MEMORANDUM OPINION
Numerous motions are pending and ready for resolution in this putative class action civil RICO case, including: (1) a motion to dismiss the federal claims or to abstain filed by Defendants King Auto of Silver Spring LLC; King Buick GMC, LLC (“King Buick GMC”); King Hagers-town Motors LLC; King Lincoln, Inc.; King Vehicles, LLC; and King Volkswagen, LLC (ECF No. 34); (2) a separate motion filed by King Buick GMC, LLC to dismiss the claims in Counts I through VII of the amended complaint (ECF No. 36); (3) a motion to dismiss or, in the alternative, for summary judgment on Counts I through VII, filed by King Auto of Silver Spring, LLC; King Hagerstown Motors LLC; King Lincoln, Inc.; King Vehicles, LLC; and King Volkswagen, LLC (ECF No. 37); (4) a motion to consolidate cases filed by Plaintiff Latechia Chambers (ECF No. 63); (5) a motion for leave to file surreply and supplemental Rule 56(d) Declaration filed by Plaintiff (ECF No. 68); and (6) a motion to strike three notices of supplemental authority filed by Defendants (ECF No. 73). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Defendants’ motion to dismiss federal claims or to abstain will be granted in part. King Buick GMC’s motion to dismiss will be granted in part, and the other Defendants’ motion to dismiss or for summary judgment will be granted. Plaintiffs motion for leave to file surreply and supplemental Rule 56(d) Affidavit and motion to consolidate cases will be denied. Defen
I. Background
This case traces its origin to March 17, 2011 and February 18, 2012, when Comfort Kaakyire and Latechia Chambers purchased, respectively, a used 2008 Saturn Outlook and 2010 Dodge Caliber from King Buick GMC. (ECF No. 22 ¶ 18). Ms. Kaakyire and Ms. Chambers each executed a Buyer’s Order with King Buick GMC, which did not indicate that these vehicles were prior short-term rentals. (See ECF No. 22-2). Ms. Kaakyire instituted a putative class action lawsuit in the Circuit Court for Howard County on January 13, 2013, and later transferred the case to the Circuit Court for Montgomery County. On May 14, 2013, Ms. Kaakyire filed a first amended class action complaint in the Circuit Court for Montgomery County, on behalf of herself and a class of similarly situated consumers, alleging violations' of COMAR 11.12.01.14(M)(1) due to King Buick GMC’s failure to disclose the prior use of sold vehicles as short-term rental vehicles. This provision governs disclosure of former vehicle use:
(1) Vehicles formerly used for a purpose other than a consumer good shall be clearly and conspicuously identified! as to their former use. This includes, but is not limited to, vehicles formerly used:
(f) As short-term rental vehicles.
COMAR 11.12.01.14(M)(l)(f).
On August 2, 2013, Ms. Kaakyire’s counsel filed a notice of voluntary dismissal in the state court action, and subsequently filed a class action complaint in this court on August 12, 2013 against the following Defendants: King Buick GMC; and King Lincoln, Inc., King Auto of Silver Spring, LLC, King Vehicles, LLC, King Hagers-town Motors LLC, and King Volkswagen, LLC (“the Other Dealer Defendants”). (ECF No. 1). The Defendants filed separate motions to dismiss, but before the motions were adjudicated, Plaintiff filed an amended complaint on October 17, 2013, adding Latechia Chambers as a Named Plaintiff. (ECF No. 22). On October 22, 2013, Defendants tendered a Rule 68 Offer of Judgment to Ms. Kaakyire, which she accepted. (ECF No. 24). On December 13, 2013, the undersigned entered judgment against Defendants as to Ms. Kaaky-ire’s claims, and she was dismissed from the lawsuit. (ECF No. 45). Thus, Latec-hia Chambers remains the only putative Named Plaintiff here.
The amended complaint by Ms. Chambers against all of the Defendants states that Defendants misrepresented the prior short-term rental use of the vehicles sold to Plaintiff and members of the putative class in a pre-printed space on the Buyer’s Order specifically designed for the disclosure of this information. Although Defendants argue that Plaintiff was provided with a CarFax Report that revealed that the vehicle was a prior short-term rental, there is a dispute about whether the Car-Fax Report was provided to Plaintiff before she executed the purchase documents and whether Plaintiff initialed the CarFax Report as Defendants indicate. (See ECF No. 34-5, at 2).
[a]s the Maryland Motor Vehicle Administration (“MVA”) recognized when it enacted COMAR regulations requiring disclosure of prior short-term rental use, [ ] buyers seek to avoid vehicles used for short-term rentals because of the perception and expectation that these vehicles are driven hard by drivers who care little about them, may not have been well or consistently maintained, and more often are involved in accidents than vehicles uses for personal, family, and household purposes.
(ECF No. 22 ¶ 3). In Plaintiffs view, this omission was intentional and part of a fraudulent scheme by King Buick and the Other Dealer Defendants—to whom she refers collectively as the “King Auto Group”—of selling used short-term rental cars without disclosing their origins in the Buyer’s Order or elsewhere clearly and conspicuously. Plaintiff asserts that Defendants consistently failed to make the requisite disclosures before consummating the sale transactions with car purchasers. COMAR 11.12.01.14(A)(2) defines “clear and conspicuous” as:
a statement, representation, or term different from other statements, representations or terms being made so as to be readily noticeable to the person to whom it is being disclosed either by its size, sound, length of time, color, placement in the advertisement, or the like.
Plaintiff maintains that “Defendants deliberately designed their standard sales agreements in a manner calculated to not draw attention to any disclosure of prior rental or other commercial use.” (ECF No. 22 ¶ 36).
Plaintiff asserts that the King Auto Group Defendants are all separately incorporated businesses that associate together as “King Auto Group,” as an association-in-fact, although there is no formal, legal entity with that name. These dealerships jointly market and sell vehicles and develop form documents such as the Buyer’s Orders used at each dealership. Plaintiff asserts:
Defendants have an agreement to work together to market and sell used vehicles and actively are doing so. Defendants’ cross-marketing and commingling and/or sharing of inventory and Carfax reports is evidence of their cooperation, joint agreements, and use of common procedures and documents to unlawfully sell such used vehicles without the disclosure required by Maryland law.
(ECF No. 22 ¶ 49). Plaintiff believes that all of the Defendants conspired to market and sell used vehicles without disclosing to consumers that the vehicles were previously used as short-term rentals. (Id. ¶ 45). Plaintiff states that Defendants King Lincoln, Inc. and King Vehicles, Inc. did not sell prior short-term rental vehicles in their own name but routinely sold these vehicles through “their King Auto Group coconspirators—King Buick, King Volkswagen, LLC, King Hagerstown Motors, LLC or King Auto of Silver Spring, LLC.” (Id. ¶ 44). Plaintiff further contends:
[a]s part of its scheme to mislead customers into believing that vehicles used for prior short-term rentals were never put to such use, King Auto Group dealerships further agreed to employ, and from time to time did employ, a form entitled “Disclosure of Prior Vehicle Use for Dealership or Commercial Purposes[.]” [ ] This form ... is provided to buyers only after they have signed the' sales agreement and thus become legally bound to purchase a vehicle, does not provide the “clear and conspicuous” disclosure of prior non-consumer use required by law.
(Id. ¶ 39). The amended complaint identifies fifteen additional vehicle sale transactions over a two-year period in which Defendants King Volkswagen LLC, King Hagerstown Motors, LLC, and King Auto of Silver Spring, LLC allegedly perpetrated the same fraudulent scheme to induce consumers into purchasing prior short-term rental vehicles. (Id. ¶ 43). Plaintiff alleges that she paid significantly more for her vehicle than it was worth and was overcharged as a result of the scheme.
The amended complaint asserts the following counts: implied warranty of merchantability (count I); violations of the Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. §§ 2301 et seq. (count II) and the Maryland Consumer Protect Act (“MCPA”) (count III); deceit by non-disclosure or concealment (count IV); unjust enrichment (count V); negligent misrepresentation (Count VI); breach of contract (count VII); and violations of the Federal Racketeer Influence and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1962(a), (c), and (d) (counts VIII, IX, and X). Defendants filed separate motions to dismiss. All of the Defendants filed a motion to dismiss the federal claims (RICO and the MMWA) or, in the alternative, for abstention (ECF No. 34). King Buick GMC filed a separate motion to dismiss addressing the non-RICO claims. (ECF No. 36). The Other Dealer Defendants filed a separate motion to dismiss or for summary judgment on the non-RICO claims. (ECF No. 37). All the motions have been fully briefed.
