Opinion
C. A. 4:22-2799-TLW-TER
11-18-2022
Kathy Reaves, a/k/a Kathy Juanita Reaves, Seth Reaves, Plaintiffs, v. Pedro Manuel Guelho, Collateral Recovery Solutions, Inc., Collateral Recovery Solutions d/b/a 128 East Industrial Blvd., Florence, S.C., Santander Consumer USA., Mullins Police Department, Defendants.
REPORT AND RECOMMENDATION
Thomas E. Rogers, III, United States Magistrate Judge
This is a civil action filed by mother and son pro se litigants, both proceeding in forma pauperis. Pursuant to 28 U.S.C. § 636(b)(1), and District of South Carolina Local Civil Rule 73.02(B)(2)(e), the undersigned is authorized to review all pretrial matters in such pro se cases and to submit findings and recommendations to the district court.
STANDARD OF REVIEW
Under established local procedure in this judicial district, a careful review has been made of Plaintiff's pro se complaint filed in this case. This court is required to liberally construe pro se complaints. Erickson v. Pardus, 551 U.S. 89, 94 (2007). Such pro se complaints are held to a less stringent standard than those drafted by attorneys. Id.; Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir. 1978). Even under this less stringent standard, however, the pro se complaint is subject to summary dismissal. The mandated liberal construction afforded to pro se pleadings means that if the court can reasonably read the pleadings to state a valid claim on which plaintiff could prevail, it should do so, but a district court may not rewrite a complaint to include claims that were never presented, construct the plaintiff's legal arguments for her, or conjure up questions never squarely presented to the court. Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985); Small v. Endicott, 998 F.2d 411 (7th Cir. 1993); Barnett v. Hargett, 174 F.3d 1128 (10th Cir. 1999). 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 currently cognizable in a federal district court. Weller v. Dep't of Soc. Servs., 901 F.2d 387, 390-91 (4th Cir.1990) (The “special judicial solicitude” with which a [court] should view such pro se complaints does not transform the court into an advocate.).
DISCUSSION
Plaintiffs' typed 29-page Complaint is not on a form and allegations at times are irrelevant and unrelated to Plaintiffs' purported claims. (ECF No. 1). Much of Plaintiffs' allegations are frivolous. Plaintiffs repeatedly reference a Defendant's(Guelho) PPP $524,000 loan which appears to be entirely unrelated to Plaintiffs' claims regarding repossession of their car. (ECF No. 1 at 2, 5, 10, 13, 14, 18, 20, 25, 26, 27). Plaintiffs cite examples of vehicles and properties Defendant Guelho owns, stating Defendant owns over a million dollars in homes and references multiple traffic tickets Defendant received in Virginia. (ECF No. 1 at 4, 5, 13, 14, 24, 26). Plaintiffs attempt to intimate Defendant is involved in criminal activity. (ECF No. 1 at 5, 19)(“These businesses are non-existent and are SCAMS believed to be operating a covert operation that runs from New Jersey to North Carolina with Defendant [Guelho] racking up a plethora of criminal traffic tickets up and down Interstate I-85 corridor from New Jersey to North Carolina, with criminal traffic cases in [multiple counties]. Plaintiffs state defendant [Guehlo] is in the ‘transportation business' alright, but what he is truly transporting is unknown.”). Plaintiffs accuse Defendant of financing his home with the PPP loan. (ECF No. 1 at 13). Plaintiffs continue to provide “a background report” as to Defendant citing civil creditor judgments against Defendant. (ECF No. 1 at 14). Plaintiffs continue to intimate unrelated activity: “Are you legal in the country? Are your immigration papers in order?”; “we don't know if he is a legal resident of the [U.S.] or not or whether he is over here on a visa or waiting for a hearing seeking asylum.” (ECF No. 1 at 21, 27). Plaintiffs allege Defendant is “posting with their PPP loan benefits of their cell phones taking selfies in the bathroom of their $805k home.” (ECF No. 1 at 24). Plaintiffs fills numerous pages with frivolous allegations that are irrelevant to Plaintiffs' car. Plaintiffs continue in this vein also as to the creditor Defendant Santander, going back twenty years about other complaints and lawsuits of persons who are not Plaintiffs. (ECF No. 1 at 14-15).
