Caldwell et al v. Redstone Federal Credit Union et al

Filing 73

MEMORANDUM OPINION AND ORDER DENYING 51 53 MOTIONS to Dismiss and GRANTING the alternative motions for a more definite statement. Plaintiffs are ORDERED to file an Amended Complaint by January 16, 2018, which should include the factual basis for the New Plaintiffs' claims that Defendants wrongfully attempted to collect the debts they discharged in bankruptcy. Signed by Magistrate Judge John H England, III on 1/2/2018. (JLC)

FILED
2018 Jan-02 AM 10:17
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
DEMETRIUS D. CALDWELL, et al.,
Plaintiffs,
v.
REDSTONE FEDERAL CREDIT UNION,
et al.,
Defendants.

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Case No.: 2:15-cv-01923-JHE

MEMORANDUM OPINION AND ORDER1
On June 28, 2017, Defendants Redstone Federal Credit Union (“Redstone”) and the Law
Office of C. Howard Grisham (“Grisham”) moved to dismiss Plaintiffs’ First Amended Class
Action Complaint, (doc. 48), under Fed. R. Civ. P. 12(b)(6) for failure to state a claim, or, in the
alternative, for a more definite statement under Fed. R. Civ. P. 12(e). (Docs. 51 & 53). Plaintiffs
filed a response opposing both motions, (doc. 61), and both Defendants replied, (docs. 62 & 63).
The motions are fully briefed and ripe for review. For the reasons stated more fully below, the
motions to dismiss are DENIED and the alternative motions for a more definite statement are
GRANTED.
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

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In accordance with the provisions of 28 U.S.C. § 636(c) and Federal Rule of Civil
Procedure 73, the parties have voluntarily consented to have a United States Magistrate Judge
conduct any and all proceedings, including trial and the entry of final judgment. (Doc. 15).

Rule 8 announces does not require ‘detailed factual allegations,’ but it demands more than an
unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
678, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.
Ct. 1955 (2007)). Mere “labels and conclusions” or “a formulaic recitation of the elements of a
cause of action” are insufficient. Iqbal, 556 U.S. at 678, 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. (citing Bell Atl. Corp., 550 U.S. at 557, 127 S. Ct. 1955).
Additionally, “[i]n alleging fraud or mistake, a party must state with particularity the circumstances
constituting fraud or mistake.” Fed. R. Civ. P. 9(b).
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, 556 U.S. at 678, 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 Twombly, 550 U.S. at 555, 127 S. Ct. at 1965
(“Factual allegations must be enough to raise a right to relief above the speculative level.”).
Ultimately, this inquiry is a “context-specific task that requires the reviewing court to draw on its
judicial experience and common sense.” Iqbal, 556 U.S. at 679, 129 S. Ct. at 1950.
The court accepts all factual allegations as true on a motion to dismiss under Rule 12(b)(6).
See, e.g., Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000). However, legal
conclusions unsupported by factual allegations are not entitled to that assumption of truth. Iqbal,
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556 U.S. at 678, 129 S. Ct. at 1950.
Background2
On October 29, 2015, Plaintiffs Demetrius and Sabrina Caldwell (the “Caldwells”) initiated
this action on behalf of themselves and a purported class against Redstone and Grisham, alleging
five counts including a bankruptcy count of contempt for violating discharge injunctions 3 and a
count for violations of the Fair Debt Collection Practices Act (“FDCPA”). (Doc. 1). Defendants
moved to dismiss the Caldwells’ claims, (docs 7 & 10), and the undersigned granted those motions
in part and denied them in part on October 17, 2016, dismissing all but the two claims identified
above. (Doc. 30).
On June 14, 2017, Plaintiffs amended their complaint. (Doc. 48). In addition to the
Caldwells, the amended complaint added named Plaintiffs Jane B. Locklin, Bart Reeves, Mitchell
A. Davis, Jeremy D. Holland, Jessalyn Hooper, and Lorondo Brazelton (the “New Plaintiffs”). (Id.
at ¶¶ 5-10). Each Plaintiff filed a Chapter 7 bankruptcy petition in the Northern District of
Alabama. (Id. at ¶ 13). Each owed money to Redstone and/or Grisham. (Id. at ¶ 14). Each
Plaintiff received a discharge from the Bankruptcy Court. (Id. at 17). Nevertheless, Redstone—
which had been mailed a copy of the discharge orders in each case—used Grisham to attempt to
collect the discharged debt. (Id. at ¶¶ 18-19).

