# ATKINSON v. CREDIT ACCEPTANCE CORPORATION

> District Court, M.D. North Carolina · March 9, 2023

URL: https://www.frixlaw.com/law-library/cases/10254426

## Case

- **Court:** District Court, M.D. North Carolina
- **Decided:** March 9, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10254426

## How later opinions describe it (automated extraction)

- finding state action where deputy told debtor that the seizure was legal
- finding state action where debtor was told to stop interfering or he would go to jail; debtor would have prevented the repossession if police had not been there
- holding that Florida and Pennsylvania prejudgment replevin statutes unconstitutionally deprived persons of property without due process of law because they denied the right to be heard before taking the property away

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

LESLIE ATKINSON, )
)
Plaintiff, )
)
v. )
)
CREDIT ACCEPTANCE CORPORATION )
PRIMERITUS FINANCIAL SERVICES )
INC., CAROLINA REPO, LLC, ) 1:22-cv-369
BRENT GODFREY, in his )
individual capacity as a law )
enforcement officer with the )
Harnett County Sheriffs Office, )
WAYNE COATS, in his official )
capacity as Sheriff of Harnett )
County, North Carolina, and )
JOHN DOE, as Surety, )
)
Defendants. )

MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
As a result of what Plaintiff, Leslie Atkinson, contends
was a wrongful private repossession of her car, Plaintiff
brought this action against a number of defendants including
Harnett County Sheriff Wayne Coats (hereinafter “Coats”) and
Deputy Brent Godfrey (hereinafter “Godfrey”). (See Doc. 1.) All
other named defendants, that is, Credit Acceptance Corporation,
Primeritus Financial Services, Inc., and Carolina Repo, LLC, and
the claims related to those defendants, have been dismissed
without prejudice in favor of arbitration. (Doc. 44 at 5.) The
sole remaining claim is set forth in Count X, in which Plaintiff
alleges a violation of 42 U.S.C. § 1983 as to Coats and Godfrey.
(Doc. 1 at 24–29.)
Coats and Godfrey move to dismiss Count X pursuant to Fed.
R. Civ. P. 12(b)(1) and 12(b)(6). (Doc. 18.) Plaintiff has
responded in opposition to the motion, (Doc. 27), and Defendants
have replied, (Doc. 35). This court finds Defendants’ motion to
dismiss, (Doc. 18), should be denied.
I. BACKGROUND

On a motion to dismiss, a court must “accept as true all of
the factual allegations contained in the complaint . . . .” Ray
v. Roane, 948 F.3d 222, 226 (4th Cir. 2020) (quoting King v.
Rubenstein, 825 F.3d 206, 212 (4th Cir. 2016)). Defendants move
for dismissal pursuant to both 12(b)(1) and 12(b)(6), however,
neither party has requested an evidentiary hearing with respect
to the 12(b)(1) motion. Defendants’ jurisdictional challenge is
a facial challenge to the complaint.
In a facial challenge, a defendant asserts that the
allegations, taken as true, are insufficient to establish
subject matter jurisdiction. See Kerns v. United States, 585

F.3d 187, 192 (4th Cir. 2009). The court then effectively
affords a plaintiff “the same procedural protection as he would
receive under a Rule 12(b)(6) consideration,” taking the facts
as true and denying the Rule 12(b)(1) motion “if the complaint
alleges sufficient facts to invoke subject matter jurisdiction.”
Id. (citations omitted).
The facts, as relevant to this motion and taken in the
light most favorable to Plaintiff, are as follows.
Plaintiff is a resident of Sanford, North Carolina. (Compl.
(Doc. 1) at 2.) Coats was the Sheriff of Harnett County, North
Carolina. (Id. at 4.) Godfrey1 was a Deputy Sheriff with the
Harnett County Sheriff’s Office. (Id.)

On January 18, 2022, Carolina Repo, LLC (hereinafter “CR”)
attempted to repossess Plaintiff’s vehicle which was at that
time parked by Plaintiff’s back door. (Id. at 7.) “As CR was
backing up its truck towards the Vehicle, [Plaintiff] jumped in
the Vehicle” and started to drive away. (Id. at 8.) CR backed up