Plaintiffs' allegations as discussed above show the majority of this action is based on frivolous and what appears to be allegations unrelated to their claim and is subject to summary dismissal. See Denton v. Hernandez, 504 U.S. 25, 32-33 (1992). When a plaintiff proceeds in forma pauperis, § 1915 “gives courts the authority to ‘pierce the veil of the complaint's factual allegations[,]' mean[ing] that a court is not bound, as it usually is when making a determination based solely on the pleadings, to accept without question the truth of the plaintiff's allegations.” Denton, 504 U.S. at 32.
Plaintiffs state numerous times that the basis of their claims is a “violation of the federal bankruptcy laws” and there are references to an “automatic stay.” (ECF No. 1 at 3, 4, 6, 7, 8, 9, 10,11, 16, 20, 23, 24, 25). Plaintiffs fail to distinguish the procedural stage of Seth's bankruptcy case in relation to any stay. On July 11, 2022, the district judge adopted the dismissal of Seth's bankruptcy appeal, No. 22-1064; that order was filed in the bankruptcy court. (No. 21-3306-hb). On July 15, 2022, the bankruptcy court marked the case closed. On August 14, 2022, Plaintiffs allege the Hyundai vehicle was repossessed. (ECF No. 1). On August 17, 2022, in the bankruptcy court case, Seth filed a Motion to Stay Proceedings. (No. 21-3306-hb)(ECF No. 57). On August 19, 2022, the bankruptcy court ruled on the order. (No. 21-3306-hb)(ECF No. 58). The bankruptcy court acknowledged the pending appeal in the Fourth Circuit Court of Appeals and Seth's request for return of the vehicle involved in the allegations of the instant Complaint. (No. 21-3306-hb)(ECF No. 58). However, pursuant to Fed.R.Bankr.P. 8007, no stay pending appeal had been previously sought by Plaintiffs/Debtor. (No. 21-3306-hb)(ECF No. 58). Plaintiffs' assertion of the law is erroneous as to stays at this procedural stage. A stay has to be sought and is not automatic as to bankruptcy appeals. Obtaining a stay pending appeal is critical in the bankruptcy context. See, e.g., 11 U.S.C. § 363(m)(validity of sale of property not affected by subsequent reversal on appeal unless stay obtained); 11 U.S.C. § 364(e)(reversal of order approving obtaining credit does not affect extension of credit, absent stay); Farmers Bank v. Kittay (In re March), 988 F.2d 498 (4th Cir. 1993) (appeal of foreclosure issue rendered moot by sale of property). As a matter of law, Plaintiffs' vehicle was not under any stay to prevent repossession. See In re Anderson, 390 B.R. 812, 814 (Bankr. D.S.C. 2007)(a stay pending appeal is not a matter of right and is discretionary); In re U.S. Airways, Inc., 445 B.R. 566, 572 (Bankr. E.D. Va. 2011)(appeal of bankruptcy court order does not stay the effect of order, unless a stay pending appeal is requested and received); In re Ern, LLC, 124 Fed.Appx. 151 (4th Cir. 2005)(Appellant's failure to obtain a stay pending appeal rendered the appeals moot).
To the extent Plaintiffs' allegations of a violation of bankruptcy law underlies all claims, this is not the proper forum to reassert this claim where the bankruptcy court has addressed this claim and the bankruptcy action is currently on appeal to the Fourth Circuit Court of Appeals.