“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)). In other words, these “facts” are taken
directly from the amended complaint.
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On April 26, 2016, because of the unusual circumstances of this case, Chief Judge Karon
Bowdre, acting on behalf of the Court, designated the undersigned magistrate judge to exercise
authority over the bankruptcy matters arising herein, including the issue of whether to withdraw
the reference to the Bankruptcy Court. (Doc. 25).
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Specifically with respect to the Caldwells, Redstone obtained a judgment against Sabrina
Caldwell for a debt on September 16, 2003. (Id. at ¶ 20). The Caldwells jointly filed for Chapter
7 bankruptcy on October 16, 2005, and received a discharge of Redstone’s debt on January 25,
2006. (Id. at ¶¶ 21-22). See also In re Caldwell, No. 05-13100-TBB7. Despite the discharge,
Redstone and Caldwell revived the judgment and recorded it with the Madison County Probate
Office on June 20, 2013; afterwards, they attempted to collect the debt. (Id. at ¶¶ 23-24).
Redstone obtained judgments against each of the other named Plaintiffs as well, the dates
of which are identified in the amended complaint. (Id. at ¶¶ 25, 29, 33, 37, 41, & 45). The
amended complaint also notes the dates on which each Plaintiff filed for Chapter 7 bankruptcy,
(id. at ¶¶ 26, 30, 34, 38, 42, & 46), and the dates on which each Plaintiff received a discharge of
Redstone’s debt, (id. at ¶¶ 27, 31, 35, 39, 43, & 47). The amended complaint alleges as to each of
the New Plaintiffs that “[s]ubsequent to the discharge, Defendants have attempted and/or continue
to attempt to collect the discharged debt from Plaintiff.” (Id. at ¶¶ 28, 32, 36, 40, 44, & 48).
Analysis
Both Defendants seek dismissal (or, alternatively, a more definite statement) of the claims
asserted by the New Plaintiffs. (Doc. 51 at 4; doc. 53 at 6-7). Defendants argue the complaint
lacks factual allegations to support that they violated the discharge order as to any of these
plaintiffs, instead simply repeating the same conclusory allegation as to each. (Doc. 51 at 2-3;
doc. 53 at 5). Plaintiffs contend the allegations, which they say are similar to those pled (and
unchallenged) in their original complaint, are sufficient to raise the reasonable inference that
Defendants are liable; therefore, their burden under Iqbal and Twombly is met. (Doc. 61 at 7-8).
Plaintiffs also contend the motions to dismiss should be stricken for failure to comply with the
undersigned’s initial order, (doc. 16). (Doc. 61 at 3-4).
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A. Compliance with Initial Order
Plaintiffs contend Defendants violated the initial order in two ways: (1) that Defendants
did not designate their motions as “opposed,” (see doc. 16 at 5); and (2) that the motions were
submitted in 12-point type, rather than the 14-point type required by the initial order, (see doc. 16
at 5). (Doc. 61 at 3-4). This latter alleged violation, Plaintiffs say, allowed Redstone to
illegitimately meet the initial order’s fifteen-page limitation for non-summary-judgment motions,
(see doc. 16 at 6). (Doc. 61 at 4). First, although neither motion indicates whether it is opposed
or unopposed, the undersigned generally assumes dispositive motions such as these will be
opposed. Second, neither motion appears to be in 12-point type, and each Defendant represents
that its motion is in 14-point type. (See doc. 62 at 7; doc. 63 at 1-2). Therefore, the undersigned
declines Plaintiffs’ request to strike the motions.
B. Sufficiency of Allegations Under Rule 12(b)(6)
To state a claim for contempt of the discharge injunction, a plaintiff must allege facts
supporting that a creditor was (1) aware of the discharge injunction and (2) intended the act that
violated it. In re McLean, 794 F.3d 1313, 1323 (11th Cir. 2015). A plaintiff seeking to assert an
FDCPA claim must show “(1) the plaintiff has been the object of collection activity arising from
consumer debt, (2) the defendant is a debt collector as defined by the FDCPA, and (3) the
defendant has engaged in an act or omission prohibited by the FDCPA.” Buckentin v. SunTrust
Mortg. Corp., 928 F. Supp. 2d 1273, 1294 (N.D. Ala. 2013) (quoting Janke v. Wells Fargo and
Co., 805 F. Supp. 2d 1278, 1281 (M.D. Ala. 2011). Although Plaintiffs’ contempt claim is against
both defendants and their FDCPA claim is only against Grisham, the element common to each
claim—in other words, the act Plaintiffs allege violated both the discharge injunction and the

