Pruitt v. Resurgent Capital Servs., LP

• Decision Date: 07 July 2022
• Docket Number: CIVIL NO. JKB-21-2615
• Citation: 610 F.Supp.3d 775
• Parties: Yorel PRUITT, Plaintiff v. RESURGENT CAPITAL SERVICES, LP, et al., Defendants.
• Court: U.S. District Court — District of Maryland

610 F.Supp.3d 775

Yorel PRUITT, Plaintiff

v.RESURGENT CAPITAL SERVICES, LP, et al., Defendants.

CIVIL NO. JKB-21-2615

United States District Court, D. Maryland.

Signed July 7, 2022

Aryeh E. Stein, Meridian Law, LLC, Baltimore, MD, for Plaintiff.

Patrick K. Burns, Alexis Bosilovic, Gordon Rees Scully Mansukhani LLP, Alexandria, VA, for Defendants Resurgent Capital Services, LP, LVNV Funding, LLC.

MEMORANDUM

James K. Bredar, Chief Judge Plaintiff Yorel Pruitt filed a Complaint, on behalf of herself individually and on behalf of a putative class, against Defendants Resurgent Capital Services, LP ("Resurgent"), LVNV Funding, LLC ("LVNV")—both alleged debt collectors (collectively, "Entity Defendants")—and John Does 1–25 (the "John Doe Defendants"), alleging violations of the Fair Debt Collection Practices Act (the "FDCPA"), 15 U.S.C. § 1692 et seq. (Compl., ECF No. 1.) Defendants Resurgent and LVNV moved to dismiss Ms. Pruitt's Complaint, arguing that Ms. Pruitt lacks standing and that the Complaint fails to state a claim upon which relief can be granted under the FDCPA. (Mot. Dismiss, ECF No. 14.) Ms. Pruitt filed a Response in Opposition to the Motion to Dismiss, (Pl.’s Opp'n Mot. Dismiss, ECF No. 15), and Defendants Resurgent and LVNV filed a Reply in Support of their Motion. (Defs.’ Reply Supp. Mot. Dismiss, ECF No. 16.) Entity Defendants’ Motion to Dismiss is now ripe for consideration and no hearing is required. See Local Rule 105.6 (D. Md. 2021). For the reasons that follow, the Court will GRANT Entity Defendants’ Motion to Dismiss (ECF No. 14), and the Complaint will be dismissed without prejudice.

I. Background¹

Ms. Pruitt received a letter from Resurgent dated July 29, 2021, regarding an alleged debt owed to LVNV (the "Resurgent Letter" or the "Letter"), who purchased the debt from its original obligee, Credit One Bank, N.A. (Compl. ¶¶ 23, 27, 29; see ECF No. 1-2.)² In addition to a notice in the top right-hand corner containing the account number, original creditor, current owner, reference ID, balance, and accountholder name, the Resurgent Letter states the following:

Resurgent Capital Services L.P. manages the above referenced account for LVNV Funding LLC and has initiated a review of the inquiry recently received either directly or from Tate & Kirlin, the current servicer of this account. For further assistance, please contact one of our Customer Service Representatives toll-free at 1-866-464-1187.

(ECF No. 1-2.) Below this message is a notice, in bold type, directing the recipient to "[p]lease read the following important notices as they may affect [her] rights." (Id. ) The notice contains the following statutorily required language:

Unless you notify us within 30 days after receiving this notice that you dispute the validity of this debt, or any portion of it, we will assume this debt is valid. If you notify us in writing within 30 days after receiving this notice that you dispute the validity of this debt, or any portion of it, we will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request of us in writing, within 30 days after receiving this notice, we will provide you with the name and address of the original creditor, if different from the current creditor. This is an attempt to collect a debt and any information obtained will be used for that purpose. This communication is from a debt collector.

(Id. ); see also 15 U.S.C. § 1692g(a) (describing the required contents of a written notice to be sent "[w]ithin five days after the initial communication with a consumer in connection with the collection of any debt").

Ms. Pruitt alleges that, read together, these paragraphs left her³ "confused as to the proper procedures to dispute her debt." (Compl. ¶ 38.) Specifically, Ms. Pruitt argues that the Letter (1) misleads "the consumer because one paragraph leads h[er] to believe that [her] account is already under review and that [s]he does not need to dispute the debt and another paragraph says [s]he has thirty days to dispute the debt"; (2) implies in the first paragraph that "a phone call is sufficient" to dispute the debt when such must be done in writing; and (3) mentions Tate & Kirlin as "the current servicer" of the account without further explaining that entity's role relative to that of Resurgent and LVNV. (Id. ¶¶ 36, 37, 40–42.) Ms. Pruitt alleges that the resulting confusion made her "unable to evaluate her options of how to handle [the] debt"; caused her to expend "time, money, and effort" to determine the proper course of action; prevented her from "adequately respond[ing]" to the Letter;⁴ misled her "to her detriment" and caused her to rely on the Letter's contents to her detriment; and that she "would have pursued a different course of action" but for the confusing nature of the Letter. (Id. ¶¶ 46, 47, 50, 52, 53.)

