Laporte v. Midland Funding LLC
| Decision Date | 28 May 2020 |
| Docket Number | Civil Action No. 5:19-cv-000073 |
| Court | U.S. District Court — Western District of Virginia |
| Parties | NICOLE LAPORTE, Plaintiff, v. MIDLAND FUNDING LLC, et al., Defendant. |
MEMORANDUM OPINION
This matter is before the court on defendant Mitchell Rubenstein and Associates PC's ("MRA") motion to dismiss the amended complaint. ECF No. 25. Plaintiff Nicole Laporte responded, ECF No. 30, and MRA replied, ECF No. 35. Court heard arguments on the issue telephonically on March 24, 2020 and directed the parties to file supplemental briefing on two issues: (1) whether the Federal Debt Collection Practices Act ("FDCPA") applies to representations made about future conduct, and (2) whether the court should look to state common law in addressing the sufficiency of the complaint. The parties subsequently submitted supplemental briefs, and the matter is ripe for resolution. The court GRANTS in part and DENIES in part MRA's motion to dismiss for the following reasons.
This case arises out of a debt dispute. Neither party contests that Laporte owed Citibank, NA a debt of $1,740.66. Am. Compl., ECF No. 20, at 2; Wage Garnishment Notice, ECF No. 30-5. Citibank retained the services of Midland Funding, LLC ("Midland"), a debt collection agency, who in turn employed the services of MRA to file a suit in Frederick County, Virginia against Laporte to collect the debt. Am. Compl., ECF No. 20, at 2. MRA and Midland obtained a default judgment in Frederick County state court against Laporte in 2016.
On February 19, 2019, MRA communicated to Laporte that if she made a payment of $1,663.66 by February 22, 2019, then she would be released from her Citibank debt obligations. Id. Specifically, a Client Services Representative from MRA stated "Upon receipt of $1,663.66 in this office on or before February 22, 2019, you will be released from further obligation in the above-referenced matter, and your account will be marked as paid in full." ECF No. 20-1. Laporte alleges that based on this representation, she sent a cashier's check by overnight mail to MRA on February 19, 2019 and that it was delivered on February 20, 2019. Am. Compl., ECF No. 20, at 3.
Despite this payment, which defendants do not dispute, Laporte received a notice on February 26, 2019, indicating that her wages would be garnished until the full debt amount was satisfied and that she would be required to pay an administrative processing fee. Id. Upon information and belief, Laporte alleges that MRA served a Writ of Garnishment on her employer sometime after her payment. At this point, Laporte alleges she contacted defendants and demanded they stop the garnishment. Id. She claims that defendants acknowledged that although the debt had been fully satisfied, they had not filed a Notice of Satisfaction with Frederick County Court. Id., at 4. She further claims that defendants represented that they would cease the garnishment and file the necessary documents in state court. Id. However, on March 7 and March 14, 2019, Laporte's wages are again garnished. Id. Defendants finally file a Notice of Satisfaction with the state court in Frederick County on March 18, 2019, as evidenced by a file stamp on that date. Id. at 5.
Laporte claims defendants continued to attempt to collect, and did indeed actually collect, additional funds from her after she settled her account. Laporte claims that, due to the unanticipated wage garnishment on top of her initial payment of the requested amount via cashier's check, she has "actual damages in the form of loss of access to her funds, lost wages, and emotional distress, including humiliation and embarrassment." Id. She alleges in Count One that defendants violated the FDCPA prohibition on deceptive representations or means in the course of collection activities as well as its prohibition on unfair or unconscionable collection practices. Id. at 6-7. Further, she alleges that defendants abused the state judicial system and the wage garnishment process in violation of state common law. Id. at 8-9. She requests actual damages, statutory damages, punitive damages, attorney's fees, and such other and further relief as may be necessary, just, and proper. Id. at 10.
MRA seeks to dismiss the amended complaint in full, alleging that it fails to state a claim. A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) tests the sufficiency of the complaint. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quotation omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not "shown"—that the pleader is entitled to relief." Id. at 1950; see also Simmons v. United Mortg.& Loan Invest, 634 F.3d 754, 768 (4th Cir. 2011) () (quotation and emphasis omitted).
