Darrington v. Navy Fed. Credit Union

1

TIANA DARRINGTON Plaintiff, v. NAVY FEDERAL CREDIT UNION, Defendant.

Civil Action No. 1:23-16-KD-C

United States District Court, S.D. Alabama, Southern Division

June 27, 2023

REPORT AND RECOMMENDATION

WILLIAM E. CASSADY, UNITED STATES MAGISTRATE JUDGE

This case is before the undersigned for the issuance of a report and recommendation, pursuant to 28 U.S.C. § 636(b)(1)(B), on Navy Federal Credit Union's (“Navy Federal”) Motion to Dismiss the Amended Complaint (“Complaint”), Doc. 10, filed by Tiana Darrington (“Plaintiff”). Navy Federal makes this motion pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure arguing that Plaintiff has failed to state a claim upon which relief may be granted. Doc. 12. Upon consideration of the motion, a careful examination of the entire record and in keeping with the purposes of judicial economy, the undersigned recommends that Navy Federal's motion be GRANTED for the following reasons.

I. Introduction

Plaintiff is proceeding without counsel and has made a wide variety of assertions against Navy Federal. Her assertions are based on Navy Federal's finance of a Chevrolet Tahoe that Plaintiff purchased in July 2021. The auto loan was memorialized with a written promissory note and secured by the vehicle as collateral.

However, it appears Plaintiff experienced a sort of buyer's remorse where she wanted to keep the vehicle but did not want to repay the loan. To that end, Plaintiff filed the instant litigation requesting that the Court void her loan obligation but allow her to keep the vehicle.

After a thorough review of the record, it is determined that Plaintiff's conclusory statements do not constitute a proper form of pleading and none of Plaintiff's theories provide her the right to void her debt but keep the vehicle. In short, Plaintiff fails to state a claim upon which relief may be granted. On this basis, the undersigned recommends that Plaintiff's Amended Complaint be dismissed.

II. Factual and Procedural Background^[1]

A. Plaintiff purchased a Chevrolet Tahoe in July 2021.

Plaintiff purchased a 2021 Chevrolet Tahoe ending in Serial Number -3178 (the “2021 Chevy Tahoe”) in July 2021. See Compl. Ex. 6, Doc. 10. To finance this purchase, Plaintiff executed a check for $74,500 on July 22, 2021, drawn on Navy Federal and payable to the order of Sandy Sansing Chevrolet. Compl. Ex. 7. This check identified the make (Chevrolet), model (Tahoe), year (2021), milage (8401), and vehicle identification number (“VIN”) of the vehicle (ending in -3178). Id. It also identified the Navy Federal loan number (loan ending in -9917) and identified that there was a Promissory Note on the reverse of the check. Id. Plaintiff signed the check. Id.

The reverse side of the check was labeled “Promissory Note Instrument,” and stated that “the undersigned promise(s) in lieu of payment of this instrument to execute and deliver an amended promissory note, security agreement and perfection documents” and “grant[ed] Navy Federal a security interest or lien on the personal property identified on the reverse hereof.” See Navy Federal Auto Check, Exhibit A, Doc. 13-1 (emphasis added).^[2] Plaintiff signed the Promissory Note Instrument on the back of the check, promising to execute and deliver an amended promissory note, security agreement and loan perfection documents in lieu of monetary payment on the check. Id.

B. Plaintiff executed a promissory note and security agreement with Navy Federal.

Per the agreement on the check, Plaintiff subsequently executed an amended promissory note, titled the ePromissory Note, Security Agreement, and Disclosure (the “Promissory Note”), with Navy Federal to memorialize the terms of her auto loan. See Compl. Ex. 6.^[3]

The Promissory Note records that Navy Federal provided $74,899.00 “Cash to Applicant,” which constituted the “Amount Financed.” Id. The Annual Percentage Rate (“APR”) of 4.49% was provided in bold type and underlined. Id. The “Finance Change,” which was the “dollar amount the credit w[ould] cost” Plaintiff, was $10,776.82. Id. This, again, was identified with bold type and underlining. Id.

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Id. The Promissory Note identified that the Amount Financed and Finance Charge totaled to $85,675.82, with 71 monthly payments of $1,189.95 and 1 payment of $1,189.37. Id.

The second page of the Promissory Note identified that Navy Federal paid the total cash amount of the loan to Plaintiff. Id. at 2. In turn, Plaintiff “promise[d] to pay to the order of Navy Federal” the Amount Financed and Finance Charge “as shown in the payment schedule.” Id. To guarantee that Plaintiff would fulfill her promise to pay, she pledged the vehicle as collateral. Id. at 1 (agreeing that Plaintiff was “pledging a security interest in the collateral described below,” which identified the 2021 Chevy Tahoe). The Promissory Note also included a statutory lien on all of Plaintiff's deposit accounts with Navy Federal. Id. (“I acknowledge and pledge to Navy Federal a statutory lien in my shares and dividends on deposit in all joint and individual accounts and any monies held by Navy Federal now and in the future, to the extent of the loan made and any charges payable.”).

