McKnight v. Benitez

• Decision Date: 17 December 2001
• Docket Number: No. 8:01-CV-1140-T-30TGW.,8:01-CV-1140-T-30TGW.
• Citation: 176 F.Supp.2d 1301
• Parties: Donn R. MCKNIGHT, Plaintiff, v. Leo BENITEZ and Benitez & Associates, Defendants.
• Court: U.S. District Court — Middle District of Florida

176 F.Supp.2d 1301

Donn R. MCKNIGHT, Plaintiff, v. Leo BENITEZ and Benitez & Associates, Defendants.

No. 8:01-CV-1140-T-30TGW.

United States District Court, M.D. Florida, Tampa Division.

December 17, 2001.

Joseph W. Bonie, Law Office of Joseph W. Bonie, St. Petersburg, FL, for plaintiff.

Leonel R. Benitez, Leo Benitez, P.A., Coral Gables, FL, for defendants.

ORDER ON DEFENDANTS' MOTION TO DISMISS

MOODY, District Judge.

This cause is before the Court upon Defendants' Motion to Dismiss (Dkt.# 6) and Plaintiff's response in opposition thereto (Dkt.# 8). Upon review of the motion, memoranda and supplemental filings by the parties, and the Court's own research, and for the reasons set forth below, the Court GRANTS in part and DENIES in part the Motion to Dismiss.

Factual Background

This case concerns an attorney "debt collector" who allegedly violated the requirements of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (hereinafter "FDCPA") because of the manner and place of filing suit for replevin and damages.

McKnight, a consumer within the meaning of the FDCPA, purchased a 1999 Chevrolet Suburban on December 1, 2000, and financed it through Ford Motor Credit Company (hereinafter "Ford"). Less than three months later, on February 23, 2001, Ford received notification from the Collier County Sheriff's Office that the vehicle had been seized on January 30, 2001, on Interstate 75 in Collier County, Florida, for allegedly being used in a drug transaction. The Sheriff was seeking forfeiture of the vehicle. Ford, through its attorney Leo Benitez of Benitez & Associates (hereinafter collectively "Benitez"), sought to protect its security interest by obtaining possession of the vehicle.

McKnight had missed his February payment and Ford alleged this default in its suit for replevin seeking possession, late charges, and pre-judgment interest. Benitez, as attorney for Ford, obtained a pre-judgment writ of possession, took possession of the vehicle from the Sheriff, and, on May 1, 2001, served the following package of documents upon McKnight:

1. Summons

2. Complaint consisting of:

A. Jurisdictional allegations

B. General allegations

C. Count I — Replevin

D. Notice Required by the FDCPA

E. Copy of retail installment contract and certificate of title

F. Affidavit of Vincent Lopez

G. Order Granting Pre-Judgment Writ of Replevin

H. Pre-Judgment Writ of Replevin

McKnight, through counsel, negotiated a settlement of that action with Benitez wherein McKnight satisfied his obligation with Ford and Ford delivered possession of the vehicle to McKnight. McKnight then brought this action for violations of the FDCPA alleging:

1. The summons and complaint package served upon him constitutes an "initial communication" which triggers the requirement for a Notice of Debt under § 1692g, and the notice which was included as a part of the complaint was overshadowed and contradicted by the language in the summons, "thereby rendering this notice ineffective in violation of 15 U.S.C. § 1692g(a)," and

2. The summons and complaint package was a "legal action" by a debt collector and was brought in an improper county in violation of § 1962i.

