The opinion
UNITED STATES DISTRICT COURT June 17, 2022
SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk
HOUSTON DIVISION
AMESHIA BLACKSHEAR, §
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Plaintiff. §
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VS. § CIVIL ACTION NO. 4:21-cv-03273
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SOUTH FORK CDJR, ET AL., §
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Defendants. §
MEMORANDUM AND OPINION
Pending before me is a Motion for Summary Judgment filed by South Fork
CDJR (“South Fork”) and Quality Wrecker Ser (“Quality Wrecker”). See Dkt. 27.
After carefully reviewing the parties’ briefing, the summary judgment record, and
the applicable law, I conclude that the motion should be GRANTED.
BACKGROUND
In September 2021, Plaintiff Ameshia Blackshear (“Blackshear”)
approached South Fork, a franchised motor vehicle dealer, about the possibility of
purchasing a vehicle. Blackshear eventually struck a deal for a 2017 Dodge
Durango, paying a $2,500 down payment with the remainder of the sales price
purchased on credit. The terms of the parties’ agreement are set forth in a Motor
Vehicle Retail Installment Contract (the “Contract”) executed on September 21,
2021.
The Contract expressly requires Blackshear to maintain insurance on the
vehicle:
AGREEMENT TO KEEP VEHICLE INSURED. You agree to have
physical damage insurance covering loss or damage to the vehicle for
the term of this contract. The insurance must cover our interest in the
vehicle. The insurer must be authorized to do business in Texas.
Dkt. 27-3 at 5. Also on September 21, 2021, Blackshear signed a separate
document, confirming her understanding that “it is required that [the purchased
vehicle] be continuously covered with insurance against the risks of fire, theft[,]
and collision.” Dkt. 27-2 at 2. The Contract specifically provides that in the event
Blackshear breaks any of the promises she made in the Contract, including her
obligation to obtain insurance, South Fork “may repossess the vehicle,” so long as
it does so peacefully. Dkt. 27-3 at 5.
After signing the Contract, Blackshear took possession of the vehicle. South
Fork then reached out to Blackshear on multiple occasions to obtain proof that
Blackshear had obtained the contractually required insurance. Despite South
Fork’s repeated requests for Blackshear to secure insurance on the vehicle and
provide proof of such insurance, Blackshear never did so. As a result, South Fork
hired Quality Wrecker to repossess the vehicle. After Quality Wrecker repossessed
the vehicle, South Fork refunded Blackshear’s $2,500 down payment.
On October 6, 2021, Blackshear filed this lawsuit against South Fork and
Quality Wrecker. Although her Original Complaint is tough to decipher, she does
complain that South Fork failed to disclose finance charges, harassed her with
threats and profane language, and then repossessed her vehicle. She asserts a
laundry list of causes of action against South Fork for violations of: (1) the Truth in
Lending Act (“TILA”), 15 U.S.C. § 1601 et seq.; (2) the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.; (3) 18 U.S.C. § 1341 (criminal
mail-fraud statute); and (4) 18 U.S.C. § 1962(a) (civil RICO statute). Blackshear
also claims that Quality Wrecker stole her car.
SUMMARY JUDGMENT STANDARD
“Summary judgment is appropriate only when ‘the movant shows that there
is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.’” Shepherd v. City of Shreveport, 920 F.3d 278, 282–83 (5th
Cir. 2019) (quoting FED. R. CIV. P. 56(a)). “A material fact is one that might affect
the outcome of the suit under governing law, and a fact issue is genuine if the
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evidence is such that a reasonable jury could return a verdict for the non-moving
party.” Renwick v. PNK Lake Charles, L.L.C., 901 F.3d 605, 611 (5th Cir. 2018)
(cleaned up).
“A party cannot defeat summary judgment with conclusory allegations,
unsubstantiated assertions, or only a scintilla of evidence.” Lamb v. Ashford Place
Apartments L.L.C., 914 F.3d 940, 946 (5th Cir. 2019) (quotations omitted). In
deciding a summary judgment motion, “the evidence of the nonmovant is to be
believed, and all justifiable inferences are to be drawn in his favor.” Tolan v.
Cotton, 572 U.S. 650, 651 (2014) (cleaned up).
ANALYSIS
I will walk through each cause of action identified in Blackshear’s Amended
Complaint.