Pursuant to the Uniform Electronic Transactions Act, Plaintiff electronically signed the Promissory Note on July 30, 2021, at 12:34 p.m. Id.

C. Navy Federal responded to Plaintiff's complaints regarding her 2021 Chevy Tahoe auto loan.

Several days after finalizing the loan, Plaintiff lodged a complaint against Navy Federal with the Consumer Financial Protection Bureau (“CFPB”). See Compl. Ex. 1. Plaintiff claimed she was disputing the debt, requested verification of the debt, and threatened to sue Navy Federal “if any negative mark is found on any of my credit reports by your company.” Id. It appears that, after obtaining her SUV, Plaintiff realized that her auto loan to buy the vehicle would be reported to consumer reporting agencies. See id.

Navy Federal responded by explaining it had “researched Mrs. Darrington's concerns,” but found that Plaintiff had “established her Navy Federal used vehicle loan account ending in 9917 on 30 July 2021.” Id. Navy Federal “confirmed that [it was] reporting accurate information to the four nationwide credit reporting agencies regarding” the loan and would “not request the removal of valid data from our member's credit file.” Id.

More than a year later, Plaintiff again complained to the CFPB. See Compl. Ex. 2. This time, Plaintiff claimed that Navy Federal misrepresented the Finance Charge as “[t]he dollar amount that the credit will cost you” instead of “[t]he sum of ALL charges,” which “has led to the conclusion that a truthful credit transaction did not occur” and, therefore, “this contract is considered null and void.” Id. Navy Federal again responded, explaining that it had “researched our member's concerns,” and that its records showed that Plaintiff had taken out an auto loan that was memorialized in an ePromissory Note, Security Agreement, and Disclosure, which had been “previously provided for Mrs. Darrington's reference.” Id.

Plaintiff responded with a “Notice to Cure” sent to Navy Federal dated December 21, 2022. See Compl. Ex. 3. Plaintiff claimed that Navy Federal's finance of Plaintiff's 2021 Chevy Tahoe was a “misrepresentation” because it “led [her] to believe this loan came from Navy Federal.” Id. Plaintiff claimed that “Navy Federal never loaned me anything.” Id. Plaintiff's basis for her belief that she purchased a vehicle for over $70,000 without Navy Federal providing the money is unclear. Plaintiff also asked for a variety of documentation, including a “statement of account.” Id. Plaintiff ended her letter with a “demand” that Navy Federal “[e]liminate the alleged debt and send a lien release stating the alleged Loan #[ending in -]9917 is paid in full.” Id. If Plaintiff's demand for a release of her auto lien was not honored, Plaintiff threatened to “take this to Federal Court.” Id. There is no allegation that Plaintiff actually paid the full amount to Navy Federal.

Navy Federal responded via a letter dated January 4, 2023. See Original Compl. Ex. 4, Doc. 1.^[4] In the response, Navy Federal confirmed that the “debt is a valid debt,” identified the outstanding loan balance, and provided supporting documentation in the form of the Promissory Note and monthly account statements from October 2022, November 2022, and December 2022. Id. Plaintiff attached some of this supporting documentation as Exhibit 5 to her Original Complaint, which included the Promissory Note and the December 2022 monthly statement. See Original Compl. Ex. 5. The December 2022 statement showed that Plaintiff was past due on the account. Id.

D. Procedural History.

Plaintiff filed the instant case on January 12, 2023, and Navy Federal filed a Motion to Dismiss on February 7, 2023. Doc. 4. Plaintiff was given until March 1, 2023 to respond to the motion to dismiss (see Order, Doc. 6) but chose instead to file an Amended Complaint on February 14, 2023. Doc. 8. Plaintiff's Amended Complaint is substantially like her original Complaint.

On March 15, 2023, Navy Federal filed a second Motion to Dismiss and it was referred to the undersigned for a report and recommendation. Plaintiff was offered the opportunity to respond to the motion if that response was filed on or before March 31, 2023. Doc. 15. Plaintiff did not file a response to the motion and on May 25, 2023, the undersigned entered notice of a preliminary decision that the motion was due to be granted for the reasons presented by the Defendant. Doc. 18. As the prevailing party, Navy Federal was directed to prepare a proposed report and recommendation for consideration by the undersigned.

III. Standard of...