Gamble v. Midland Funding LLC et al
MEMORANDUM OPINION AND ORDER: 6 , MOTION to Dismiss Plaintiff's Complaint, is GRANTED as to Gamble's FDCPA § 1692g and state law negligence and abuse of process claims. Accordingly, these claims are DISMISSED without prejudice. However, the motion is DENIED in all other respects. Signed by Judge Abdul K Kallon on 03/07/13. (CVA)
2013 Mar-07 PM 12:43
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
MIDLAND FUNDING LLC, and
Civil Action Number
MEMORANDUM OPINION AND ORDER
Plaintiff Jason Gamble (“Gamble”) brings this action against Defendants
Midland Funding, LLC and Midland Credit Management, Inc. (collectively
“Midland”) under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §
1692 et seq., and Alabama law for alleged wrongful collection efforts. Doc. 1.
Midland seeks dismissal of Gamble’s claims, doc. 6, and the motion is fully
briefed and ripe for review, docs. 12-13. For the reasons stated more fully below,
Midland’s motion is GRANTED as it relates to Gamble’s § 1962(g) and state law
abuse of process and negligence claims, and DENIED in all other respects.
I. STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain “a
short and plain statement of the claim showing that the pleader is entitled to
relief.” “[T]he pleading standard Rule 8 announces does not require ‘detailed
factual allegations,’ but it demands more than an unadorned, the-defendantunlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Mere “labels and
conclusions” or “a formulaic recitation of the elements of a cause of action” are
insufficient. Iqbal, 129 S. Ct. at 1949 (citations and internal quotation marks
omitted). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of
‘further factual enhancement.’” Id., at 1949 (citing Bell Atl. Corp., 550 U.S. at
Federal Rule of Civil Procedure 12(b)(6) permits dismissal when a
complaint fails to state a claim upon which relief can be granted. “To survive a
motion to dismiss, a complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face.” Iqbal, 129 S. Ct. at
1949 (citations and internal quotation marks omitted). A complaint states a
facially plausible claim for relief “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Id. (citation omitted). The complaint must establish
“more than a sheer possibility that a defendant has acted unlawfully.” Id.; see also
Bell Atl. Corp., 550 U.S. at 555 (“Factual allegations must be enough to raise a
right to relief above the speculative level.”). Ultimately, this inquiry is a “contextspecific task that requires the reviewing court to draw on its judicial experience
and common sense.” Iqbal, 129 S. Ct. at 1950.
II. PROCEDURAL AND FACTUAL BACKGROUND1
On June 7, 2012, Midland filed suit against Gamble in the Small Claims
Court of Jefferson County, Alabama to recover on a $2,288.26 debt. Doc. 1 at ¶¶
47, 50. The notice Midland sent stated that the court would enter a default
judgment against Gamble if he failed to respond, and that “ONCE A JUDGMENT HAS
BEEN ENTERED AGAINST YOU, YOUR PAYCHECK CAN BE GARNISHED AND/OR YOUR
HOME OR PROPERTY SOLD TO SATISFY THAT JUDGMENT.”
Id. at ¶ 52 (emphasis in
original). Gamble asserts that he did not owe the debt and that Midland did not
own the debt at the time it instituted the debt collection action. Id. at ¶¶ 60-64.
Gamble claims further that Midland knew Gamble did not owe the debt and yet
made several misrepresentations during the pendency of the lawsuit in an attempt
to gain money, and continued to report the wrongful debt on Gamble’s credit
“When considering a motion to dismiss, all facts set forth in the plaintiff’s complaint
‘are to be accepted as true and the court limits its consideration to the pleadings and exhibits
attached thereto.’” Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000)
(quoting GSW, Inc. v. Long Cnty., 999 F.2d 1508, 1510 (11th Cir. 1993)). However, legal
conclusions unsupported by factual allegations are not entitled to that assumption of truth. See
Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1950 (2009).
report. Id. at ¶¶ 58-59, 98. Apparently, Midland failed to present any evidence to
support its contentions at the trial. Id. at ¶¶ 81-83. As a result, the court entered a
judgment in Gamble’s favor. Id. at ¶ 96.
Gamble then filed this lawsuit, asserting claims for FDCPA violations, and
state law claims for invasion of privacy, negligent, wanton, and intentional hiring
and supervising of incompetent debt collectors, negligent, wanton and intentional
conduct, and malicious prosecution and abuse of process. Doc. 1. The court
discusses each claim below.
Midland asserts that Gamble’s FDCPA claims fail as a matter of law
because the collection lawsuit it filed was not a “communication” governed by the
FDCPA. Doc. 7 at 4-5. With respect to § 1692g, the Eleventh Circuit has, in fact,
held that a legal action is not an “initial communication.”2 See Vega v. McKay,
351 F.3d 1334, 1337 (11th Cir. 2003). Therefore, as related to Gamble’s § 1962g
claim, Midland’s motion is GRANTED. The motion is, however, DENIED on
the remaining FDCPA claims. As Midland noted in its reply brief, Gamble
This section requires a debt collector to send a written notice containing specific
information regarding the debt to the consumer within five days of sending an “initial
communication.” 15 U.S.C. 1692g(a).
sufficiently alleged that Midland made explicit misrepresentations in the state
court proceeding because it knew that Gamble did not owe the debt. Doc. 13 at 12. While an implicit misrepresentation may be insufficient for a claim under the
FDCPA, Gamble’s remaining claims survive in light of his allegations of explicit
misrepresentations. See Webb v. Midland, No. 2:12-cv-2920-KOB, 2013 WL
360151, at *2-3 (N.D. Ala., January 29, 2013).
