Jallali v. USA Funds
| Decision Date | 13 August 2012 |
| Docket Number | CASE NO.: 11-62510-CIV-SCOLA/OTAZO-REYES |
| Parties | MARGARET JALLALI, Plaintiff, v. USA FUNDS, WEST ASSET MANAGEMENT, INC., and SUN HEALTHCARE GROUP, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
ORDER GRANTING DEFENDANT SUN HEALTHCARE GROUP'S
MOTION TO DISMISS
THIS MATTER is before the Court on Defendant, Sun Healthcare Group's, ("Sun Healthcare") Motion to Dismiss Plaintiff's First Amended Complaint (ECF No. 19), filed March 30, 2012. In her First Amended Complaint (the "Amended Complaint"), Plaintiff, Margaret Jallali, alleges that Sun Healthcare inappropriately withheld a portion of her wages pursuant to a wage garnishment order issued by Defendant, USA Funds. In the instant Motion to Dismiss, Sun Healthcare seeks dismissal of all six counts of the Amended Complaint (ECF No. 12) under Rules 8 and 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, the Court grants the Defendant's Motion to Dismiss. Counts I, III, and VI are dismissed with prejudice. Counts II, IV, and V are dismissed without prejudice.
BACKGROUND
This case involves the Federal Family Education Loan Program ("FFELP"), established by the Higher Education Act of 1965, as amended, 20 U.S.C. § 1071 et seq. ("HEA"). Jallali is a student loan debtor who was employed by SunDance Rehabilitation Corporation, a subsidiary of Sun Healthcare. Jallali financed a portion of her education with a FFELP loan ("Stafford Loan"), which was guaranteed by USA Funds, an Indiana nonprofit corporation. Under theFFELP, when a student defaults on her loan, the guarantor must pay the outstanding loan balance to the lender and, thereafter, has the right to take title to the loan.
The record indicates that Jallali failed to make the required payments on her loan which entered into default in 2011. On September 2, 2011, USA Funds issued an Order of Withholding from Earnings ("Withholding Order") to Sun Healthcare. The Withholding Order directed that Sun Healthcare withhold and remit to Defendant, West Asset Management, a collection agency, fifteen percent of Jallali's disposable wages. Jallali alleges that as of November 23, 2011, Sun Healthcare had "deducted $1,187.85 of [Jallali's] pay on three separate occasions." Am. Compl., ¶ 22.
Under the wage garnishment provision of the HEA, a guaranty agency, such as USA Funds, may garnish the disposable pay of a debtor if the debtor has failed to make payments required under a repayment agreement. 20 U.S.C. § 1095a(a). A debtor who is subject to a garnishment, however, is statutorily entitled to certain procedural protections, including, for example, a hearing "concerning the existence or the amount of the debt," and, in certain cases, about "the terms of the repayment schedule." Id. § 1095a(a)(5). If the debtor requests a hearing on or before the fifteenth day following the mailing of the pre-garnishment notice, a hearing must be provided before a garnishment order may be issued to the debtor's employer. Id. § 1095a(b). Otherwise, the debtor is entitled to a hearing, but the hearing need not be conducted before garnishment begins. Id. The HEA also exempts from wage garnishments debtors who have been reemployed within twelve months after having been involuntarily separated from their previous employment. Id. § 1095a(a)(7). Jallali contends that (1) she met the HEA's exemption for wage garnishment, and (2) neither USA Funds, West Asst Management, nor Sun Healthcare accorded her any of the HEA's procedural rights. As a consequence, Jallali commenced the instant action on November 23, 2011.
After filing her initial Complaint, Jallali alleges that Sun Healthcare "began a pattern of unusual work related [sic] reviews." Am. Compl., ¶ 26. Specifically, Jallali alleges that she received warnings and notices regarding her work performance. She also alleges that in January 2012 she expressed concern to Sun Healthcare about other employees "padding hours" by billing significantly more time than those actually worked. See id. ¶¶ 27-28. On March 15, 2012, Jallali was terminated from her employment with Sun Healthcare.