II. Standards of Review
A. Motion to Dismiss
All of the Defendants move to dismiss Plaintiffs RICO claims. King Buick GMC also filed a separate motion to dismiss the non-RICO claims. A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) tests the sufficiency of the complaint. Presley v. City of Charlottesville,
At this stage, the court must consider all well-pleaded allegations in a complaint as true, Albright v. Oliver,
Moreover, allegations of fraud—-which Plaintiff raises in both her RICO and state law claims—are subject to a heightened pleading standard under Rule 9(b). Harrison,
B. Summary Judgment Standard
The Other Dealer Defendants move to dismiss or, in the alternative, for summary judgment on the non-RICO counts. Summary judgment may be entered only if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(a); Celotex Corp. v. Catrett,
“A party opposing a properly supported motion for summary judgment ‘may not rest upon the mere allegations or denials of [his] pleadings,’ but rather must ‘set forth specific facts showing that there is a genuine issue for trial.’ ” Bouchat v. Balt. Ravens Football Club, Inc.,
III. Analysis
A. RICO Claims
Plaintiff asserts three claims for racketeering pursuant to RICO’s civil provision, 18 U.S.C. § 1964, which provides a cause of action to “[a]ny person injured in his business or property by reason of a violation of [18 U.S.C. § 1962].”
1. RICO Enterprise
Defendants argue that Plaintiff has not properly alleged the existence of a RICO enterprise. Under 18 U.S.C. § 1962(c), it is unlawful:
for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.
“[T]o establish liability under § 1962(c) one must allege and prove the existence of two distinct entities: (1) a ‘person’; and (2) an ‘enterprise’ that is not simply the same ‘person’ referred to by a different name.” Cedric Kushner Promotions, Ltd. v. King,
Plaintiff argues that the King Auto Group constitutes an association-in-fact enterprise. (ECF No. 48, at 76). An association-in-fact enterprise is not defined by a formal legal structure, but is instead characterized by the association of its members “for a common purpose of engaging in a course of conduct.” United States v. Turkette,
Defendants argue that Plaintiffs RICO allegations fail to differentiate between the “person” and the “enterprise,” and thus cannot show distinctiveness under Section 1962(c). Defendants contend that Plaintiff has alleged an enterprise that is “nothing more than the Defendants by a different name (‘King Auto Group’).” (ECF No. 34, at 20). Defendants essentially argue that because the “King Auto Group” is comprised of the individual dealership Defendants, Plaintiff merely attempts to refer to the “persons” by a different name. As Judge Garbis recently observed, however, in Bailey v. Atl. Automotive Corp.,
Defendants’ reliance on Gondel v. PMIG 1020, LLC, Civ. Action No. CCB-08-1768,
Here, the amended complaint states that each Defendant is a separately incorporated entity, has its own business location and employees, and that through “contractual arrangement and joint management activity, formed an association-in-fact with each other.” (ECF No. 22 ¶ 253). Plaintiff avers that “the function of the King Auto Group association-in-fact enterprise is to facilitate a fraudulent scheme of selling prior short-term rental vehicles to consumers without the disclosures required by Maryland law,” whereas each dealership Defendant is also engaged in legitimate vehicle sale transactions. (ECF No. 48, at 49). Myers,
Bailey,
Heritage and the Other Dealer Defendants are wholly owned subsidiaries of Atlantic. Plaintiff alleges that Heritage and the Other Dealer Defendants are all used car dealerships under the operation and ownership of Atlantic and that these commonly owned entities operate jointly and associate together as MileOne Automotive to sell used vehicles legitimately, as well as fraudulently.
Id. at 583.'
Unlike in Myers and Bailey, Plaintiff has made the requisite showing here. First, the Defendants are not subsidiaries of a single dealership; according to the amended complaint, each Defendant is an independent car dealership. Moreover, as Plaintiff explains, “[i]n contrast to the lack of distinction between the ‘persons’ and ‘enterprise’ in [] Myers, the King corporate Defendants joined together to form the King Auto Group association-in-fact not just to conduct their own separate affairs as individual car dealerships, but to facilitate a fraudulent scheme involving their co-conspirators.” (ECF No. 48, at 53-54). Plaintiffs allege in the amended complaint that each Defendant owned and operated its own dealership, but also associated together under the non-incorporated “King Auto Group.” (ECF No. 22 ¶ 6). The amended complaint states that “[a]ll of the Defendants share the moniker ‘King’ in their corporate names and jointly hold themselves out to the general public under the name King Auto Group.” (ECF No. 22 ¶ 6). Plaintiff further states that “Defendants conduct business using [the King Auto Group] name and have established a central website, http://www.King Auto.com.” (Id. ¶ 7). Plaintiff maintains that:
Through their association, Defendants developed and agreed upon the uniform and systematic scheme described herein to acquire and sell prior short-term rental vehicles to consumers without the disclosures required by Maryland law, with misleading and fraudulent omissions and representations concerning the history of the used vehicles being sold, and with the specific intent to deceive and defraud [ ] Plaintiff[ ] and members of the Class.
Although “[a]n organization cannot join with its own members to undertake regular corporate activity and thereby become an enterprise distinct from itself,” this is not the case here. Begala v. PNC Bank, Ohio, N.A,
2. Pattern of Racketeering Activity
To show a “pattern of racketeering activity,” a plaintiff must “adequately plead at least two predicate acts of racketeering activity!.]” Am. Chiropractic Assoc., Inc. v. Trigon Healthcare, Inc.,
a. Predicate Acts
Defendants argue that Plaintiff fails sufficiently to plead mail and wire fraud because she cannot show that any Defendant other than King Buick GMC owed a legal duty to Plaintiff and the complaint also fails to identify any predicate acts of criminal wire and mail fraud committed by each of these Other Dealer Defendants.
Defendants further argue that Plaintiff fails to specify each Defendant’s role in the mail and wire fraud. Fed. R.Civ.P 9(b) states that “[i]n alleging fraud ... a party must state with particularity the circumstances constituting fraud.” Thus, when mail and wire fraud are asserted as predicate acts in a civil RICO claim, each must be pled with particularity required by Rule 9(b). See WW, LLC v. Coffee Beanery, Ltd., Civ. Action No. WMN-05-3360,
“A scheme to defraud means any deliberate plan of action or course of conduct by which someone intends to deceive or cheat another or by which someone intends to deprive another of something of value.” Levine v. First Am. Title Ins. Co.,682 F.Supp.2d 442 , 462 (E.D.Pa. 2010). Here, the [plaintiffs allege that First American’s title agents made the initial contact with the consumer, and each time, they “falsely and intentionally misrepresented to their customers that they would pay only the filed or best rate for title insurance.... The [plaintiffs further allege that First American and its title agents acted with the intent to defraud: specifically, to overcharge borrowers for title insurance, “guaran-teefing] a stream of business” for First American.
Much like in Mitchell Tracey, at this juncture, Plaintiffs allegations are sufficient to survive a motion to dismiss. Plaintiff alleges that “Defendants failed to disclose and intentionally concealed from Named Plaintiffs and the Class the material fact that vehicles sold to them previously were used as short-term rentals.” (ECF No. 22 ¶ 4). Plaintiff asserts that “Defendants all used the identical form vehicle sales agreements[, which] included a space specifically designated for the disclosure of the prior non-consumer use of the vehicles being sold.” (Id. ¶ 54). Plaintiff asserts that despite this disclosure built into the form, “each Defendant routinely failed to use this space to identify the prior short-term rental use of the vehicles it sold to retail buyers and knew the other King Auto Group Defendants failed to do so as well.” (Id. ¶ 55). In addition to the sale transaction on February 18, 2012, when King Buick GMC allegedly failed to disclose to Ms. Chambers that the vehicle she purchased was a prior short-term rental, the amended complaint identifies fifteen (15) additional transactions
Defendants also argue that the amended complaint “fails to identify any fraudulent mail or wire sent allegedly by the Unrelated Defendants to Plaintiffs or anyone else in connection with the purchase of their vehicles.” (ECF No. 34-1, at 28). Defendants argue that “the Complaint fails to identify how the Unrelated Defendants allegedly used generic mail or wire to further the alleged fraudulent scheme against the Plaintiffi] (who they did not know and had no involvement) so as to constitute criminal mail and wire fraud under RICO.” (ECF No. 34-1, at 28). They argue that “[e]very commercial transaction will inevitably require using the mail or wire system as part of its ordinary business, but this does not establish criminal mail fraud or the requisite pattern of racketeering activity.” (Id.). As explained above, however, “[t]o be part of the execution of the fraud ... the use of the mails need not be an essential element of the scheme.” Schmuck v. United States,
[t]he most basic consideration in making a judgment as to sufficiency of a pleading is the determination of how much detail is necessary to give adequate notice to an adverse party and enable him to prepare a responsive pleading.
