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Doyle v. Frontline Asset Strategies, LLC

United States District Court, D. Maryland

April 4, 2017

JEFFREY DOYLE, Plaintiff
v.
FRONTLINE ASSET STRATEGIES, LLC, et al., Defendants.

          MEMORANDUM OPINION

          Richard D. Bennett United States District Judge.

         Plaintiff Jeffrey Doyle (“Plaintiff” or “Doyle”) has brought this putative class action against Defendants Frontline Asset Strategies, LLC (“Frontline”) and Resurgent Capital Services L.P. (“Resurgent”) (collectively “Defendants”), alleging violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. (Counts II & V), and the Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law § 14-201, et seq. (Counts III & VI), in connection with Defendants' efforts to collect on void judgments obtained against Doyle and members of the putative class by LVNV Funding, LLC (“LVNV”), an unlicensed collection agency. Compl., ¶¶ 54-65, 71-86, ECF No. 2. This action was initially filed in the Circuit Court for Anne Arundel County, Maryland, but Defendants have subsequently removed the instant action to this Court, pursuant to 28 U.S.C. § 1441(b). See Notice of Removal, ECF No. 1. Currently pending before this Court is Defendants' Motion to Dismiss the Complaint, or alternatively, Motion for Stay of Proceedings (ECF No. 12), pursuant to the “Colorado River” abstention doctrine articulated by the United States Supreme Court in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976).[1] The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2016). The Defendants have failed to satisfy the criteria set forth in Colorado River, and recently confirmed in vonRosenberg v. Lawrence, 849 F.3d 163, 168 (4th Cir. 2017). Accordingly, for the reasons stated herein, Defendants' Motion to Dismiss the Complaint, or alternatively, Motion for Stay of Proceedings (ECF No. 12) is DENIED.

         BACKGROUND

         I. LVNV Funding, LLC's Maryland State Court Judgment Against Plaintiff Jeffrey Doyle

         Plaintiff Jeffrey Doyle (“Plaintiff” or “Doyle”) is a resident of Washington County, Maryland. Compl., ¶ 5, ECF No. 2. On December 1, 2008, LVNV Funding, LLC (“LVNV”), a collection agency, sued Doyle in the District Court of Maryland for Washington County, Case No. 11020005681-2008, “based upon a consumer claim that it acquired in default from another for pennies on the dollar.” Id., ¶ 19. LVNV subsequently “obtained an affidavit judgment of $2[, ]033.99 against [Doyle] on February 2, 2009.” Id.

         II. Finch v, LVNV Funding, LLC Class Action Filed in the Circuit Court for Baltimore City, Maryland

         On November 11, 2009, Larry Finch (“Finch”) and Kurt A. Dorsey (“Dorsey”), two debtors against whom LVNV had also obtained judgments in 2009, filed a putative class action against LVNV in the Circuit Court for Baltimore City, Maryland (the “Finch Action”) on behalf of the class of “persons sued by LVNV in Maryland state courts from October 30, 2007 through February 17, 2010 against whom LVNV obtained a judgment for an alleged debt, interest or costs, including attorneys['] fees in its favor in an attempt to collect a consumer debt” (the “Finch Class”). See Finch v. LVNV Funding, LLC, 71 A.3d 193, 195 (Md. Ct. Spec. App. 2013). Finch and Dorsey (collectively the “Finch Plaintiffs”) alleged “that LVNV engaged in illegal collection of debts because LVNV was not licensed as a collection agency in Maryland, as required by the Maryland Collection Agency Licensing Act (“MCALA”), Md. Code Ann., Bus. Reg. § 7-301.” Id. They alleged “that LVNV's unlicensed collection activities violated the Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law §§ 14-201 to 14-204, and the Maryland Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law § 13-301” and sought “declaratory judgment[, ] . . . injunctive relief, ” “all judgment sums, costs, and pre-and post-judgment interest [LVNV] ha[d] collected, ” and “individual and class claims for damages under the MCDCA and the MCPA.” Id. Upon motion of LVNV, the Circuit Court dismissed the Finch Action, reasoning that all “claims [we]re barred as an impermissible attempt to mount a collateral attack on the judgments entered by the District Court of Maryland for Baltimore City.” Id. at 195-96. The Finch Plaintiffs subsequently appealed the Circuit Court's Order of dismissal to the Court of Special Appeals of Maryland.