The extent of Plaintiffs' allegations as to the Telephone Consumer Protection Act is that Seth was contacted about repossession in violation of federal bankruptcy laws. (ECF No. 1 at 20). As discussed above, it does not appear that an automatic stay was in place as to the bankruptcy appeal case, and Plaintiff merely conclusorily alleges in one sentence that the Fair Credit Reporting Act was violated with the reporting of the repossession. (ECF No. 1 at 19). See Gwaltney v. Ford Motor Credit Co., No. 1:16CV428, 2016 WL 3255028, at *2 n*1 (M.D. N.C. June 13, 2016)(as to removal of a repossession from a credit report, the court did not accept as true allegations that were legal conclusions). Moreover, there is not an overarching private right of action under the Fair Credit Reporting Act, only certain statutory sections provide private rights of action. Smith v. Am. Exp., No. CIV.A. 1:13-3014, 2014 WL 1338518, at *9 (S.D. W.Va. Jan. 15, 2014), report and recommendation adopted, 2014 WL 1338537 (S.D. W.Va. Mar. 31, 2014) (there is no private right of action under Section 1681 s-2(a) for furnishing inaccurate information to a credit reporting agency)(citing Carney v. Experian Info. Solutions, Inc., 57 F.Supp.2d 496, 502 (W.D. Tenn. 1999)(“liability for violations of § 1681 s-2 are limited, and the provisions for civil liability set forth in 15 U.S.C. § 1681n and 1681o do not apply to any violation of § 1681s-2”); Gibbs v. SLM Corp., 336 F.Supp.2d 1, 11 (D. Mass. 2004)(“courts have consistently held that there is no private action for violations of § 1681s-2(a)”)).
There are only two provisions for any private right of action for consumers under 47 U.S.C. § 227. Plaintiff's allegations are unrelated to those two provisions. Worsham v. Direct Energy Servs., LLC, 2021 WL 948819, at *3 (D. Md. Mar. 12, 2021), aff'd, 2022 WL 1261998 (4th Cir. Apr. 28, 2022).
The remainder of Plaintiff's Complaint is related to attempts at pursuing state law claims in this court; Plaintiff cites conversion and various articles of the state constitution. As Plaintiff has not stated a claim to garner § 1331 federal question jurisdiction as discussed above, § 1332 diversity jurisdiction is analyzed as to Plaintiffs' attempts to bring state law claims before this court's jurisdiction. The diversity statute requires complete diversity of parties and an amount in controversy in excess of seventy-five thousand dollars ($75,000.00). 28 U.S.C. § 1332(a). Complete diversity of parties in a case means that no party on one side may be a citizen of the same State as any party on the other side. See Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 372-374 (1978). Plaintiffs allege that Plaintiffs are residents of South Carolina and a Defendant is a South Carolina resident. (ECF No. 1). There is no diversity jurisdiction over state law claims here because there is no complete diversity of parties. Additionally, there is no diversity jurisdiction over state law claims here because Plaintiffs' allegations that the “amount in controversy exceeds $75,000.” is not plausibly alleged. (ECF No. 1 at 12, 28). The request for relief contains no amount of damages; however, the request is related to return of the vehicle and enjoining a sale of vehicle. Court records show the VIN# for the repossessed vehicle is for a 2021 Hyundai Accent SE. No. 21-03306-hb(ECF No. 37). In considering the amount in controversy determination, the court “is not required to leave its common sense behind.” Mullins v. Harry's Mobile Homes, Inc., 861 F.Supp. 22, 24 (S.D. W.Va. 1994). Plaintiff fails to plausibly allege the jurisdictional threshold and thus fails to garner diversity jurisdiction under § 1332 in this court.
Because Plaintiff has filed actions in this court subject to summary dismissal for frivolity, Plaintiff is on notice that any future filings like the present action may result in a pre-filing injunction order by the court in the future as Plaintiff's filings are bordering on abuse of the court's process.
See Graham v. Riddle, 554 F.2d 133, 134-135 (4th Cir. 1977); see In Re Rochester, Nos. 11-1931 and 11-7088, 2012 WL 764443 (4th Cir. March 12, 2012)(the Fourth Circuit imposing its own pre-filing injunction).
RECOMMENDATION
It is recommended that the District Court dismiss this case with prejudice and without issuance and service of process. As noted above, this action is in part frivolous and subject to summary dismissal. Thus, the undersigned recommends the court decline to automatically give Plaintiff leave to amend. See Rufus v. Seymour, 836 Fed.Appx. 155 (4th Cir. Feb. 16, 2021)(unpublished)(affirming the declination of amendment due to frivolity summary dismissal).
Plaintiff's attention is directed to the important notice on the next page.
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 committee's 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
Post Office Box 2317
Florence, South Carolina 29503
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).