A court must consider all well-pleaded allegations in a complaint as true, see Albright v. Oliver, 510 U.S. 266, 268 (1994), and must construe factual allegations in the light most favorable to the plaintiff. See Lambeth v. Bd. of Comm'rs, 407 F.3d 266, 268 (4th Cir. 2005). Nevertheless, a court is not required to accept as true "a legal conclusion couched as a factual allegation," Papasan v. Allain, 478 U.S. 265, 286 (1986), conclusory allegations devoid of any reference to actual events, see United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979), or "allegations that are merely conclusory, unwarranted deductions of fact or unreasonable inferences." Veney v. Wyche, 293 F.3d 726, 730 (4th Cir. 2002) (internal quotation marks omitted). "'Thus, in reviewing a motion to dismiss an action pursuant to Rule 12(b)(6) a court must determine whether it is plausible that the factual allegations in the complaint are enough to raise a right to relief above the speculative level.'" Monroe v. City of Charlottesville, 579 F.3d 380, 386 (4th Cir. 2009) (quoting Andrew v. Clark, 561 F.3d 261, 266 (4th Cir. 2009)).
Given the abundance of exhibits attached to the various briefs in this matter, the court notes that it may consider some of these documents without turning the proceeding into a summary judgment analysis. "Generally, when a defendant moves to dismiss a complaint under Rule 12(b)(6), courts are limited to considering the sufficiency of the allegations set forth in the complaint and the 'documents attached or incorporated into the complaint.'" Zak v. Chelsea Therapeutics Int'l Ltd, 780 F.3d 597, 606 (4th Cir. 2015) (quoting E.I. du Pont deNemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir. 2011)). However, the court may take judicial notice of certain publicly available records. Brown v. Ocwen Loan Servicing, LLC, No. CIV. PJM 14-3454, 2015 WL 5008763, at *1 (D. Md. Aug. 20, 2015), aff'd, 639 F. App'x 200 (4th Cir. 2016) (citations omitted) ("A court may take judicial notice of docket entries, pleadings and papers in other cases without converting a motion to dismiss into a motion for summary judgment."). Further, the court may consider documents outside of the amended complaint if they are "integral to the Complaint" and there is no dispute regarding their authenticity. Goines v. Valley Comm. Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016). A document is "integral to the Complaint" where the Complaint "relies heavily upon its terms and effect. . . ." Id. (quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002)).
First, MRA argues that Laporte's FDCPA claims fail as a matter of law. ECF No. 26, at 9. Laporte alleges violations of 15 U.S.C. §§ 1692e, 1692e(2)(A), 1692e(4), 1692f, and 1692f(1).
The FDCPA seeks "to eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692e. The Act "is a strict liability statute and a consumer only has to prove one violation to trigger liability." Akalwadi v. Risk Mgmt. Alts., Inc., 336 F. Supp. 2d 492, 500 (D. Md. 2004). To succeed on a FDCPA claim, a plaintiff must demonstrate that "(1) the plaintiff has been the object of collection activity arising from consumer debt, (2) the defendant is a debt collector as defined by the FDCPA, and (3) the defendant has engaged in an act or omission prohibited by the FDCPA." Stewart v. Bierman, 859 F. Supp. 2d 754, 759-60 (D. Md. 2012) (internal citations omitted). Neither party contests whether Laporte is a "consumer"within the meaning of the statute or that MRA is a "debt collector" within the meaning of the statute. The parties dispute whether MRA violated §§ 1692e & 1692f of the FDCPA.
Laporte alleges multiple instances of misrepresentation by MRA in the course of its debt collection activities. First, she argues that MRA's February 19 email induced her to pay a certain amount through deceptive communications or means. Second, she argues the Writ of Garnishment MRA served, and failed to retract, falsely represented the status of her debt obligations. The merits of each claim are discussed below.
Section 1692e of the FDCPA prohibits a "debt collector" from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692(e). This section of the FDCPA provides a non-exhaustive list of "conduct" that falls within this general prohibition. Id. § 1692e(1)-(16). "The Fourth Circuit has adopted the 'least sophisticated consumer' standard to determine if...
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