Kuria v. Palisades Acquisition Xvi Llc

• Decision Date: 16 November 2010
• Docket Number: Civil Action No. 1:09–cv–03321–JOF–RGV.
• Citation: 752 F.Supp.2d 1293
• Parties: Julius KURIA, Plaintiff,v.PALISADES ACQUISITION XVI, LLC, Defendant.
• Court: U.S. District Court — Northern District of Georgia

752 F.Supp.2d 1293

Julius KURIA, Plaintiff,

v.PALISADES ACQUISITION XVI, LLC, Defendant.

Civil Action No. 1:09–cv–03321–JOF–RGV.

United States District Court, N.D. Georgia, Atlanta Division.

Nov. 16, 2010.

Edward M. Wayland, Law Office of Edward M. Wayland, Montgomery, AL, for Plaintiff.Jeremy Thomas McCullough, McCullough, Payne & Haan, Atlanta, GA, for Defendant.

OPINION & ORDER

J. OWEN FORRESTER, Senior District Judge.

This matter is before the court on Defendant's motion to dismiss [15]; Defendant's motion to dismiss second amended complaint [19]; and the Non–Final Report and Recommendation of Magistrate Judge Russell G. Vineyard [23].

Having read and considered the Non–Final Report and Recommendation of Magistrate Judge Russell G. Vineyard, it is ADOPTED as the ORDER of this court. The court DENIES AS MOOT Defendant's motion to dismiss [15]. The court DENIES Defendant's motion to dismiss second amended complaint [19].

ORDER FOR SERVICE OF NON–FINAL ORDER, REPORT AND RECOMMENDATION

RUSSELL G. VINEYARD, United States Magistrate Judge.

Attached is the Non–Final Report, Recommendation, and Order of the United States Magistrate Judge made in this action in accordance with 28 U.S.C. § 636(b)(1), Fed.R.Civ.P. 72(b), and this Court's Local Rule 72. Let the same be filed and a copy, together with a copy of this Order, be served upon counsel for the parties.

Pursuant to 28 U.S.C. § 636(b)(1), each party may file written objections, if any, to the Report and Recommendation within fourteen (14) days of the receipt of this Order. Should objections be filed, they shall specify with particularity the alleged error or errors made (including reference by page number to the transcript if applicable) and shall be served upon the opposing party. The party filing objections will be responsible for obtaining and filing the transcript of any evidentiary hearing for review by the district court. If no objections are filed, the Report and Recommendation may be adopted as the opinion and order of the district court and any appellate review of factual findings will be limited to a plain error review. United States v. Slay, 714 F.2d 1093 (11th Cir.1983) (per curiam).

The Clerk is directed to submit the Report and Recommendation with objections, if any, to the district court after expiration of the above time period.

IT IS SO ORDERED, this 27th day of August, 2010.

MAGISTRATE JUDGE'S NON–FINAL ORDER, REPORT AND RECOMMENDATION

Plaintiff Julius Kuria (“Kuria”) brings this action against Palisades Acquisitions XVI, LLC (“Palisades”) alleging violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. and the Georgia Fair Business Practices Act (“GFBPA”), O.C.G.A. § 10–1–399 (2000). [Doc. 14]. Pending before the Court are Palisades' motions to dismiss the first amended complaint and the second amended complaint, [Docs. 15 & 19], and Kuria's motion for leave to file the second amended complaint pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure, [Doc. 20]. For the following reasons, Kuria's motion for leave to file the second amended complaint [Doc. 20] is GRANTED, and it is RECOMMENDED that Palisades' motion to dismiss the first amended complaint, [Doc. 15], be DENIED as moot, and that the motion to dismiss the second amended complaint, [Doc. 19], be DENIED.

I. BACKGROUND

Palisades is a Delaware corporation with its principal office in New Jersey. [Doc. 16 ¶ 5]. Palisades' sister company is named “Palisades Collection, LLC,” and is located at the same address in Englewood, New Jersey. [Doc. 13 ¶ 4]. Palisades and Palisades Collection, LLC are both wholly owned by Asta Funding, and are represented by the same counsel. [ Id. at ¶¶ 4–5]. Palisades is engaged in the business of buying and collecting debts that are in default. [Doc. 16 ¶ 5].

On December 1, 2008, Palisades sued Kuria in the State Court of Clayton County, Georgia for an amount allegedly due on a credit card account formerly owned by Providian that Palisades had purchased. [Doc. 16 ¶¶ 6, 10]. Kuria denies owing the sums claimed by Palisades or any debt to Providian. [ Id. at ¶ 11]. When Kuria requested discovery, Palisades voluntarily dismissed the state court action on October 30, 2009, purportedly because it had no documentation substantiating the existence or validity of the debt aside from an entry on an electronic spreadsheet containing similar information about many other accounts. [ Id. at ¶¶ 16–18].