Kerby,
Plaintiff has alleged the predicate acts of mail and wire fraud with sufficient particularity at this juncture. Plaintiff asserts that the mailings in furtherance of the fraudulent scheme included: the mailing and distribution among Defendants of contracts, form sale and credit agreements, and other documents used in the transactions of Plaintiff and members of the putative class. (ECF No. 22 T 102). Plaintiff further contends that:
Defendants and their co-conspirators on hundreds if not thousands of occasions used, and caused to be used, telephone, Internet and other wire transmissions including, but not limited to, use of the wires in the sale of vehicles previously used as prior short-term rental vehicles to Named Plaintiffi ] and members of the Class; in the emailing, faxing and transmission by wire of documents such as loan applications, vehicles sale and financing contracts and other documents related to the sale and financing of vehicles by Defendants to potential assignees in the transactions of Named Plaintiff[] and Class members who financed their vehicles with Defendants; in the electronic registration and titling system established with the MVA; and in the marketing of their enterprise “King Auto Group” and its vehicles on the Internet—with the intent to defraud and in furtherance of their scheme to defraud.
(Id. ¶ 103).
In Coffee Beanery,
Plaintiff further asserts that “on or before February 18, 2012, Defendants used the wires to advertise the vehicle sold to Ms. Chambers on the Internet, “without the required clear and conspicuous disclosure of this vehicle’s prior use as a short-term rental required by Maryland law.” (Id. ¶ 106). Plaintiff avers that in February 2012, “Defendants used the wires and/or U.S. mail to submit a loan application, contract of sale, and other documents related to the sale to a potential assignee for the financing of Ms. [Chambers’s] prior but undisclosed short term rental vehicle—
Plaintiff contends that Defendants used the wires to “register and title Ms. Chambers’s] vehicle through an electronic registration and titling system.” (Id. ¶ 113). Specifically, Defendants allegedly used the wires electronically to transfer $587.95 of funds to the MVA in connection with Ms. Chambers’s transaction on February 18, 2012, for payment of sales tax, titling and registration fees. Defendants also allegedly used mails and wires to advertise and sell to putative class members the vehicles previously used as short-term rentals without the requisite disclosure in the fifteen additional transactions Plaintiff has identified in the complaint, including the date of the transaction. (Id. ¶¶ 108, 114; see also ¶ 104 (“Defendants used the Internet and the wires in connection with the sale of hundreds if not thousands, of vehicles sold to members of the class by providing a forum in which customers could search for and receive information regarding vehicles offered for sale by Defendants, including the prior rental vehicles sold by Defendants.”)). Plaintiff also avers that:
Defendants further used the wires to send and receive purchase orders, retail installment contracts, and other documents among their co-conspirators, funding lenders, and other entities; to distribute money among those entities; to transmit to the MVA information related to the registration and titling of motor vehicles purchased and sold by Defendants to Named Plaintiff! ] and members of the Class; to transmit among the Defendants forms and other documents used in the sale of vehicles.
(Id. ¶ 109). Finally, according to Plaintiff, “Defendants further used the wires to facilitate the operation of and to operate the fraudulent scheme- described herein, and to communicate with each [other] during the course of the scheme through telephone calls, facsimiles, e-mail transmissions, and wire transfers of money resulting from and in furtherance of the fraudulent scheme.” (Id. ¶ 116); see, e.g., Proctor,
In Coffee Beanery,
Plaintiffs further provide the names of seven other individuals who received through the mails or wires copies of allegedly fraudulently UFOCs dated from 2002 and 2003.[ ] Plaintiffs then allege with particularity the fraudulent misrepresentations and omissions contained in Coffee Beanery’s UFOCs issued annually from September 2003 to October 2011.[ ] Making all inferences in favor of Plaintiffs, the Court can construe these allegations to suggest that every potential franchisee from 2002 until at least 2011 was provided with a fraudulent UFOC, and that the majorityof the fraudulent UFOCs were transmitted through the mail or wires.
Id. Although the facts are less compelling here, Plaintiff identifies fifteen additional transactions between 2010 and 2011, in which consumers entered into sales agreements for vehicles as a result of Defendants’ fraudulent scheme to sell prior short-term rental vehicles without the requisite disclosures. For these fifteen transactions, Plaintiff identifies the approximate vehicle sale date, the vehicle description, VIN, and the Defendant dealership that consummated the transaction. (See ECF No. 48, at 41). Plaintiff asserts that mail and wire were used to send the loan documents and financing contracts in connection with the fraudulent transactions, to register and title the sold vehicles, and to wire funds to the MVA in connection with the vehicle sale transactions. (ECF No. 22 ¶¶. 111-114). These acts involving mail and wire use were allegedly made in connection with consummating the fraudulent sale of -the vehicles to induce unaware consumers into purchasing prior short-term rentals. See VNA Plus, Inc. v. Apria Healthcare Grp., Inc.,
Defendants also challenge Plaintiffs RICO allegations insofar as they fail to demonstrate that the conduct of the enterprise affected interstate commerce. Defendants assert that “the gravamen of Plaintiffs’ claim is that the ‘enterprise’ consists of Maryland-automobile dealers, licensed by the Maryland MVA to sell cars in Maryland to two Maryland residents in a manner that does not comply with the Maryland law applicable to automobiles sales occurring solely in Maryland.” (ECF No. 34-1, at 44). Defendants are correct that Plaintiff must plead the existence of a RICO enterprise whose activities affected interstate commerce. See DB Capital Group,
b. Pattern of Racketeering Activity
To state a plausible claim of a pattern of racketeering activity, the plaintiff must allege facts establishing “that the racketeering predicates are related and' that they amount to or pose a threat of continued criminal activity.” Cf. H.J. Inc. v. Nw. Bell Tel. Co.,
Plaintiffs allege that all of the representations were made for the express purpose of inducing [plaintiffs, and other potential franchisees, to investee in Coffee Beanery café franchises, and that the scheme involved providing the same fraudulent UFOCs and making the same false representations to franchisees in support of this end. Essentially, as alleged, the predicate acts of mail and wire fraud were perpetrated an uncounted number of times against the same type of victim in a nearly identical manner. In the context of a motion to dismiss, the Court finds these allegations sufficient to satisfy the relationship requirement.
Plaintiff here also alleges that the predicate acts of mail and wire fraud were perpetrated on at least fifteen other occasions with separate consumers in an effort to induce them to purchase vehicles that dealership Defendants did not disclose were previously used as prior short-term rentals. Accordingly, the relatedness element is satisfied.
Defendants also argue that Plaintiffs allegations are insufficient to meet the continuity-of-activity requirement. A plaintiff can fulfill the continuity-of-activity requirement by establishing either a closed or open-ended pattern. H.J. Inc.,
Plaintiffs amended complaint suggests that she attempts to establish an open-ended pattern. Specifically, Plaintiff asserts that King Auto Group is an association-in-fact that “has continued as a unit, with a core membership, over a substantial period of time, exceeding five years, and is an ongoing organization established for an economic motive.” (ECF No. 22 ¶ 231). Defendants assert that the amended complaint fails to plead facts demonstrating a threat of continuing future criminal conduct for essentially two reasons. First, Defendants argue that there is no criminal activity at all because the prior short-term rental disclosure was made in the CarFax Report, which Defendants maintain Plaintiff received along with the Buyer’s Order and which indicated that the vehicle she bought was previously used as a short-term rental. (ECF No. 34-1, at 38). This argument is unpersuasive at this point because whether Plaintiff received the Car-Fax Report before she consummated the transaction is a disputed fact, and inappropriate to resolve on a motion to dismiss. (See ECF No. 48-2, at 33, Declaration of Latechia Chambers (“I do not recall anyone at the dealership showing me a Carfax report or asking me to sign or initial it, though I do recall signing quite a few documents wherever the King rep put an “x” mark next to a line for my signature, but the Carfax report was NOT one of those documents” (emphasis in original))).
Second, Defendants argue that there is no threat of continuing future criminal conduct or that the pattern of racketeering activity is open and ongoing because on May 14, 2013, the State of Maryland promulgated its own disclosure form to be used by motor vehicle dealers-Disclosure of Former Vehicle Use Form, VR-460. (See ECF No. 34-7). Defendants argue that:
[i]n so doing, the MVA conclusively put. an end to Plaintiff[’s] erroneous theory that disclosure of a vehicle’s prior rental history on a ‘separate document!,]’ signed by the customer, somehow violates COMAR, or that Maryland law requires that the prior use disclosure must be on the Buyer’s Order, or sales agreement, or in bold, or in super large print as alleged in their Complaint.
