Johnson v. Capital One Financial Corp., No. 2:25-cv-10737 (Oct. 31, 2024)

Case details
Full caption
Marques Johnson v. Capital One Financial Corporation
Country
United States
Jurisdiction
Federal
Decided
Oct. 31, 2024
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION MARQUES JOHNSON, Plaintiff, v. CAPITAL ONE FINANCIAL CORPORATION, Defendant. Case No. 2:25-cv-10737 District Judge Matthew F. Leitman Magistrate Judge Anthony P. Patti ___________________________________/ REPORT AND RECOMMENDATION TO GRANT DEFENDANT’S MOTION TO DISMISS (ECF No. 27) I. RECOMMENDATION: The Court should GRANT Defendant’s motion to dismiss (ECF No. 27) the amended complaint (ECF No. 25). II. REPORT: A. Background This lawsuit concerns Marques Johnson’s Capital One Financial Corporation (“Capital One”) credit account number ending in 1583 (ECF No. 25, 5), which he apparently opened on December 21, 2022 (id., PageID.158). According to the credit report attached to the operative pleading, the balance on this account was $1,445 in October 2024. (Id.) By a letter dated October 31, 2024, Capital One informed Johnson that it was “closing this account . . . [,]” because “activity on this or another account is not consistent with our expectations for account usage and Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.215 Filed 11/10/25 Page 1 of 14
2 violates the Capital One Customer Agreement[,]” but that he was “still responsible for paying the full amount of any remaining account balance . . . .” (Id., PageID.138.) Plaintiff alleges “[n]o specific clause in the agreement was cited.” (Id., 23.) On December 26, 2024, Johnson executed a durable power of attorney. (ECF No. 25, PageID.129-136.) By a letter dated January 7, 2025, he appears to have requested review and reinstatement of Account No. 1583. (Id., PageID.141-143.) Plaintiff alleges that Capital One “remained silent.” (Id., 27.) One week later – by letters dated January 14, 2025 – he appears to have submitted a “credit claim,” allegedly a “tender of payment,” (ECF No. 25, PageID.145), and a request for clarification regarding account closure (ECF No. 25, PageID.147-148). Plaintiff alleges Capital One did not respond to the request for clarification. (Id., 25.) Around this time, Johnson’s “new balance” was $1,683.22, due on February 3, 2025, and he apparently submitted the bill, marking it “accepted for deposit” and “pay to the order of bearer.” (ECF No. 25, PageID.150.) By a letter dated February 10, 2025, he seems to have sent Capital One an “opportunity to cure.” (Id., PageID.152-153.) On February 18, 2025, he seems to have sent Capital One a “default judgement.” (Id., PageID.155-156.) As of February 25, 2025, Johnson’s Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.216 Filed 11/10/25 Page 2 of 14
3 credit limit with Capital One (for his account number ending in 1583) was $1,500.00. (Id., PageID.119-127.) B. Operative Pleading Johnson initiated this matter in pro per on March 17, 2025 against Capital One. (ECF No. 1.) He is proceeding in forma pauperis. (See ECF Nos. 2, 8.)1 As discussed in this Court’s June 20, 2025 order (see ECF No. 26), Plaintiff’s June 16, 2025 first amended complaint (ECF No. 25) is the operative pleading. Plaintiff alleges multiple causes of action and seeks multiple forms of relief. C. Pending Matter Judge Leitman has referred this case to me for pretrial matters. Currently before the Court is Defendant’s July 23, 2025 motion to dismiss Plaintiff’s amended complaint. (ECF No. 27.) On July 28, 2025, Plaintiff filed a response (ECF No. 29), and, on August 11, 2025, Defendant filed a reply (ECF No. 30). At that point, briefing was closed. However, on August 14, 2025, Plaintiff filed additional matters. Upon consideration, Plaintiff’s “notice of supplemental authority in opposition to Defendants [sic] motion to dismiss[,]” (ECF No. 31), will not be considered by the Court. The four cases it cites, none of which are binding precedent, each pre-date 1 As of May 13, 2025, it appears Plaintiff’s balance was $1,856. (ECF No. 25, PageID.158.) As of June 13, 2025, Plaintiff’s Equifax credit report listed his Capital One Bank USA NA account number *1583 as “closed.” (Id.) Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.217 Filed 11/10/25 Page 3 of 14
