Barboza v. Weinstein & Riley, P.S.
| Decision Date | 01 October 2020 |
| Docket Number | Civil Action No.: 4:20-cv-104-KPJ |
| Court | U.S. District Court — Eastern District of Texas |
| Parties | MARIO A. BARBOZA, Plaintiff, v. WEINSTEIN & RILEY, P.S.; and PALLIDA LLC., Defendants. |
Pending before the Court is Defendants Weinstein & Riley, P.S. ("Weinsten") and Pallida LLC's ("Pallida") (together, "Defendants") Motion to Dismiss Under Rule 12(b)(6) (the "Motion") (Dkt. 2), to which Plaintiff Mario A. Barboza ("Plaintiff") filed a response (the "Response") (Dkt. 14), and Defendants filed a reply (the "Reply") (Dkt. 23).
Upon consideration, the Motion is DENIED.
Plaintiff contends he has been a resident of Collin County, Texas, at all times continuously since November of 2005. See Dkt. 1 at 3. On September 10, 2010, Pallida's predecessor, Pharia, L.L.C., filed suit against Plaintiff in Denton County, Texas, to recover the balance due on Plaintiff's personal credit card (the "Credit Card Suit"). See Dkt. 1 at 3. In February 25, 2011, a consumer default judgment (the "Default Judgment") was obtained against Plaintiff in the Credit Card Suit. See id.
On or about February 14, 2019, Defendants filed a garnishment action (the "Garnishment Action") in Denton County, Texas, to collect on the Default Judgment against JPMorgan Chase Bank, N.A. ("JPMorgan"). See id. Defendants served JPMorgan with a Writ of Garnishment, and Plaintiff's account at JPMorgan was frozen for a period of time. See Dkt. 1 at 4. Plaintiff filed this Fair Debt Collection Practices Act ("FDCPA") suit on February 12, 2020, alleging that in filing the Garnishment Action, Defendants violated 15 U.S.C. § 1692i. See generally Dkt. 1. Plaintiff further alleges Pallida is liable for a state law claim of distant forum abuse pursuant to the Texas Deceptive Trade Practices Act ("DTPA"), Tex. Bus. & Com. Code § 17.46(b)(23). See id.
When considering a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must assume all well-pleaded facts in the complaint are true and view those facts in the light most favorable to the plaintiff. Bowlby v. City of Aberdeen, 681 F.3d 215, 218 (5th Cir. 2012).
To survive a motion to dismiss, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). Plausibility does not mean probability, but it requires "more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 687 (2009). To be plausible, the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. A plaintiff's obligation to provide the grounds of his entitled-to relief "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555. The plaintiff must plead specific facts, not merely conclusory allegations, to avoid dismissal. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000).
The FDCPA seeks to eliminate "abusive, deceptive, and unfair debt collection practices" by regulating the type and number of contacts a "debt collector" can make with a debtor. 15 U.S.C.§ 1692. The purpose of the statute is to "eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). "Because Congress 'intended the FDCPA to have a broad remedial scope,' the FDCPA should 'be construed broadly and in favor of the consumer.'" Salinas v. R.A. Rogers, Inc., 952 F.3d 680, 683 (5th Cir. 2020) (quoting Daugherty v. Convergent Outsourcing, Inc., 836 F.3d 507, 511 (5th Cir. 2016)).
Defendants argue Plaintiff fails to state a FDCPA claim because the statute of limitations has expired. See Dkt. 2 at 6. The FDCPA has a one-year statute of limitations. See 115 U.S.C. § 1692k(d). The statute of limitations begins to run on the date of the FDCPA violation. See Rotkiske v. Klemm, 140 S. Ct. 355, 361 (2019). Defendants argue the statute of limitations on the alleged violation for filing the Credit Card Suit in a distant forum expired more than eight years ago. See Dkt. 2 at 6. Defendants further argue the Garnishment Action did not start a new running of a one-year statute of limitations. See id. at 7. Finally, Defendants argue for the first time in the Reply that the Garnishment Action was not an action against Plaintiff, and thus, the FDCPA does not apply. See Dkt. 23 at 3.
Plaintiff contends the FDCPA affords the Court the power to address unfair and deceptive collection practices not specifically addressed by legislation and that Plaintiff's claim should be liberally construed. See Dkt. 14 at 3. Plaintiff cites Randall v. Maxwell & Morgan, P.C., 321 F.Supp.3d 978 (D. Ariz. 2018), as supporting a two-step analysis to determine whether there can be a FDCPA violation for a post-judgment garnishment action that turns on whether the underlying judgment was obtained in the proper venue. See Dkt. 14 at 6.
Neither Plaintiff nor Defendants cite any Fifth Circuit law relevant to the present matter. The Fifth Circuit has, however, weighed in on the date of accrual of a statute of limitations for a violation of Section 1692i. In Serna v. Law Office of Joseph Onwuteaka, P.C., the Fifth Circuit determined that, "[b]ecause the harm of responding to a suit in a distant forum arises only after receiving notice of that suit, a 'violation' does not arise under § 1692i(a)(2) until such time as the alleged debtor receives notice of the suit." 732 F.3d 440, 445 (5th Cir. 2013). The Fifth Circuit expounded that its holding was supported by the history of the adoption of Section 1692i:
Serna, 732 F.3d at 446-47.
None of the filings presently before the Court discuss when Plaintiff became aware of the Credit Card Suit. Therefore, even if the filing of the Garnishment Action did not trigger a one-year statute of limitations, it is not clear that the statute of limitations with regard to the Credit Card Suit ever accrued. For this reason alone, the Motion should be denied.
The Court also considers the two-pronged approach, referenced by Plaintiff, in determining whether a garnishment action can be considered a legal action under Section 1692i, such that the one-year statute of limitations would accrue from Plaintiff's notice of the Garnishment Action. Section 1692i requires "any debt collector who brings any legal action on a debt against any consumer" to "bring such action only in the judicial district or similar legal entity (A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action." 15 U.S.C. § 1692i(a)(2).
In Endicott-Johnson Corp. v. Encyclopedia Press, the Supreme Court made clear that garnishment actions are not wholly new actions. 266 U.S. 285, 288 (1924). However, courts have determined there are circumstances under which a Section 1692i claim can be asserted for filing a garnishment action. In Fox v. Citicorp, the Ninth Circuit found that an application for a writ of garnishment falls within the FDCPA's venue provision, holding that 15 F.3d 1507, 1515 (9th Cir. 1994).
As previously noted, Defendants argue in the Reply that the FDCPA does not apply to the Garnishment Action because it is not an action against Plaintiff, but rather, the garnishee. See Dkt. 23 at 3. Many courts also analyze whether a garnishment action—though a legal action on a debt—is an action "against any consumer," as required under the statute. The case law indicates, however, this determination requires a consideration as to whether the underlying judgment was obtained in the proper venue—a two-step analysis. See, e.g., Cole v. Cardez Credit Affiliates, LLC, No. 1:14-CV-00077-REB, 2015 WL 1281651, at *5 (D. Idaho Mar. 19, 2015) (...
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