Currier v. First Resolution Inv. Corp.

• Decision Date: 08 August 2014
• Docket Number: No. 13–5943.,13–5943.
• Citation: 762 F.3d 529
• Parties: Roslyn CURRIER, Plaintiff–Appellant, v. FIRST RESOLUTION INVESTMENT CORP., Defendant–Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

762 F.3d 529

Roslyn CURRIER, Plaintiff–Appellant,

v.FIRST RESOLUTION INVESTMENT CORP., Defendant–Appellee.

No. 13–5943.

United States Court of Appeals,Sixth Circuit.

Argued: March 13, 2014.

Decided and Filed: Aug. 8, 2014.

ARGUED:James Hays Lawson, Lawson at Law, PLLC, Louisville, Kentucky, for Appellant. John R. Tarter, Mapother & Mapother, P.S.C., Louisville, Kentucky, for Appellee. ON BRIEF:James Hays Lawson, Lawson at Law, PLLC, Louisville, Kentucky, James R. McKenzie, James R. McKenzie Attorney, PLLC, Louisville, Kentucky for Appellant. John R. Tarter, Mapother & Mapother, P.S.C., Louisville, Kentucky, for Appellee.

Before: GRIFFIN, WHITE, and STRANCH, Circuit Judges.

OPINION

STRANCH, Circuit Judge.

The Fair Debt Collection Practices Act (FDCPA) was enacted to prevent a wide array of unfair, harassing, deceptive, and unscrupulous collection practices by debt collectors. First Resolution Investment Corp. filed a notice of judgment lien against Roslyn Currier's home and maintained it for approximately one month although the judgment it was based on never became final and was vacated. We hold that filing and failing to release an invalid judgment lien against a debtor's home while the related state court collection action remains pending falls within the broad scope of practices prohibited by the FDCPA. Because Currier stated a plausible claim under the FDCPA, we REVERSE the dismissal of her claims and REMAND for further proceedings.

I. FACTS AND PROCEEDINGS

We begin by accepting as true the facts alleged in the Complaint. In May 2012, First Resolution, a debt collector, brought an action in Kentucky state court against Currier to collect a charged-off credit card debt of $1,000.51 plus 24% per annum interest for over six years, to be charged “until paid.” After Currier's pre-arranged local counsel failed to appear at a hearing on October 1, 2012, the Kentucky court issued a default judgment against Currier. On October 5, Currier filed a motion to vacate the default judgment and for an enlargement of time to file her Answer, alleging that she had a complete statute of limitations defense.¹ As of that date, the judgment against Currier was not final under Kentucky law. See Gullion v. Gullion, 163 S.W.3d 888, 891 (Ky.2005) (noting that a motion to vacate a judgment stays finality until the motion is ruled upon).

On October 8, First Resolution filed a judgment lien against Currier's home. This lien was invalid because, under Kentucky law, a judgment lien can arise only from a final judgment. SeeKy.Rev.Stat. Ann. § 426.720(1); Laferty v. Wickes Lumber Co., 708 S.W.2d 107, 108 (Ky.Ct.App.1986) (noting that failure to strictly follow statutory requirements renders a lien invalid). A Kentucky judge held a hearing on October 29 and ruled from the bench that it would grant Currier's motion to vacate the default judgment. Although the lien had been invalid since October 5 and First Resolution knew the underlying judgment would be entirely vacated, First Resolution did not release the lien until November 5.

Currier sued First Resolution in federal court, alleging that the invalid lien violated various provisions of the FDCPA, including the prohibitions against unfair debt collection practices, against collecting an unauthorized amount, and against threateningto take an action that cannot legally be taken. See15 U.S.C. §§ 1692f, 1692f(1), 1692e(5). Finding that a violation of state law is not a per se violation of the FDCPA and that the invalid lien was not a threat, the district court dismissed the claims. Currier appeals.

II. STANDARD OF REVIEW

We review de novo a district court order dismissing a complaint pursuant to Rule 12(b)(6). Bridge v. Ocwen Fed. Bank, FSB, 681 F.3d 355, 358 (6th Cir.2012). To survive a motion to dismiss, the plaintiff need only plead sufficient factual matter, which we must accept as true, to “state a claim to relief that is plausible on its face” meaning that we can draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted). Rule 8(a)(2) requires only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Our analysis “rests primarily upon the allegations of the complaint, [but] matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint also may be taken into account.” Henry v. Chesapeake Appalachia, L.L.C., 739 F.3d 909, 912 (6th Cir.2014) (internal quotation marks omitted).