(ECF No. 34-1, at 40). As Plaintiff points out, though, her RICO claims are based on Defendants’ alleged scheme to defraud, not just an alleged violation of COMAR or an MVA bulletin. Furthermore, Defendants’ argument assumes that the dealership Defendants accused of fraudulent misrepresentations and concealment will cease this alleged conduct and use this new form. Defendants further argue that the conduct attributed to the RICO enterprise lasted less than eighteen months, which is insuffi-. cient to establish continuity for RICO pattern purposes. Although Defendants are correct to note that the Fourth Circuit has expressed reservations about RICO claims where the predicate acts are mail and wire fraud, see GE Inv. Private Placement Partners II v. Parker,
The Fourth Circuit has identified several factors to consider when determining whether a RICO pattern exists. These factors, including, “the number and variety of predicate acts and the length of time over which they were committed, the number of putative victims, the presence of separate schemes, and the potential for multiple distinct injuries,” should be considered along with “all the facts and circumstances of the particular case—with special attention to the context in which the predicate acts occurred.” Brandenburg v. Seidel,
Defendants’ actions were narrowly directed towards a single fraudulent goal. They involved a limited purpose: to defraud Menasco, Inc. and Lucky Two, Inc. with respect to their oil interests. They involved but one perpetrator: Wasserman. They involved but one set of victims: Menasco and Lucky Two. Finally, the transaction took place over approximately one year. Clearly, these acts do not constitute ‘ongoing lawful activities whose scope and persistence pose a special threat to social well-being.’ [International Data Bank, Ltd. v. Zepkin,812 F.2d 149 , 155 (4th Cir. 1987).]
(emphasis added). Here, unlike in Menas-co, Plaintiff does not allege that the fraudulent scheme was only directed at her. Instead, Plaintiff alleges that King Auto Group enterprise undertook a scheme to defraud consumers into purchasing vehicles that were previously used as short-term rentals, but which disclosure was not made clearly and conspicuously as required under Maryland law.
In Bailey,
In Friedler,
3. Proximate Cause
The parties also disagree over the means by which Plaintiff may satisfy RICO’s proximate cause requirement in a class action. To state a claim under civil RICO, a plaintiff is required to show that a RICO predicate offense “not only was a
The fraudulent conduct alleged here is the misrepresentation and concealment of the rental history of the vehicles sold to Plaintiff and other consumers in violation of Maryland law. Plaintiffs alleged injury was that she was overcharged for the vehicle because the vehicle was sold falsely as a former consumer car. (ECF No. 22 ¶ 249); Bailey,
[a]s a direct and proximate result of Defendants’ negligent statements, representations, and omissions of material fact ... Plaintiff[ ] and Class members were induced, ab initio, to enter into sales agreements for vehicles with Defendants, paid significantly more for their vehicles than these vehicles were worth, and otherwise were harmed.
(ECF No. 22 ¶ 209). Unlike in Hemi, where the Supreme Court found that “Multiple steps [] separate the alleged fraud from the asserted injury,” there is a sufficiently direct relationship between the wrongful conduct here and the alleged injury. Hemi,
the conduct directly responsible for the City’s harm was the customers’ failure to pay their taxes. And the conduct constituting the alleged fraud was Hemi’s failure to file Jenkins Act reports. Thus, [], the conduct directly causing the harm was distinct from the conduct giving rise to the fraud.
Defendants assert that Plaintiff fails to allege that she detrimentally relied on any fraudulent mail or wire sent by the Unrelated Defendants, “or the specific harm directly caused to them as a result of the predicate acts allegedly committed by each Unrelated Defendant.” (Id. at 32). Defendants essentially argue that because Plaintiff only dealt with King Buick GMC, she cannot show reliance in connection with the Other Dealer Defendants with which she did not transact business. As Judge Nickerson stated in Robinson v. Fountainhead Title Grp. Corp., Civ. No. WMN-03-3106,
Judge Messitte’s reasoning in Biggs v. Eaglewood Mortg. LLC,
Bridge did not eliminate reliance as an element of a RICO claim predicated on mail fraud. The Supreme Court was presented with a situation where the plaintiffs themselves had not received or relied upon misrepresentations made by defendants, but had relied on misrepresentations defendants made to others. See Bridge,128 S.Ct. at 2139 . What the Court held was that, even though plaintiffs had not themselves relied on the misrepresentations made by defendants, they properly asserted a claim because first-party reliance is not a required element of a RICO claim predicated on mail fraud. See Id. at 2145. The Court was careful to note, however, that “none of this is to say that a RICO plaintiff who alleges injury by reason of a pattern of mail fraud can prevail without showing that someone relied on the defendant’s misrepresentations.” Id. at 2144 (internal quotations omitted),
(emphasis added). Here, Plaintiff has alleged that she justifiably relied on the misrepresentation made in the Buyer’s Order, which encompassed the alleged scheme involving “Defendants’ conceal-ments, failures to disclose and affirmative misrepresentations concerning the prior rental use of the used vehicles they purchased when they consummated their transactions.” (ECF No. 22 ¶ 176); Busby v. Crown Supply, Inc.,
Defendants’ argument that Plaintiff’s alleged injuries were caused by her own conduct is also unpersuasive. Defendants argue that “Plaintiff[’s] alleged injury occurred either because [she] ignored or failed to read the CarFax Report [she] signed which clearly discloses five times that it was a prior rental vehicle.” (ECF No. 34-1, at 34). Thus, the argument goes:
Plaintiff[ ] here cannot logically or legally contend that the absence of the “x” on the line on the Buyer’s Order fraudulently induced [her] to buy the vehicle, but that the presence of this fact disclosed five times in the Carfax Report [she] received and signed at the same time, acknowledging that [she] knew the very fact [she] claimfs] was omitted, does not negate this inducement.
(Id. at 35). As explained supra, the Car-fax Report was not attached to the complaint, but to Defendants’ motion to dismiss the federal claims. Although as a general rule extrinsic evidence should not be considered at the 12(b)(6) stage, the Fourth Circuit has held that when a defendant attaches a document to its motion to dismiss, “a court may consider it in determining whether to dismiss the complaint [if] it was integral to and explicitly relied on in the complaint and [if] the plaintiffs do not challenge its authenticity.” Phillips v. LCI Int’l Inc.,
Accordingly, drawing all inferences in favor of Plaintiff, the proximate cause element is met at this stage.
4. Section 1962(a) Claim
Defendants argue that Plaintiff has not pled a violation of Section 1962(a). To allege a violation of Section 1962(a), a plaintiff must show: (a) receipt of income from a pattern of racketeering activity, and (b) the use or investment of this income in an enterprise. See Busby,
Plaintiff asserts that “[t]hrough the use of this illegal and fraudulent scheme, and through their efforts to operate and maintain the enterprise ... and to facilitate the sale of prior short-term rental vehicles without the disclosures required by Maryland law, Defendants have been able to retain money that is rightfully payable to [ ] Plaintiffi ] and Class members.” (ECF No. 22 ¶ 245). Plaintiff further alleges that Defendants have retained these illegally gained funds and reinvested and used those funds in their operations in violation of 18 U.S.C. § 1962(a). (Id. ¶ 246). Plain
These conclusory allegations are insufficient to assert a RICO violation under Section 1962(a). Section 1962(a) prohibits a person from receiving income from a pattern of racketeering activity and then using that income in the operation of an enterprise engaged in commerce. See New Beckley Mining Corp.,
Without any factual support to buttress these legal conclusions, the allegations are insufficient to survive a motion to dismiss. Plaintiff does not allege how much was invested or the contours of the reinvestment of the funds into the King Auto Group operation. Section 1962(a) applies only in situations where an enterprise is an object or goal of the racketeering activity, not a tool to carry out the racketeering activity. See Eason,
[r]equires allegations under section 1962(a) to be supported by distinct allegations of how the use or investment of illicit income played a causative role. Similarly, the rule against “reinvestment” allegations is not a per se rule that the use of proceeds from predicate acts chargeable under section 1962(c) can never support a separate claim under section 1962(a). Instead, this rule requires only that plaintiffs do more than allege that income received from one predicate act was used in the operation of an enterprise.
5. Section 1962(d)
Plaintiff also alleges a violation of Section 1962(d), which states, in relevant part, that “[i]t shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.” Defendants argue that “[s]ince the Complaint fails to allege any substantive RICO claim under 1962(c), Plaintiffs’ conspiracy claim under 18 U.S.C. § 1962(d) alleged in Count X fails as a matter of law.” (ECF No. 34-1, at 43). See also Walters v. McMahen,
Plaintiffs Section 1962(d) claim fails for a different reason, however. A RICO conspiracy claim “requires that the plaintiff allege and later prove that the defendants knew of the RICO violations of the enterprise and agreed to facilitate those activities.” Proctor,
The amended complaint contains the following allegations:
Defendants associated together under the King Auto Group moniker to advertise and jointly market themselves, purchased used vehicles that previously had been used as rental vehicles, used and agreed to use misleading form documents in the course of their sales of used vehicles, and agreed to conceal from, and not to disclose to, purchasers the prior rental use of vehicles to advance each Defendant’s independent personal gain and individual financial stake in its respective corporation and in the conspiracy.