A. TRUTH IN LENDING ACT
TILA is a strict-liability statute that requires a lender in a commercial credit
transaction to disclose certain terms and conditions of the transaction to a
borrower prior to consummating the loan. See 15 U.S.C. § 1601 et seq. TILA’s
purpose is to promote the “informed use of credit . . . [and] an awareness of the
cost thereof by consumers” by “assur[ing] a meaningful disclosure of credit terms
so that the consumer will be able to compare more readily the various credit terms
available to him.” Id. at § 1601(a).
Under the authority of TILA, the Federal Reserve Board has promulgated
rules to implement the statute. See 15 U.S.C. § 1604(a). These rules, found at 12
C.F.R. § 226 et seq., are commonly known as “Regulation Z.” Together, TILA and
Regulation Z require lenders to make a series of material disclosures to borrowers
for transactions that do not involve a continuing line of credit, such as South Fork’s
loan to Blackshear. See 15 U.S.C. § 1638 (listing required disclosures); 12 C.F.R. §
226.18 (listing required disclosures). To comply with its TILA duties, South Fork
must disclose the identity of the creditor, the amount financed, the itemization of
the amount financed, the finance charge, the annual percentage rate, the payment
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schedule, the total of payments, and the total sales price. See id. Blackshear
contends that South Fork violated TILA by “not fully disclos[ing] all details of a
[f]inance charge or any information that is suppose[d] to be disclosed.” Dkt. 9 at 1.
The obvious problem with this argument is that the Contract conspicuously
provides all the information that TILA and Regulation Z require be disclosed.
The Contract includes a box labeled “FEDERAL TRUTH-IN-LENDING
DISCLOSURES,” which provides as follows:
ANNUAL FINANCE Amount Total of Total Sale
PERCENTAGE CHARGE Financed Payments Price
RATE The dollar The amount of The amount you The total cost of
The cost of amount the credit provided will have paid after | your purchase on
your credit as credit will to you or you have made all | credit. including
a yearly rate. cost you. on your behalf. payments as your down
scheduled. payment of
$ ___2,500.00
20.60 _ %$ 24,498.68 |g 32,035.00 | ¢$ 56,533.68 | $ 59,033.68 ||
Payments Payments Are Due
pws [swe | ww
Late Charge: If we do not receive your entire payment within _15__ days after it is due (10 days if you are buying
a heavy commercial vehicle), you will pay a late charge of 5% of the scheduled payment.
Prepayment. If you pay early, you will not have to pay a penalty.
Security Interest. We will have a security interes! in the vehicle being purchased.
Additional [nformatton: See this document for more information about nonpayment, default, security interests,
and any required repayment in full before the scheduled date.
Dkt. 27-3 at 2. The information provided in this box unquestionably satisfies South
Fork’s disclosure obligations under TILA and Regulation Z.
As far as Blackshear’s complaint that South Fork failed to inform her of her
right to rescind the transaction, that argument falls flat since Blackshear’s financed
purchase of a vehicle is not a transaction for which she had a right to rescission.
The right of rescission provided for under TILA only applies to a “consumer credit
transaction ... in which a security interest . . . is or will be retained or acquired in
any property which is used as the principal dwelling of the person to whom credit
is extended.” 15 U.S.C. § 1635(a). See also Hardaway v. Toyota Fin. Servs., No.
4:21-CV-194-KPJ, 2022 WL 317758, at *3 (E.D. Tex. Feb. 2, 2022) (“Plaintiff has
not alleged facts showing that the TILA right to re[s]cission applies to Plaintiff’s
purchase of the Vehicle.”); Walker v. U.S. Bank, No. 3:21-cv-758, 2021 WL
5701498, at *3 (N.D. Tex. Nov. 30, 2021) (dismissing the plaintiff’s TILA claim
because the TILA rescission provisions did not apply to the plaintiff’s “purchase of
a Chevrolet Silverado, a vehicle which does not qualify as a ‘principal dwelling’”).
In sum, South Fork fully complied with its disclosure obligations under
TILA. Blackshear’s TILA claim fails as a matter of law.
B. FAIR DEBT COLLECTION PRACTICES ACT
The FDCPA prohibits conduct designed to “harass, oppress, or abuse any
person in connection with the collection of a debt.” 15 U.S.C. § 1692d. It also
prohibits the use of “false, deceptive, or misleading representation or means in
connection with the collection of any debt.” Id. § 1692e. Congress enacted the
FDCPA to “eliminate abusive debt collection practices by debt collectors . . . and to
. . . protect consumers against debt collection abuses.” Id. § 1692(e).
Blackshear alleges that South Fork is subject to civil liability under the
FDCPA “for [h]arassment, threats and profane language.” Dkt. 9 at 1. In response,
South Fork argues that even assuming its conduct was harassing, oppressive, or
abusive, the FDCPA does not apply because South Fork was not a “debt collector.”
