Sobayo v. Ally Bank

Background

Nathaniel Basola Sobayo sued Ally Bank and other defendants, seeking damages for what he called the wrongful conversion and repossession of his 2011 black Cadillac Escalade. He sought $100,000 in compensatory damages and $10,000,000 in punitive damages. The court previously allowed him to proceed without paying the filing fee but dismissed his original complaint for failing to state a claim and establish subject-matter jurisdiction, while allowing him to amend.

Sobayo then filed an amended complaint asserting eight counts: breach of peace in seizing the vehicle, conversion, violation of a closed-end credit provision, violation of the federal debt-collection law identified in the complaint as the FDCPA, violation of the Federal Trade Commission Act, trespass to chattels, trespass, and assault and battery. Daybreak Metro, Inc. moved to dismiss under Federal Rules of Civil Procedure 12(b)(6) and 12(b)(1). Ally Bank and Ally Financial, Inc. joined that motion. The court vacated the scheduled hearing.

Failure to State a Claim

A Rule 12(b)(6) motion tests whether a complaint alleges enough facts to state a legally plausible claim. The court held that Counts I, IV, and V—breach of peace, federal debt-collection violations, and Federal Trade Commission Act violations—were not adequately pleaded. Sobayo alleged generally that defendants used abusive language, called at inconvenient times, and breached the peace, but he did not identify who contacted him, what was said, or when the conduct occurred. For the Federal Trade Commission Act claim, he quoted statutory language without connecting specific defendant conduct to a violation.

The court reached the same conclusion for Counts II, III, VI, VII, and VIII, involving conversion, the closed-end credit provision, trespass to chattels, trespass, and assault and battery. The court found that Sobayo described legal elements and conclusions without facts identifying the defendants’ specific acts or explaining how he was harmed. It therefore granted the defendants’ motion to dismiss and dismissed the entire amended complaint under Rule 12(b)(6).

Subject-Matter Jurisdiction

The court also considered Rule 12(b)(1), which permits dismissal when the federal court lacks subject-matter jurisdiction. The court found that Sobayo did not establish federal-question jurisdiction because he did not state a cognizable legal theory under the federal debt-collection law and because the Federal Trade Commission Act does not provide a private right of action. The court also found that the amended complaint did not establish diversity jurisdiction: it showed that Sobayo resided in Sunnyvale, California, and that defendant Primeritus Financial Services resided in El Dorado Hills, California. The court therefore granted Daybreak Metro’s motion to dismiss for lack of subject-matter jurisdiction.

Disposition

Judge Susan Illston dismissed the amended complaint with leave to amend. The court permitted Sobayo to file a second amended complaint by April 30, 2021, addressing both the need to plead specific facts—who, what, when, and where—and the jurisdictional defects. The order states that if no second amended complaint were filed by that date, or if the defects were not cured, the action would be dismissed with prejudice.