         On appeal, the Court of Special Appeals “first consider[ed] whether the [D]istrict [C]ourt judgments [we]re void, ” an issue “not expressly consider[ed]” by the Circuit Court, ultimately holding in an opinion dated June 28, 2013, Finch v. LVNV Funding, LLC, 71 A.3d 193, 205 (Md. Ct. Spec. App. 2013), that “LVNV was not licensed when it obtained judgments against [the Finch Plaintiffs] in the [D]istrict [C]ourt; accordingly, the underlying [D]istrict [C]ourt judgments [we]re void.” Id. at 196, 205. The Court of Special Appeals reversed the Circuit Court and remanded the Finch Action for further proceedings, “hold[ing] that the [C]ircuit [C]ourt erred in dismissing [the Finch Action] [C]omplaint” and that the “parties may collaterally attack a void judgment in another court.” Id. The Court of Special Appeals denied reconsideration of its Judgment on September 3, 2013. See id. LVNV subsequently appealed the Judgment of the Court of Special Appeals to the Court of Appeals of Maryland, but the Court of Appeals denied certiorari on October 8, 2013. See LVNV Funding v. Finch & Dorsey, 77 A.3d 1084 (Md. 2013).

         On remand, the Circuit Court for Baltimore City, Maryland certified the Finch Class and declared the judgments entered against the Finch Class members in the District Court of Maryland void and unenforceable. Compl., ¶ 16, ECF No. 2; see Finch Action Docket, p. 21, ECF No. 12-2. Following a three-day jury trial, the Circuit Court entered judgment on a jury verdict in favor of the Finch Class for $38, 630, 344.00. See id. at 33. LVNV has now filed a second appeal in the Finch Action action, which is currently pending before the Court of Special Appeals of Maryland. On appeal, LVNV challenges, inter alia, the Circuit Court's declaring the judgments obtained by LVNV to be void. Finch Action Not. of Appeal, ECF No. 12-5. As a member of the putative Finch Class, Doyle was sent notice of the pendency of the Finch Action and was given an opportunity to opt-out of the Finch Class. See Admin. Order & Notice, ECF No. 12-3. The Circuit Court docket confirms that Doyle did not opt-out of the Class Action. See Finch Action Docket, ECF No. 12-2.

         III. Defendant Resurgent Capital Services L.P. Collects on LVNV's 2009 Judgment Against Plaintiff Doyle

         In 2015, during the pendency of the Finch Action, but after the Court of Special Appeals' ruling that judgments obtained by LVNV between 2007 and 2010 were void, Doyle attempted to buy a house, but found that he was unable to because of [LVNV's 2009] judgment against him.” Compl., ¶ 20, ECF No. 2. Doyle “contacted [Frontline Asset Strategies (“Frontline”)], the ‘collection agency' for [Resurgent Capital Services L.P. (“Resurgent”), as servicer for LVNV (collectively “Defendants”), to . . . pay the judgment.” Id. Doyle contends that “[a]t no time did Frontline or Resurgent tell him that the judgment was void as a matter of law, was unenforceable, and that he owed nothing.” Id. Rather, Frontline and Resurgent “demanded payment of $2[, ]033.99 to satisfy the void and unenforceable judgment, ” and “Doyle paid this in August [of] 2015.” Id., ¶¶ 21-22.

         IV. The Instant Putative Class Action Against Frontline and Resurgent

         On August 31, 2016, Doyle brought the instant putative class action against Defendants Frontline and Resurgent in the Circuit Court for Anne Arundel County, Maryland, alleging “predatory and deceptive debt collection practices” on behalf of “[t]hose persons in the State of Maryland from who Frontline and/or Resurgent have communicated with directly or indirectly for the purpose of collecting a judgment entered in favor of an unlicensed collection agency that filed suit when it was unlicensed.” Id., ¶¶ 1, 34. Specifically, Doyle alleges that both Frontline and Resurgent have violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. (Counts II & V), and the Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law § 14-201, et seq. (Counts III & VI). Id., ¶¶ 54-65, 71-86. Doyle requests a Declaration of this Court that neither Frontline nor Resurgent are “entitled, directly or indirectly, as a matter of law to collect against any member of the Class based upon a void judgment” and further requests that both Frontline and Resurgent “be enjoined from attempting to collect any sums from [Doyle] and Class members, directly or indirectly, based upon a void judgment” (Counts I & IV). Id., ¶¶ 50-53, 66-70. Subsequently, Frontline and Resurgent have removed the instant case to this Court, pursuant to 28 U.S.C. § 1441(b). See Notice of Removal, ECF No. 1. Now pending before this Court is Frontline and Resurgent's Motion to Dismiss the Complaint, or alternatively, Motion for Stay of Proceedings (ECF No. 12) in light of LVNV's pending appeal in the separate Finch Action, pursuant to the “Colorado River” abstention doctrine articulated by the United States Supreme Court in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976).

         STANDARD ...


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