On behalf of herself and a putative class of similarly situated individuals, Ms. Pruitt filed a Complaint in this Court on October 12, 2021, alleging two counts in violation of the FDCPA. (Compl. at 1, ¶¶ 55–59, 60–64.) In Count I, Ms. Pruitt claims that Defendants made "a false and misleading representation" in violation of 15 U.S.C. § 1692e(10), which prohibits debt collectors from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt[,]" including "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." (Id. ¶¶ 55–59.) In Count II, Ms. Pruitt claims that the Letter's "contradictory language" relating to "the current status of the debt and method for a dispute" violated 15 U.S.C. § 1692g, which requires debt collectors to send a consumer a written notice containing certain statutorily enumerated details within five days of the initial communication with the consumer. (Id. ¶¶ 60–64.) She seeks actual damages, statutory damages, costs, attorneys’ fees, and declaratory relief. (Id. ¶¶ 6, 59, 64.)

II. Legal Standards

A. Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) provides that a party may move to dismiss a claim on the argument that the presiding court lacks subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). "Motions to dismiss for lack of subject matter jurisdiction are properly granted where a claim fails to allege facts upon which the court may base jurisdiction." Davis v. Thompson , 367 F. Supp. 2d 792, 799 (D. Md. 2005) (citing Crosten v. Kamauf , 932 F. Supp. 676, 679 (D. Md. 1996) ).

Though Entity Defendants bring their Motion to Dismiss under Rule 12(b)(6) only, their standing argument challenges the Court's subject matter jurisdiction and is therefore properly considered under Rule 12(b)(1). See Roy v. Ward Mfg., LLC , Civ. No. RDB-13-3878, 2014 WL 4215614, at *1 (D. Md. Aug. 22, 2014) ("When a defendant moves to dismiss a plaintiff's claim for lack of standing, courts commonly address the motion under Rule 12(b)(1) of the Federal Rules of Civil Procedure."); see also Stone v. Trump , 400 F. Supp. 3d 317, 333 (D. Md. 2019) (" Rule 12(b)(1) governs motions to dismiss ... for lack of standing, which pertain to subject matter jurisdiction."). When considering a motion to dismiss challenging a plaintiff's standing to bring suit in federal court, "the court determines whether the allegations in the Complaint, taken as true, are sufficient to establish standing under the plausibility standard of Rule 12(b)(6) and Iqbal/Twombly. " Allah-Mensah v. Law Office of Patrick M. Connelly, P.C. , Civ. No. PX-16-1053, 2016 WL 6803775, at *2 (D. Md. Nov. 17, 2016) (citing Zander v. United States , 786 F. Supp. 2d 880, 883 (D. Md. 2011) ); see also infra Part II.B.

B. Rule 12(b)(6)

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. Proc. 8(a)(2). To survive a Rule 12(b)(6) motion to dismiss, "a plaintiff must plead enough factual allegations ‘to state a claim to relief that is plausible on its face.’ " Bing v. Brivo Sys., LLC , 959 F.3d 605, 616 (4th Cir. 2020) (citing Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) and Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). At this stage, the Court "accept[s] as true all of the factual allegations contained in the complaint," and "draw[s] all reasonable inferences in favor of the plaintiff." Weidman v. Exxon Mobil Corp. , 776 F.3d 214, 219 (4th Cir. 2015) (citing E.I. du Pont de Nemours & Co. v. Kolon Indus. , 637 F.3d 435, 440 (4th Cir. 2011) ). That said, "[b]are legal conclusions ‘are not entitled to the assumption of truth’ and are insufficient to state a claim." King v. Rubenstein , 825 F.3d 206, 214 (4th Cir. 2016) (citing Ashcroft , 556 U.S. at 679, 129 S.Ct. 1937 ).

III. Analysis

In support of their Motion to Dismiss, Entity Defendants argue that Ms. Pruitt's claims fail for lack of standing and on the merits, (See generally Mot. Dismiss Mem. Supp.) In response, Ms. Pruitt raises several arguments in support of her Article III standing in addition to the substance of her FDCPA claims. (See generally Pl.’s Opp'n Mot. Dismiss.) Because the Court concludes that the Complaint does not allege facts sufficient to establish Ms. Pruitt's standing to sue in federal court—depriving the Court of subject matter jurisdiction—it does not reach the merits of Ms. Pruitt's claims under the FDCPA.

A. Standing

Under the Constitution, federal courts are empowered to resolve "Cases" and "Controversies[.]" U.S. Const. art. III, § 2, cl. 1. One consequence of this textual restriction is that a plaintiff seeking relief in federal court must demonstrate that she has standing to sue. See Raines v. Byrd , 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) (citing Lujan v. Defenders of Wildlife , 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). To do so, it is the plaintiff...