(ECF No. 22 ¶ 160). Plaintiff further asserts that “Defendants reached an agreement or understanding to conceal from, and fail to disclose to, [ ] Plaintiff! ] and the Class material facts concerning the prior short-term rental use of the vehicles sold.” {Id. ¶ 177). Plaintiff avers that “Defendants participated in this fraudulent scheme- and worked in combination with each other ... to facilitate and engage in a conspiracy to deceive and defraud” Plaintiff and members of the class. {Id.). Plaintiff also alleges that “Defendants conspired with each other to engage in the various activities set forth herein, agreed to participate in the operation of the conspiracy and scheme to defraud Named Plaintiff! ] and Class members, and aided and abetted one another in these activities, all as proscribed by Maryland law.” {Id. ¶ 79).
These allegations are insufficient to show a violation of Section 1962(d). “As compared with an allegation under general conspiracy law, the objective of a RICO conspiracy is the violation of a sub
B. Abstention
Defendants argue, in the alternative, that the court should abstain from exercising jurisdiction pursuant to the doctrine set forth in Burford v. Sun Oil Co.,
Burford permits abstention when federal adjudication would unduly intrude upon complex state administrative processes because either: (1) there are difficult questions of state law ... whose importance transcends the result in the case then at bar; or (2) federal review would disrupt state efforts to establish a coherent policy with respect to a matter of substantial public concern.
(internal marks omitted). Defendants argue that- the State of Maryland has a strong interest in having the issues decided in state court. Defendants explain that “[ijor more than 50 years, the Maryland legislature has set forth a comprehensive scheme with detailed provisions regulating the sale of automobiles, which requires restrictive licensing from the state in order to do business.” (ECF No. 34-1, at 45-46). Defendants contend that Maryland’s legislature has developed a comprehensive legislative and regulatory scheme involving the disclosure requirements for automobile dealers selling cars in the State of Maryland. Thus, Defendants believe that “the Maryland legislature and the MVA have a strong interest in retaining the power to govern the types of disclosure required to comply with COMAR to ensure dealer accountability in the context of consumer transactions.” (Id. at 46-47) (internal citations omitted).
Defendants do not offer compelling reasons to support abstention. Plaintiff alleges that Defendants engaged in a fraudulent scheme by failing to disclose to consumers the prior short-term rental history of the vehicles that they were systematically selling, in violation of Maryland law. Although Plaintiff disputes this point, Defendants maintain that the prior short-term rental history of the vehicle was disclosed to Plaintiff in a separate
C. Standing to Sue the Other Dealer Defendants for the Non-Rico Claims
The Other Dealer Defendants argue that Plaintiff lacks standing to sue them. (ECF No. 37-1, at 32).
Standing is a threshold jurisdictional requirement. See Central Wesleyan College v. W.B. Grace & Co.,
That a suit may be a class action ... adds nothing to the question of standing, for even named plaintiffs who represent a class “must allege and show that they personally have been injured, not that injury has been suffered by other unidentified members of the class to which they belong and which they purport to represent.”
Lewis v. Casey,
Plaintiff argues that “a conspiracy [among all of the Defendants] confers standing with respect to each Defendant.” (ECF No. 48, at 107). Her theory is that the Other Dealer Defendants are liable as co-conspirators with King Buick GMC because all of the Defendants reached an agreement and/or understanding concerning the written disclosures to be made to Named Plaintiff and members of the putative class and regularly concealed the fact that the vehicles they sold were prior short-term rentals, in violation of Maryland law. In a situation where a named plaintiff did not deal directly with the named defendants, “a plaintiff may be able to satisfy the injury aspect of standing through sufficient allegations of conspiracy.” See Cent. Wesleyan Coll,
Plaintiff has not adequately pled the existence of a conspiracy. A civil conspiracy is “ ‘a combination of two or more persons by an agreement or understanding to accomplish an unlawful act or to use unlawful means to accomplish an act not in itself illegal, with the further requirement that the act or the means employed must result in damages to the plaintiff.’ ” Hoffman v. Stamper,
Here, the dealerships Defendants are separate businesses. Plaintiff asserts that:
Defendants reached an agreement and/or understanding concerning the written disclosures to be made to Named Plaintiff ] and the Class in connection with their vehicle purchases and failed to make the written disclosures required by Maryland law in furtherance of their conspiracy for their own personal gain, advantage and profit, resulting in legal damage to Named Plaintiff ] and Class.
(ECF No. 22 ¶ 208). She further asserts that “Defendants conspired among themselves, by agreement and understanding, to engage in the unlawful acts and omissions described herein.” (Id. ¶ 5). Plaintiff provides no details as to when such an agreement was reached or the contours of the agreement. Furthermore, Plaintiff does not reference when King Buick GMC met or communicated with other members of the alleged conspiracy. Cf. DB Capital Grp.,
The analysis in Herlihy,
Nowhere in the complaint is there an allegation that a named plaintiff suffered any injury or damage because of the wrongful act or conduct of a named defendant. Rather than relying on any allegation in the complaint of a specific injury [caused by a named defendant], plaintiffs contend that they have standing to sue under a so-called “concert of action” theory. Plaintiffs argue that a defendant may be liable for an injury caused by the product of another if the plaintiff can prove that multiple defendants acted tortuously pursuant to a common plan or design. [] Plaintiffs contends that they have sufficiently alleged in this case a concert of action and that therefore they have standing to sue the six named defendants.
Id. The court rejected this argument, noting that Maryland law does not recognize a cause of action based upon an alleged concert of action. Here, although Plaintiff uses the word “conspiracy” in the amended complaint, the factual allegations support the inference of concerted action among the Defendants, 'which does not confer standing. Indeed, the amended complaint alleges that “when King Buick failed to disclose and concealed from [ ] Ms. Chambers the prior rental use of the vehicle[ ] [she was] purchasing, it did so as part of a conspiracy, scheme and concerted action in which all of the Defendants participated with their knowledge and consent, as well as with the aid and encouragement of one another.” (ECF No. 22 ¶ 60; see also ¶ 16 (“The King Auto Group entities named as Defendants acted in concert to accomplish, and jointly benefitted from, the scheme described herein.”)); Sprint Nextel Corp. v. Simple Cell, Inc., Civil No. CCB-13-617,
The allegations are insufficient to show a conspiracy among all of the Defendants. In Acosta,
Defendants assert that this court lacks subject matter jurisdiction over the MMWA claim because the amended complaint fails to allege any amount of damages and, even if it did, Plaintiff and members of the class still could not plausibly allege $50,000 in damages under their separate MMWA claims. (ECF No. 34-1, at 16-17). Defendants further argue that Plaintiff cannot meet the jurisdictional “100-named plaintiff’ requirement under 15 U.S.C. § 2301(d)(3)(C).
A plaintiff may file a MMWA suit for damages for certain breach of warranty obligations in either state or federal court. 15 U.S.C. § 2301(d)(1). Such a suit, however, is not appropriately brought in a United States district court:
(A) If the amount in controversy of any individual claim is less than the sum or value of $25;
(B) If the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or
(C) If the action is brought as a class action, and the number of named plaintiffs is less than one hundred.
15 U.S.C. § 2310(d)(3); Misel v. Mazda Motor of Am., Inc.,
The court has subject matter jurisdiction over the MMWA claim because one of the RICO counts will not be dismissed at this time. As Judge Ellis reasoned in Barnes v. West, Inc.,
E. The 1V1MWA and Implied Warranty of Merchantability Claims (Counts I & II)
Plaintiff asserts a claim for breach of implied warranty of merchantability and seeks relief under both federal law, the MMWA, and state law: Section 2-314 of the Uniform Commercial Code, as codified at Md.Code Ann. § 2-314. Resolution of Plaintiffs claims for breach of implied warranty of merchantability and violation of the MMWA turns largely on principles of state law. Carlson v. Gen. Motors Corp.,
Here, Plaintiff invokes Section 2-314(2)(a), alleging that:
[u]nder both a consumer’s reasonable expectations as well as trade quality standards, a vehicle with a prior rental history that is not clearly and conspicuously disclosed cannot pass without objection in the trade under the contract description and simply is not merchantable under Maryland law. A significant segment of the buying public would object to purchasing a used vehicle previously used as a short-term rental vehicle.
(ECF No. 22 ¶ 134). Defendants argue that absent allegations of any physical defect in the vehicle sold to Plaintiff, there can be no cause of action for breach of implied warranty of merchantability or violation of the MMWA. (ECF No. 36, at 15).