1 The complaint contains allegations as to Godfrey, set
forth in paragraphs 30-42, that are irrelevant, immaterial,
inflammatory, and completely inappropriate here even if true.
(See Compl. (Doc. 1) ¶¶ 30–42.) These allegations have no
bearing on Plaintiff’s claim, at least none this court can
discern at this stage. As a result, these allegations appear to
violate at least Fed. R. Civ. P. 8 and 12(f) as well as perhaps
Fed. R. Civ. P. 10(b). While this court is not able to
definitively say these allegations will have no bearing on the
subject matter at some point in time, they do not have any
bearing on the present pleadings or issues. Plaintiff is
cautioned that further allegations which appear to be
“immaterial, impertinent, or scandalous,” see Fed. R. Civ. P.
12(f), will be addressed by this court on its own motion. For
purposes of this order, the immaterial allegations will be
ignored.
and slid the tow bar under the vehicle and lifted the vehicle by
the bumper, causing the vehicle’s back tires to spin in the air.
(Id.) CR approached Plaintiff in her vehicle and demanded that
she exit the vehicle, to which Plaintiff responded that CR drop
the vehicle and leave. (Id.) The two argued. (Id.)
While the confrontation continued, CR called the Harnett
County Sheriff’s Office for assistance. (Id. at 8–9.) Godfrey
was sent to Plaintiff’s home where, upon arrival, Godfrey saw
Plaintiff still in the vehicle with the back end of the vehicle

raised by the tow bar. (Id. at 10–11.) Plaintiff “explained to
Godfrey that she was inside the Vehicle when CR slid its tow bar
under her bumper, she was inside the vehicle when CR lifted it,
and pointed out that the Vehicle was not even hooked up
properly.” (Id. at 11.)
According to Plaintiff, Godfrey “ordered [Plaintiff] to
exit the vehicle so that CR could repossess it.” (Id. at 11.)
Plaintiff alleges that she was intimidated by Godfrey and
therefore exited the vehicle so that it could be repossessed.
(Id.)
II. STANDARD OF REVIEW

To survive a Rule 12(b)(6) motion, “a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible on its
face if “the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable” and demonstrates “more than a sheer possibility that a
defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S.
at 556–57). When ruling on a motion to dismiss, this court
accepts the complaint’s factual allegations as true. Id.
Further, this court liberally construes “the complaint,

including all reasonable inferences therefrom, . . . in
plaintiff’s favor.” Estate of Williams-Moore v. All. One
Receivables Mgmt., Inc., 335 F. Supp. 2d 636, 646 (M.D.N.C.
2004) (citation omitted). This court does not, however, accept
legal conclusions as true, and “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Iqbal, 556 U.S. at 678.
Under Federal Rule of Civil Procedure 12(b)(1), a plaintiff
must prove by a preponderance of the evidence the existence of
subject matter jurisdiction. See U.S. ex rel. Vuyyuru v. Jadhav,
555 F.3d 337, 347 (4th Cir. 2009).

III. ANALYSIS
Defendants make three arguments in support of their motion
to dismiss. Defendants argue that Plaintiff has failed to
plausibly allege the necessary state action under 42 U.S.C.
§ 1983 because Godfrey’s actions are no more than a “de minimus
involvement in a private company’s repossession of Plaintiff’s
vehicle . . . .” (Mot. to Dismiss Defs. Brent Godfrey and
Sheriff Wayne Coats (“MTD”) (Doc. 18) at 1.) Defendants also
argue that Godfrey is entitled to qualified immunity as a matter
of law. (Id. at 2.) Finally, Defendants argue that as to Coates,
Plaintiff has failed to plausibly allege a policy or custom of
the Harnett County Sheriff which caused a constitutional

violation. (Id.) Plaintiff disagrees and argues the motion
should be denied. (See Pl. Leslie Atkinson’s Resp. to Defs.
Brent Godfrey and Wayne Coats Mot. to Dismiss (“Resp.”) (Doc.
27).)
Both parties submit, and this court agrees, that the Fourth
Circuit has not addressed the issue of law enforcement
involvement in the private repossession of a motor vehicle. (Br.
in Supp. Mot. to Dismiss Defs. Brent Godfrey and Sheriff Wayne
Coats (“Br.”) (Doc. 19) at 7; Resp. (Doc. 27) at 16.)
A. Jurisdiction

Although Plaintiff contends that Defendants “move only
under Rule 12(b)(6)” for dismissal, (Resp. (Doc. 27) at 5), this
court concludes that Defendants assert a jurisdictional issue
for reasons similar to those described in Menchaca v. Chrysler
Credit Corp., 613 F.2d 507 (5th Cir. 1980). In Menchaca, the
Fifth Circuit stated that
[d]espite plaintiffs’ allegations of multiple bases of
jurisdiction in their original complaint, the parties
agree that the sole basis of jurisdiction that could
support this claim is 42 U.S.C. § 1983. As such, the
existence of the “under color of law” element of the
claim, i.e., state action, is required in order to
invoke the district court’s jurisdiction.

