Melissa Bediako, on her own behalf and on behalf of all others similarly situated v. American Honda Finance Corporation

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-1795
MELISSA BEDIAKO, on her own behalf and on behalf of all
others similarly situated,
Plaintiff – Appellant,
v.
AMERICAN HONDA FINANCE CORPORATION,
Defendant – Appellee.
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−-----
AMERICAN FINANCIAL SERVICES ASSOCIATION,
Amicus Supporting Appellee.
Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Roger W. Titus, District Judge. (8:11-
cv-00001-RWT)
Argued: May 14, 2013 Decided: August 1, 2013
Before Sandra Day O’CONNOR, Associate Justice (Retired), Supreme
Court of the United States, sitting by designation, and WYNN and
DIAZ, Circuit Judges.
Affirmed by unpublished opinion. Judge Diaz wrote the opinion,
in which Justice O’Connor and Judge Wynn joined.
ARGUED: Cory Lev Zajdel, Z LAW, LLC, Owings Mills, Maryland,
for Appellant. Donald M. Falk, MAYER BROWN LLP, Palo Alto,

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California, for Appellee. ON BRIEF: David M. Ross, WILSON
ELSER MOSKOWITZ EDELMAN & DICKER LLP, Washington, D.C., for
Appellee. Robert L. Wise, BOWMAN AND BROOKE LLP, Richmond,
Virginia, for Amicus Supporting Appellee.
Unpublished opinions are not binding precedent in this circuit.

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DIAZ, Circuit Judge:
Melissa Bediako, on behalf of a putative class, asserts
that American Honda Finance Corporation (“Honda Finance”)
violated Maryland’s Credit Grantor Closed End Credit Provisions,
Md. Code, Com. Law § 12-1001 et seq. (“CLEC”), by providing
inadequate notice of private sales of repossessed automobiles.
The district court dismissed Bediako’s complaint, concluding
that her claim was time barred, failed to allege actionable
damages, and failed on the merits. Because we conclude that
Bediako has failed to allege actionable damages, we affirm.
I.
A.
In 2004, Bediako, a citizen of Maryland, purchased a used
automobile with financing she obtained by executing a Retail
Installment Sale Contract (“RISC”). A provision in the RISC
chose CLEC as the governing law for the agreement. The RISC was
subsequently assigned to Honda Finance, a California
corporation.
Bediako eventually defaulted on her payment obligations.
As a result, Honda Finance repossessed her vehicle on or before
April 28, 2005. Thereafter, Honda Finance notified Bediako in
writing that it would sell the car at a private sale after May
15, 2005, but that she could get the vehicle back at any time

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before the sale if she paid her entire outstanding obligation.
J.A. 45. Honda Finance also informed Bediako that she could
reinstate her contract if she paid the current arrearage within
fifteen days, and told her the exact location where her vehicle
was stored. J.A. 46-47.
On July 1, 2005, after Bediako failed to act, Honda Finance
sold her vehicle in a private sale. Honda Finance subsequently
sent a post-sale notice to Bediako demanding payment on a
deficiency of $7,036.80, which remained due on her account after
crediting the proceeds of the sale. Bediako made three payments
after the sale (all in 2008), which totaled $375.
B.
In 2010, Honda Finance filed a lawsuit against Bediako in
Maryland state court to collect the remaining debt, but it later
dismissed the action without prejudice. Honda Finance has said
repeatedly in this action that it has abandoned its deficiency
claim against Bediako.
While Honda Finance’s deficiency action was pending in
2010, Bediako filed a putative class action complaint against
Honda Finance in Maryland state court alleging defects in the
pre-sale notice, namely that Honda Finance systematically sold
repossessed property at private sales at unknown locations, on
unknown dates, and at unknown times, contrary to CLEC’s
requirements. Bediako asserted claims for declaratory judgment,

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breach of contract, restitution, unjust enrichment, violations
of CLEC, and violations of Maryland’s Consumer Protection Act.
Honda Finance removed the action to federal court and filed
a motion to dismiss asserting that Bediako’s claims were not
timely and failed as a matter of law. Bediako then voluntarily
dismissed the suit. Three months later, however, she refiled
essentially the same complaint in the Southern Division of the
United States District Court for the District of Maryland.
Honda Finance then moved to dismiss Bediako’s complaint on
largely the same grounds as its prior motion to dismiss.
The district court granted Honda Finance’s motion to
dismiss. First, the court concluded that Bediako’s claims were
time barred because the RISC is a contract for the sale of goods
subject to the four-year statute of limitations in section 2-275
of Maryland’s Uniform Commercial Code. Second, the court
concluded that the purported CLEC violation did not result in
any actionable damages to Bediako because CLEC permits Honda
Finance to recover the principal amount of its loan
notwithstanding the alleged CLEC violation. Finally, the court
concluded that Honda Finance’s notice, which advised Bediako of
the location of the vehicle and the date after which Honda
Finance would conduct a private sale, comported with the
requirements of CLEC. Bediako filed a motion for