There is a long history of applying the implied warranty of merchantability in the used car context. Jones v. Koons Automotive, Inc.,
The difficulty is that, so far as these plaintiffs are concerned, GM’s diesel— equipped cars have served the traditionally recognized purpose for which automobiles are used. Since cars are designed to provide transportation, the implied warranty of merchantability is simply a guarantee that they will operate in a safe condition and substantially free of defects. Thus, where a car canprovide safe, reliable transportation, it is generally considered merchantable.
Carlson v. Gen. Motors Corp.,
In Koons,
[t]he Maryland appellate courts have not yet addressed directly whether a vehicle can be considered non-merchantable under § 2-314(2) in the absence of a claim that the car suffers from some tangible defects (i.e., a design or manufacturing defect) or has some concrete physical problem that renders it of a lesser quality than other cars of the same contract description.
Judge Garbis stated that “[t]he Court doubts—in the absence of Maryland precedent supporting [plaintiff’s] position—that there would be a valid claim based upon a violation of an implied warranty of merchantability.” Although Judge Garbis ultimately decided not to dismiss this claim because he found viable the other claims premised on the same facts, the undersigned declines to keep the implied warranty of merchantability and MMWA claims on this basis.
Plaintiff has submitted a notice of supplemental authority, including a transcript from a proceeding before the Circuit Court for Baltimore City (Case No. 03-C-13-008147), another putative class action against dealerships. (See ECF No. 64-1). In ruling on a motion to dismiss the implied warranty of merchantability claim in that.case, Judge Stringer Jr. decided to
F. Negligent Misrepresentation (Count VI)
Plaintiff asserts a negligent misrepresentation claim. She alleges that:
Defendants negligently omitted and failed to disclose the material facts that the vehicles sold to Named Plaintiff[] and the Class previously had been used as short-term rental vehicles, negligently misrepresented that the vehicles sold to them previously were used for consumer purposes only, negligently misrepresented the condition, quality and standard of the vehicles, [and] negligently failed to disclose that the price of the vehicles did not accurately reflect their value.
(ECF No. 22 ¶ 200). To state a claim for negligent misrepresentation under Maryland law, Plaintiff must show:
(1) the defendant, owing a duty of care to the plaintiff, negligently asserts a false statement; (2) the defendant intends that his statement will be acted upon by the plaintiff; (3) the defendant has knowledge that the plaintiff will probably rely on the statement, which, if erroneous, will cause loss or injury; (4) the plaintiff, justifiably, takes action in reliance on the statement; and (5) the plaintiff suffers damage proximately caused by the defendant’s negligence.
Lloyd v. Gen. Motors Corp.,
King Buick GMC argues that Plaintiff fails to state a negligent misrepresentation claim because King Buick GMC did not make any misrepresentations or omissions. King Buick maintains that it disclosed to Plaintiff in a CarFax Report in multiple places that the vehicle she was purchasing was a prior short-term rental. King Buick GMC further asserts that because Plaintiff received the CarFax Report which disclosed that the vehicle was previously used as a short-term rental, she could not have justifiably relied on any alleged misrepresentations in the Buyer’s Order. It includes as an exhibit to its motion to dismiss a copy of a CarFax Report allegedly furnished to Ms. Chambers, showing that the word “rental” is highlighted in blue and Ms. Chambers’s initials are contained next to this purported disclosure. (See ECF No. 36-5).
There are several problems with King Buick GMC’s arguments. First, King Buick GMC has moved to dismiss. As indicated above, as a general rule, extrinsic evidence should not be considered at the 12(b)(6) stage. The Fourth Circuit has held that “when a defendant attaches a document to its motion to dismiss, “a court may consider it in determining whether to dismiss the complaint [if] it was integral to and explicitly relied on in the complaint and [if] the plaintiffs do not challenge its authenticity.” ” Phillips v. LCI Int’l Inc,.,
I understand that King has filed a motion with the Court which tells the Court that it has a copy of a Carfax report for my car and claims that I initialed it in two places.... I do not recall anyone at the dealership showing me a Carfax report or asking me to sign or initial it, though I do recall signing quite a few documents wherever the King rep put an “x” mark next to a line for signature, but the Carfax report was NOT one of those documents.
(ECF No. 48-2, at 33) (emphasis added). Plaintiff avers that she “further understand[s] that King has told the Court that the word ‘rental’ was circled and highlighted in blue when the Carfax report was presented to [her]. This cannot be true.” (Id.). Accordingly, to the extent King Buick GMC maintains that Plaintiff could not have justifiably relied on any representations in the Buyer’s Order given the conflicting information in the CarFax Report, this argument is unavailing at this stage of the proceedings because Plaintiff disputes the authenticity of the CarFax Report that King Buick GMC proffers.
King Buick relies on American Chiropractic,
G. Deceit by Non-Disclosure or Concealment (Count IV)
Count IV of the complaint alleges deceit by non-disclosure or conceal
(1) the defendant owed a duty to the plaintiff to disclose a material fact; (2) the defendant failed to disclose that fact; (3) the defendant intended to defraud or deceive the plaintiff; (4) the plaintiff took action in justifiable reliance on the concealment; and (5) the plaintiff suffered damages as a result of the defendant’s concealment.
Blondell v. Littlepage,
Unlike the negligent misrepresentation claim, this claim requires Plaintiff to plead scienter. King Buick GMC argues that it did not make any intentionally false statement or conceal anything from Plaintiff because it clearly disclosed in the CarFax Report the prior short-term rental use of the vehicle it sold to Ms. Chambers. (See ECF No. 36-1, at 23-24). King Buick GMC avers that “[b]y providing Plaintiff[ ] with the CarFax Report, with the ‘Title History’ and ‘Ownership History’ disclosing that [her] vehicle was a prior rental in five different places, King Buick GMC intended to and did in fact accurately disclose the true title history of the vehicle before it was sold.” (ECF No. 36-1, at 23-24). King Buick GMC points to guidance from the Maryland MVA stating that disclosures regarding a vehicle’s prior use do not need to be made on the Buyer’s Order and the disclosure can be made on a separate document. (See ECF No. 36-6, at 2 (MVA Bulletin, Aug. 25, 2011)); Philips v. Pitt Cnty. Mem’l Hosp.,
This claim will not be dismissed at this time. The parties dispute whether Ms. Chambers received a CarFax Report in connection with her transaction and, if she did, at what point (before or after the purchase transaction was consummated) it was provided and whether Ms. Chambers signed it. On a motion to dismiss, Plaintiffs allegations in the amended complaint must be credited given that she disputes the authenticity of the CarFax Report that King Buick GMC submits. According to the amended complaint, when King Buick GMC sold to Plaintiff the used 2010 Dodge Caliber on February 18, 2012, it failed to disclose to her that this vehicle had been used as a short-term rental. She asserts that by concealing the prior short-term rental use of the vehicle, King Buick GMC intended to induce her to purchase a less desirable and less valuable vehicle and to pay more for the vehicle than it was worth. (ECF No. 22 ¶¶ 175, 182). Defendant argues that Plaintiff cannot show that King Buick GMC intended to conceal the prior short-term rental use of the vehicle as part of a scheme to defraud her. Although Plaintiff certainly has to make this showing to ultimately prevail on this claim, at this stage, “intent, knowledge, and other conditions of a person’s mind may be alleged generally.” United States ex rel. Palmieri v. Alpharma, Inc., Civ. Action No. ELH-10-1601,
King Buick GMC relies on McGraw v. Loyola Ford, Inc.,
Indeed, during his deposition, appellant admitted that Loyola Ford told him pri- or to signing the first buyer’s order that it was a demonstrator vehicle. [Plaintiff] also knew that the car had been driven 6,161 miles, and the dealer noted the exact mileage on the same form that erroneously described the vehicle as “new.” In addition, the first buyer’s order form was replaced with a second form a few days later, before the transaction was consummated. On the second form, the dealer correctly described the vehicle as a demo.
(emphasis added). Thus, the facts of McGraw are readily distinguishable, as Plaintiff alleges that King Buick GMC did not make the requisite disclosure regarding the vehicle’s prior rental use before she consummated the transaction—and Plaintiffs allegations must be accepted as true at this juncture. Plaintiff has identified the time, place, and content of the false representation, which is sufficient under Rule 9(b). Accordingly, Count IV against King Buick GMC will not be dismissed at this time.
