Shadrin v. Student Loan Sols.

• Decision Date: 31 March 2022
• Docket Number: Civil Action CCB-20-3641
• Parties: YURY SHADRIN, et al. v. STUDENT LOAN SOLUTIONS LLC, et al.
• Court: U.S. District Court — District of Maryland

YURY SHADRIN, et al.
v.
STUDENT LOAN SOLUTIONS LLC, et al.

Civil Action No. CCB-20-3641

United States District Court, D. Maryland

March 31, 2022

MEMORANDUM

Catherine C. Blake United States District Judge

Plaintiffs Yury Shadrin and Tania Burinskas bring a putative class action against defendants Student Loan Solutions, LLC (“SLS”), Williams & Fudge, Inc. (“WFI”) (together, the “servicer defendants”), and Feldman & Associates, P.C. (“Feldman”). The plaintiffs allege that the defendants violated the federal Fair Debt Collections Practices Act (“FDCPA”), the Maryland Consumer Debt Collection Act (“MCDCA”), and the Maryland Consumer Protection Act (“MCPA”) in their attempts to collect outstanding balances on the plaintiffs' student loans. Mr. Shadrin and Ms. Burinskas also seek attorneys' fees and a declaratory judgment against the defendants.

Now pending before the court is a motion to dismiss, or in the alternative, a motion for summary judgment (ECF 40) brought by Feldman, and a motion for judgment on the pleadings (ECF 50) brought by defendants SLS and WFI. The motions are fully briefed, and no oral argument is necessary. See Local Rule 105.6 (D. Md. 2021). For the reasons that follow, the court will deny both motions.

BACKGROUND

I.Yury Shadrin

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On September 28, 2006, Mr. Shadrin took out a $12, 150.00 private, “direct-to-consumer” student loan from Bank of America, upon which he defaulted at some point in 2014 or 2015. (ECF 34, FAC, ¶¶ 44-46, 48-49). Mr. Shadrin claims that Bank of America charged-off^[1] his entire loan in 2015, accelerating its entire balance “by Bank of America and through its third-party debt collectors.” (Id. ¶¶ 49-50).^[2] Mr. Shadrin received a collection letter from WFI on August 16, 2016, that alleged he owed $15, 452.61, which he also asserts accelerated the loan. (Id. ¶¶ 51-52; ECF 34-2, Ex. A).

SLS acquired Mr. Shadrin's student loan in 2017. (ECF 34 ¶ 37(a)). On March 6, 2020, SLS, through its attorneys at Feldman, filed a debt collection action in the District Court for Baltimore County, Case No. D-08-CV-20-014318, to collect $7, 188.04 of the balance of Mr, Shadrin's loan. (Id. ¶¶ 53-54). SLS and Feldman claimed that the commencement of this action accelerated Mr. Shadrin's loan. (Id. ¶¶ 56-58; ECF 34-3, Ex. B). SLS and Feldman also reference an “acceleration notice” sent by WFI to Mr. Shadrin on November 26, 2019 (ECF 34-4, Ex. C), As noted, Mr. Shadrin asserts acceleration already had occurred in 2015 or 2016. (ECF 34 ¶¶ 59-60).

II.Tania Burinskas

Ms. Burinskas similarly took out a student loan totaling $11, 049.72 from Bank of America on January 4, 2008. (Id. ¶¶ 70-71). Ms. Burinskas took out a second loan for $13, 259.67 in 2015, upon which she defaulted in 2016. (Id. ¶ 72). On August 5, 2016, Sunrise Credit Services, Inc., a

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debt collector acting for Bank of America, wrote to Burinskas, allegedly accelerating and seeking to collect her second loan, listing both an “account balance” and “balance due” of $17, 683.79. (Id. ¶ 74; ECF 34-6, Ex. E).

SLS acquired both of Ms. Burinskas's student loan accounts from Bank of America in 2017. (ECF 34 ¶ 37(a)). On behalf of SLS, WFI sent Ms. Burinskas a collection letter on November 12, 2017, which she contends accelerated both her loans. (Id. ¶¶ 76, 77; ECF 34-7, Ex. F). WFI subsequently sent Ms. Burinskas two letters on November 26, 2019, which she claimed she understood as an additional attempt to accelerate both her loans, demanding $7, 182.24 to be repaid on the first and $9, 832.72 repaid on the second. (ECF 34 ¶ 78; ECF 34-8, Ex. G). On January 2, 2020, Feldman sent Ms. Burinskas collection two letters demanding “payment in full” on both loans and “attorney's fees of $250, ” further stating that “court costs will accrue to the debt if lawsuit is filed.” (ECF 34 ¶ 79; ECF 34-9, Ex. H).

On February 14th and 28th, 2020, SLS and Feldman filed two separate debt collection actions against Burinskas in the District Court for Baltimore County for both her student loan balances (Case Nos. D-08-CV-20013430 and D-08-CV-20011796). (ECF 34 ¶ 86).