On November 24, 2009, Kuria filed the instant suit alleging violations of the FDCPA and the GFBPA.¹ [Doc. 1]. The original complaint erroneously named Palisades Collection, LLC as the defendant. [ Id.]. Kuria obtained the name “Palisades Collection, LLC” from court documents filed by Palisades in the Clayton County lawsuit. [Doc. 13 ¶ 2; Doc. 17 at 16]. On March 9, 2010, after defense counsel informed Kuria that Palisades Collection, LLC was not the proper defendant, Kuria was granted leave to amend the complaint to name Palisades Acquisitions XVI, LLC as defendant. [Doc. 14; Doc. 17 at 14; Doc. 19–1 at 10–11]. On March 15, 2010, Palisades filed a motion to dismiss the first amended complaint for failure to state a claim on which relief can be granted. [Doc. 15].

On March 29, 2010, Kuria, without leave of court or Palisades' consent, filed a second amended complaint adding only additional factual allegations to support the FDCPA and GFBPA claims. [Doc. 16]. On April 9, 2010, Palisades filed a motion to dismiss the second amended complaint prior to a ruling on the motion to dismiss the first amended complaint. [Doc. 19]. On April 21, 2010, Kuria moved for nunc pro tunc leave to file the second amended complaint. [Doc. 20].

II. DISCUSSION

A. Motion for Leave to File Second Amended Complaint

Palisades has moved to dismiss the second amended complaint because Kuria failed to obtain either its consent or leave of court prior to amending the complaint as required by Rule 15(a)(1) of the Federal Rules of Civil Procedure. [Doc. 19–1 at 5]. Kuria argues that he was not required to obtain leave to file the second amended complaint because under Rule 15(a)(1) he was entitled to amend the complaint as a matter of course within 21 days after serving it on the defendant or within 21 days of defendant filing a motion to dismiss under Rule 12(b)(6). [Doc. 20 at 3–4; Doc. 21 at 2]. However, recognizing that the Court may reject this argument, Kuria also seeks retroactive leave to file the second amended complaint on grounds that justice requires that leave be granted.² [Doc. 20].

Rule 15(a)(1) states:

(1) Amending as a Matter of Course. A party may amend its pleading once as a matter of course:

(A) 21 days after serving it, or

(B) if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.

Fed.R.Civ.P. 15(a)(1) (2009). Kuria's argument that the second amended complaint was properly filed under Rule 15(a)(1) overlooks the fact that the rule permits a party to amend its pleading “once” as a matter of course and requires that the amendment occur within 21 days after serving the pleading or 21 days after service of a responsive pleading or designated motion, “whichever is earlier.” Id. “The 21–day periods to amend once as a matter of course after service of a responsive pleading or after service of a designated motion are not cumulative.” Fed.R.Civ.P. 15 advisory committee's notes, 2009 amends.

Thus, Kuria's argument that the second amendment to the complaint falls within the scope of Rule 15(a)(1) would require the Court to view the first amended complaint, instead of the original complaint, as the first pleading in this case. Kuria asserts that such a view is proper in light of the fact that the original complaint was filed naming the wrong defendant (Palisades Collection, LLC), therefore, the first amended complaint (naming the proper defendant, Palisades Acquisitions XIV, LLC) was actually the first “pleading” in the chain of complaints for the purposes of Rule 15(a)(1) because it was the first complaint “accepted by” Palisades Acquisitions XVI, LLC. [Doc. 20 at 3–4]. Kuria cites no authority in support of this argument, and his contention is contrary to the plain language of Rule 15(a)(1) as well as a common-sense application of the rule to these facts. Furthermore, viewing the first amended complaint as a new Rule 15 “pleading” is inconsistent with the relation back argument Kuria advances in response to Palisades' contention that this action is time barred, as discussed infra.³ Kuria did not therefore have free reign under Rule 15(a)(1) to file a second amendment to the complaint as a matter of course.

However, Kuria has also moved for leave to amend the complaint under Rule 15(a)(2), and to allow the amendment to be granted after the fact and made retroactive to the date that the second amended complaint was filed (an amendment nunc pro tunc ). In circumstances where a party is not authorized to amend as a matter of course, Rule 15(a)(2) provides that a party may amend its complaint only by leave of court or by written consent of the adverse party. Fed.R.Civ.P. 15(a). Rule 15 requires that leave to amend “shall be freely given when justice so requires,” Fed.R.Civ.P. 15(a), and that leave should be granted with “extreme liberality,” Eminence Capital LLC v. Aspeon, 316 F.3d 1048, 1051 (9th Cir.2003) (per curiam), because cases should be decided on the merits, rather than on the pleadings or technicalities. Schiavone v. Fortune, 477 U.S. 21, 27, 106 S.Ct. 2379, 91 L.Ed.2d 18 (1986). See also Anastasio v. Internap Network Servs. Corp., Civil Action No. 1:08–CV–3462–JOF, 2009 WL 2486317, at *1 (N.D.Ga. Aug. 12, 2009) (“the Supreme Court held that leave to amend a complaint should be ‘freely given’ in the absence of ‘undue delay, bad faith or dilatory motive ..., repeated failure to cure...