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reconsideration, which the district court summarily denied.
Bediako timely appealed.
II.
The issues before us on appeal are whether the district
court erred in concluding that (1) Bediako failed to state a
claim because Honda Finance has not collected more than the
principal amount of her loan; (2) Bediako’s claim is time barred
under section 2-725 of Maryland’s Uniform Commercial Code; and
(3) Honda Finance complied with CLEC’s notice requirements
before conducting a private sale of Bediako’s automobile. We
consider only the first issue because it is dispositive of the
appeal.
We review de novo the district court’s grant of Honda
Finance’s motion to dismiss. Kensington Volunteer Fire Dep’t,
Inc. v. Montgomery Cnty., Md., 684 F.3d 462, 467 (4th Cir.
2012). To survive a motion to dismiss, Bediako must allege
“sufficient facts to state a claim that is plausible on its
face.” Id. (internal quotations omitted).
Bediako’s claims in this appeal are premised on a violation
of the CLEC provisions requiring notice before a creditor may
sell collateral securing a loan. If a creditor violates the
CLEC notice requirements, it “may collect only the principal
amount of the loan and may not collect any interest, costs,

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fees, or other charges with respect to the loan.” CLEC § 12-
1018(a)(2). In addition, CLEC section 12-1021(k)(4) provides,
in the case of certain notice violations, that “the credit
grantor shall not be entitled to any deficiency judgment to
which he would be entitled under the loan agreement.”
Bediako maintains that the district court improperly
dismissed her claims for failure to allege actual damages
because CLEC entitles her to relief without proving actual
damages. Bediako relies primarily on CLEC section 12-
1018(a)(2), which she argues allows her monetary, equitable, and
declaratory relief for inadequate notice of a private sale.
Looking to an analogous passage in Maryland’s Secondary Mortgage
Loan Law (“SMLL”), section 12-413, Bediako cites Duckworth v.
Bernstein, 466 A.2d 517, 526 (Md. Ct. Spec. App. 1983), among
other Maryland cases, for her claim that an accounting and
declaratory order stating the amount of her debt is mandatory.
Honda Finance responds that Bediako has no remedy under
section 12-1018(a)(2) because it never collected more than the
principal amount of Bediako’s loan. According to Honda Finance,
Bediako’s request for declaratory, equitable, and monetary
relief is flawed because the plain text of CLEC section 12-1018
provides no remedy until the creditor has collected more than
the principal amount of the loan.

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We agree with Honda Finance and the district court that
Bediako’s claims fail as a matter of law because of her failure
to allege actual, compensable damages. Sections 12-1018(a)(2)
and 12-1021(k)(4) simply do not provide any relief for Bediako.
Section 12-1018(a)(2), by its plain terms, limits a
debtor’s relief under CLEC to any amounts paid in excess of the
principal amount of the loan. As the district court aptly
noted, all of Bediako’s payments, plus the amount Honda Finance
recovered in the private sale of her automobile, fall far short
of the original principal amount of the loan.1 Unlike the Fair
Debt Collection Practices Act, which, as Bediako notes, provides
for statutory damages as long as the claimant can establish a
violation, 15 U.S.C. § 1692k(a)(2), CLEC does not provide for
any fixed statutory damages beyond the plaintiff’s actual loss.
To the contrary, CLEC section 12-1018(a)(2) expressly permits
creditors to recover the principal amount of a loan.
Accordingly, Bediako has no right to monetary relief under
section 12-1018(a)(2).
1 Bediako owed a principal amount of $16,234.75. Assuming
that she made all of her payments until the day Honda Finance
repossessed her automobile, these payments totaled $4,308.72.
After accounting for the proceeds of the sale ($7,900) and her
subsequent payments ($375), at least $3,701.03 of the principal
remains uncollected. Bediako suggests that the district court
failed to consider other illegal fees Bediako might have paid,
but she does not allege that she actually paid any such fees.

