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Richardson v. Midland Funding, LLC

United States District Court, Fourth Circuit

December 18, 2013



CATHERINE C. BLAKE, District Judge.

Plaintiff Adrienne Richardson filed this action against Midland Funding, LLC ("Midland Funding") and Midland Credit Management, Inc. ("MCM"), (collectively "Midland"), alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), the Maryland Consumer Debt Collection Act ("MCDCA"), and the Maryland Consumer Protection Act ("MCPA"). Midland has filed a motion to dismiss or, in the alternative, for summary judgment. A hearing was held on November 21, 2013. For the reasons set forth below, the motion will be granted.


Midland Funding is a debt collector that bought a debt Richardson incurred on a Credit One Bank, N.A., credit card after she defaulted. Midland sought an affidavit judgment against Richardson in state court to collect. (Am. Compl., ECF No. 7, ¶ 46). On April 3, 2013, Richardson filed this action in the Circuit Court for Baltimore County, Maryland, seeking damages from Midland for alleged violations of the FDCPA, the MCDCA, and the MCPA, and seeking a stay of the collection action while this action was pending. (Notice of Removal, ECF No. 1, ¶ 1; Def.'s Mem., ECF No. 9-1, at 1-2). The collection action was stayed, and on May 8, 2013, Midland removed the FDCPA suit to this court. (Def.'s Mem., at 5).

Richardson alleges Midland violated provisions of the FDCPA, the MCDCA, and the MCPA in five ways. First, Richardson claims Midland violated 15 U.S.C. §§ 1692e and 1692f- specifically claiming violations of §§ 1692e(2)(A), 1692e(4), 1692e(5), 1692e(10) and 1692f(1)-as well as § 14-202(8) of the MCDCA and § 13-303(1) of the MCPA, by seeking an affidavit judgment against her in state court without the proper documentation required under Maryland Rule 3-306(d), which governs pleading requirements for debt collectors seeking affidavit judgments. (Am. Compl. ¶¶ 68(a), 69(a), 70(a), 71(a), 72(a), 73(a), 74(a), 79). Second, Richardson alleges Midland violated the same provisions by filing a lawsuit to collect the debt when it did not have legal grounds to do so and misrepresenting its standing. (Am. Compl. ¶¶ 68(b), 69(b), 70(b), 71(b), 72(b), 73(b), 74(b), 80). Third, Richardson claims Midland's use of a "scattershot litigation strategy, " designed to deceive consumers into accepting default judgments or to coerce them into settling, violates the above-listed provisions. (Am. Compl. ¶¶ 68(c), 69(c), 70(c), 71(c), 72(c), 73(c), 74(c), 81). Fourth, Richardson alleges Midland violated the previously listed provisions, with the exception of § 1692f(1), by claiming the sale in which it obtained ownership rights to Richardson's alleged debt was subject to representation or warranty as to collectability. (Am. Compl. ¶¶ 68(d), 69(d), 70(d), 71(d), 72(d), 73(d), 82). Fifth, and finally, Richardson claims Midland violated § 1692e(10) by having no meaningful attorney involvement when it filed suit against Richardson. (Am. Compl. ¶ 72(e)).

Midland seeks dismissal on the grounds that Richardson's claims are not ripe and that she has failed to state a claim upon which relief can be granted. Because the court finds Richardson has failed to state a claim, it will assume, without deciding, that her claims are ripe.


When ruling on a motion under Rule 12(b)(6), the court must "accept the well-pled allegations of the complaint as true, " and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). "Even though the requirements for pleading a proper complaint are substantially aimed at assuring that the defendant be given adequate notice of the nature of a claim being made against him, they also provide criteria for defining issues for trial and for early disposition of inappropriate complaints." Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). "The mere recital of elements of a cause of action, supported only by conclusory statements, is not sufficient to survive a motion made pursuant to Rule 12(b)(6)." Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). 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) (internal citations and alterations 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, 684 F.3d at 439 (quotations and 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).

I. Section 1692e Claims

The FDCPA protects consumers from abusive and deceptive debt collection practices. United States v. Nat'l Fin. Serv., Inc., 98 F.3d 131, 135 (4th Cir. 1996). Section 1692e prohibits the use of "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. The section also includes a non-exhaustive list of conduct that violates the general prohibition. Id. At issue in this case are alleged violations of § 1692e(2)(A), prohibiting "[t]he false representation of the character, amount, or legal status of any debt;" § 1692e(4), prohibiting the representation that a consumer will be imprisoned, arrested, or lose property if he does not pay a debt, unless the action is lawful and the collector intends to take the action; § 1692e(5), prohibiting a collector from threatening any action that "cannot legally be taken or that is not intended to be taken;" and § 1692e(10), prohibiting the use of "any false representation or deceptive means to collect or attempt to collect any debt." "It is well established that the threshold requirement for application of the [FDCPA] is that prohibited practices are used in an attempt to collect a debt.'" Bradshaw v. Hilco Receivables, LLC, 765 F.Supp.2d 719, 725 (D. Md. 2011) (quoting Mabe v. G.C. Serv. Ltd. P'ship, 32 F.3d 86, 87-88 (4th Cir. 1994)). Because Richardson has failed to allege sufficient facts making it plausible that Midland engaged in conduct that would violate any of the provisions of § 1692e when it filed a collection suit against her, she has failed to meet the threshold requirement for stating a claim.