4 his July 28, 2025 response; indeed, the most recent of the four cases – i.e., Orleans Int'l, Inc. v. Alterna Cap. Sols., No. 2:21-CV-11335, 2024 WL 5480365 (E.D. Mich. Nov. 26, 2024) (Murphy, J.) – pre-dates the initiation of this lawsuit. Thus, if Plaintiff wished for the Court to consider this case law, it should have been included in his response.2 D. Fed. R. Civ. P. 12 Defendant brings its motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). (ECF No. 27, PageID.173, 180-181.) When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must “construe the complaint in the light most favorable to plaintiff and accept all allegations as true.” Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation omitted); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (concluding that a plausible claim need not contain “detailed factual allegations,” but it must contain more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action”). Facial plausibility is established “when the plaintiff pleads factual content that allows the court to draw 2 On August 14, 2025, Plaintiff also filed a “motion to expedite” a ruling on Defendant’s motion to dismiss the first amended complaint (see ECF No. 32) and a “declaration” (ECF No. 33). These will be addressed under separate cover. Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.218 Filed 11/10/25 Page 4 of 14
5 the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The plausibility of an inference depends on a host of considerations, including common sense and the strength of competing explanations for the defendant’s conduct.” 16630 Southfield Ltd., P’Ship v. Flagstar Bank, F.S.B., 727 F.3d 502, 503 (6th Cir. 2013). Furthermore, the Court holds pro se complaints to “less stringent standards than formal pleadings drafted by lawyers.” Haines v. Kerner, 404 U.S. 519, 520 (1972). However, even in pleadings drafted by pro se parties, ‘“courts should not have to guess at the nature of the claim asserted.”’ Frengler v. Gen. Motors, 482 F. App’x 975, 976-77 (6th Cir. 2012) (quoting Wells v. Brown, 891 F.2d 591, 594 (6th Cir. 1989)). Moreover, “courts may not rewrite a complaint to include claims that were never presented . . . nor may courts construct the Plaintiff’s legal arguments for him. Neither may the Court ‘conjure up unpled allegations[.]’” Rogers v. Detroit Police Dept., 595 F.Supp.2d 757, 766 (E.D. Mich. 2009) (Ludington, J., adopting report and recommendation of Binder, M.J.).3 E. Discussion 1. Factual allegations 3 See also, Evans v. Mercedes Benz Fin. Servs., LLC, No. 11-11450, 2011 WL 2936198, at *2 (E.D. Mich. July 21, 2011) (Cohn, J.) (“Even excusing plaintiff's failure to follow Rules 8(a)(2) and 10(b), a pro se plaintiff must comply with basic pleading requirements, including Rule 12(b)(6).”). Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.219 Filed 11/10/25 Page 5 of 14
6 Plaintiff’s factual allegations are organized into five areas. First, he contends his credit application “created a monetized receivable[.]” (ECF No. 25, ¶¶ 5-12.) Where Capital One’s credit agreement explains that it “may sell, assign or transfer your Account and this Agreement without your permission and without prior notice to you[,]” (id., PageID.126 (emphasis in original)), Plaintiff alleges this provision makes his “application and obligation a receivable – an asset monetizable and transferable.” (Id., ¶¶ 5-8.)4 Moreover, Plaintiff alleges Capital One “uses the same structure” and similarly monetized his application as occurred in S.E.C. v. Spiegel, Inc., No. CIV.A. 03 C 1685 (N.D. Ill.). (ECF No. 25, ¶¶ 10-12.) Second, Plaintiff alleges that the Sixth Circuit and other federal courts “confirm that signed credit applications and contracts – even without money exchanged – are valuable