Opinion
C. A. 6:21-cv-03435-DCC-KFM
12-27-2021
Shumari Tareesha Byrd, Plaintiff, v. Sharonview Federal Credit Union, Defendant.
REPORT OF MAGISTRATE JUDGE
Kevin F. McDonald United States Magistrate Judge.
The plaintiff, a non-prisoner proceeding pro se and in forma pauperis, brings this action seeking damages from the defendant. Pursuant to the provisions of 28 U.S.C. § 636(b), and Local Civil Rule 73.02(B)(2) (D.S.C.), this magistrate judge is authorized to review all pretrial matters in this case and submit findings and recommendations to the district court.
The plaintiff's complaint was entered on the docket on October 20, 2021 (doc. 1). On November 16, 2021, the undersigned issued an order informing the plaintiff that her complaint was subject to dismissal as drafted and providing her with time to file an amended complaint to correct the deficiencies noted in the order (doc. 16). The plaintiff was informed that if she failed to file an amended complaint or otherwise cure the deficiencies outlined in the order, the undersigned would recommend that her case be dismissed (id. at 4-5). On November 30, 2021, the plaintiff's amended complaint was entered on the docket (doc. 18). However, because the plaintiff's amended complaint likewise fails to state a claim for relief, the undersigned recommends dismissal of the case.
ALLEGATIONS
The plaintiff brings this action pursuant to the Truth in Lending Act (“TILA”) and the Fair Debt Collections Practices Act (“FDCPA”) (doc. 18). The plaintiff alleges that the defendant is a debt collector because it has attempted to collect a debt from her (id. at 7-8). The plaintiff contends that she sent a letter to the defendant regarding its violations of TILA and the FDCPA, but the defendant did not respond (id. at 8-9). The plaintiff further contends that she does not owe the defendant anything because her billing statements show a positive balance (id. at 9). The plaintiff further contends that the loan in question is “open-ended credit” governed by 12 C.F.R. § 1026.13 (id.). Because the account is “open-ended credit, ” the defendant is precluded from collections activity until the plaintiff's alleged billing error is resolved (id.). The plaintiff has also requested that the defendant cease contacting her, but her cease and desist letter was ignored, which is a violation of the FDCPA (id. at 10). The plaintiff contends that the defendant is now attempting to “garnish” the property financed by the debt at issue (id. at 11). For relief, the plaintiff seeks to have the defendant provide clear title to her vehicle and money damages for mental anguish and emotional distress (id. at 11). Attached to her amended complaint, the plaintiff included the TILA disclosure she signed upon purchase of the vehicle giving rise to the debt in question (doc. 18-1).
STANDARD OF REVIEW
The plaintiff filed this action pursuant to 28 U.S.C. § 1915, the in forma pauperis statute. This statute authorizes the District Court to dismiss a case if it is satisfied that the action “fails to state a claim on which relief may be granted, ” is “frivolous or malicious, ” or “seeks monetary relief against a Defendant who is immune from such relief.” 28 U.S.C. § 1915(e)(2)(B). As a pro se litigant, the plaintiff's pleadings are accorded liberal construction and held to a less stringent standard than formal pleadings drafted by attorneys. See Erickson v. Pardus, 551 U.S. 89 (2007) (per curiam). The requirement of liberal construction does not mean that the Court can ignore a clear failure in the pleading to allege facts which set forth a claim cognizable in a federal district court. See Weller v. Dep't of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990).
DISCUSSION
As noted above, the plaintiff filed the instant action seeking damages from the defendant for TILA and FDCPA violations. However, as an initial matter, the plaintiff's amended complaint, similar to her original complaint, relies on vague and conclusory - as opposed to specific and factual - allegations. Such pleaded allegations do not give rise to the level of plausibility required under Iqbal and Twombly; thus, the plaintiff's case, is subject to summary dismissal. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (noting that “a claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”) (citing Twombly v. Bell Atl. Corp., 550 U.S. 544, 556-57 (2007)). Nevertheless, the undersigned has addressed specific pleading deficiencies below with respect to the plaintiff's TILA and FDCPA claims.