Id. at 511 (cleaned up). Under that analysis, a failure by
Plaintiff to plausibly allege state action could preclude
jurisdiction.
Like Menchaca, Plaintiff alleges an unconstitutional
seizure of her property in violation of the Fourth and
Fourteenth Amendments.2 (Compl. (Doc. 1) at 24-20.) Also like
Menchaca, jurisdiction as to Count X is predicated upon 28
U.S.C. § 1331, as this action arises under the Constitution and
laws of the United States. (See Compl. (Doc. 1) at 2.)3 The claim
by Plaintiff is a violation of 42 U.S.C. § 1983. Therefore,
under the analysis described by Menchaca, the failure by

2 Plaintiff also alleges a violation of the Fifth Amendment,
(Compl. (Doc. 1) at 2), which is immaterial to this analysis and
appears to have been abandoned in the briefing. (See, e.g.,
Resp. (Doc. 27) at 15.)

3 Plaintiff asserts several other grounds for jurisdiction,
however, with the dismissal of all other defendants and claims,
only this claim remains for jurisdictional purposes. Although
Plaintiff makes allegations about a conspiracy, (see Compl.
(Doc. 1) ¶ 108), Count X is alleged as a substantive violation
of 18 U.S.C. § 1983.
Plaintiff to plausibly allege state action supports a dismissal
on jurisdictional grounds.
Nevertheless, unlike Menchaca, Defendants assert a facial
challenge to jurisdiction and the allegations must be construed
in the light most favorable to Plaintiff. Plaintiff’s
allegations, taken as true, establish for purposes of this
motion that Plaintiff was in her car, attempting to drive away,
when CR used the tow bar to secure and lift the back end of her
car. Thereafter, Godfrey “ordered [Plaintiff] to exit the

Vehicle so that CR could repossess it” and, as a result,
Plaintiff “exited the vehicle.” (Compl. (Doc. 1) at 11.)
Whether Godfrey’s order can be construed as active
participation in the creditor’s repossession will have to be
determined later. For purposes of the motion to dismiss, it
appears the order to exit the vehicle so that CR could repossess
it, as alleged, plausibly describes active participation.
When an on-duty police officer actively participates
in a creditor’s repossession . . . “the officers are
participating in the removal of the debtor’s property
while cloaked in the mantle of their authority as
agents of the state.” Wallace v. Chrysler Credit
Corp., 743 F. Supp. 1228, 1234 (W.D. Va. 1990); see
also Lugar v. Edmondson Oil Co., 457 U.S. 922, 935 n.
18 (1982); Abbott v. Latshaw, 164 F.3d 141, 146 (3rd
Cir. 1998).

Goard v. Crown Auto, Inc., 170 F. Supp. 3d 915, 918 (W.D. Va.
2016) (cleaned up). Under this standard, this court is compelled
to find subject matter jurisdiction is present. To the extent
Defendants contend that the de minimus nature of Godfrey’s
involvement precludes jurisdiction, that issue will be addressed
in the analysis of the motion to dismiss pursuant to Fed. R.
Civ. P. 12(b)(6).
B. Failure to State a Claim
1. State Action

“By the plain terms of § 1983, two — and only two —
allegations are required in order to state a cause of action
under that statute. First, the plaintiff must allege that some
person has deprived him of a federal right. Second, he must
allege that the person who has deprived him of that right acted
under color of state or territorial law.” Gomez v. Toledo, 446
U.S. 635, 640 (1980). Defendants do not challenge the fact that
Plaintiff may have been deprived of a federal right, only that
state action was not employed to deprive her of that right.
Defendants contend Godfrey’s limited involvement cannot be
considered state action sufficient to establish the second
element of a § 1983 claim. (Br. (Doc. 19) at 10.) However, “[a]

‘seizure’ of property . . . occurs when ‘there is some
meaningful interference with an individual’s possessory
interests in that property.’” Soldal v. Cook Cnty., 506 U.S. 56,
61 (1992).
A number of cases have considered the question of
whether a law enforcement officer’s presence at or
participation in a creditor’s repossession constitutes
action under color of state law. In such cases, of
course, the officers are participating in the removal
of the debtor’s property while cloaked in the mantle
of their authority as agents of the state.