III.Procedural History

Mr. Shadrin and Ms. Burinskas filed their putative class action complaint against the defendants in the Circuit Court for Anne Arundel County on November 17, 2020. (ECF 1-3, Compl.). The defendants then jointly removed the case to federal court on December 17, 2020, on federal question jurisdiction. (ECF 1 ¶¶ 8-12).

Feldman filed a motion to dismiss on January 29, 2021 (ECF 29), which became moot upon the plaintiffs' filing a first amended complaint on March 15, 2021. (ECF 34). On April 14, 2021,

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Feldman filed another motion to dismiss, or in the alternative, a motion for summary judgment (ECF 40) that incorporated the arguments made in the previous motion to dismiss. On July 16, 2021, SLS and WFI filed a motion for judgment on the pleadings (ECF 50). The plaintiffs have responded to both motions (ECFs 45, 54), and the defendants have replied (ECFs 46, 61). The plaintiffs also submitted a notice of supplemental authority (ECF 55), to which Feldman has responded (ECF 58) and the plaintiffs replied (ECF 62).

DISCUSSION

I.Standard of Review

“A motion for judgment on the pleading under Rule 12(c) is assessed under the same standards as a motion to dismiss under Rule 12(b)(6).” Occupy Columbia v. Haley, 738 F.3d 107, 115 (4th Cir. 2013) (citation omitted). To survive a motion to dismiss, the factual allegations of a complaint “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). “To satisfy this standard, a plaintiff need not ‘forecast' evidence sufficient to prove the elements of the claim. However, the complaint must allege sufficient facts to establish those elements.” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citation omitted). “Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is ‘probable,' the complaint must advance the plaintiff's claim ‘across the line from conceivable to plausible.'” Id. (quoting Twombly, 550 U.S. at 570). Additionally, although courts “must view the facts alleged in the light most favorable to the plaintiff, ” they “will not accept ‘legal conclusions couched as facts or unwarranted inferences, unreasonable conclusions, or arguments'” in deciding whether a case should survive a motion to dismiss. U.S. ex rel. Nathan v. Takeda Pharm. North Am., Inc.,

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707 F.3d 451, 455 (4th Cir. 2013) (quoting Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 365 (4th Cir. 2012)).^[3]

II.FDCPA Claim

Though the plaintiffs assert claims under the federal Fair Debt Collections Practices Act (“FDCPA”), the Maryland Consumer Debt Collection Act (“MCDCA”), and the Maryland Consumer Protection Act (“MCPA”), and request declaratory judgment, each of the latter causes of action is explicitly dependent on the success of their first FDCPA claim.^[4]

The FDCPA prohibits debt collectors from “us[ing] any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. §1692e. The plaintiffs allege that the defendants^[5] violated this provision of the FDCPA in three ways: 1) by attempting to collect the plaintiffs' loans, via sending collection letters that purported to accelerate the loans and filing lawsuits, despite the loans already being time-barred by prior acceleration; 2) by attaching a general promissory note example to their state court filings and representing it to be an original document specific to the plaintiffs; and 3) by falsely stating that Feldman was owed $250 in attorney's fees and that court costs would be added to the plaintiff's alleged debts if suit was filed.^[6] (ECF 34 ¶¶ 158-63).

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a) Attempting to Collect Time-Barred Debt

At the heart of both the defendants' dispositive motions is the issue of whether the plaintiffs have sufficiently alleged that their debts were accelerated by the collection letters sent in 2016, more than three years before the debt collection suits were filed.

i.Choice of Law Regarding the Applicable Statute of Limitations

Before addressing the issue of acceleration, the court must determine the law governing the interpretation of the plaintiffs' loan contracts and the applicable statute of limitations. SLS and WFI contend that the California choice of law provision in the contracts is substantive, and therefore governs which statute of limitations controls.

In Maryland, a statute of limitations is typically considered a “procedural” rule “for choice-of-law purposes, ” and “[p]rocedural matters…are always governed by the law of the forum.” Lewis v. Waletzky, 422 Md. 647, 657-58 (2011); see also Doughty v. Prettyman, 219 Md. 83, 88 (1959) (“Included in the procedural matters governed by the law of this state is the statute of limitations”); Akinmeji v. Jos A. Bank Clothiers, Inc., 399 F.Supp.3d 466, 472 (D. Md. 2019) (holding that “Maryland courts almost universally view issues pertaining to the statute of limitations as procedural, not substantive, ” but determining an exception exists where California statute both created a liability that did not exist at common law and identified a statute of limitations for that right); cf. Jennings v. Dynamic Recovery Sols. LLC, 441 F.Supp.3d 106, 112-14 (D. Md. 2020) (holding Delaware's statute of limitations to apply where the choice of law would influence the

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“real-world activity of debtors, ” because making the partial payment requested in the collections letter would revive the debt only under Delaware, not Maryland, law).

Here, unlike in Jennings, the distinction is not one of substance, but rather is merely the difference of a year. Compare Maryland Code Ann. CJP § 5-101 (“A civil action at...