United States District Court, D. Maryland
ELLEN LIPTON HOLLANDER, District Judge.
Andrew Chartier filed suit against M. Richard Epps, P.C. ("Epps"); Equifax Information Services, LLC ("Equifax"); TransUnion, LLC ("TransUnion"); Cohn, Goldberg & Deutsch, LLC ("Cohn"); and Green Tree Servicing, LLC ("Green Tree"), alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA") and the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. ("FCRA"). Chartier also asserts a claim for breach of contract. See ECF 5 ("Amended Complaint" or "Am. Compl.").
Pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure, Epps filed a motion to dismiss (ECF 11), supported by a memorandum (ECF 11-1) (collectively, the "Epps Motion"), seeking dismissal of the Amended Complaint based on lack of personal jurisdiction and for failure to state a claim. Green Tree also filed a motion to dismiss (ECF 18) and a supporting memorandum (ECF 18-1) (collectively, the "Green Tree Motion"), urging dismissal pursuant to Rule 12(b)(6). Chartier has opposed both motions. ECF 28 (Opposition to Green Tree Motion); ECF 29 (Opposition to Epps Motion). Green Tree and Epps each replied. ECF 31 (Green Tree Reply); ECF 32 (Epps Reply).
The issues have been fully briefed, and no hearing is necessary to resolve them. See Local Rule 105.6. For the reasons that follow, I will deny both motions.
I. Factual Background
This case arises from a dispute concerning the interpretation of a settlement agreement. On an unspecified date, plaintiff defaulted on his obligations under a promissory note, which was held by Green Tree as servicing agent for RBS Citizens, N.A. See Am. Compl. Exh. A (ECF 5-2). When the debt became delinquent, Green Tree assigned it to Epps for collection. Am. Compl. ¶ 12. On September 21, 2011, plaintiff entered into a Settlement Agreement and Release with Green Tree, see Am. Compl. Exh. A (the "Agreement"), which was negotiated by Epps. See Am. Compl. ¶ 13.
At the time of default, Chartier owed $42, 273.17, with interest at an annual rate of eight percent. See Agreement at 1. Under the Agreement, plaintiff promised to pay $21, 136.00, without interest (the "Settlement Amount"), in full satisfaction for the money owed on the promissory note. Agreement ¶ 1. The Agreement specified that plaintiff was to pay an initial installment of $2, 500 by September 30, 2011, and then "$18, 636.00 payable in equal monthly installments of $328.26 commencing on October 15, 2011 and continuing on the same day of each month thereafter until September 15, 2015 at which time the last such monthly installment of the settlement amount shall be due and payable." Id. ¶ 2(b). The Agreement stipulated that plaintiff could pre-pay the Settlement Amount, in whole or in part, "without penalty." Id. ¶ 4; Am. Compl. ¶ 15. In addition, the Agreement provided: "[S]o long as the installment payments provided herein are received as provided herein the Lender will take no legal action to collect the promissory note." Id. ¶ 1. With respect to default, Epps was appointed as agent of Chartier to, "without further notice to Borrower, confess judgment on behalf of the Borrower for the unpaid balance...." Id. ¶ 6. The Agreement also stated, id. :
In the event of a default in the making of any installment payment of the settlement amount, and if such installment is not received by Green Tree Servicing LLC within 10 days of its due date, at Lender's option, this Settlement Agreement and Release shall be null and void and in such event all payments made pursuant to this Agreement prior to the default shall be applied to the indebtedness and Borrower shall remain liable for the remaining balance of the indebtedness, which said sum shall be immediately due and payable without further notice to Borrower.
By the end of July 2013, plaintiff had paid the initial installment of $2, 500.00 and made forty-eight payments of $328.26. See Am. Compl. Exh. B (email dated July 29, 2013, 3:43 p.m., from Mr. Epps to Chartier). Almost two years after execution of the Agreement, on July 29, 2013, Mr. Epps sent an email to plaintiff, stating that there was a typographical error in the Agreement and the monthly installment amount should have read $388.26 instead of $328.26-a difference of $60.00 per month. Am. Compl. Exh. B. Mr. Epps acknowledged the receipt from Chartier of forty-eight payments of $328.26 each, plus the initial installment, but advised plaintiff that these payments only totaled $18, 256.48. Id. In addition, Mr. Epps asserted that plaintiff still owed a remaining balance of $2, 869.52 pursuant to the Agreement. Id.; Am. Compl. ¶ 17.
