Labarrere-Abreu v. Carvana Co.
1:25-cv-00299
D.N.M.Jul 7, 2025Background
- Plaintiff, proceeding pro se, sued Carvana Co. and its executive over actions relating to an auto financing debt.
- Plaintiff claims she used a Bill of Exchange to settle the debt, relying on various federal regulations, UCC provisions, and GAAP standards.
- Defendants allegedly refused to accept this payment method, continued to list the account as delinquent, and moved to repossess the car.
- Plaintiff alleges violations of federal banking laws, financial disclosure regulations, and tax reporting requirements, as well as several state law tort and contract claims.
- The Magistrate Judge found the complaint did not plausibly state claims under cited federal law provisions or under GAAP, and ordered Plaintiff to amend her complaint or explain why her claims were sufficient as pleaded.
- Plaintiff failed to amend or respond by the deadline; the Court then dismissed the federal claims for failure to state a claim and declined supplemental jurisdiction over the remaining state law claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of claim under 12 C.F.R. § 201.108 | Defendants failed to properly process negotiable instrument | Section does not mandate such processing | Statute inapplicable—no private right of action |
| Misrepresentation under 12 C.F.R. § 37.3(b) | Defendants misrepresented facts about loan securitization | Not a national bank; no covered contract | Statute inapplicable—complaint insufficient |
| Failure to issue IRS Form 1099-C under 26 C.F.R. § 1.6050P-1 | Defendants didn’t issue required 1099-C on discharged debt | Debt was not discharged | No claim—no discharge alleged |
| GAAP violations | Defendants breached accounting principles in loan handling | No intent to mislead investors | No claim—no fraudulent intent alleged |
Key Cases Cited
- Heredia v. Capital Mgmt. Services, L.P., 942 F.3d 811 (7th Cir. 2019) (Form 1099-C only required when a debt is actually discharged)
- In re Gold Resource Corp. Securities Litigation, 776 F.3d 1103 (10th Cir. 2015) (GAAP violations alone do not state a claim unless accompanied by fraudulent intent)
- City of Philadelphia v. Fleming Companies, Inc., 264 F.3d 1245 (10th Cir. 2001) (Accounting irregularities must be coupled with evidence of intent to mislead)