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Huertas v. Foulke Managment, Corp.

United States District Court, D. New Jersey

August 13, 2018

HECTOR L. HUERTAS, Plaintiff,
v.
FOULKE MANAGEMENT CORP., CHERRY HILL MITSUBISHI, ANTHONY TRAPANI, et al., Defendants.

          Hector L. Huertas, pro se, CAPEHART & SCATCHARD, P.A. Laura D. Ruccolo, Esq. Counsel for Defendant Foulke Management Corp.

          MCGUIREWOODS LLP, Graham Howard Claybrook, Esq., Counsel for Defendant Capital One Bank, N.A.

          OPINION

          RENÉE MARIE BUMB UNITED STATES DISTRICT JUDGE

         Pro se Plaintiff Hector Huertas brings this suit against various defendants in connection with his purchase of a used Hyundai Sonata on December 22, 2016. In the Court's previous Opinion and Order in this suit, the Court granted Defendant Foulke Management Corp.'s Motion to Compel Arbitration and granted Plaintiff leave to file a Motion to Amend his Complaint before addressing Defendant Capital One's Motion to Compel Arbitration. Presently before the Court is Plaintiff's Motion to Amend. Capital One opposes the Motion, arguing that amendment would be futile in two respects. Capital One asserts that (1) all claims in the proposed amended complaint are subject to arbitration, and (2) the proposed amended complaint fails to state a claim. For the reasons stated herein, the Motion to Amend will be granted in part, denied in part, and denied without prejudice in part.

         I. FACTS

         The proposed amended complaint (“P.A.C.”) includes all of the same allegations as the original complaint, and then adds new allegations.[1] As the original allegations are set forth in the Court's previous opinion in this suit, see Huertas v. Foulke Mgmt Corp., et al., No. CV 17-1891 (RMB/AMD), 2017 WL 6447868 (D.N.J. Dec. 18, 2017), they will not be repeated here, except to the extent necessary to place the proposed claims against Capital One in proper context.

         Defendant Foulke Management allegedly provided the financing for Plaintiff's purchase of a car pursuant to a Retail Installment Sale Contract (RISC), and then immediately “assigned” its rights under the RISC to Defendant Capital One. (P.A.C. ¶¶ 4, 88, 91, 95-97, 161-62 and Ex. C to original complaint) The RISC was signed by Plaintiff the day he purchased the car-- December 22, 2016. (Ex. C) The RISC provides that Plaintiff will repay the loan in 72 monthly payments of $354.80 beginning on February 4, 2017, at an interest rate of 14.28%. (P.A.C. ¶ 147 and Ex. C to original complaint)

         “On January 14, 2017, ” Plaintiff received his “first ‘Monthly eStatement'” from Capital One, which “shows that $152.79 worth of interest had accrued during the period of December 22 to December 28, 2016.” (P.A.C. ¶ 192)

         “On February 11, 2017, ” Plaintiff received his “second Monthly eStatement that showed total interest of $339.03 had accrued for the period ending on February 4, 2017.” (P.A.C. ¶ 193)

         “On March 4, 2017, ” Plaintiff allegedly “began paying off the car loan with the first payment that comprised the February 4 ($354.80) and March 4, 2017 ($354.80) payments due, plus a $10.00 late fee for a $719.60 total.” (P.A.C. ¶ 196)

         “On April 13, 2017, ” Plaintiff received his “fourth Monthly eStatement that showed $196.24 in interest had accrued for the period ending April 4 plus $72.14 of prior unpaid interest for a total interest expense of $268.38 for the period ending April 4, 2017.” (P.A.C. ¶ 193) Plaintiff contends that the April eStatement evidences an interest rate of 19.29%. (Id. ¶ 198) Similarly, Plaintiff contends that the May eStatement evidences an interest rate of 19.32%; the June eStatement evidences an interest rate of 16.05%; and the July eStatement evidences an interest rate of 16.99%. (Id. ¶¶ 200-207)

         The Proposed Amended Complaint asserts the following claims against Capital One: violations of the Truth In Lending Act (“TILA”), 15 U.S.C. § 1601 et seq.; violation of U.C.C. § 2-312; fraud; civil conspiracy; and violations of the RICO Act.

         II. MOTION TO AMEND STANDARD

         Federal Rule of Civil Procedure 15(a)(2), states in relevant part, “a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.”

         “[T]he grant or denial of an opportunity to amend is within the discretion of the District Court.” Foman v. Davis, 371 U.S. 178, 182 (1962). The District Court may deny leave to amend “if it is apparent from the record that (1) the moving party has demonstrated undue delay, bad faith or dilatory motives, (2) the amendment would be futile, or (3) the amendment would prejudice the other party.” Lake v. Arnold, 232 F.3d 360, 373 (3d Cir. 2000).

         “Amendment would be futile if the amended complaint would not survive a motion to dismiss for failure to state a claim.” Budhun v. Reading Hosp. & Med. Ctr., 765 F.3d 245, 259 (3d Cir. 2014). Therefore, in determining whether an amendment is futile, this Court must apply “the same standard of legal sufficiency as applies under Federal Rule of Civil Procedure 12(b)(6).” Travelers Indem. Co. v. Dammann & Co., 594 F.3d 238, 243 (3d Cir. 2010). That is, when the party opposing the motion to amend asserts that amendment is futile, a motion to amend should only be granted if the proposed amended complaint “contain[s] sufficient factual material, 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 Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         III. ANALYSIS

         A. Arbitration of proposed claims against Capital One

         Capital One asserts that amendment would be futile because “this Court has already ruled” that “the claims are subject to mandatory arbitration.” (Opposition Brief, Dkt No. 48, p. 2 of 7) To the contrary, the Court did not rule on whether Plaintiff's claims against Capital One are subject to arbitration; indeed, the Court did not even rule that Plaintiff's claims against Foulke Management were subject to arbitration. Rather, the Court ruled that the arbitrability of Plaintiff's claims against Foulke Management is an issue for an arbitrator to decide, pursuant to the valid delegation clause in the Arbitration Agreement signed by Plaintiff and Foulke Management. Foulke Mgmt Corp., 2017 WL 6447868, at *5 (D.N.J. Dec. 18, 2017) (“in ...


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