Wallace, 743 F. Supp. at 1234 (citations omitted). “Misuse of
power, possessed by virtue of state law and made possible only
because the wrongdoer is clothed with the authority of state
law, is action taken under color of state law.” United States v.
Classic, 313 U.S. 299 (1941).
At this stage of the proceedings, this court finds Marcus
v. McCollum persuasive. 394 F.3d 813 (10th Cir. 2004). As
described in Marcus with respect to law enforcement involvement
in a private repossession:
This area of the law is particularly fact-
sensitive, so the circumstances must be “examined in
their totality.” Howerton v. Gabica, 708 F.2d 380, 384
(9th Cir. 1983). If the evidence showed, for example,
that an “officer came on the scene at the request of
the repossessor and said to the debtor, ‘don’t
interfere with this repossession,’ or ‘you know you’re
not the rightful owner of the property,’” an officer
might be liable. Barrett v. Harwood, 189 F.3d 297, 303
(2d Cir. 1999); see also Greco v. Guss, 775 F.2d 161,
168 (7th Cir. 1985) (finding state action where deputy
told debtor that the seizure was legal); Harris v.
City of Roseburg, 664 F.2d 1121, 1127 (9th Cir. 1981)
(finding state action where debtor was told to stop
interfering or he would go to jail; debtor would have
prevented the repossession if police had not been
there). An officer’s “arrival with the repossessor”
could give “the repossession a cachet of legality” and
have “the effect of intimidating the debtor into not
exercising his right to resist, thus facilitating the
repossession.” Booker v. City of Atlanta, 776 F.2d
272, 274 (11th Cir. 1985). “Even if unintended, such
an effect could constitute police ‘intervention and
aid’ sufficient to establish state action.” Id.
(quoting Menchaca, 613 F.2d at 513).

Other factors courts take into consideration
include intervening at more than one step, Howerton,
708 F.2d at 385; failing to depart before completion
of the repossession, Jones v. Gutschenritter, 909 F.2d
1208, 1211–12 (8th Cir. 1990); standing in close
proximity to the creditor, id.; and unreasonably
recognizing the documentation of one party over
another, Abbott, 164 F.3d at 149. To repeat, the
overarching lesson of the case law is that officers
may act to diffuse a volatile situation, but may not
aid the repossessor in such a way that the
repossession would not have occurred but for their
assistance.

Marcus, 394 F.3d at 819 (cleaned up). This court finds that
determination of whether Godfrey participated in a manner
sufficient to constitute intervention and state action is a
fact-intensive issue. For instance, it is possible that under
all the circumstances, if Godfrey did in fact order Plaintiff to
exit the vehicle, that might be construed as recognizing the
rights of one party over another. Similarly, that fact might be
understood to “aid the repossessor in such a way that the
repossession would not have occurred” but for Godfrey’s
assistance. See id. On the other hand, an examination of the
totality of the circumstances might disclose that Godfrey’s
actions were necessary to keep the peace and were not in aid of
the repossessor.
A determination of whether Godfrey’s actions were
insufficient to constitute state action cannot be determined as
a matter of law for purposes of Fed. R. Civ. P. 12(b)(6).
Defendant’s argument raises factual issues which must be decided
in favor of Plaintiff’s averments.
2. Qualified Immunity
Godfrey contends that he is entitled to qualified immunity.
(Br. (Doc. 19) at 11.) When subject to suit under § 1983, state
and local officials may assert qualified immunity to shield them

“from liability for civil damages[,] insofar as their conduct
does not violate clearly established statutory or constitutional
rights of which a reasonable person would have known.” Harlow v.
Fitzgerald, 457 U.S. 800, 818 (1982). Therefore, in deciding
whether a government official is entitled to qualified immunity,
this court must determine whether there was a violation of a
person’s constitutional rights and then analyze whether the
right was “clearly established” so that a reasonable officer
would know “that his conduct was unlawful in the situation he
confronted.” Saucier v. Katz, 533 U.S. 194, 202 (2001). The
doctrine of “[q]ualified immunity gives government officials

breathing room to make reasonable but mistaken judgments,” and
“protects ‘all but the plainly incompetent or those who
knowingly violate the law.’” Ashcroft v. al-Kidd, 563 U.S. 731,
743 (2011) (citations omitted).
Plaintiff contends Godfrey’s actions violated her Fourth
and Fourteenth Amendment rights. (Resp. (Doc. 27) at 15-16.)
Defendants contend that:
There is no binding authority in this district,
or others, that would have given Defendant Godfrey
fair notice that his actions would result in an
“adoption” or conspiracy with the repossessing
company, let alone a violation of constitutional law.
The cases described in the previous section
demonstrate that his actions were appropriate, common,
and did not invoke Section 1983.