Jallali filed the Amended Complaint on March 16, 2012. The Amended Complaint alleges six counts: Retaliatory Discharge in violation of 42 U.S.C. § 1983 (Count I); Discriminatory Discharge in violation of 42 U.S.C. § 1983 and the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA") (Count II); Infringement of Liberty Interest in violation of the Fourteenth Amendment of the U.S. Constitution (Count III); Declaratory and Injunctive Relief pursuant to 28 U.S.C. §§ 2201, 2202 and Fed. R. Civ. P. 65 (Count IV); Civil Rights/Due Process violation pursuant to 20 U.S.C. §§ 1095a(a)-(b) (Count V); and Unjust Enrichment (Count VI). Jallali requests that the Court enjoin Defendants from garnishing her future wages. She also asks for $1,187.85 in damages, as well as an award of compensatory damages, attorneys' fees, and costs.
On March 30, 2012, Sun Healthcare filed the instant Motion to Dismiss pursuant to Rules 8 and 12(b)(6) of the Federal Rules of Civil Procedure. Specifically, Sun Healthcare argues that Jallali has failed to state a claim upon which relief can be granted with respect to all six counts in the Amended Complaint. Sun Healthcare also argues that the Amended Complaint is deficient because it does not contain sufficient facts to give Defendants fair notice of the grounds upon which Plaintiff's claims rest. The Court has reviewed the Motion, the Response thereto, and is otherwise duly advised. For the reasons set forth below, the Court dismisses Counts I, III, and VI with prejudice and dismisses Counts II, IV, and V without prejudice.
LEGAL STANDARD
When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must accept all of a complaint's factual allegations as true, construing them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). Under Federal Rule of Civil Procedure 8, "[a] pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief," and that "[e]ach allegation must be simple, concise, and direct." Fed. R. Civ. P. 8(a)(2), (d)(1). "[T]he statement need only give the defendant fair notice of what the . . . claim is and the ground upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Conley v. Gibson, 355 U.S. 41, 47 (1957)). The plaintiff must nevertheless articulate "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. "A claim has facial plausibility when the plaintiff pleads factualcontent that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Rule 8 "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. (quoting Twombly, 550 U.S. at 555). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Thus, a pleading that offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" will not survive dismissal. Id. (quoting Twombly, 550 U.S. at 555).
In applying the Supreme Court's directives in Twombly and Iqbal, the Eleventh Circuit has provided the following guidance to the district courts:
In considering a motion to dismiss, a court should 1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Further, courts may infer from the factual allegations in the complaint obvious alternative explanation[s], which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer.
Kivisto v. Miller, Canfield, Paddock & Stone, PLC, 413 F. App'x 136, 138 (11th Cir. 2011) (quoting Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)). "This is a stricter standard than the Supreme Court described in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), which held that a complaint should not be dismissed for failure to state a claim 'unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Mukamal v. Bakes, 378 F. App'x 890, 896 (11th Cir. 2010) (quoting Twombly, 550 U.S. at 577). These precepts apply to all civil actions, regardless of the cause of action alleged. Kivisto, 413 F. App'x at 138.
With these standards in mind, the Court turns to the Amended Complaint to determine whether each count states a claim upon which relief can be granted.
ANALYSIS
In Counts I and III, Jallali alleges that Sun Healthcare wrongfully discharged her in retaliation for "protected conduct," and infringed upon her liberty interest in violation of 18 U.S.C. § 1983 and the Fourteenth Amendment, respectively. As a threshold to liability undersection 1983 and the Fourteenth Amendment, a plaintiff must show that the conduct at issue resulted from state action. See Allocco v. City of Coral Gables, 221 F. Supp. 2d 1317, 1372 (S.D. Fla. 2002) (Gold, J.) (citing Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 936 (1982)). "To establish a claim under 42 U.S.C. § 1983, a plaintiff must prove (1) a violation of a constitutional right, and (2) that the alleged violation was committed by a person acting under color of state law." Cohen v. World Omni Fin. Corp., 457 F. App'x 822, 828 (11th Cir. 2012) (quoting Holmes v. Crosby, 418 F.3d 1256, 1258 (11th Cir. 2005)). Similarly, the Fourteenth Amendment requires there to be state action, and "erects no shield against merely private conduct, however discriminatory or...
To continue reading
Request your trial