H. Maryland Consumer Protection Act (“MCPA”) (Count III)
Count III of the amended complaint alleges violations of the MCPA. The MCPA prohibits “unfair or deceptive trade practices.” Md.Code Ann., Com. Law, § 13-801. The MCPA proscribes fourteen categories of unfair or deceptive practices, including “any ... [fjalse ... or misleading oral or written statement, visual description, or other representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers” and “any ... [failure to state a material fact if the failure deceives or tends to deceive.” Private parties who bring a suit must establish that they “suffered an identifiable loss, measured by the amount the consumer spent or lost as a result of his or her reliance on the sellers’ misrepresentation.” Green v. Wells Fargo Bank, N.A., Civ. Action No. DKC 12-1040,
King Buick GMC makes three arguments to contest Plaintiffs ability to plead an MCPA claim: (1) King Buick GMC did not make any false statement; (2) there was no justifiable reliance; and (3) Plaintiff fails to meet MCPA’s “actual injury” requirement. The first two arguments have already been addressed and rejected in the context of the negligent misrepresentation and fraud claims, and the same logic applies here. As for the third argument, King Buick GMC argues that Plaintiff has not alleged that she sold her vehicle and suffered any actual injury or loss. King Buick GMC further avers that Plaintiff has not alleged that she has “spent a dime on any repair or has been unable to use [her] vehicle at any time over the past 21/2-3 years.” (ECF No. 36-1, at 35). Plaintiff asserts that as a result of the misrepresentations regarding the vehicle’s prior short-term rental use, she suffered injury because she was overcharged and paid significantly more for the vehicle than it was worth. (ECF No. 22 ¶ 180). The amended complaint further states that Plaintiff was denied the opportunity to decline to purchase vehicles known to have been used previously for short-term rentals. (Id. ¶ 129). In the opposition, Plaintiff asserts that “Ms. ■ Chambers [ ] suffered an actual economic loss at the time [she] paid for [her] vehiele[ ],” because she paid more for the vehicle than it was worth (ie., she was overcharged). (ECF No. 48, at 103).
Plaintiff has not adequately pled injury with respect to the MCPA violation. “[I]n order to articulate a cognizable injury under the [MCPA], the injury must be objectively identifiable.” Lloyd,
Plaintiff argues in the opposition that she suffered an actual economic loss on the date of the transaction because she was overcharged for the vehicle and paid significantly more for her vehicle. Plaintiff specifies in the opposition that she does not assert that she suffered damages on the basis of “a diminished post-sale value of the vehicles, lost profits, or any other speculative future loss.” (Id.); Jones,
I. Breach of Contract (Count VII)
Plaintiff asserts that King Buick GMC’s failure to disclose the prior short-term rental use of the 2010 Dodge Caliber in the Buyer’s Order constituted a breach of contract. “To prevail in an action for breach of contract, a plaintiff must prove that the defendant owed the plaintiff a contractual obligation and that the defendant breached that obligation.” Carroll Co. v. Sherwin-Williams Co.,
The breach of contract claim will be dismissed. As noted in RRC Northeast, LLC v. BAA Maryland, Inc.,
J. Money Had and Received/Unjust Enrichment (Count V)
Plaintiff alleges an unjust enrichment claim, stemming from King Buick GMC’s
In its motion to dismiss, King Buick includes a paragraph arguing that the unjust enrichment claim should be dismissed because there is an express contract governing this action. (ECF No. 36-1, at 37). “In Maryland, a claim of unjust enrichment, which is a quasi-contract claim, may not be brought where the subject matter of the claim is covered by an express contract between the. parties.” Janusz v. Gilliam,
Here, the amended complaint alleges fraud. Moreover, the Federal Rules of Civil Procedure allow parties to plead claims in the alternative. See Fed. R.Civ.P. 8(e)(2) (“A party may also state as many separate claims or defenses as the party has regardless of consistency and whether based on legal [or] equitable grounds.”). King Buick GMC has not argued that Plaintiff failed to state a claim for-unjust enrichment. Thus, dismissing the unjust enrichment claims now would be premature. See, e.g., RaceRedi Motorsports, LLC v. Dart Mach., Ltd.,
K. Plaintiffs Motion for Leave to File Surreply and Supplemental Rule 56(d) Declaration
Plaintiff moved for leave to file a surreply and to file a supplemental Rule 56(d) Declaration. (ECF No. 68). “Unless otherwise ordered by the Court, surreply memoranda are not permitted to be filed.” Local Rule 105.2(a). Although a district court has discretion to allow a surreply, surreplies are generally disfavored. Chubb & Son v. C.C. Complete Servs., LLC,
Here, to support her request, Plaintiff objects to the arguments made in the Other Dealer Defendants’ motion to dismiss or for summary judgment regarding King Buick GMC’s inspection of its sales files and arguments made regarding the percentage of rental vehicles sold in the last three years and the disclosures made. (See ECF No. 55-6). The Other Dealer Defendants also submitted as exhibits to their motion to dismiss or for summary judgment, redacted versions of customer
There are several problems with Plaintiffs arguments. As an initial matter, the Other Dealer Defendants’ motion for summary judgment only addressed the non-RICO claims, and as discussed supra, Plaintiff lacks standing to assert these claims against the Other Dealer Defendants.
Plaintiffs request to file a supplemental Rule 56(d) affidavit from Richard Gordon, counsel for Plaintiff in this matter, will also be denied. First, the Other Dealer Defendants’ motion to dismiss or for summary judgment was granted on standing grounds, not on the merits of the claims against them. Thus, Plaintiffs initial Rule 56(d) request is moot. In any event, the information contained in this supplemental affidavit largely attempts to refute the statistics provided by the Other Dealer Defendants regarding the number of short-term rental vehicles sold and disclosures made to purchasers. For instance, Mr. Gordon states in the supplemental affidavit that:
one of the more compelling reasons why Plaintiff! ]■ require[s] discovery from Defendants before responding to Defendants’ Motion for Summary Judgment is because, based on Plaintiffs investigation, it appears that Defendants have provided this Court with materially inaccurate information about the number of prior short-term rentals they have sold.
(ECF No. 68-4 ¶ 18). Plaintiff also seeks to submit declarations from three purchasers alleging that they were unaware at the time of purchase that the vehicles they were buying were prior short-term rentals. These arguments fail for the same reason that a surreply is unnecessary. The claims addressed in the motion to dismiss or for summary judgment will be dismissed against the Other Dealer Defen
L. Plaintiffs Motion to Consolidate Cases
Fed.R.Civ.P. 42 gives the court broad discretion to make decisions about how to most efficiently and economically try cases on its docket while providing justice to the parties. The rule states that the court may consolidate actions that involve a common question of law or fact. Fed.R.Civ.P. 42(a).
1 Plaintiff urges the undersigned to consolidate the instant lawsuit with another putative class action, Michelle Clay et al. v. King Buick CMC LLC, et all, Case No. 1:14-cv-00811-DKC (“the Clay Lawsuit”), also pending before the undersigned. (See ECF No. 63-1). The Clay Lawsuit is a putative class action against the same dealership Defendants, alleging a fraudulent scheme among these Defendants based on their failure to disclose the prior short-term rental use of vehicles to consumers. Plaintiff asserts that the two lawsuits involve identical defendants, rely on virtually the same facts, and assert the same counts, with the exception of an additional count for express breach of warranty asserted in the Clay Lawsuit. Plaintiff further argues that the Clay Lawsuit is based on seemingly-overlapping factual and legal issues and the required document discovery from the Defendants will be virtually identical in both lawsuits. (Id. at 6). Plaintiff believes that consolidating both lawsuits will generate substantial economies for the court and the parties and prevent inconsistent factual and legal determinations in the event the two actions are separately adjudicated.
All of the Defendants filed a motion opposing the request to consolidate the two actions. Although Plaintiff cited Fed.R.Civ.P. 42 as the basis for her motion to consolidate, Defendants rely on Fed. R.Civ.P. 20-governing joinder of parties-in framing their arguments against consolidation. In any event, Defendants offer compelling arguments against consolidation. Defendants argue that:
Chambers seeks to indirectly amend her Complaint, which she cannot do without leave of court, by trying to improperly ‘join’ the individual claims of three unrelated plaintiffs[ ] against different defendants involving separate transactions occurring over a three year period in the Clay Lawsuit[], and then improperly joining them with Chambers’ claim involving her purchase of her vehicle from King Buick GMC in the Chambers Lawsuit.
