of the violation . . . .”
Id. § 1640(f).
Section 1635 makes
it a violation to fail to disclose the right to rescission.
Id.
§ 1635(a).
Thus,
the
one-year
statute
of
limitations
provided by Section 1640 applies to damages claims for failing
to disclose the right to rescission.
The
claim
in
Sharp’s
Second
Amended
Complaint
that
Defendants “fail[ed] to provide the disclosure of the right to
rescission” –- a violation for which Sharp could seek only
damages
--
limitations
Dismiss.
is
therefore
argument
subject
Defendants
to
the
same
statute
of
make
in
their
Motion
to
Sharp has claimed the separate remedy of rescission
in his First Amended Complaint: “On Plaintiff’s TILA claims
against Defendant MBC, Plaintiff seeks statutory and/or actual
damages
and,
alternatively,
rescission
of
the
agreement(s) allegedly secured by the Deed of Trust.”
21 at 90) (emphasis added).
credit
(ECF No.
Sharp’s argument that section
1635’s three year-statute of limitations for rescission moots
Defendants’ Motion to Dismiss is not well-taken.
6
That does not mean, however, that Sharp’s case should be
dismissed
at
this
time.
Contrary
to
Defendants’
interpretation, the Court’s September 13, 2018 Order to Show
Cause afforded Sharp fourteen additional days to submit his
response to Defendants’ Motion to Dismiss.
his
Motion
for
Leave
to
File
a
Sharp filed both
Response
and
his
response
fourteen days after the Court entered the Order to Show Cause.
Because
Sharp
accepts
Sharp’s
complied
response
with
to
the
Court’s
Defendants’
Order,
Motion
the
to
Court
Dismiss.
Sharp’s Motion for Leave to File a Response to Defendants’
Motion to Dismiss is GRANTED.
Defendants’ Renewed Motion to
Dismiss and/or Motion for Judgment is DENIED.
III. Conclusion
For the foregoing reasons, Sharp’s Motion for Leave to
File a Response to Defendants’ Motion to Dismiss is GRANTED and
Defendants’
Renewed
Judgment is DENIED.
from
the
entry
of
Motion
to
Dismiss
and/or
Motion
for
Defendants shall have fourteen (14) days
this
Order
to
file
a
reply
to
Sharp’s
response to Defendants’ July 23, 2018 Motion to Dismiss.
So ordered this 12th day of February, 2019.
/s/ Samuel H. Mays, Jr.
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE
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