receivables[,]” and that these precedents (all of which are criminal cases and two of which are not binding precedent anyway) “confirm that [his] application was a financial asset – eligible for securitization and 4 To the extent Plaintiff attempts to rely upon Cohen v. Cap. One Funding, LLC, 489 F. Supp. 3d 33 (E.D.N.Y. 2020), he improperly cites it as a decision of the United States District Court for the District of Columbia (i.e., D.D.C.), and the purported quote – “Receivables are pooled and sold monthly.” – does not appear in the Cohen decision. (ECF No. 25, 9.) Unfortunately, it may be yet another example of “hallucinated” citation through use of generative artificial intelligence (AI), which has been a recent, all-too-common, and ongoing problem in litigants’ filings before this and other courts. Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.220 Filed 11/10/25 Page 6 of 14
7 transfer.” (ECF No. 25, 13 (emphasis in original), 14.) See United States v. Lucas, 99 F.3d 1290 (6th Cir. 1996) (remanding as to sentencing where defendant was convicted of violating 18 U.S.C. § 656); United States v. Krimsky, 230 F.3d 855 (6th Cir. 2000) (affirming conviction and sentence regarding violations of 18 U.S.C. §§ 664, 1027); United States v. Thrush, 768 F. Supp. 3d 879 (E.D. Mich. 2024) (Ludington, J.) (charged with violating 26 U.S.C. §§ 7202, 7202 and 18 U.S.C. § 1343); and, United States v. Wirth, 437 F. Supp. 2d 688 (E.D. Mich. 2006) (Lawson, J.) (opinion and order adjudicating controverted sentencing items). Third, citing his December 26, 2024 “durable power of attorney” (id., PageID.129-136), which Plaintiff allegedly submitted on January 7, 2025, he contends he “has legal authority to issue tenders, demand performance, and resolve financial obligations.” (Id., ¶¶ 15-16.) Fourth, citing his January 14, 2025 “credit claim” (ECF No. 25, PageID.145), his same-day “request for clarification regarding account closure” (id., PageID.147-148), his February 10, 2025 “opportunity to cure” (id., PageID.152-153), and his February 18, 2025 “default judgement” (id., PageID.155-156), Plaintiff alleges “[a]ll tenders cited the underlying application as the security collateral for payment,” and “all instructed Defendant to communicate within 3 business days[,]” but “Capital One failed to respond to any tender.” (Id., ¶¶ 17-21.) Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.221 Filed 11/10/25 Page 7 of 14
8 Finally, Plaintiff contends the account closure was “without just cause[.]” (ECF No. 25, ¶¶ 22-27.) He alleges Defendant’s October 31, 2024 letter closing the account (see id., PageID.138) did not cite a “specific clause in the agreement . . . [,]” (id., ¶¶ 22-23), Defendant was silent as to his January 7, 2025 “request for review and reinstatement of account” (see id., PageID.141-143) (id., ¶¶ 26-27), and Defendant did not respond to his January 14, 2025 request for clarification (see id., PageID.147-148) (id., ¶¶ 24-25). 2. Legal theory To the extent Plaintiff alleges he satisfied his debt by submitting a bill marked “accepted for deposit” and “pay to the order of bearer” on January 14, 2025 (ECF No. 25, PageID.150), or a typewritten “credit claim” dated January 14, 2025 (id., PageID.145) or a typewritten “opportunity to cure” dated February 10, 2025 (id., PageID.152-153) or a typewritten “default judgement” (id., PageID.155-156) (see id., ¶¶ 17-19), these are not valid forms of payment and, as Defendant argues, his “claims are founded on a frivolous legal theory[.]” (ECF No. 27, PageID.181-183.) See, e.g., Marvin v. Cap. One, No. 16-2307, 2017 WL 4317143, at *1 (6th Cir. June 6, 2017) (“[N]o facts were alleged that would make Marvin’s claims under the TILA, or for slander of credit, breach of contract, misrepresentation, fraud, or involuntary servitude, plausible. The complaint contained no factual allegations showing that defendant’s refusal to accept Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.222 Filed 11/10/25 Page 8 of 14
