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John Waller and Wanda Kelly-Waller v. Foulke Management Corporation D/B/A Cherry Hill Dodge and Cherry Hill Triplex; Chrysler Financial

August 11, 2011


The opinion of the court was delivered by: Hillman, District Judge


Plaintiffs, John Waller and Wanda Kelly-Waller, brought an action against Defendants, Foulke Management Corporation doing business as Cherry Hill Dodge and Cherry Hill Triplex ("Foulke Management") and Chrysler Financial, under the Equal Opportunity Credit Act ("EOCA"), the New Jersey Consumer Fraud Act ("CFA"), and for fraudulent misrepresentation. Before the court is Foulke Management's motion to dismiss*fn1 the complaint and compel arbitration.

For the reasons discussed below, Foulke Management's motion to dismiss the complaint and compel arbitration will be granted.


This court has jurisdiction based on 28 U.S.C. §1331. The federal question being raised by the plaintiffs is their cause of action under ECOA. The Court has supplemental jurisdiction over the New Jersey CFA and fraudulent misrepresentation claims based on 28 U.S.C. §1367.


Plaintiffs went to Foulke Management's car dealership on May 24, 2010 seeking to purchase a vehicle. Plaintiffs purchased a 2010 Dodge Journey with an automobile loan for $23,499 at a 24.95% interest rate. Plaintiff placed a $3,000 deposit and signed the following documents given to them by Foulke Management: (1) a "Spot Delivery Agreement" (2) a Chrysler Financial retail installment contract (RISC); and (3) an arbitration agreement entitled "Your Right to Maintain a Court Action."

Foulke Management issued only temporary tags to Plaintiffs which lasted four months. After the four months, Foulke Management demanded Plaintiffs return the car because Foulke Management said they could not secure financing for the vehicle. Plaintiffs never received notice of the denial of credit. Plaintiffs now store the vehicle in a garage and cannot drive it because of the lack of permanent license tags.

In October 2010, Plaintiffs purchased a different vehicle from another dealership due to their inability to drive the vehicle bought from Foulke Management. The new vehicle cost the plaintiffs $34,812.40, financed at an interest rate of 13.6%.

Plaintiffs' complaint alleges that Foulke Management charged Plaintiffs a higher price for the auto loan than the terms and conditions granted to persons who are not of their race, national origin, gender, and/or age characteristics who presented similar levels of risk to the lender. Plaintiffs are African American. Plaintiffs' complaint further alleges that Foulke Management allows its employees to propose a risk level and base loan price unrelated to the qualifications of the borrowers or the risk to the lender. Further, Plaintiffs allege that Foulke Management has not properly instructed its employees or brokers regarding their obligation to treat prospective customers without regard to race, national origin, gender or age. Finally, they allege that information on each applicant's race, national origin, gender and age has been available and known to employees and brokers, as well as to officials of Chrysler, who made decisions to grant or deny loans and to set or confirm the terms and conditions of any loan granted.


A.Standard for Motion to Dismiss

A motion to compel arbitration may properly be considered as a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Palcko v. Airbourne Express, Inc., 372 F.3d 588, 597 (3d Cir. 2004); see also Nationwide Ins. Co. v. Patterson, 953 F.2d 44, 45 n.1 (3d Cir. 1991). When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), a court must accept all well-pleaded allegations in the complaint as true and view them in light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 350 (3d Cir. 2005). It is well settled that a pleading is sufficient if it contains "a short and plaint statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2).

A district court, in weighing a motion to dismiss, asks "'not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claim.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 563 n.8 (2007) (quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1935 (2009) ("Our decision in Twombly expounded on the pleading standard for 'all civil actions[.]'" (citation omitted)). First, under the Twombly/Iqbal standard, a "district court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions." Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009). (citing Iqbal, 129 S. Ct. at 1950). Second, a district court "must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.'" Id. at 211 (quoting ...

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