Invasion of Privacy
Midland raises two contentions in support of its motion to dismiss the
invasion of privacy claim. First, Midland asserts the claim is preempted by the
Fair Credit Reporting Act (“FCRA”). Doc. 7 at 22-24. The court disagrees
because the FCRA states unequivocally that an invasion of privacy claim is
preempted “except as to false information furnished with malice or willful intent to
injure such consumer.” 15 U.S.C. § 1681h(e) (emphasis added). Gamble’s
allegation that Midland willfully furnished false information falls squarely within
the exception. Therefore, Gamble’s claim is not preempted by the FCRA.
Second, Midland asserts that it is due to prevail because it simply took
“reasonable measures to collect a debt.” Doc. 7 at 22-24. Unfortunately for
Midland, a factual determination is necessary to ascertain whether Gamble’s
allegations that Midland wrongfully instituted legal action and knowingly supplied
false information in order to collect a debt Gamble purportedly did not owe
qualified as “reasonable measures to collect a debt.” At this juncture, it is clear
that Gamble is alleging that Midland engaged in unreasonable collection efforts.
Therefore, Midland’s motion is DENIED.
Negligent, Wanton, and Intentional Conduct
Midland asserts next that Counts 3 and 4 fail, in part, because claims for
negligent, wanton, or intentional hiring of incompetent employees cannot exist
under Alabama law without an underlying wrong. Doc. 7 at 25. The court
disagrees. As discussed previously, Gamble has surviving state law claims
sufficient to establish an “underlying wrong.” See section B, supra, and D, infra.
Therefore, Midland’s motion is due to be denied on this basis.
Midland also asserts that Gamble’s claims fail because negligent or wanton
filing of a lawsuit is not a recognized state law claim. Doc. 7 at 26. The court
agrees with respect to the negligence claim under Count 4, which Gamble
withdrew. Doc. 12 at 35 n.11. Accordingly, the motion to dismiss the negligence
claim under Count 4 is GRANTED. However, the wantonness claims survive
Midland’s motion. Under Alabama law, to establish wanton conduct, Gamble
“must  show that with reckless indifference to the consequences the party
consciously and intentionally did some wrongful act or omitted some known duty,
and that this act or omission produced the injury.” Brown v. Turner, 497 So. 2d
1119, 1120 (Ala. 1986). Although “wanton filing of a lawsuit” may not be a
cognizable tort, see Ex parte Miller, Hamilton, Snider & Odom, LLC, 942 So. 2d
334 (Ala. 2006), Gamble alleged that, among other things, Midland wantonly
made false statements and attempted to harass Gamble into paying a debt Midland
knew he did not owe. See doc. 1. Accordingly, the court finds that Gamble
alleged sufficient facts to state a claim for wantonness and DENIES Midland’s
Malicious Prosecution and Abuse of Process
Midland asserts lastly that Count 5 (malicious prosecution and abuse of
process) fails to state a viable claim. Doc. 7 at 26-29. The court agrees with
respect to the abuse of process claim.
“To establish a claim of malicious prosecution, [Gamble] must prove that
the defendant  instigated without probable cause and with malice, a prior judicial
proceeding against [Gamble], that the prior proceeding ended in favor of
[Gamble], and that [Gamble] suffered damages.” Willis v. Parker, 814 So. 2d 857,
863 (Ala. 2001) (quoting Lumpkin v. Cofield, 536 So. 2d 62, 64 (Ala. 1988)).
Midland contends that this claim fails because a malicious prosecution claim
cannot be based on small claims court proceedings and, alternatively, because
Gamble failed to sufficiently allege malice. Midland’s first contention is
unsupported by Alabama law which, to the contrary, does not call for the dismissal
of malicious prosecution claims simply because they are based on small claims
court proceedings. See e.g., Hollander v. Nichols, 19 So. 3d 184 (Ala. 2009);
Brown v. Parnell, 386 So. 2d 1137 (Ala. 1980). Moreover, “[m]alice in a
malicious prosecution action has been defined as whatever is done willfully and
purposely, whether the motive is to [injure the] accused, to gain some advantage to
the prosecutor, or through mere wantonness or carelessness, if at the same time
wrong and unlawful within the knowledge of the actor.” Willis, 814 So. 2d at 86364 (emphasis in original). Because Gamble clearly alleged that Midland acted
willfully and wantonly to injure Gamble and that Midland knew its conduct was
unlawful, Gamble’s complaint facially states a claim for malicious prosecution.
Therefore, Midland’s motion is DENIED as to the malicious prosecution claim.
Abuse of Process
“To establish a claim of abuse of process, [Gamble] must prove: (1) the
existence of an ulterior purpose; 2) a wrongful use of process, and 3) malice.”
Willis, 814 So. 2d at 865. However, “[t]he defendant cannot be liable for an abuse
of process claim unless [it] somehow acted outside the boundaries of legitimate
procedure after the charge had been filed.” Id. (citation omitted). In other words,
“[t]here is no liability where the defendant has done nothing more than carry out
the process to its authorized conclusion, even though with bad intentions[.]” Id.
(citation omitted). Although Gamble alleged that Midland had an ulterior purpose
and acted with malice, Gamble failed to allege that Midland “acted outside the
boundaries of legitimate procedure” once it instituted the small claims court
action. Accordingly, Midland’s motion on this claim is GRANTED.
For the reasons stated above, Midland’s motion is GRANTED as to
Gamble’s FDCPA § 1692g and state law negligence and abuse of process claims.
Accordingly, these claims are DISMISSED without prejudice. However, the
motion is DENIED in all other respects.
DONE this 7th day of March, 2013.
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE
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