Rizvi v. BMW Financial Services NA, LLC

          RULING AND ORDER

          Victor A. Bolden, United States District Judge.

         On December 3, 2018, the Court ordered Eileen and Nusrat Rizvi (“Plaintiffs”) and BMW Financial Services NA, LLC (“BMW FS” or “Defendant”) to show cause as to why this case is not moot. Order to Show Cause, dated Dec. 3, 2018 (“Show Cause Order”), ECF No. 10.

         For the reasons explained below, the Court finds that this case is not moot, and ORDERS the parties to file a joint Rule 26(f) report by August 2, 2019.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         On July 17, 2018, Plaintiffs sued BMW FS, alleging that BMW FS had refused to refund multiple inadvertent overpayments on their auto lease in violation of the Consumer Leasing Act, 15 U.S.C. § 1667 et seq., and the Truth in Lending Act, 15 U.S.C. § 1601 et seq. Complaint, dated July 17, 2018 (“Compl.”), ECF No. 1, ¶¶ 1-27. Specifically, Plaintiffs allege that BMW FS's policy of retaining overpayments was not clearly and conspicuously disclosed in the lease or any accompanying lease documents, which they allege is required by 15 U.S.C. § 1667, 12 C.F.R. § 213 et seq. (“Regulation M”), and 12 C.F.R. § 226 et seq. (“Regulation Z”). See Compl. ¶¶ 18-23, 24-27.

         Plaintiffs also allege state-law claims under the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. 42-110b, and for unjust enrichment.^[1] Id. ¶¶ 28-33.

         On August 15, 2018, BMW FS answered and asserted several affirmative defenses, including mootness. Answer, dated Aug. 15, 2018, ECF No. 7.

         BMW FS argued that the case was or would shortly become moot, “inasmuch as (1) as any payments the plaintiffs have made that exceeded the amounts due at the time the plaintiffs made them have been applied to monthly payments that have become due since, and at present, the plaintiffs' account does not have a ‘credit' balance; and (2) the lease will end on August 31, 2018 . . . at which time the plaintiffs will be obliged to return the leased car to BMW FS or purchase it pursuant to the terms of the agreement. As such, not only do the plaintiffs not have a ‘credit' balance, but depending on the outcome of the end-of-lease inspection and accounting, they might actually be liable for additional amounts for damage to the vehicle, extra mileage, unpaid property taxes, and the like, pursuant to the terms of the lease.” Id. at 5-6.

         On December 3, 2018, the Court ordered the parties to show cause as to why this case is not moot, explaining that mootness is a threshold issue that must be resolved before the Court could proceed to adjudicate the merits of the Complaint. Show Cause Order at 2. The Court noted that: (1) Plaintiffs had admitted, in their Complaint, that the lease was scheduled to end in August 2018, id. (citing Compl. ¶ 7); (2) that three months had passed since the lease had ended, id.; and (3) that discovery had not yet begun, id. Accordingly, the Court ordered the parties to show cause by December 21, 2018 why this case is not moot, and warned that failure to file a response might result in dismissal for lack of jurisdiction.

         On December 28, 2018, Plaintiffs moved to disqualify the Court in this case. See Motion to Disqualify Judge Victor A. Bolden, dated Dec. 28, 2018 (“Disqual. Mot.”), ECF No. 11. Plaintiffs argued, inter alia, that the Court could not render an unbiased or impartial decision in this case because it ruled against Plaintiffs in a prior, unrelated case. See id.; Affidavit of Nusrat Rizvi in Support of Disqual. Mot., dated Dec. 28, 2018, ECF No. 11-1.

         On January 10, 2019, the Court, construing Plaintiffs' motion as a motion for recusal, denied the motion, finding that “Plaintiffs' disagreement with or even disappointment in an earlier ruling . . . does not provide a sufficient basis for recusal.” Ruling and Order on Motion for Recusal, dated Jan. 10, 2019 (“Ruling & Order”), ECF No. 12, at 8 (collecting cases). The Court held that it would not refuse to hear this case, but would instead “consider the Plaintiffs' claims in this case anew, in service of its solemn obligations under Article III of the United States Constitution.” Id. at 9. (citation omitted).

         On January 25, 2019, BMW FS responded to the Court's Order to Show Cause, explaining that it had not timely responded, but was submitting a late response in light of the Court's statement in the January 10, 2019 Ruling and Order that it would “consider the Plaintiffs' claims in this case anew[.]” Defendant's Response to December 3, 2018 Order to Show Cause, dated Jan. 25, 2019 (“Def.'s Resp.”), ECF No. 13.

         In its response, BMW FS indicates that Plaintiffs' lease matured on August 29, 2018. Id. at 1. After that date, BMW FS alleges that “Plaintiffs made a payment or payments that resulted in a surplus of $64.75, before accounting for an unpaid disposition fee.” Id. On November 15, 2018, BMW FS alleges that Mr. Rizvi called BMW FS and requested a waiver of the disposition fee, which BMW FS granted. Id. BMW FS alleges it then mailed Plaintiffs a check for $64.75, refunding the surplus balance on the account. Id. To substantiate these assertions, BMW FS has submitted to the Court: (1) a November 16, 2018 letter BMW FS's attorney allegedly mailed to Plaintiffs; and (2) a bank record displaying a copy of a check in the amount of $64.75 issued on November 20, 2018 by BMW FS to Mr. Rizvi. See Exs. A & B to Def.'s Resp. The bank record also indicates that the check was cashed on November 27, 2018. See Ex. B.

         BMW FS argues that because Plaintiffs' account is now closed and Plaintiffs are not owed any money-and because Plaintiffs had not timely responded to the Court's Order to Show Cause to demonstrate otherwise-the case is moot and ...