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Section 12-1021(k)(4), which bars a creditor from obtaining
a deficiency judgment in the case of certain notice violations,
fails to save Bediako’s claims as well. CLEC expressly provides
that section 12-1021(k)(4) applies only to notice violations
with respect to public sales, and therefore provides no relief
to Bediako or the putative class. See CLEC § 12-1021(k)(1)
(“The provisions of this subsection apply to a public sale of
property . . . .”).
Nor may Bediako salvage her suit by relying on a potential
award of nominal damages. Maryland courts have refused to allow
nominal damages in certain consumer protection cases, requiring
proof of actual damages. See Frazier v. Castle Ford, Ltd., 27
A.3d 583, 589 (Md. Ct. Spec. App. 2011) (“[N]ominal damages are
not available in an action . . . for a deceptive trade practice
under the Consumer Protection Act . . . .”), rev’d on other
grounds, 59 A.3d 1016 (Md. 2013). The purpose of this
restriction is “to prevent aggressive consumers who were not
personally harmed by the prohibited conduct . . . from
instituting suit as self-constituted private attorneys general
over relatively minor statutory violations.” Lloyd v. Gen.
Motors Corp., 916 A.2d 257, 280 (Md. 2007) (internal quotations
omitted). A similar limitation requiring actual damages is
implicit in the language of section 12-1018(a)(2), which
provides no remedy beyond recovery of payments in excess of the

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principal amount of the loan. The limitation is more explicit
in section 12-1016(c)(2), which provides that the Commissioner
of Financial Regulation may only award a CLEC complainant a
refund of (1) the amount a creditor has collected in excess of
that expressly permitted by CLEC, or (2) the amount a creditor
is expressly not permitted to collect.2 Considering these two
provisions in harmony and looking to CLEC as a whole, we
conclude that CLEC does not permit an award of nominal damages,
but rather requires an actual loss to sustain the claims alleged
by Bediako.
Finally, Bediako’s request for equitable and declaratory
relief also fails. Even assuming that declaratory relief is
available under CLEC when the debtor has paid less than the full
principal amount, Bediako has no right to such relief. Honda
2 Bediako suggests that section 12-1016 implies that there
is a broader right to statutory damages under section 12-
1018(a)(2) because to proceed under section 12-1016 the
complainant must waive his or her right to “rais[e] or assert[]
against the credit grantor in any subsequent forum any claim,
defense, setoff, recoupment, penalty for violation, or right of
any kind based on the matters addressed in the complaint or the
hearing.” CLEC § 12-1016(b)(3)(i). We read this provision,
however, to simply state that a complainant who has pursued a
remedy with the Commissioner under section 12-1016 may not have
a second bite at the apple in another forum. We also note that
a section 12-1016 proceeding provides a remedy independent of
actual damages--the Commissioner may order the creditor to cease
and desist from unlawful practices. CLEC § 12-1016(c)(1). No
such remedy is provided under the civil remedy provision of
section 12-1018(a)(2).

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Finance has repeatedly abandoned any claim for a deficiency
judgment against Bediako, and such a claim would now be time
barred under the applicable statute of limitations. In the
absence of an actual controversy concerning Bediako’s liability
for a deficiency judgment, the federal courts lack authority
under 28 U.S.C. § 2201 to issue declaratory relief.3
In short, even if Bediako has adequately alleged a
violation of CLEC’s notice provisions, she is unable to state a
claim because she has suffered no actual damages that are
compensable under CLEC.4
3 Bediako has attempted to salvage her claims by contending
that the debt remains listed on her credit report. However,
this argument was not raised in her opening brief and is waived.
United States v. Hudson, 673 F.3d 263, 268 (4th Cir. 2012).
4 Honda Finance also contends that because Bediako has not
suffered a compensable loss, she lacks Article III standing to
pursue her claims. We disagree, as Bediako has alleged “an
invasion of a legally protected interest” that is concrete and
particularized, Lujan v. Defenders of Wildlife, 504 U.S. 555,
560 (1992), that is, Honda Finance’s purported failure to comply
with the notice provision of CLEC when repossessing and selling
her automobile. While a statute may not enlarge the boundaries
of Article III standing, a party certainly may enforce a
statutory right in federal court. See, e.g., Havens Realty
Corp. v. Coleman, 455 U.S. 363, 374 (1982). Thus, Bediako has
alleged an injury-in-fact sufficient to provide standing even
if, as we have concluded, the claim fails on the merits.

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III.
For these reasons, we affirm the judgment of the district
court.
AFFIRMED

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