9 Marvin’s documents as payment of his debt gave rise to a claim under any of these theories.”). See also Marshall v. Bank of Am., N.A., No. 1:25-CV-00721-SDG-RDC, 2025 WL 2146376, at *2 (N.D. Ga. May 29, 2025) (“Plaintiff’s claims are premised on a frivolous sovereign-citizen-like legal theory. She believes, in short, that her stamped remittance coupon, submitted sans payment, constituted a negotiable instrument that somehow satisfied her outstanding credit-card debt obligation. . . . She is incorrect.”), report and recommendation adopted, No. 1:25-CV-00721-SDG, 2025 WL 2429094 (N.D. Ga. Aug. 11, 2025); Williams v. TD Auto Fin. LLC, No. 1:23-CV-03642-LMM-RDC, 2024 WL 1957319, at *5 (N.D. Ga. Apr. 11, 2024) (“courts have rejected the vapor money theory and sovereign citizens’ attempts to create legal forms of payment by handwriting financial buzzwords on payoff quotes or credit card statements.”), report and recommendation adopted, No. 1:23-CV-03642-LMM, 2024 WL 2938732 (N.D. Ga. May 2, 2024); and, Harp v. Police & Fire Fed. Credit Union, No. CV 23-2577, 2023 WL 5152625, at *2 (E.D. Pa. Aug. 10, 2023) (“And because all of Harp’s claims rest upon her mistaken belief that her ‘bill of exchange’ was valid legal tender, and are based on a fundamental misunderstanding of the operation of a credit card, I will dismiss the Complaint with prejudice and without leave to amend.”). Moreover, with respect to Plaintiff’s theory that he considers his debt discharged or satisfied due to Defendant’s failure to respond to his Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.223 Filed 11/10/25 Page 9 of 14
10 communications, “[c]ourts have routinely rejected claims that a debt was discharged by similar unilateral action.” Pitts v. Navy Fed. Credit Union, No. 25-cv-11367, 2025 W.L. 1668314, *3 (E.D. Mich. June 12, 2025) (White, J.). 3. Causes of action a. TILA (Counts I & II) Beyond Plaintiff’s frivolous legal theory, his causes of action suffer other ailments. Plaintiff alleges violations of the Truth in Lending Act (TILA), see 15 U.S.C. §§ 1601-1667f. However, while Plaintiff alleges Capital One “failed to disclose that it would securitize and sell Plaintiff’s obligation[,]” (ECF No. 25, 28), the “security interest” mentioned in 15 U.S.C. § 1637(a)(6) of the creditor disclosure requirements (see Count I) is distinct from “securitization of receivables.” (ECF No. 27, PageID.184.) Moreover, while Plaintiff cites Section 1640 of the TILA, United States v. Emmons, 8 F.4th 454 (6th Cir. 2021), and U.C.C. § 3-603 (“Tender of Payment”) in support of his cause of action for “failure to credit payment” (Count II), Plaintiff erroneously suggests that his typewritten submissions (see ECF No. 25, PageID.145, 152-153, 155-156) are “lawful payment instruments” or “constituted legal discharge of the obligation under UCC § 3-603(b)[.]” (ECF No. 25, ¶¶ 31, 32, 33.) Therefore, Plaintiff’s related claims that Defendant failed to “apply credit” or “reject the tenders in writing” (id., ¶¶ 33, 34) are unavailing. Indeed, as Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.224 Filed 11/10/25 Page 10 of 14
11 Defendant notes, Capital One’s credit agreement states: “Your payment must be made in U.S. dollars from a U.S. deposit account in a form acceptable to us.” (ECF No. 25, PageID.124; ECF No. 27, PageID.184.) Plaintiff’s complaint provides no hint of actual satisfaction or partial payment in the form of payment specified in the credit agreement, i.e., in legal tender.5 b. Breach of Contract (Count III) Plaintiff also alleges breach of contract (Count III). (ECF No. 25, ¶¶ 35-40.) Yet, Plaintiff erroneously suggests that his typewritten submissions (see id., PageID.145, 152-153, 155-156) are “full payment.” (Id., 36.) Defendant’s refusal of such tender or refusal to “apply Plaintiff’s instrument” (see id., ¶¶ 37-39) would not constitute a breach of the credit agreement, nor would it “trigger[] discharge under UCC § 3-603(b)[,]” (id., 38). Again, as Defendant notes, the agreement requires payment in U.S. dollars. (ECF No. 25, PageID.124; ECF No. 27, PageID.184-185.) c. Unjust Enrichment (Count IV) Finally, within his cause of action for unjust enrichment (Count IV), Plaintiff alleges that Capital One “retained the benefit of [his] securitized obligation[,]” and “also retained value by not applying Plaintiff’s tenders[,]” in support of which 5 See Legal Tender, Black’s Law Dictionary (12th ed. 2024) (“The money (bills and coins) approved in a country for the payment of debts, the purchase of goods, and other exchanges for value.”). Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.225 Filed 11/10/25 Page 11 of 14