Plaintiff appended to the Amended Complaint a truncated version of a series of emails exchanged prior to the settlement between Mr. Epps and Justin M. Jacks, Esq., plaintiff's attorney at the time he entered into the Agreement. Am. Compl. Exh. B (email of July 29, 2013, from Mr. Epps to Chartier); see also Green Tree Mot. Exh. 1. In an email dated September 19, 2011, Jacks wrote to Mr. Epps: "Mr. Chartier would like to know what he needs to sign to get this agreement done on the $2500.00 down and payments in 48 month [sic] installments of $388.26." Green Tree Mot. Exh. 1 (email of September 19, 2011, from Jacks to Mr. Epps). See also Am. Compl. Exh. B (email of July 29, 2013, from Mr. Epps to Chartier, containing text of the prior email of September 19, 2011).
On February 9, 2014, Chartier wrote an email to Mr. Epps to advise him of his current Maryland address. Am. Compl. Exh. B (email of February 9, 2014, from Chartier to Mr. Epps). Chartier stated: "I have no ties to Virginia or the Virginia Beach address. Please ensure all communication comes to me at this address." Id. On February 10, 2014, Mr. Epps responded to Chartier's email as follows: "Please advise if you intend to pay the remaining due under the settlement. If so fine. If not I will advise my client to send the file to its Maryland attorney. My recommendation will be to pursue the entire balance remaining due, not just what remains of the settlement." Am. Compl. Exh. B (email of February 10, 2014 from Mr. Epps to Chartier). Below this message, the email advised: "THE UNDERSIGNED IS A DEBT COLLECTOR. THIS IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE." Id. (emphasis in original). At some point thereafter, Epps forwarded the account to Cohn to collect a debt in the amount of $25, 001.46. Id. ¶ 20.
Plaintiff also alleges that, in or around December 2013, he became aware that Green Tree was reporting the debt to one or more of the three national consumer reporting agencies. Id. ¶ 22. On or about January 11, 2014, plaintiff sent a letter to Equifax and TransUnion, asserting that the debt had been paid in full pursuant to a settlement with Green Tree. Id. ¶ 23. Nevertheless, plaintiff asserts, Equifax and TransUnion continued to report the debt as having a current balance due and payable. Id. ¶ 24.
II. Standards of Review
A. Fed.R.Civ.P. 12(b)(2)
A motion to dismiss for lack of personal jurisdiction arises under Fed.R.Civ.P. 12(b)(2). "When a court's personal jurisdiction is properly challenged by a Rule 12(b)(2) motion, the jurisdictional question thus raised is one for the judge, with the burden on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence." Combs v. Bakker , 886 F.2d 673, 676 (4th Cir. 1989). Discovery and an evidentiary hearing are not required to resolve a motion under Rule 12(b)(2). See generally 5B Wright & Miller, Federal Practice & Procedure § 1351, at 274-313 (3d ed. 2004, 2012 Supp.). Rather, the district court may address the question of personal jurisdiction as a preliminary matter, ruling solely on the basis of motion papers, supporting legal memoranda, affidavits, and the allegations in the complaint. Consulting Engineers Corp. v. Geometric Ltd. , 561 F.3d 273, 276 (4th Cir. 2009). In that circumstance, a plaintiff need only make "a prima facie showing of a sufficient jurisdictional basis to survive the jurisdictional challenge." Id.
"In deciding whether the plaintiff has made the requisite showing, the court must take all disputed facts and reasonable inferences in favor of the plaintiff." Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc. , 334 F.3d 390, 396 (4th Cir. 2003). However, "[a] threshold prima facie finding that personal jurisdiction is proper does not finally settle the issue; plaintiff must eventually prove the existence of personal jurisdiction by a preponderance of the evidence, either at trial or at a pretrial evidentiary hearing.'" New Wellington Fin. Corp. v. Flagship Resort Dev. Corp. , 416 F.3d 290, 294 n.5 (4th Cir. 2005) (citation omitted).