III. ANALYSIS

Congress passed the FDCPA to address the widespread and serious national problem of debt collection abuse by unscrupulous debt collectors. SeeS.Rep. No. 95–382, at 2 (1977), 1977 U.S.C.C.A.N. 1695, 1696; see also15 U.S.C. § 1692(a), (e). The Act prohibits a wide array of specific conduct, but it also prohibits, in general terms, any harassing, unfair, or deceptive debt collection practice, which enables “the courts, where appropriate, to proscribe other improper conduct which is not specifically addressed.” S.Rep. No. 95–382, at 4, 1977 U.S.C.C.A.N. 1695, 1698; see generally15 U.S.C. §§ 1692d–1692f. As we have explained in the past, the Act is “extraordinarily broad.” Barany–Snyder v. Weiner, 539 F.3d 327, 333 (6th Cir.2008) (quoting Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir.1992)). To determine whether conduct fits within the broad scope of the FDCPA, the conduct is viewed through the eyes of the “least sophisticated consumer.” Id. This standard recognizes that the FDCPA protects the gullible and the shrewd alike while simultaneously presuming a basic level of reasonableness and understanding on the part of the debtor, thus preventing liability for bizarre or idiosyncratic interpretations of debt collection notices. Id.

Currier alleges that filing and failing to release the invalid lien against her home violated multiple provisions of the FDCPA, “including, but not limited to”: 15 U.S.C. § 1692f, which prohibits using “unfair or unconscionable means ... to collect any debt”; § 1692f(1), which prohibits the “collection of any amount ... unless such amount is expressly authorized by the agreement creating the debt or permitted by law”; and § 1692e(5), which prohibits “threat[ening] to take any action that cannot legally be taken or that is not intended to be taken.” First Resolution admits, and the district court properly found, that Currier has alleged that: she is a “consumer” within the meaning of the Act; the debt arose for personal, family, or household purposes; and First Resolution is a “debt collector.” See15 U.S.C. §§ 1692(e), 1692a(3), 1692a(5)-(6). We conclude that Currier sufficiently alleged conduct that falls within the broad scope of practices prohibited by the FDCPA and turn now to the specific provisions alleged.

1. Claims Under the FDCPA

The FDCPA does not define an “unfair or unconscionable” practice under § 1692f, but, with the caveat that it is not limiting the general application of the term, it sets forth a non-exhaustive list of conduct that rises to that level. See also Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 461–62 (6th Cir.2013); Limited, Inc. v. C.I.R., 286 F.3d 324, 332 (6th Cir.2002) (under the rule of noscitur a sociis, the court should view the undefined term in light of its associates). The listed conduct includes acceptance or solicitation of a postdated check absent certain circumstances, charging any person for communications by concealing the true purpose of the communication, taking or threatening to take an action to dispossess or disable property when there is no present right in the property, communicating with a consumer about a debt via postcard, or sending mail with any symbol other than the debt collector's address and non-identifying business name. 15 U.S.C. § 1692f. The term also includes the collection of any amount not expressly authorized by the debt agreement or by law. 15 U.S.C. § 1692f(1). Other actions that courts have determined to be potentially “unfair” under § 1692f include attaching law-firm generated documents resembling credit card statements to a state collection complaint, Hartman v. Great Seneca Fin. Corp., 569 F.3d 606, 610, 614 (6th Cir.2009), sending a collection letter that questioned the debtor's honesty and good intentions, McMillan v. Collection Prof'l, Inc., 455 F.3d 754, 765 (7th Cir.2006), filing for a writ of garnishment against a debtor who was current in payments, Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507, 1517 (9th Cir.1994), and collecting 33% of a debt balance as a collection fee, Bradley v. Franklin Collection Serv., 739 F.3d 606, 610 (11th Cir.2014).

Unfair practices and deceptive practices are prohibited under separate sections of the Act. See15 U.S.C. §§ 1692e (barring “false, deceptive, or misleading representations or means”), 1692f (barring “unfair or unconscionable means”); S.Rep. No. 95–382, at 4, 1977 U.S.C.C.A.N. 1695, 1698 (“[T]his bill prohibits in general terms any harassing, unfair, or deceptive collection practice.”). Therefore, a collection practice could be unfair without necessarily being deceptive. See Fed. Exp. Corp. v. U.S. Postal Serv., 151 F.3d 536, 542 (6th Cir.1998) (“A statute should be construed to accord meaning and effect to each of its provisions.”)

Drawing all reasonable inferences from the facts alleged, First Resolution filed an invalid judgment lien on October 8, when it should have known that Currier had filed a meritorious motion to vacate the default judgment on October 5, three days earlier. Though First Resolution admittedly knew of Currier's motion to vacate later on October 8, it did nothing to release the lien or correct the error. First Resolution admitted at oral argument that good and proper practice would be to correct such errors, but offered no explanation for its failure to do so. Several weeks...