12 Plaintiff seems to cite Wright v. Genesee Cnty., 934 N.W.2d 805 (Mich. 2019) and Tkachik v. Mandeville, 790 N.W.2d 260 (Mich. 2010). (ECF No. 25, ¶¶ 41-44.) However, it is not clear what Plaintiff means by a “securitized obligation,” (see id., 41), and, assuming Plaintiff’s “tenders” (see id., 42) are references to a bill marked “accepted for deposit” and “pay to the order of bearer” on January 14, 2025 (ECF No. 25, PageID.150), or any of his typewritten submissions (id., PageID.145, 152-153, 155-156), these are not valid forms of payment. (ECF No. 27, PageID.185.) F. Conclusion In his response, Plaintiff argues that “tender of value discharges obligation under UCC § 3-603,” “securitization is central and actionable,” “Plaintiff’s instrument is not claimed as money but is backed by monetized value[,]” “contractual payment terms do not override commercial law,” “breach is clear and well-pled,” “the tender satisfies the agreement’s terms,” and “Defendant’s failure to disclose securitized collateral triggers § 1637(a)(6).” (ECF No. 29, PageID.192-194.) Plaintiff is incorrect. Neither a piece of paper titled by Plaintiff’s own whim, nor a document he subjectively perceives to be a “tender of payment,” nor a sack of potatoes would render his debt paid, partially paid, and/or satisfied; rather, payment in U.S. dollars was required. As explained at length and in detail above, Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.226 Filed 11/10/25 Page 12 of 14
13 the Court should GRANT Defendant’s motion to dismiss (ECF No. 27) the amended complaint (ECF No. 25). III. PROCEDURE ON OBJECTIONS The parties to this action may object to and seek review of this Report and Recommendation, but are required to file any objections within 14 days of service, as provided for in Fed. R. Civ. P. 72(b)(2) and E.D. Mich. LR 72.1(d). Failure to file specific objections constitutes a waiver of any further right of appeal. Thomas v. Arn, 474 U.S. 140 (1985); Howard v. Sec’y of Health & Human Servs., 932 F.2d 505 (6th Cir. 1991). Filing objections that raise some issues but fail to raise others with specificity will not preserve all the objections a party might have to this Report and Recommendation. Willis v. Sec’y of Health & Human Servs., 931 F.2d 390, 401 (6th Cir. 1991); Smith v. Detroit Fed’n of Teachers Local 231, 829 F.2d 1370, 1273 (6th Cir. 1987). Pursuant to Local Rule 72.1(d)(2), any objections must be served on this Magistrate Judge. Any objections must be labeled as “Objection No. 1,” and “Objection No. 2,” etc. Any objection must recite precisely the provision of this Report and Recommendation to which it pertains. Not later than 14 days after service of an objection, the opposing party may file a concise response proportionate to the objections in length and complexity. Fed. R. Civ. P. 72(b)(2); E.D. Mich. LR 72.1(d). The response must specifically address each issue raised in the objections, Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.227 Filed 11/10/25 Page 13 of 14
14 in the same order, and labeled as “Response to Objection No. 1,” “Response to Objection No. 2,” etc. If the Court determines that any objections are without merit, it may rule without awaiting the response. Dated: November 10, 2025 ___________________ Anthony P. Patti UNITED STATES MAGISTRATE JUDGE Case 2:25-cv-10737-MFL-APP ECF No. 34, PageID.228 Filed 11/10/25 Page 14 of 14
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