It is well-settled that the prohibitions of the FDCPA apply only to “debt collectors.”
See Taylor v. Perrin, Landry, deLaunay, & Durand, 103 F.3d 1232, 1234 (5th Cir.
1997). The FDCPA defines a “debt collector” as one who collects or attempts to
collect debts owed or asserted to be owed to another. See 15 U.S.C. § 1692a(6).
Creditors, like South Fork, who collect debts in their own name and whose
principal business is not debt collecting, are not subject to the FDCPA. See Bacon
v. Sw. Airlines Co., No. CIV.A.3:97-CV-2211-L, 1999 WL 134569, at *2 (N.D. Tex.
Mar. 5, 1999) (finding that “American Express cannot be a debt collector under the
FDCPA” because “the FDCPA specifically excludes creditors who, while using their
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own names, attempt direct collection of debts owed to them”). Consequently,
Blackshear’s FDCPA cause of action falls by the wayside.
C. 18 U.S.C. § 1341
Next, Blackshear asserts that South Fork has violated 18 U.S.C. § 1341, the
federal criminal mail-fraud statute. This “statute prohibits in general terms the use
of the United States mails in furtherance of fraudulent schemes.” United States v.
Curry, 681 F.2d 406, 410 (5th Cir. 1982). Importantly, § 1341 is a criminal statute
that does not provide a private cause of action. See Napper v. Anderson, Hensley,
Shields, Bradford & Pritchard, 500 F.2d 634, 636 (5th Cir. 1974). This claim must,
therefore, be dismissed.
D. 18 U.S.C. § 1962(a)
Blackshear’s live pleading asserts, without any elaboration whatsoever, that
South Fork is “in violation” of 18 U.S.C. § 1962(a). Dkt. 9 at 1. “Subsection 1962(a)
prohibits a person who has received income from a pattern of racketeering activity
from investing that income in an enterprise.” N. Cypress Med. Ctr. Operating Co.,
Ltd. v. Cigna Healthcare, 781 F.3d 182, 202 (5th Cir. 2015). “To establish a §
1962(a) violation, a plaintiff must prove 1) the existence of an enterprise, 2) the
defendant’s derivation of income from a pattern of racketeering activity, and 3) the
use of any part of that income in acquiring an interest in or operating the
enterprise.” St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 441 (5th Cir.
2000).
Blackshear’s § 1962(a) claim fails because the summary judgment evidence
conclusively negates the second element of such a cause of action. The affidavit of
Chris Godwin, South Fork’s owner and managing partner, establishes that South
Fork did not receive any income from its business dealings with Blackshear. South
Fork returned her $2,500 down payment. Truth be told, South Fork actually lost
money on the transaction since it had to pay Quality Wrecking to repossess the
vehicle. Because South Fork did not derive any income on the transaction, the §
1962(a) must be dismissed.
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E. CONVERSION
Blackshear makes one claim against Quality Wrecker. She claims that
Quality Wrecker stole her car. This is a straightforward common-law conversion
cause of action. To prevail on a conversion claim under Texas law, Blackshear must
establish that: (1) she owned, had legal possession of, or was entitled to possession
of the property; (2) Quality Wrecker assumed and exercised dominion and control
over the property in an unlawful and unauthorized manner, to the exclusion of and
inconsistent with the plaintiff’s rights; (3) Blackshear made a demand for the
property; and (4) Quality Wrecker refused to return the property. See Freezia v. IS
Storage Venture, LLC, 474 S.W.3d 379, 386–87 (Tex. App.—Houston [14th Dist.]
2015, no pet.). Blackshear’s conversion claim flunks element one. No evidence
remotely suggests that Blackshear owned, had legal possession of, or was entitled
to possession of the vehicle. On the contrary, the Contract clearly provides that the
automobile can be repossessed if Blackshear is in breach of her contractual
obligations. Blackshear’s failure to provide evidence of insurance coverage was a
clear breach of the Contract, giving South Fork (and its agent, Quality Wrecker)
the absolute right to repossess the vehicle. Summary judgment is appropriate on
the conversion claim.
CONCLUSION
For the reasons identified in this Memorandum and Opinion, South Fork
and Quality Wrecker’s Motion for Summary Judgment (Dkt. 27) is GRANTED.
This case is dismissed. A separate final judgment will be issued.
SIGNED this day of June 2022.
______________________________
ANDREW M. EDISON
UNITED STATES MAGISTRATE JUDGE
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