B. Fed.R.Civ.P. 12(b)(6)
A defendant may test the adequacy of a complaint by way of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See McBurney v. Cuccinelli , 616 F.3d 393, 408 (4th Cir. 2010). To survive a Rule 12(b)(6) motion, a complaint must satisfy the pleading standard articulated in Fed.R.Civ.P. 8(a)(2), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendant with "fair notice" of the claim and the "grounds" for entitlement to relief. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555-56 & n.3 (2007). That showing must consist of more than "a formulaic recitation of the elements of a cause of action" or "naked assertion[s] devoid of further factual enhancement." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (internal citations omitted); see Painter's Mill Grille, LLC v. Brown , 716 F.3d 342, 350 (4th Cir. 2013). Rather, to defeat a motion under Rule 12(b)(6), a complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570; see Iqbal , 556 U.S. at 684 ("Our decision in Twombly expounded the pleading standard for all civil actions'....") (citation omitted); see also Epps v. JP Morgan Chase Bank, N.A. , 675 F.3d 315, 320 (4th Cir. 2012); Simmons v. United Mortg. & Loan Inv., LLC , 634 F.3d 754, 768 (4th Cir. 2011). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not show[n]'-that the pleader is entitled to relief.'" Iqbal , 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)).
In considering a Rule 12(b)(6) motion, the court "must accept as true all of the factual allegations contained in the complaint, '" and must "draw all reasonable inferences [from those facts] in favor of the plaintiff.'" E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc. , 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see, e.g. , Kendall v. Balcerzak , 650 F.3d 515, 522 (4th Cir. 2011), cert. denied , ___ U.S. ___ , 132 S.Ct. 402 (2011). But, the court need not accept unsupported or conclusory factual allegations devoid of any reference to actual events. United Black Firefighters v. Hirst , 604 F.2d 844, 847 (4th Cir. 1979); see also Francis v. Giacomelli , 588 F.3d 186, 193 (4th Cir. 2009). Nor must it accept legal conclusions couched as factual allegations, Iqbal , 556 U.S. at 678, or legal conclusions drawn from the facts. See Papasan v. Allain , 478 U.S. 265, 286 (1986); Monroe v. City of Charlottesville , 579 F.3d 380, 385-86 (4th Cir. 2009), cert. denied , 559 U.S. 992 (2010). If the "well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, " the complaint has not shown that "the pleader is entitled to relief.'" Iqbal , 556 U.S. at 679 (citation omitted).
"Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal , 556 U.S. at 679. "A court decides whether this standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer" that the plaintiff is entitled to relief. A Society Without A Name v. Virginia , 655 F.3d 342, 346 (4th Cir. 2011), cert. denied , ___ U.S. ___ , 132 S.Ct. 1960 (2012). Dismissal "is inappropriate unless, accepting as true the well-pled facts in the complaint and viewing them in the light most favorable to the plaintiff, the plaintiff is unable to state a claim to relief....'" Brockington v. Boykins , 637 F.3d 503, 505-06 (4th Cir. 2011) (citation omitted). See Hartmann v. Calif. Dept. of Corr. & Rehab. , 707 F.3d 1114, 1122 (9th Cir. 2013) ("Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.'") (citation omitted); Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Reg. Sys., Inc. , 680 F.3d 1194, 1201-02 (10th Cir. 2011) ("When reviewing a 12(b)(6) dismissal, we must determine whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed.' Dismissal is appropriate if the law simply affords no relief.") (citation omitted).
