United States District Court, E.D. Virginia, Norfolk Division
Plaintiffs: John E. Bedi, Esquire, Chesapeake, VA.
Defendant: Timothy J. St. George, Esquire, Troutman Sanders
LLP, Richmond, VA.
Beach Smith, Chief United States District Judge.
matter comes before the court on the Motion to Dismiss
(" Motion" ), ECF No. 5, and Memorandum in Support,
ECF No. 6, filed by the Defendant, U.S. Bank, on September
10, 2015. The Plaintiffs, Danilo Garcia and Teresa Garcia,
filed their Response, ECF No. 7, and Memorandum in
Opposition, ECF No. 8, on September 24, 2015. The Defendant
filed its Reply on September 30, 2015. ECF No. 9. This matter
has been fully briefed and is ripe for review.
FACTUAL AND PROCEDURAL BACKGROUND
this matter arises from a motion for dismiss for failure to
state a claim upon which relief can be granted under Federal
Rule of Civil Procedure 12(b)(6), the sparse facts alleged in
the Complaint are assumed to be true and viewed in the light
most favorable to the Plaintiffs. In February 2004, the
Plaintiffs entered into a loan agreement ("
Agreement" ) with the Defendant to finance the purchase
of a boat. Compl. ¶ 4, ECF No. 1-1. The Plaintiffs
borrowed $87,000, plus financing fees, and granted the
Defendant a security interest in the boat as collateral for
the loan. Id. ¶ 6, Ex. A, ECF No. 1-2. Under
the terms of the Agreement, the Plaintiffs were to make set
monthly payments for 180 months, beginning April 4, 2004.
Ex. A. The Plaintiffs would be in default on the contract if
(1) they failed to perform any obligation undertaken in the
contract, or (2) the Defendant, in good faith, believed the
Plaintiffs could not, or would not, pay or perform the
obligations undertaken in the contract. Id. The
Agreement further stipulated that the Defendant could not
accelerate payment or repossess the secured property because
of late payment or non-payment of an installment if the
Plaintiffs made full payment within ten days of the date on
which the installment was due. Id.
Agreement also specified the remedies available to the
Defendant if the Plaintiffs were in default. One remedy was
to take immediate possession of the secured property by legal
process or self-help. Mem. Supp. Ex. A, ECF No.
6-1. The Defendant could then sell the
property and apply the proceeds to the costs of the sale and
the Plaintiffs' outstanding obligations. Id. If
notice of an intended sale of the property was required, the
parties agreed notice would be reasonable if mailed to the
Plaintiffs' address, as reflected in the Defendant's
records, at least ten days prior to the date of the intended
sale. Id. Finally, the Defendant was authorized to
take possession of any personal property left on the secured
property when the secured property was taken into possession,
subject to the Plaintiffs' right to recover such
property. Compl. Ex. A.
October 31, 2014, the Defendant repossessed the
Plaintiffs' boat from a storage facility. Id.
¶ ¶ 7, 9. The Defendant then sold the boat on
November 19, 2014. Id. ¶ 11. Personal property
stored on the boat was also taken and never returned to the
Plaintiffs. Id. ¶ ¶ 14, 22. The Plaintiffs
allege this repossession was wrongful because they were not
in default on the loan and had made all monthly payments due.
Id. ¶ ¶ 8, 9, 11, 16.
Plaintiffs filed a Complaint in the Circuit Court for the
City of Norfolk, Virginia, on August 4, 2015, alleging four
claims arising from the repossession of the boat and the
property stored thereon. The Defendant removed the case to
this court on September 9, 2015, based upon 28 U.S.C. §
1332 (diversity jurisdiction). Notice of Removal, ECF No. 1.
On September 10, 2015, the Defendant filed the instant
Motion, arguing that the Complaint fails to state a claim
upon which relief can be granted under Federal Rule of Civil
Procedure 12(b)(6). ECF No. 5.
STANDARD OF REVIEW
to Rule 12(b)(6), a complaint must be dismissed when a
plaintiff's allegations fail to state a claim upon which
relief can be granted. Fed.R.Civ.P. 12(b)(6). A Rule 12(b)(6)
motion to dismiss tests the sufficiency of a complaint; it
does not resolve contests surrounding the facts of the case,
the merits of a claim, or the applicability of any defense.
Republican Party of N.C. v. Martin, 980 F.2d 943,
952 (4th Cir. 1992). " To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to 'state a claim to relief that is plausible on
its face.'" Ashcroft v. Iqbal, 556 U.S.
662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting
Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127
S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Facial plausibility
a " plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged." Id. (citing