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Credit Union Loan Source, LLC v. Wood

United States District Court, D. Maryland

September 19, 2014

ETHEL V. WOOD, Defendant.


THEODORE D. CHUANG, District Judge.

This is a debt collection action that originated in the Circuit Court for Prince George's County, Maryland. Defendant Ethel V. Wood defaulted on an auto loan with Plaintiff The Credit Union Loan Source, LLC ("Credit Union"). Credit Union seeks the remaining balance. After the state court denied her motion to dismiss. Wood removed the case to this Court, arguing that Credit Union violated the Pair Debt Collection Practices Act ("FDCPA")* 15 U.S.C. §§ 1692 at seq. (2012). by failing to validate her debt. Presently pending before the Court are Credit Union's unopposed Motion to Dismiss and Remand, ECF No. 11, and Wood's Emergency Motion for an Injunction, ECF No. 8. The motions are ripe, and no hearing is necessary. See Local Rule. 105.6 (D. Md. 2014). Because Wood does not bring a cognizable federal claim, the case must be remanded. Therefore, the Court grants Credit Union's Motion to Dismiss and Remand, and denies as moot Wood's Emergency Motion for an Injunction.


On January 27, 2011, Wood entered into an auto loan agreement with Ivory Chevrolet in Union City, Georgia, for $40, 956.98, which they evidenced with a promissory note (the "Note"). Ivory Chevrolet transferred the Note to Credit Union, a credit union service organization owned by several Georgia credit unions, and Wood defaulted on the loan. Wood alleges that, in September 2012, she asked Credit Union lo validate her debt, but it never responded. On July 25, 2013, Samuel I. White. P.C. ("SrWPC"), a debt collection lau firm, notified Wood that Credit Union had retained it to collect the $32, 029.43 outstanding balance. Def.'s Emergency Mot. Inj. Ex. I, at 1, ECF No. 8-2. In response, on September 6, 2013, Wood faxed SIWPC the same September 2012 validation request that she had previously sent to Credit Union. SIWPC replied to Wood the following week. It identified Ivory Chevrolet as the original lender, provided Wood a copy of the Note, and forwarded the request to Credit Union to address any remaining issues. Again, Credit Union never responded.[2]

On September 20, 2013, Credit Union initiated a debt collection action against Wood in Prince George's County Circuit Court for the $32, 029.43 unpaid balance on her loan. On March 12, 2014, Wood filed a motion lo dismiss, arguing that Credit Union failed to validate her debt despite multiple requests. Def.'s Mem. Supp, Mot. Dismiss at 3. ECF No, 4*1. The Prince George's County Circuit Court summarily denied that motion on March 20. 2014. See ECF No. 6. Six days later. Wood removed the action to this Court and filed an accompanying emergency motion to halt the Prince George's County Circuit Court proceedings. See ECF No. 8. Credit Union now moves to remand the action to state court. See ECF No. 11. The Court addresses both motions below.


I. Legal Standards

A defendant may remove a civil action from state court to federal court only if "the district courts of the United States have original jurisdiction" over it. 28 U.S.C. § 1441(a) (2012); Lontz v. Tharp. 413 F.3d 435, 439 (4th Cir. 2005). The removing party must prove that removal is appropriate. See Lontz. 413 F.3d at 439. Where, as here, diversity jurisdiction does not apply, [3] the removing party must therefore establish that "the face of the complaint raises a federal question, " and that this Court has subject matter jurisdiction. Id In that regard, "merely having a federal defense to a state law claim is insufficient to support removal, since il would also be insufficient for federal question jurisdiction in the first place." Id Finally, because removal raises "significant federalism concerns, " the Court's removal jurisdiction must be strictly construed, and any doubt must be resolved in favor of remanding the case to state court. Md Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255, 260 (4th Cir. 2005) (quoting Mukahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994)) (internal quotation marks omitted).

To withstand a Federal Rule of Civil Procedure 12C(b)(6) motion to dismiss, the complaint must allege enough facts to state a plausible claim for relief. Ashcroft v. IqhaL 556 U.S. 662. 678 (2009). A claim is plausible when the facts pleaded "allowf] the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id Legal conclusions or conclusory statements do not suffice. Id The Court must examine the complaint as a whole, consider the factual allegations in the complaint as true, and construe the factual allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. o/Cornm rs of Davidson Cnty., 407 F.3d 266, 268 (4th Cir. 2005).

II. Motion to Dismiss and Remand

A. The FDCPA Claim

Wood's sole basis for removal is an alleged FDCPA violation. The Court must, however, remand this case because Wood raises no cognizable issue under the FDCPA and therefore does not establish subject matter jurisdiction. The FDCPA protects consumers from "abusive debt collection practices" by prohibiting debt collectors from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C §§ 1692(e), 1692e. Relevant here, the FDCPA allows consumers, after having received a debt collection notice, to dispute whether the debt is valid. § 1692g(b). Once a debt is disputed, the debt collector must cease the debt collection until it validates the debt by mailing the consumer a copy of the original debt instrument or judgment, or the name and address of the original creditor. Id Congress included this validation requirement in the statute "to eliminate ihe recurring problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid." Russell ». Absolute Collection Sew., Inc., No. 12-2357. 2014 WL 3973792, at *7 (4th Cir. Aug. 15. 2014) (citation and internal quotation marks omitted).

The FDCPA, and by extension, the validation requirement, only applies to a "debt collector, " 15 U.S.C. §§ 1692b-1692g. 1692k(a). defined as any person who uses interstate commerce "or the mails in any business the principal purpose of which is the collection of any debts." or "who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another;' § 1692a(6). With few exceptions, these requirements do not apply to a "creditor, " m Schlosser v. Fairbanks Capital Corp., 323 F.3d 534, 536 (7th Cir. 2003), whom the FDCPA defines as one "who otters or extends credit creating a debt or to whom a debt is owed, " § 1692a(4) (noting that "creditor" does not include any person who receives "a debt in default solely for the purpose of facilitating collection of such debt for another").

Wood specifically claims that Credit Union violated the FDCPA when it failed to validate her debt She alleges that Credit Union received her "notice and demand to validate the debt" at least twice - once in September 2012, when she sent the request directly to Credit Union, and again in September 2013. when SIWPC forwarded Credit Union another cop> of the same request to "address any remaining issues." Def.'s Compl. at 2. FCF No 1. Credit Union never responded to either request. Credit Union argues that the FDCPA does not apply here because it is not a "debt collector." Credit Union is correct. Credit Union, as holder of the Note, was the entity to which Wood owed the debt, not a debt collector. As such, Credit Union was under no obligation under the FDCPA to validate the debt despite Wood's multiple attempts. See Ademiluyi v. Penny-Mac Mortg. Inv Trust Holdings I LLC. 929 F.Supp.2d 502. 525 (D. Md, 2013) (discussing the creditor exception under the FDCPA). Accordingly, Wood's FDCPA cause of action must be dismissed for failure to state a claim. Fed.R.Civ.P. 12(b)(6). Because Wood ...

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