A. Insufficient Documentation under Maryland Rule 3-306(d)

Under Maryland Rule 3-306(d), a party seeking to collect on an assigned consumer debt by affidavit judgment must include with the affidavit various properly authenticated documents tending to show the debt exists as alleged, the defendant in the collection action is the actual debtor, and the debt collector has ownership rights to the debt. Md. Rule 3-306(d). In addition, the debt collector must include an "Assigned Consumer Debt Checklist, " on which the collector marks and identifies which information attached to the affidavit is intended to make the showings required by the rule. Id. Even after filing the complaint, and without the plaintiff filing a notice to defend or showing up in court, the court can find the documentation is insufficient to entitle the debt collector to judgment on affidavit. Md. Rule 3-306(e)(2)(B). A completed checklist is thus no guarantee that the debt collector will succeed on the merits.

Richardson claims that, because much of the documentation Midland attached to its collection complaint allegedly was not properly authenticated or did not sufficiently demonstrate the information required by Rule 3-306, the checklist Midland filed identifying the documentation as satisfying the rule's requirements was false and misleading. ( See, e.g., Am. Compl. ¶¶ 51-52, 61). For example, to satisfy the requirement that a debt collector attach "[p]roof of the existence of the debt or account" to its complaint for affidavit judgment, Midland attached a record generated by MCM from electronic records Midland Funding received when it bought the defaulted account. (Def.'s Mot. Ex. A, ECF No. 9-2, at 8).[1] The record includes Richardson's name, the amount of the debt owed, the name of the original creditor, Richardson's address, the charge off date of the debt, the day Richardson opened the account, and the day she last made a payment. Id. Richardson claims the document is not a "bill or other record reflecting purchases, payments, or other use of credit card or account" as Midland indicated on the checklist, and that Midland therefore falsely claimed to have provided proof of the debt when it checked the corresponding box on the checklist. (Am. Compl. ¶ 51). Richardson does not claim that any information in the record is false, or that it is not a record from MCM as indicated, only that it does not meet the evidentiary requirements of the pleading rule. Richardson makes the same claim with respect to the other documents Midland attached-only alleging that the document at issue does not satisfy the evidentiary requirements of the rule, but never disputing the accuracy of the record. One of the documents, a credit card statement from Credit One to Richardson showing an amount due matching Midland's claim and alerting her that the account will be charged off, appears to be a document from the original creditor corroborating Midland's claim, (Def.'s Mot. Ex. A, at 18); and, in fact, Richardson does not dispute the accuracy of the bill or its authenticity. She only claims it does not demonstrate that the account has been charged off as the corresponding box on the checklist requires. (Am. Compl. ¶ 60).[2]

Richardson's allegations do not support a claim that Midland engaged in deceptive conduct in violation of § 1692e because they amount to nothing more than a claim that the evidence Midland offered at the time it filed suit was insufficient to support a judgment in its favor. A debt collector's mere failure to offer evidence sufficient to prove its claim at the time it files a complaint is not prohibited conduct under the FDCPA. See Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 332-33 (6th Cir. 2006) (finding no cause of action existed under § 1692e(10) where the only allegation was that a debt collector "did not presently possess the means of proving [the] debt" when it filed its complaint); Johnson v. BAC Home Loans Servicing, LP, 867 F.Supp.2d 766, 781 (E.D. N.C. 2011) ("To the extent Plaintiffs' allegations imply the filing of a lawsuit without substantiating documentation is false, deceptive or misleading, Plaintiffs do not state a claim[.]"); Deere v. Javitch, Block and Rathbone LLP, 413 F.Supp.2d 886, 891 (S.D. Ohio 2006) (finding the plaintiff failed to state a claim under §§ 1692e and 1692f where she alleged only that "more of a paper trail should have been in the [collector's] lawyers' hands or attached to the complaint" when the collector filed suit). To hold otherwise would mean every time a debt buyer filed suit in good faith, but ultimately failed to win on the merits or faced dismissal on the basis of its complaint, it could be subject to liability under § 1692e. This cannot be in line with the goals of the FDCPA, which is intended to ...

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