Tillman v. Capital One Auto Finance

Background

Delaneo-Nathaniel Tillman, Sr. filed a lawsuit against Capital One Auto Finance, Volkswagen Group of America, and JPMorgan Chase. The opinion states that Tillman filed an earlier related lawsuit against the same parties and then filed an identical lawsuit, except for the dates on which he signed the complaints. Chase removed the later lawsuit to federal court.

The basis of Tillman’s complaint was unclear. The court understood him to seek discharge of his car loan based on Article I, Section 10, Clause 1 of the United States Constitution. Tillman stated that he could not be held responsible for paying a debt and argued that financial institutions were supposed to balance the transaction’s book entry rather than demand payment.

Chase and Volkswagen separately moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not allege enough facts to state a legally sufficient claim.

Constitutional and loan-related allegations

The court interpreted Tillman’s allegations as attempting to use the “vapor money” theory. That theory claims that a borrower does not owe money advanced by a lender because the lender did not fund the loan with “actual money,” or that a borrower’s signed promissory note itself created the money.

The court stated that federal courts have consistently rejected this theory as frivolous and unsupported by law. It also concluded that Tillman did not allege conduct by the defendants that violated the Constitution. The court explained that the constitutional provision he cited restricts states, not private entities. It further stated that the Constitution’s Contract Clause concerns state laws interfering with contractual obligations, and that the argument that only gold and silver coins are legal tender had been rejected by the United States Supreme Court.

Fraud allegations

Reading the complaint liberally, the court found that Tillman might also have been attempting to plead fraud. Federal Rule of Civil Procedure 9(b) requires fraud to be pleaded with particularity, including the who, what, where, when, and how of the alleged fraud. The court held that Tillman did not plead the elements of fraud under Minnesota law or provide the required details.

Ruling

The court held that the complaint was based on a legal theory that had been uniformly rejected and that any amendment would be futile. It therefore dismissed the case with prejudice.

Judge Donovan W. Frank ordered that Chase’s motion to dismiss was GRANTED, Volkswagen’s motion to dismiss was GRANTED, and Tillman’s claims against the defendants were DISMISSED WITH PREJUDICE. The court did not reach the defendants’ alternative grounds for dismissal.