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Hendrickson v. Fifth Third Bank

United States District Court, D. Minnesota

February 15, 2019

Kelley L. Hendrickson, Plaintiff,
v.
Fifth Third Bank and 11th Hour Recovery, Inc., Defendants. Elizabeth A. Sampson and Tracey A. Lane, Plaintiffs,
v.
Fifth Third Bank, Defendant.

          ORDER

          Wilhelmina M. Wright United States District Judge

         Before the Court are three dispositive motions in two related cases: Hendrickson v. Fifth Third Bank et al., Case No. 18-cv-0086 (the Hendrickson case), and Sampson et al. v. Fifth Third Bank, Case No. 18-cv-1622 (the Sampson case). In the first motion, Defendant Fifth Third Bank (Fifth Third) seeks judgment on the pleadings in the Hendrickson case. In the second motion, Defendant 11th Hour Recovery, Inc. (11th Hour), seeks judgment on the pleadings or, alternatively, summary judgment in the Hendrickson case. In the third motion, Defendant Fifth Third seeks dismissal of the Sampson case. For the reasons addressed below, the Court denies both Fifth Third's and 11th Hour's motions in the Hendrickson case, and grants Fifth Third's motion to dismiss the Sampson case.

         BACKGROUND

         I. Hendrickson Complaint

         Plaintiff Kelley L. Hendrickson financed the purchase of a vehicle with a loan from Fifth Third in August 2016. Fifth Third retained a security interest in the vehicle. The loan agreement between Fifth Third and Hendrickson required Hendrickson to make monthly payments on the loan. In the event of default, the loan agreement specified that Fifth Third may repossess the vehicle.

         After a change in her financial circumstances, Hendrickson initiated discussions with Fifth Third about payment plans. Fifth Third agreed to refrain from repossessing Hendrickson's vehicle as long as she continued making payments. During the months of June 2017 through October 2017, Hendrickson made five late payments on the loan. Fifth Third accepted each late payment, but later refunded the October payment.

         In October 2017, Fifth Third secured 11th Hour to repossess Hendrickson's vehicle. Before the repossession, neither Fifth Third nor 11th Hour sent Hendrickson a notice advising her that Fifth Third intended to strictly enforce the terms of the loan agreement after accepting the late payments.

         II. Sampson Complaint

         Plaintiff Elizabeth A. Sampson financed the purchase of a vehicle with a loan from Fifth Third in August 2014. Sampson's mother, Plaintiff Tracey A. Lane, co-signed the loan. Fifth Third retained a security interest in the vehicle. The loan agreement between Fifth Third and Sampson required Sampson to make monthly payments on the loan and specified several remedies in the event of Sampson's default on the agreement. Those remedies included Fifth Third's right to “immediately take possession” of the vehicle.

         From February 2015 through June 2017, Sampson made at least nine late payments on the loan. Fifth Third repeatedly accepted these late payments. Fifth Third repossessed Sampson's vehicle on July 6, 2017. Prior to doing so, Fifth Third did not send Sampson a notice advising her of Fifth Third's intent to strictly enforce the terms of the loan agreement.

         Sampson filed for Chapter 7 bankruptcy protection on March 2, 2017, and she obtained a bankruptcy discharge on May 31, 2017. The parties agree that Sampson did not reaffirm her debt with Fifth Third.

         ANALYSIS

         The same legal standard applies to both a motion to dismiss and a motion for judgment on the pleadings. Ashley Cty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009). Judgment on the pleadings or dismissal is appropriate when the plaintiff fails to plead facts sufficient “to state a claim to relief that is plausible on its face.” NanoMech, Inc. v. Suresh, 777 F.3d 1020, 1023 (8th Cir. 2015) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). As to either motion, a district court may consider only the pleadings and “materials that are necessarily embraced by the pleadings.” Greenman v. Jessen, 787 F.3d 882, 887 (8th Cir. 2015) (quoting Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999)).[1]

         Hendrickson and Sampson (collectively, Plaintiffs) assert multiple claims against Defendants founded on the allegation that Fifth Third failed to send them a “Cobb notice” before repossessing their vehicles. See Cobb v. Midwest Recovery Bureau Co., 295 N.W.2d 232, 237 (Minn. 1980) (holding that, if a creditor repeatedly accepts late payments, the creditor is required to give the debtor written notice of the creditor's intent to strictly enforce the terms of the loan agreement before repossessing collateral). Fifth Third and 11th Hour move for judgment on the pleadings, Fed.R.Civ.P. 12(c), against Hendrickson, and Fifth Third moves to dismiss the Sampson case for failure to state a claim, Fed.R.Civ.P. 12(b)(6), arguing that, as both actions are “action[s] on a credit agreement, ” they are barred by Minn. Stat. § 513.33, subd. 2. As all three motions before the Court involve the Cobb-notice ...


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