Nelson v. Midland Credit Mgmt., Inc.
Decision Date | 11 July 2016 |
Docket Number | No. 15-2984,15-2984 |
Citation | 828 F.3d 749 |
Parties | Domick Nelson, Plaintiff–Appellant v. Midland Credit Management, Inc., Defendant–Appellee. National Association of Consumer Bankruptcy Attorneys, Amicus on Behalf of Appellant(s) ACA International, Amicus on Behalf of Appellee(s) |
Court | U.S. Court of Appeals — Eighth Circuit |
Counsel who presented argument on behalf of the appellant and appeared on the brief was Richard A. Voytas, Jr., of Saint Louis, MO.
Counsel who presented argument on behalf of the appellee was Jason B. Tompkins, of Birmingham, AL. The following attorneys also appeared on the appellee brief; Joshua C. Dickinson, of Omaha, NE., Shilee T. Mullin, of Omaha, NE., Chase T Espy, of Birmingham, AL.
Counsel who presented argument for amicus National Association of Consumer Bankruptcy Attorneys on behalf of appellant(s) was Daniel Luke Geyser, of Los Angeles, CA. The following attorneys also appeared on the amicus brief; Peter K. Stris, of Los Angeles, CA., Tara A. Twomey, of San Jose, CA.
The following attorney appeared on the amicus brief of ACA International on behalf of appellee(s); Brian Melendez, of Minneapolis, MN.
Before WOLLMAN, BENTON, and SHEPHERD, Circuit Judges.
BENTON
, Circuit Judge.
In November 2006, Domick R. Nelson defaulted on a consumer debt of $751.87. On February 25, 2015, she filed a Chapter 13 petition in bankruptcy court. Midland Credit Management, Inc., as agent for the creditor, filed a proof of claim in bankruptcy court for the amount of the debt. According to the proof of claim, Nelson made no payment on the debt after November 2006. Nelson objected to the proof of claim, arguing it was time-barred. See § 516.120(1) RSMo
2000; Discovery Grp. LLC v. Chapel Dev., LLC , 574 F.3d 986, 990 (8th Cir. 2009) ( ). The bankruptcy court agreed, disallowing Midland's claim. See 11 U.S.C. § 558 ( ).
Nelson then sued Midland, alleging that, by filing the proof of claim on the time-barred debt, Midland violated the Fair Debt Collection Practices Act (FDCPA).
The district court1 dismissed for failure to state a claim, holding that the FDCPA is not implicated by a debt collector filing an accurate and complete claim on a time-barred debt. Nelson appeals. Having jurisdiction under 28 U.S.C. § 1291
, this court affirms.
This court reviews de novo the Rule 12(b)(6) dismissal of Nelson's claims. Cox v. Mortgage Elec. Registration Sys., Inc. , 685 F.3d 663, 668 (8th Cir. 2012)
. This court assumes as true all factual allegations in the pleadings, interpreting them most favorably to Nelson, the nonmoving party. Bell v. Pfizer, Inc. , 716 F.3d 1087, 1091 (8th Cir. 2013). “[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, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
“Enacted to eliminate abusive debt collection practices, the FDCPA imposes civil liability on debt collector[s] for certain prohibited debt collection practices.” Hemmingsen v. Messerli & Kramer, P.A. , 674 F.3d 814, 817 (8th Cir. 2012)
(alteration in original). Nelson alleges that Midland's claim violated three prohibitions in the FDCPA: “engag[ing] in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt,” 15 U.S.C. § 1692d ; “us[ing] any false, deceptive, or misleading representation or means in connection with the collection of any debt,” § 1692e ; and “us[ing] unfair or unconscionable means to collect or attempt to collect any debt,” § 1692f . Because each of these allegations stem from the same conduct—the filing of the proof of claim—this court may consider the provisions together. See
More specifically, under the FDCPA, a debt collector may neither falsely represent “the character, amount, or legal status of any debt,” 15 U.S.C. § 1692e(2)(A)
, nor threaten “to take any action that cannot legally be taken or that is not intended to be taken,” id. § 1692e(5). Nelson argues that Midland, by submitting its claim, represented that the claim was valid and enforceable. See 11 U.S.C. § 502(a) (). Even if—as here—the debt collector does not make express misrepresentations, the FDCPA bars a debt collector from filing or threatening a lawsuit to collect a time-barred debt. See
Freyermuth v. Credit Bureau Servs., Inc. , 248 F.3d 767, 771 (8th Cir. 2001) ().
Nelson urges this court to follow the Eleventh Circuit and extend to bankruptcy claims the rule against actual or threatened litigation on time-barred debts. See Crawford v. LVNV Funding, LLC , 758 F.3d 1254 (11th Cir. 2014)
; see also
Johnson v. Midland Funding, LLC , 823 F.3d 1334, 1338–39, 2016 WL 2996372, at *3 (11th Cir. May 24, 2016) ( ). In Crawford, the Eleventh Circuit held that knowingly filing a time-barred proof of claim violated the FDCPA's prohibitions against unfair, unconscionable, deceptive, or misleading conduct. 758 F.3d at 1261. The Crawford court reasoned that the same concerns underlying the rule against litigating or threatening to litigate time-barred debts—the debtor's faded memory and lost records, possible ignorance of the statute of limitations, and expense to contest the stale debt—apply equally to a debt collector filing a claim on a stale debt. Id.
, however, ignores the differences between a bankruptcy claim and actual or threatened litigation. In Freyermuth, this court held that a defendant's FDCPA liability turns on “whether an unsophisticated consumer would be harassed, misled or deceived by” the debt collector's acts. Freyermuth , 248 F.3d at 771. The bankruptcy process protects against such harassment and deception. Unlike defendants facing a collection lawsuit, a bankruptcy debtor is aided by “trustees who owe fiduciary duties to all parties and have a statutory obligation to object to unenforceable claims.” In re...
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