(Br. (Doc. 19) at 15.) Contrary to Defendants’ arguments, this
court finds at this stage of the proceedings that qualified
immunity has not been established. The court finds Goard, 170 F.
Supp. 3d 915, persuasive on the issue of qualified immunity.
First, the complaint contains allegations which are
sufficient to establish a violation of Plaintiff’s
constitutional rights.
The right to due process prior to the seizure of one’s
property is subject to Fourth and Fourteenth Amendment
scrutiny. See Fuentes v. Shevin, 407 U.S. 67, 92
(1972) (holding that Florida and Pennsylvania
prejudgment replevin statutes unconstitutionally
deprived persons of property without due process of
law because they denied the right to be heard before
taking the property away); Soldal v. Cook Cnty., 506
U.S. 56, 61 (1992) (providing Fourth and Fourteenth
Amendment protection to the removal of a mobile home
by police officers). Courts have also routinely denied
qualified immunity in officer-assisted repossession.
Goard, 170 F. Supp. 3d at 919.
Second, with respect to whether the right was clearly
established at the time of the private repossession here,
“[i]t is true that the Fourth Circuit has not, itself,
specifically considered whether a reasonable officer
could have believed that active involvement in a
private vehicle repossession would be lawful.” Morozov
v. Howard Cnty., No. MJG-10-1515, 2012 WL 2048296, at
*1 (D. Md. June 5, 2012). However, “reasonable police
officers should know from the established precedent in
Fuentes that their role is not to be participants in
property deprivations without notice and an
opportunity to be heard.” Abbott, 164 F.3d at 149.
Furthermore, the Supreme Court’s Soldal opinion,
discussed above, also provides sufficient precedent
that a police officer cannot actively participate in
self-help repossession. Soldal, 506 U.S. at 61; see
also Brian S. Batterton, Self-Help Repossession Versus
the Fourth Amendment, Legal & Liability Risk
Management Institute (Dec. 2012) (discussing how to
follow the law in self-help repossession cases after
Soldal).

Goard, 170 F. Supp. 3d at 920 (cleaned up).
Discovery and further proceedings may establish that
qualified immunity applies. However, at this stage, taking the
allegations of the complaint as true and drawing all reasonable
inferences in favor of Plaintiff, this court cannot find as a
matter of law that Defendants are entitled to qualified
immunity.
3. Coats and the Monell Claim
Defendants contend the allegations are insufficient to
establish a claim against Coats under Monell v. Dep’t of Soc.
Servs., 436 U.S. 658 (1978). (Br. (Doc. 19) at 16–19.) To
establish a claim against the Sheriff, Plaintiff must plausibly
allege that her injury, if any, resulted from an official policy
or custom of the Sheriff’s Office. See Collins v. City of Harker
Heights, 503 U.S. 115, 120–121 (1992). Official liability will
attach under § 1983 only if “‘execution of a government’s policy
or custom, whether made by its lawmakers or by those whose
edicts or acts may fairly be said to represent official policy,
inflicts the injury.’” Id. at 121 (quoting Monell, 435 U.S. at

694). Official liability under § 1983 may not be premised on a
respondeat superior or other vicarious liability theory. See
Collins, 503 U.S. at 121.
After careful review, this court finds Plaintiff’s
allegations sufficient to plausibly state a claim for relief
under Monell. Many of Plaintiff’s allegations as to custom or
policy are made on information and belief; discovery may or may
not disclose facts upon which Monell liability may be
established. However, this court is not able to find, as a
matter of law at this stage of the proceedings, that the claim
against Coates is subject to dismissal.

IV. CONCLUSION
For the reasons set forth herein, this court finds
Defendants’ Motion to Dismiss Defendants Brent Godfrey and
Sheriff Wayne Coats, (Doc. 18), should be denied. Plaintiff’s
complaint states a claim upon which relief may be granted under
42 U.S.C. § 1983. In addition, the allegations in the complaint
are not sufficient to establish the defense of qualified
immunity.
For the foregoing reasons,
IT IS THEREFORE ORDERED that Defendants Motion to Dismiss
Brent Godfrey and Sheriff Wayne Coates is hereby DENIED.
This the Sth day of March, 2023.

Union 1. Olen. Me
United States District J e

=_ 16 =_

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10254426. Public record. Not legal advice.