(ECF No. 65, at 4). Specifically, in the Clay Lawsuit, there are three putative Named Plaintiffs. Michelle Clay alleges that in 2010, she purchased her vehicle from Hagerstown Ford for $8,000; Veronica Blake Weinberger alleges that in 2011, she purchased her vehicle from Kia of Silver Spring for $15,034.66; and Agnita Kote alleges that in 2012, she purchased her vehicle from King Volkswagen for $10,841. Defendants point out that Ms. Chambers and the three Plaintiffs in the Clay Lawsuit received different disclosures regarding the prior short-term rental use in each transaction with a different dealership Defendant. For instance, Defendants include as an exhibit to their opposition a copy of a Disclosure of Former Vehicle Use Form from King Hagers-town Motors to Michelle Clay, showing that the “short term rental vehicle” box is checked, highlighted, and the form is
Also compelling is Defendants’ argument that the terms of the sales agreements with each Plaintiff differ in important respects. For instance, Agnita Kote—a Plaintiff in the Clay Lawsuit— executed a sales contract with King Volkswagen. Her contract contains a binding arbitration clause. (See ECF No. 65-2, at 2). Moreover, the integration clause in Ms. Kote’s Buyer’s Order is different from the Buyer’s Order Ms. Chambers executed with King Buick GMC. Specifically, the integration clause in Ms. Kote’s contract states that “any other documents signed by Purchaser in connection with the transaction comprise the entire and complete agreement.” (Id). Furthermore, Ms. Kote’s contract contains a “waiver of jury trial” provision, not included in other agreements. The undersigned finds persuasive Defendants’ argument that consolidation would “create a logistical nightmare with different plaintiffs each raising unique factual and legal issues that will have to be analyzed one at a time.” (ECF No. 65, at 31). The two lawsuits are quite obviously similar on their face, but there are important factual differences that counsel against consolidation.
Although analyzed in the context of join-der, the reasoning in Saval v. BL Ltd.,
The cars were purchased at different times, were driven differently, and had different service histories. Quite probably, severance would have been required in order to keep straight the facts pertaining to the separate automobiles.
Moreover, Plaintiff is operating under the premise that all of the claims in the instant lawsuit will survive dismissal; but for the reasons explained supra, this is not the case. Accordingly, to consolidate the two cases where some of the claims against the Other Dealers Defendants and King Buick GMC will be dismissed here would only complicate the already involved proceedings in this action. To the extent Plaintiff is worried that maintaining two separate actions would result in inconsistent adjudication, the fact that the two cases are both before the undersigned reduces the risk that the undersigned would decide differently identical issues in the two cases. Of course, nuances in the law and facts in each proceeding may require different results.
Accordingly, the motion to consolidate the two actions will be denied at this time.
IV. Conclusion
For the foregoing reasons, the motion to dismiss the RICO claims filed by all of Defendants will be granted in part. Claims under Section 1962(a) and (d) will be dismissed. King Buick GMC’s motion to dismiss the non-RICO claims will be granted in part. The MMWA breach of the implied warranty of merchantability, MCPA, and breach of contract claims will be dismissed. The Other Dealer Defendants’ motion to dismiss or for summary judgment on the non-RICO claims will be
Notes
. Ms. Chambers will be referred to as "Plaintiff” throughout the memorandum opinion.
. Defendants include as an exhibit to their motion to dismiss a copy of the Carfax Report for the 2010 Dodge Caliber that Plaintiff purchased. In this document, the fact that this car was a prior rental is shown as highlighted and Ms. Chambers appears to have initialed the CarFax Report. (See ECF No. 34-5, at 2). Ms. Chambers declares in an affidavit, however, that she does "not recall anyone at the dealership showing her a Carfax report or asking her to sign or initial it.” (See ECF No.
. On October 18, 2013, Plaintiff filed a motion to certify the class, but requested that this motion be held in abeyance pending adjudication of Defendants' motion to dismiss. (ECF No. 23). The undersigned issued a paperless order on November 4, 2013, holding the motion for class certification in abeyance. (ECF No. 31).
. Plaintiff has filed four notices of supplemental authority. (ECF Nos. 50, 64, 71, 76). Defendants argue that these notices of supplemental authority are improper because they actually are surreplies consisting of addition arguments to support Plaintiff's opposition to Defendants’ motions and concern non-bind.ing authority. Defendants dispute the applicability of the cases Plaintiff submitted as supplemental authority to the instant dispute and reargue the merits of their own position. Granting Defendants' motion to strike would not preclude the court from applying any existing precedent or considering any other authority. See Carter v. Astrue, Civ. Action No. CBD-11-2980,
. Although the Other Dealer Defendants have raised standing as an issue in their motion to dismiss or, in the alternative, for summary judgment on the non-RICO claims, they have not briefed the argument that Plaintiff lacks standing to assert RICO claims against them in the motion to dismiss the federal claims. The sole mention of standing in Defendants' motion to dismiss the RICO counts is that Plaintiff lacks standing “to assert RICO claims against the Unrelated Defendants because they do not owe any legal duty to [her].” (ECF No. 34-1, at 6). Plaintiff need not allege that the Other Dealer Defendants owed a legal duty to Ms. Chambers in order to state a civil RICO claim, however. Furthermore, although King Buick GMC joins the Other Dealer Defendants in their motion to dismiss the RICO claims, the arguments made in the brief largely concern Plaintiff's failure to plead a civil RICO case against the Other Dealer Defendants, not King Buick GMC.
. In relevant part, Title 18, Section 1962 states:
(a) It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity ... to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.
(c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in theconduct of such enterprise's affairs through a pattern of racketeering activity.
(d) It shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.
. Defendants argue that Plaintiff’s claims are routine allegations of state tort law beyond the intended scope of the RICO statute. (ECF No. 34-1, at 17-18). Citing HMK Corp. v. Walsey,
[ajlthough we hold that no pattern exists in the present case, we want to make clear that the pattern requirement certainly does not bar all RICO claims arising in the zoning context.... We note that a plaintiff who alleged pervasive involvement by a developer in the political process through widespread racketeering activity could indeed meet the pattern requirement.
Walsey,
. The "distinctiveness” requirement is limited to Section 1962(c) claims; Section 1962(a) does not carry this requirement. Busby v. Crown Supply, Inc.,
. To state a claim for interstate transport of money converted or fraudulently obtained, she must, at a minimum, allege how or when these interstate transports occurred. See Ker-
Defendants on hundreds if not thousands of occasions transported, transmitted, and transferred in interstate or foreign commerce money of the value of $5,000 or more, knowing the same to have been obtained and/or taken by fraud, an artifice of fraud, or by means of false or fraudulent pretenses of representations in violation of 18 U.S.C. § 2314.
(ECF No. 22 ¶ 117). This conelusory allegation is insufficient to plead a predicate act. See, e.g., Robinson v. Fountainhead Title Grp. Corp.,
. Defendants refer to all of the Defendants, except for King Buick GMC, as the “Unrelated Defendants.”
. Judge Garbis stated, however, that plaintiff can reinstate the RICO claim in the event that discovery as to the viable claims yields evidence adequate to support a plausible claim of a pattern of racketeering activity.
. As mentioned supra, the Other Dealer Defendants have not argued that the undersigned lacks standing over the RICO claims either in their initial motion to dismiss the federal claims or in their reply brief. They first raise standing as the very last argument in their motion to dismiss or, in the alternative, for summary judgment. (See ECF No. 37-1, at 32). They state that ‘‘[s]ince the Plaintiffs fail to allege any legal duty owed to them by any of the [Other Dealer] Defendants, they have no standing to assert these claims against them,” presumably referencing the state law claims briefed in the motion to dismiss or for summary judgment. Notably, the Other Dealer Defendants argue in their motion to dismiss the federal claims that the court lacks subject matter jurisdiction over the MMWA claim; they do not raise standing as an issue as to the RICO claims in the same motion.
. In Bailey,
Plaintiff submitted a Notice of Supplemental Authority on April 30, 2014, alerting the undersigned to an order issued in the Circuit Court for Baltimore County related to another class action, Buie v. Antwerpen Motorcars, Ltd., Case No. C-13-12341, that alleges that a group of automobile dealerships failed to disclose the prior short-term rental use of vehi
Accordingly, the undersigned does not find these decisions controlling on the issue of standing against the Other Dealer Defendants in this matter.
. In her affidavit, Ms. Chambers also states:
King put a copy of various documents in an envelope for me to take home. Upon returning home with the car, I sometime later looked at what was in the envelope. When I did, I was surprised to find a folded-up copy of a Carfax report among my documents.
(ECF No. 48-2, at 33). Plaintiff submits the CarFax Report that she allegedly received in the envelope from King Buick GMC, which is not initialed and the disclosure regarding the vehicle's prior use as a short-term rental is not highlighted (unlike the CarFax Report that Defendant proffers). (Id. at 36-38). Thus, the authenticity of the CarFax Report that King Buick GMC provides is disputed.
. Plaintiff submitted a Rule 56(d) Affidavit with its opposition. Rule 56(d) allows the court to deny summary judgment or delay ruling on the motion until discovery has occurred if the "nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition." Fed.R.Civ.P. 56(d). Here, only the Other Dealer Defendants moved for summary judgment on Counts I through VII. King Buick GMC moved to dismiss. Because the motion filed by the Other Dealer Defendants will be granted on standing grounds, Plaintiff's Rule 56(d) request will be denied as moot.
. King Buick GMC moved to dismiss, not for summary judgment.