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Grays v. Auto Mart USA, LLC

United States District Court, D. Colorado

September 25, 2019



          Nina Y. Wang United States Magistrate Judge.

         This matter comes before this court for recommendation on pro se[1] Plaintiff Tiffany Grays's (“Plaintiff” or “Ms. Grays”) Motion for Sanctions Pursuant to Fed.R.Civ.P. 11 and 28 U.S.C. § 1927 (the “Motion for Sanctions” or “Motion”), filed July 7, 2019. [#68]. The undersigned considers the Motion pursuant to 28 U.S.C. § 636(b), Rule 72 of the Federal Rules of Civil Procedure, and the Memorandum dated July 24, 2019 [#75]. This court concludes that oral argument will not materially assist in the resolution of this matter, nor is an evidentiary hearing necessary given the types of issues presented by Ms. Grays. See Eisenberg v. Univ. of New Mexico, 936 F.2d 1131, 1135 (10th Cir. 1991) (explaining that due process does not require oral or evidentiary hearings on motions for sanctions when the Parties fully brief the issue). Accordingly, having reviewed the Motion and associated briefing, the applicable case law, and the entire docket, this court respectfully RECOMMENDS that the Motion for Sanctions be DENIED.[2]


         The court discussed the background of this matter in its prior Order, see [#49], and thus this court discusses it here only as it pertains to the instant Motion for Sanctions. Plaintiff initiated this action by filing her Complaint on July 10, 2018. See [#1]. The Honorable Gordon P. Gallagher granted Plaintiff leave to proceed in forma pauperis and directed Plaintiff to file an Amended Complaint. See [#4]. Plaintiff filed an Amended Complaint and has since filed a Second Amended Complaint, the operative pleading in this matter. See [#16].

         The Second Amended Complaint raises a host of claims against Defendants Auto Mart USA, LLC, Jorge Pacheco, Auto Mart USA2, Daniel Ramirez, JB Ovalle, Donnie Mcelroy, Marco Sandoval, Auto Mart, Jay Barber (collectively, “Defendants”), including violations of state and federal credit and consumer laws as well as various common law claims pursuant to Colorado law. See [#16; #49 at 4-7 (detailing Ms. Grays's 20 claims)]. All of Plaintiff's claims arise from her attempt to purchase an automobile from Defendants. Specifically, on or about March 17, 2018, Plaintiff purportedly purchased a Dodge Journey from Defendants, but had to return the vehicle three days later when Defendants informed Ms. Grays that they could not secure financing for the vehicle-this being despite Defendants' “Credit Approval Guaranteed” assurance. See [#49 at 2, 3]. According to Ms. Grays, a lender approved Ms. Grays for a loan on the Dodge Journey but Defendants refused to complete the necessary loan paperwork, allegedly in discrimination to Ms. Grays's race. See [id. at 4]. Defendants stated they did not submit Ms. Grays's credit application to lenders, but Ms. Grays began receiving letters from lenders indicating Defendants had sought credit on Ms. Grays's behalf. Ms. Grays further contends Defendants sought “hard checks” of her creditworthiness, despite agreeing to run “soft checks, ” which detrimentally affected her credit score. See [id. at 4]; see also [#16].

         On October 31, 2018, Defendants moved to compel arbitration of Ms. Grays's claims based on the sales agreement entered between Plaintiff and Defendants for the purchase of the Dodge Journey. See [#24]. The presiding judge, the Honorable Marcia S. Krieger, granted the Motion to Compel Arbitration in part, bifurcating Ms. Grays's claims, and compelling arbitration as to claims based on:

(i) false promises by Auto Mart of “guaranteed credit acceptance” or the like, (ii) the failure of Auto Mart to assign the Sale Contract to a lender, and (iii) any claims that involve Auto Mart's failure to make disclosures or provide documents (including Ms. Grays'[s] Claim 8) that were required to be provided as part of the transaction represented by the Sale Contract.

[#49 at 13-14]. Ms. Grays's remaining claims alleging violations of the Fair Credit Reporting Act (Count 1), violations of the Truth in Lending Act (Count 2), fraudulent misrepresentation (Count 7), violation of Colo. Rev. Stat. § 4-5-109(a), fraud and forgery (Count 16), and violations of 15 U.S.C. § 1638(a)(1), (b)(1)(B)[3] “Credit Transaction” (Count 20) remain pending before the court. See [id. at 14].

         Then, on April 18, 2019, the Parties appeared before the undersigned Magistrate Judge for a Scheduling Conference. See [#47]. Relevant here, the Scheduling Order sets the discovery deadline for October 18, 2019 and the dispositive motion deadline for November 18, 2019. See [#48 at 10]. The Parties have proceeded with discovery and have neither sought nor received any modifications to the Scheduling Order.

         Ms. Grays filed the instant Motion for Sanctions on July 7, 2019.[4] [#68]. She argues that the court should impose sanctions on Defendants and defense counsel for numerous instances of alleged misconduct, including (1) failing to abide by court Orders, (2) advancing defenses known to be unsupported by evidence, (3) failing to confer with and respond to Plaintiff, (4) proffering false information and unauthentic evidence to the court, (5) filing an improper Motion to Compel Arbitration and Reply in support thereof, (6) failing to confer with Plaintiff regarding the Proposed Scheduling Order, (7) raising Plaintiff's lack of service on Defendants JB Ovalle and Daniel Ramirez at the Scheduling Conference, (8) filing an Answer that does not comply with “Court Rules” and denies undisputed facts, (9) failing to confirm Defendants “actually registered the arbitration clause” at issue in the Motion to Compel Arbitration, (10) serving initial disclosures based on fraudulent evidence, and (11) initiating “unreasonabl[e] and vexatious[] multipl[e] proceedings.” See generally [id.]. Ms. Grays seeks a variety of relief: reasonable litigation costs and fees; an injunction against any future delays by Defendants and “certified documentation to substantiate any future requests for extensions of time by Defendants”; striking of Defendants' Answer and entry of default against Defendants; an Order requiring Defendants' counsel to respond to Plaintiff within 24 hours of all communications; and monetary sanctions for any future violations of the contemplated injunctions. [Id. at 12-13]. Defendants oppose the Motion, arguing Ms. Grays fails to support her assertions that Defendants engaged in sanctionable conduct and thus the Motion is groundless and frivolous. See [#74].[5] Ms. Grays has since filed her Reply [#78], and the Motion for Sanctions is now ripe for recommendation. I consider the Parties' arguments below.


         I. Rule 11 of the Federal Rules of Civil Procedure

         Rule 11(b) of the Federal Rules of Civil Procedure provides:

(b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper--whether by signing, filing, submitting, or later advocating it--an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:
(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly ...

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