Daily v. Rawlings Co.

Decision Date15 January 2016
Docket NumberCase No.: 2:15-CV-1138-VEH
PartiesJOHN KEITH DAILY, on behalf of the class of persons described herein, Plaintiffs, v. THE RAWLINGS COMPANY, LLC, et al., Defendants.
CourtU.S. District Court — Northern District of Alabama

This civil action was commenced on July 7, 2015, by the filing of a "Class Action Complaint," by the named plaintiff, John Keith Daily, against "The Rawlings Company, LLC" ("Rawlings") and "Aetna Life Insurance Company" ("Aetna").1 Against both Rawlings and Aetna, the complaint alleges the Alabama state law claim for "Interference with Business/Contractual Relations" (Count One). Against Rawlings alone, the complaint alleges a violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1601, et seq. (Count Two), and an Alabamastate law claim for the "Unauthorized Practice of Law" (Count Three).2 All counts arise out of the settlement of Daily's personal injury claim against a third party, and the attempts by Rawlings and Aetna to enforce Aetna's subrogation interest.

The case comes before the court on Rawlings and Aetna's Motion to Dismiss (doc. 24), Rawlings and Aetna's "Motion for a Discovery Stay Pending Their Motion to Dismiss" (doc. 43), and Daily's "Corrected Motion to Amend Complaint" (doc. 45). For the reasons stated herein, the motion to dismiss will be GRANTED and this case will be DISMISSED. The motion to amend will be DENIED as futile, and the motion to stay will be DENIED as moot.


The Eleventh Circuit Court of Appeals has noted:

"Although '[l]eave to amend shall be freely given when justice so requires,' a motion to amend may be denied on 'numerous grounds' such as 'undue delay, undue prejudice to the defendants, and futility of the amendment.' " Brewer-Giorgio v. Producers Video, Inc., 216 F.3d 1281, 1284 (11th Cir.2000) (quoting Abramson v. Gonzalez, 949 F.2d 1567, 1581 (11th Cir.1992)).

Maynard v. Bd. of Regents of Div. of Universities of Florida Dep't of Educ. ex rel. Univ. of S. Florida, 342 F.3d 1281, 1287 (11th Cir. 2003). The only argument made by the defendants in opposition to the motion to amend is that, because none of thefactual allegations will change with the amendment,3 the amendment would be futile, as the complaint will be still be dismissed for failure to state a claim upon which relief may be granted. In support of that argument, the defendants incorporate their briefs in support of their motions to dismiss. (Docs. 24, 37).

The court has examined the proposed "First Amended Class Action Complaint" (hereinafter the "amended complaint"). Indeed, except for a few word changes which are not relevant to this motion, the "facts" pled in the amended complaint are identical to those pled in the original complaint. Accordingly, the court will defer ruling on the motion to amend until after it examines the arguments in support of the motion to dismiss.

A. Standard of Review

A Rule 12(b)(6) motion attacks the legal sufficiency of the complaint. See Fed.

R. Civ. P. 12(b)(6) ("[A] party may assert the following defenses by motion: (6) failure to state a claim upon which relief can be granted[.]"). The Federal Rules of Civil Procedure require only that the complaint provide "'a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 103, 2 L. Ed. 2d 80 (1957) (footnote omitted) (quoting Fed. R. Civ. P. 8(a)(2)), abrogated by Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S. Ct. 1955, 1965, 167 L. Ed. 2d 929 (2007); see also Fed. R. Civ. P. 8(a) (setting forth general pleading requirements for a complaint including providing "a short and plain statement of the claim showing that the pleader is entitled to relief").

While a plaintiff must provide the grounds of his entitlement to relief, Rule 8 does not mandate the inclusion of "detailed factual allegations" within a complaint. Twombly, 550 U.S. at 555, 127 S. Ct. at 1964 (quoting Conley, 355 U.S. at 47, 78 S. Ct. at 103). However, at the same time, "it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 550 U.S. at 563, 127 S. Ct. at 1969.

"[A] court considering a motion to dismiss can choose to begin by identifyingpleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Iqbal, 556 U.S. at 679, 129 S. Ct. at 1950. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. (emphasis added). "Under Twombly's construction of Rule 8 . . . [a plaintiff's] complaint [must] 'nudge[] [any] claims' . . . 'across the line from conceivable to plausible.' Ibid." Iqbal, 556 U.S. at 680, 129 S. Ct. at 1950-51.