Motion to Dismiss Standard

The appropriate standard for deciding to dismiss a complaint is whether it appears beyond a reasonable doubt that the Plaintiff can prove no set of facts to support his claim. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); South Florida Water Management Dist. v. Montalvo, 84 F.3d 402, 406 (11th Cir.1996); Marshall County Bd. of Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1174 (11th Cir.1993). The Court must view the complaint in the light most favorable to the Plaintiff and construe the allegations in the complaint as true. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). The threshold is "exceedingly low" for a complaint to survive a motion to dismiss for failure to state a claim. Ancata v. Prison Health Services, Inc., 769 F.2d 700, 703 (11th Cir.1985). Regardless of the alleged facts, however, a court may dismiss a complaint on a dispositive issue of law. Marshall County, 992 F.2d at 1174 (11th Cir.1993); Hunt v. American Bank & Trust Co., 783 F.2d 1011, 1013 (11th Cir.1986).

Legal Discussion

Count I — Notice of Debt Under the FDCPA

McKnight's first claim is that the Notice of Debt attached to the complaint was rendered ineffective because it was overshadowed and contradicted by the language in the summons in violation of 15 U.S.C. § 1692g(a). Of course, it does not matter if the Notice is ineffective unless the Act required it to be sent. 15 U.S.C. § 1692g(2) states:

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing —

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

Under the FDCPA, a debt collector's obligation to send a Notice of Debt is triggered by an "initial communication" with the consumer. The first question, then, is whether a complaint served upon a debtor is an "initial communication" within the meaning of the Act. There is no precedent binding on this Court which resolves this question so the Court begins by reviewing the Act itself.

The term "communication" is defined in the Act at 15 U.S.C. § 1692a(2) which states:

The term "communication" means the conveying of information regarding a debt directly or indirectly to any person through any medium.

Granted the definition of "communication" is broad (and probably intentionally so to keep debt collectors from circumventing it), but the purpose, wording, and structure of the Act point to the conclusion that Congress did not intend for a legal action to be a "communication."

The purpose of the Act, as stated in § 1692(e), is "to eliminate abusive debt collection practices by debt collectors, to ensure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent state action to protect consumers against debt collection abuses." That language indicates that Congress intended to regulate unscrupulous practices of debt collectors and level the playing field for debt collectors who do not use abusive practices. There is no indication whatsoever that Congress considered state law legal remedies to be "abusive," nor does it appear necessary to alter the procedures for filing state lawsuits to level the playing field. After all, if state lawsuits are used in an abusive manner, protection already exists in the court where the action is brought.

Moreover, Congress did not overlook legal actions as being potentially abusive. It made a specific provision in the Act, in a section entitled "Legal Actions by Debt Collectors¹," to regulate venue, the place where a lawsuit could be filed. Had it wished to alter the timing of the filing or create other changes in existing legal remedies to curb "abuses," it would have been logical to do so there. Or, specific mention of legal actions could have been made within the definition of "communication." The absence of doing so is one indication that Congress did not intend the revolutionary changes to long-standing judicial remedies which are required if a legal action is considered a "communication" within the meaning of the Act.

Like this Court, the Federal Trade Communication does not view a formal legal action to be a "communication" in connection with the collection of a debt. Courts may look to relevant administrative publications and the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 41, et seq., for guidance. Jeter v. Credit Bureau, Inc., 760 F.2d 1168 (11th Cir.1985). The Federal Trade Commission, in 1989, published a non-binding "Commentary" which states in part²:

1. Coverage (Sections 803 (2, 5, 6), 811) "Attorneys or law firms that engage in traditional debt collection activities ... are covered by the FDCPA, but those whose practice is limited to legal activities are not covered. Similarly, filing or service of a complaint or other legal paper (or transmission of a notice that is a legal prerequisite to enforcement of a debt) is not a `communication' covered by the FDCPA, but traditional collection efforts are covered." * * * * * * * * * *

Section 803 Definitions

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2. Exclusions. The term communication does not include formal legal action (e.g., filing of a lawsuit or other petition/pleadings with a court; service of a complaint or other legal papers in connection with a lawsuit, or activities directly related to such service.)

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"Section 809(a) requires a collector, within 5 days of the first communication," ...

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"6. Legal Action. A debt collector's institution of formal legal action against a consumer (including the filing of a complaint or service of legal papers by an attorney in connection with a lawsuit to collect a...