Truth in Lending Act
TILA was enacted to “‘assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.'” Mourning v. Fam. Publ'ns Serv., Inc., 411 U.S. 356, 364-65 (1973) (quoting 15 U.S.C. § 1601(a)). The statute “requires creditors to provide borrowers with clear and accurate disclosures of terms, ” and imposes criminal penalties and civil liability on creditors who fail to do so. Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998) (citing 15 U.S.C. § 1640(a)). The plaintiff's TILA claim is unclear, but it appears that she argues that her car loan qualifies as “open-end credit” under TILA and that the defendant charged illegal finance charges (doc. 18 at 8-11). First, the plaintiff asserts that the defendant has violated the open-end credit regulations under TILA, relying on the inclusion of the following phrase on the TILA disclosure attached her amended complaint:
Thank you for taking a loan advance under your lending plan. This Advance Receipt and Truth-in-Lending Statement provides important information regarding the terms of this loan. This advance is governed by the terms of your Consumer Lending Plan, Open-end Credit Plan, or similar credit contract (“Plan”).(doc. 18-1 at 1). The use of the phrase open-end credit plan on the disclosure form, however, does not mean that the open-end credit regulations apply to the plaintiff's transaction. Indeed, this transaction does not fall within the definition provided by the regulations for accounts which qualify as open-end credit. For example, open-end credit is consumer credit extended by a creditor under a plan with all three of the following characteristics:
(I) The creditor reasonably contemplates repeated transactions;
(ii) The creditor may impose a finance charge from time to time on an outstanding unpaid balance; and
(iii) The amount of credit that may be extended to the consumer during the term of the plan (up to any limit set by the creditor) is generally made available to the extent that any outstanding balance is repaid.12 C.F.R. § 1026.2(a)(20). Here, the plaintiff's allegations and provided documentation indicate that there was only one transaction contemplated between the plaintiff and the defendant - the purchase of a vehicle - not repeated transactions or the opening of a credit line (see docs. 18; 18-1). As such, the regulations cited by the plaintiff governing open-end credit do not apply and, thus, cannot provide a basis for a TILA violation claim by the plaintiff.
Likewise, to the extent the plaintiff's allegations can be liberally construed as asserting that the defendant charged illegal finance charges, this claim would be subject to summary dismissal as well. Among other required material disclosures, TILA and Regulation Z require lenders to disclose the finance charge, the amount financed, and the annual percentage rate. See 15 U.S.C. § 1638(a); 12 C.F.R. § 226.18. The “finance charge” refers to the “sum of all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit.” 15 U.S.C. § 1605(a); see 12 C.F.R. § 226.4(a). Here, however, as noted above, the plaintiff's vague and conclusory allegations do not contain any mention of undisclosed finance charges. Thus, because TILA proscribes the disclosure of certain finance charges, not the propriety of the charges themselves, the plaintiff's TILA finance charge claim fails as well. In light of the foregoing, the plaintiff's TILA claims are subject to summary dismissal.
Fair Debt Collection Practices Act
The plaintiff also alleges that the defendant has violated her rights pursuant to the FDCPA (doc. 18 at 7-11). To state a claim under the FDCPA, a plaintiff must plausibly allege that (1) she was the object of collection activity arising from consumer debt as defined in the FDCPA; (2) the defendant is a debt collector as defined in the FDCPA; and (3) the defendant engaged in an act or omission prohibited by the FDCPA. See e.g., Boosahda v. Providence Dane LLC, 462 Fed.Appx. 331, 333 n.3 (4th Cir. 2012) (per curiam unpublished decision); Johnson v. BAC Home Loans Servicing, LP, 867 F.Supp.2d 766, 776 (E.D. N.C. 2011). Here, the plaintiff's claim fails because the defendant is not a “debt collector” under the FDCPA. See 15 U.S.C. § 1692a(6) (defining debt collector as any person “who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another”). Indeed, the attachment to the plaintiff's amended complaint shows that the defendant is the entity which provided the loan to the plaintiff; thus, the defendant is not subject to the provisions in the FDCPA. See Barber v. Rushmore Loan Mgmt. Servs., LLC, C. A. No. 3:17-cv-00982-TLW-SVH, 2018 WL 4957409, at *4 (D.S.C. Feb. 21, 2018), Report and Recommendation adopted by 2018 WL 4489290 (D.S.C. Sept. 19, 2018), aff'd 769 Fed.Appx. 106 (4th Cir. 2019) (noting that “creditors collecting their own debts are not ‘debt collectors' for purposes of the FDCPA and are exempt from the FDCPA's provisions” (internal quotation marks and citations omitted)). As such, the plaintiff's FDCPA claims are subject to summary dismissal.
RECOMMENDATION
By order issued November 16, 2021, the undersigned gave the plaintiff an opportunity to correct the defects identified in her complaint and further warned the plaintiff that if she failed to file an amended complaint or failed to cure the identified deficiencies, the undersigned would recommend to the district court that the action be dismissed with prejudice and without leave for further amendment (doc. 16). Despite filing an amended complaint, the plaintiff has not cured the deficiencies identified in the order dated November 16, 2021 (id.). Therefore, the undersigned recommends that the district court decline to give the plaintiff further leave to amend his complaint and dismiss this action with prejudice and without issuance and service of process. See Workman v. Morrison Healthcare, 724 Fed.Appx. 280, 281 (4th Cir. 2018) (in a case where the district court had already afforded the plaintiff an opportunity to amend, the district court was directed on remand to “in its discretion, either afford [the plaintiff] another opportunity to file an amended complaint or dismiss the complaint with prejudice, thereby rendering the dismissal order a final, appealable order”) (citing Goode v. Cent. Va. Legal Aid Soc'y, Inc., 807 F.3d 619, 630 (4th Cir. 2015)); see also Bing v. Brivo Sys., LLC, 959 F.3d 605 (4th Cir. 2020). The attention of the parties is directed to the important notice on the following page.
IT IS SO RECOMMENDED.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committees note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
250 East North Street, Room 2300
Greenville, South Carolina 29601
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).