A claim is plausible on its face "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 556, 127 S. Ct. at 1965).

B. Facts

The factual allegations in the proposed amended complaint read:

6. On the evening of September 16, 2014, Daily was traveling on Greensport Road at the intersection of Peaceful Valley Road in St. Clair County, Alabama, when Samantha Kelley pulled out in front of him, causing a collision in which the [p]laintiff was injured and incurred medical expenses.
7. At the time, plaintiff Daily had a health insurance policy through his employer, Total Safety U.S., Inc's, benefits plan [("the Plan")]. Aetna administered those health benefits, and paid Mr. Daily's medical bills.
8. Samantha Kelley, at the time of the accident, was insured by Nationwide Insurance Company.
9. Shortly after the date of the collision, Counsel for Mr. Daily made a demand on Nationwide for its $100,000.00 policy limits on the automobile policy covering Ms. Kelley. In addition, counsel for Mr. Daily made demands on behalf of his client pursuant to the uninsured/underinsured coverage Daily had with State Farm Mutual Automobile Insurance Company ("State Farm"), and Allstate Property and Casualty Company ("Allstate").
10. Beginning in October, counsel for Mr. Daily attempted to negotiate settlements with Nationwide, State Farm, and Allstate. All applicable medical records and expenses were sent to the three insurers, and Mr. Daily's counsel received copies of the applicable policies so that he could verify coverages and policy limits.
11. On October 14, 2014, counsel for Mr. Daily received notice from Aetna of [the Plan's] subrogation claim on Mr. Daily's tort recovery in the amount of $3,445.87.
12. On or about November 21, 2014, counsel for Mr. Daily received an updated lien from Rawlings, stating a subrogation demand on behalf of Aetna for $25,382.36.
13. Rawlings was acting on behalf of Aetna, [the Plan's] administrator, and Aetna and Rawlings will be referred to collectively sometimes herein as Aetna/Rawlings.
14. The subrogation claims that Aetna hired Rawlings to collect are those of [the Plan]. There is no question that those claims, or debts, do not belong to Rawlings.
15. The Rawlings Company, LLC, is not a law firm, and is not authorized to practice law in Alabama. Despite this fact, Rawlings, through non-lawyers holding the title "Recovery Analyst" sends correspondence to . . . beneficiaries with tort claims like Mr. Daily including legal arguments that Aetna is entitled to assert its subrogation claims directly, and that Aetna/Rawlings does not have to pay any of the costs of collection. . . .
16. In addition to sending the above-referenced correspondence, those "Recovery Analysts" assert legal claims on behalf of Rawlings' clients, and negotiate the settlement of subrogation claims. Neither Rawlings or its employees performing these functions are licensed to practice law in Alabama.
17. On November 24, 2014, counsel for Mr. Daily sent Aetna/Rawlings's notice of its $25,382.36 subrogation interest to Nationwide, and accepted Nationwide's offer to settle the case against its insured Kelley for the $100,000.00 Nationwide policy limits.
18. In a letter dated November 24, 2014, but not received until at least the next day, counsel for Mr. Daily received another updated lien amount. Aetna/Rawlings now stated its subrogation interest as $86,510.74.
19. At the same time, counsel for Mr. Daily continued to provide all information requested by Allstate and State Farm in an attempt to resolve the matter with those carriers.
20. On December 1, 2014, counsel for Mr. Daily received a letter from Allstate agreeing to waive its subrogation interest, and advising him to accept the Nationwide offer.
21. On December 15, 2014, counsel for Mr. Daily received an offer from State Farm of its $25,000.00 policy limits, contingent upon being provided a copy of the written Nationwide offer to settle for its $100,000.00 policy limits, and the Nationwide declarations page from its policy with Ms. Kelley. Those documents were provided to State Farm the next day, and the agreement was formalized in a writing.
22. Unbeknownst to counsel for Mr. Daily at the time, Rawlings, per its custom and practice, had been in communication with Nationwide, Allstate, and State Farm, demanding that Aetna's lien amount be paid directly to it

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