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Horowitz v. Continental Casualty Co.

United States District Court, D. Maryland

July 5, 2016




         Presently pending and ready for resolution in this case is a motion to alter or amend the court's judgment filed by Plaintiffs Robert and Cathy Horowitz ("Plaintiffs") (ECF No. 46) and a motion for sanctions filed by Defendant Eccleston and Wolf, P.C. ("Eccleston") (ECF No. 44). The relevant issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, both motions will be denied.

         I. Background

         The factual and procedural background to this case may be found in the memorandum opinion issued on December 28, 2015 (the "Memorandum Opinion"). (ECF No. 42, at 1-5). The Memorandum Opinion and an accompanying order granted the motions to dismiss filed by Defendants Eccleston; Selzer Gurvitch Rabin Wertheimer Polott & Obecny, P.C. ("Selzer"); Bregman, Berbert, Schwartz & Gilday, LLC ("Bregman"); and Continental Casualty Company ("Continental"). Accordingly, the first amended complaint was dismissed. On January 11, 2016, Eccleston filed the pending motion for sanctions (ECF No. 44), and the court ordered Plaintiffs to respond within twenty-one days (ECF No. 45). On January 25, Plaintiffs filed the pending motion to alter or amend the judgment pursuant to Fed.R.Civ.P. 59(e). (ECF No. 46). Plaintiffs then responded to the motion for sanctions (ECF No. 49), and Eccleston replied (ECF No. 54). Each defendant responded to Plaintiffs' motion for reconsideration (ECF Nos. 50; 51; 52; 53), and Plaintiffs replied (ECF No. 55).

         II. Plaintiffs' Motion for Reconsideration

         A. Standard of Review

         Courts have recognized three limited grounds for granting a motion for reconsideration under Rule 59(e): (1) to accommodate an intervening change in controlling law; (2) to account for new evidence not previously available; or (3) to correct clear error of law or prevent manifest injustice. See United States ex. rel. Becker v. Westinghouse Savannah River Co., 305 F.3d 284, 290 (4th Cir. 2002) (citing Pacific Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998)).

         A Rule 59(e) motion "may not be used to relitigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment." Pac. Ins. Co., 148 F.3d at 403 (quoting 11 Wright, et al., Federal Practice & Procedure § 2810.1, at 127-28 (2d ed. 1995)); see also Medlock v. Rumsfeld, 336 F.Supp.2d 452, 470 (D.Md. 2002), aff'd, 86 F.App'x 665 (4th Cir. 2004) (citation omitted) ("To the extent that Plaintiff is simply trying to reargue the case, he is not permitted to do so. Where a motion does not raise new arguments, but merely urges the court to ‘change its mind, ' relief is not authorized."). "In general, ‘reconsideration of a judgment after its entry is an extraordinary remedy which should be used sparingly.'" Pac. Ins. Co., 148 F.3d at 403 (quoting Wright, et al., supra, § 2810.1, at 124).

         B. Analysis

         Plaintiffs assert that reconsideration is necessary "to prevent clear errors of law and ensure adherence to the standard of review that requires facts pleaded in the complaint to be deemed true." (ECF No. 46, at 1). Plaintiffs seek reconsideration on: the court's application of res judicata and collateral estoppel; the holding that Plaintiffs failed to plead sufficient facts showing Continental and Eccleston were debt collectors for purposes of the Fair Debt Collection Practices Act ("FDCPA"), the Maryland Debt Collection Act ("MCDCA"), and the Maryland Collection Agency Licensing Act ("MCALA"); and the dismissal of Plaintiffs' § 1983 claim against Selzer. Plaintiffs also seek "permission to re-plead" and request that the judgment be stayed "until related appeals in state court are finalized." (ECF No. 46, at 14).

         Plaintiffs ask that the court reconsider the application of res judicata to their claims against Selzer and Bregman. In the Memorandum Opinion, the court held that Maryland's "transactional approach" to res judicata barred many of Plaintiffs' claims against Selzer and Bregman because "the claims all arise from the same transaction: Selzer and Bregman's representation of Plaintiffs in their suit against the Zipin Firm." (ECF No. 42, at 10). Plaintiffs' argument that the court incorrectly applied the transactional approach is unpersuasive. Plaintiffs cite to Kent Cty. Bd. of Educ. v. Bilbrough, 309 Md. 487 (1987), and argue that the court "ignored the convenient trial unit for the res judicata transaction test. (ECF No. 46, at 9-10). The Court of Appeals of Maryland's passing citation to the Restatement's mention of the "convenient trial unit" in Kent Cty. does not alter the Memorandum Opinion's extensive analysis of more recent Maryland case law regarding the appropriate transactional test for res judicata. (ECF No. 42, at 7-11). Specifically, res judicata bars claims, such as those at issue here, which are "identical to [those] determined or [those] which could have been raised and determined in the prior litigation." Comproller of Treasury v. Sci. Applications Int'l Corp., 405 Md. 185, 195-96 (2008) (emphasis added) (citing R&D 2001, LLC v. Rice, 402 Md. 648, 663)). Accordingly, Plaintiffs have not shown that the court's application of res judicata was a clear error.

         Similarly, Plaintiffs argue that collateral estoppel should not prevent the court from assessing the legality of the Settlement Agreement and Release (the "Settlement") that was entered into by Plaintiffs and the Zipin Firm. (ECF No. 46, at 7-9). In the Memorandum Opinion, the court determined that collateral estoppel bars Plaintiffs from relitigating the legality of the Settlement because Plaintiffs "had extensive opportunity to litigate these issues" and were afforded a full opportunity to present arguments before the circuit court" regarding the Settlement's legality. (Id. at 13). Plaintiffs' motion for reconsideration on this point is merely another attempt to argue that the circuit court's decision was incorrect. Plaintiffs' continued disagreement with the decisions of the circuit court does not warrant reconsideration under Rule 59(e).

         In their motion, Plaintiffs put forth two primary arguments for reconsideration of the court's dismissal of the debt collection claims against Eccleston and Continental: that Plaintiffs pleaded facts sufficient to show that Eccleston and Continental engaged in debt collection activities; and that the court's citation to Fleet Nat. Bank v. Baker, 263 F.Supp.2d 150 (D.Mass. 2003) was inappropriate. Plaintiffs' first argument is an attempt to relitigate the motion to dismiss. Plaintiffs continue to assert that Eccleston and Continental engaged in debt collection, but this assertion is not sufficiently supported by factual allegations. The Memorandum Opinion noted:

"[I]t 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, 765 F.Supp.2d at 725 (quoting Mabe v. G.C. Servs. Ltd. P'ship, 32 F.3d 86, 87-88 (4th Cir. 1994)). Plaintiffs assert that Eccleston represented the Zipin Firm in its action to recover unpaid fees, but Mr. Zipin and other lawyers at the Zipin Firm represented themselves in the fee-recovery portion. (See, e.g., ECF No. 21-7, at 8). Plaintiffs ...

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