Ordinarily, in resolving a motion under Rule 12(b)(6), a court "is not to consider matters outside the pleadings...." Bosiger v. U.S. Airways, Inc. , 510 F.3d 442, 450 (4th Cir. 2007); see Clatterbuck v. City of Charlottesville , 708 F.3d 549, 557 (4th Cir. 2013). If a court considers material outside of the pleadings, "the motion must be treated as one for summary judgment under Rule 56, " in which case "[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Fed.R.Civ.P. 12(d). Under certain limited exceptions, however, a court may consider exhibits without converting the motion to one for summary judgment. For instance, a court may properly consider documents "attached to the complaint, as well those attached to the motion to dismiss, so long as they are integral to the complaint and authentic." Philips v. Pitt Cnty. Mem. Hosp. , 572 F.3d 176, 180 (4th Cir. 2009) (citations omitted); see Anand v. Ocwen Loan Servicing, LLC , 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic Ass'n v. Trigon Healthcare, Inc. , 367 F.3d 212, 234 (4th Cir. 2004). To be "integral, " a document must be one "that by its very existence, and not the mere information it contains , gives rise to the legal rights asserted.'" Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC , 794 F.Supp.2d 602, 611 (D. Md. 2011) (citation omitted) (emphasis in original). Further, in resolving a motion to dismiss, a court may consider "documents which are referred to in the Complaint and upon which Plaintiff relies in bringing the action." Biospherics, Inc. v. Forbes, Inc. , 989 F.Supp. 748, 749-50 (D. Md. 1997), aff'd , 151 F.3d 180 (4th Cir. 1998); accord Mid-Atlantic Soaring Ass'n, Inc. v. F.A.A. , 2006 WL 1892412, at *7 (D. Md. June 29, 2006). Additionally, facts and documents subject to judicial notice may be considered by a court, without converting the motion under Rule 12(d). Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U.S. 308, 322 (2007); Katyle v. Penn Nat'l Gaming, Inc. , 637 F.3d 462, 466 (4th Cir.), cert. denied , ___ U.S. ___ , 132 S.Ct. 115 (2011).
Plaintiff has attached two exhibits to his Amended Complaint: (1) the Agreement (Am. Compl. Exh. A, ECF 5-2); and (2) a chain of three emails between Chartier and Mr. Epps (Am. Compl. Exh. B, ECF 5-3). Notably, Epps attached the same chain of emails as an exhibit to its motion. See Epps Motion Exh. 1 (ECF 11-1). Green Tree and Epps raise no objections to any exhibit attached to the Amended Complaint. Because the exhibits are integral to the Amended Complaint and no party disputes their authenticity, I may consider them in connection with the motions under a Rule 12(b)(6) standard. See Anand , 754 F.3d at 198; Philips , 572 F.3d at 180; Am. Chiropractic Ass'n , 367 F.3d at 234.
In addition, Green Tree and Epps attached to their motions a chain of three emails exchanged between Mr. Epps and Jacks. See Green Tree Motion Exh. 1 (ECF 18-2); Epps Motion Exhs. 1(a), (b), and (c) (ECF 11-2). The email of July 29, 2013, from Mr. Epps to Chartier, which is attached as Exhibit B to plaintiff's Amended Complaint, references these three emails and incorporates their content. In his oppositions to the motions, plaintiff raises no objection to the exhibits attached by Green Tree and Epps. Because these emails are referenced in the Amended Complaint, and because plaintiff has relied upon them in bringing suit, I may consider them under a Rule 12(b)(6) standard. See Biospherics, Inc. , 989 F.Supp. at 749-50; Mid-Atlantic Soaring Ass'n, Inc. , 2006 WL 1892412, at *7.
A. Dismissal Under Fed.R.Civ.P. 12(b)(2) for Lack of Personal Jurisdiction
Rule 4(k)(1)(A) of the Federal Rules of Civil Procedure authorizes a federal district court to exercise personal jurisdiction over a defendant in accordance with the law of the state where the district court is located. Carefirst, supra , 334 F.3d at 396. Therefore, "to assert personal jurisdiction over a nonresident defendant, two conditions must be satisfied: (1) the exercise of jurisdiction must be authorized under the state's long-arm statute; and (2) the exercise of jurisdiction must comport with the due process requirements of the Fourteenth Amendment." Id.
Maryland's long-arm statute is codified at Md. Code (2013 Repl. Vol., 2013 Supp.), § 6-103(b) of the Courts & Judicial Proceedings Article. It authorizes "personal ...