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FDCPA—is that Defendants have tried to collect debts that Plaintiffs discharged in bankruptcy. 4
Defendants argue the amended complaint’s allegations that “[s]ubsequent to the discharge,
Defendants have attempted and/or continue to attempt to collect the discharged debt from” each
of the six new Plaintiffs are insufficient to support this, as they are conclusory and not bolstered
by any actual facts. (Doc. 51 at 2-3; doc. 53 at 5).
Plaintiffs identify several parts of the amended complaint they say illustrate the specific
acts Defendants have done: (1) “attempting to collect discharged debts,” (doc. 48 at ¶ 19); (2)
wrongfully reviving and recording a judgment, (id. at ¶ 23); (3) the allegations of “attempt[ing]
and/or continu[ing] to attempt to collect the discharged debt” they make for each of the six new
Plaintiffs; and (4) collection activities that “include, but are not limited to, revival of judgment
debts, writs of execution, and inaccurate reporting of the debt or judgment on a credit report,” (id.
at ¶ 50). (Doc. 61 at 6). The only one of these that describes a specific, concrete act is the second,
which is an allegation exclusive to the Caldwells (whose claims Defendants do not challenge in
their motions to dismiss). The other three portions are vague and conclusory. The first of these
does little more than recite the element Plaintiffs are trying to support, and the third restates the
first for each new plaintiff; in neither case do Plaintiffs indicate what Defendants are alleged to
have done to attempt debt collection. The fourth is a class allegation describing, in general, the

Redstone characterizes the amended complaint as a shotgun pleading that “fails to
identify who is alleged to have taken whatever action about which the six new plaintiffs are
complaint,” leaving it “to wonder whether the new Plaintiffs contend Redstone acted, Grisham
acted, or they both acted.” (Doc. 53 at 5). While it is true the amended complaint contains
allegations that Defendants, generally speaking, engaged in particular actions, it also alleges
“Redstone utilized . . . Grisham in attempting to collect discharged debts.” (Doc. 48 at ¶ 19). The
reasonable inference is that the actions Plaintiffs attribute to “Defendants”—assuming their
complaint sufficiently described those actions—are the result of Redstone using Grisham’s debt
collection services.
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types of acts Plaintiffs say constitute attempts to collect debt. This undermines the contention that
“attempting to collect discharged debt” identifies specific conduct, because it could refer to any or
all of these activities. Plaintiffs finally point to ¶ 66, which contains a laundry list of actions they
state Grisham has taken against the class members. (Doc. 61 at 8-9). Similar to the class
allegations in ¶ 50, this is simply a recitation of categories of actions Plaintiffs claim violate the
FDCPA, divorced from any specifics.
The Caldwells can hang their factual hats on the revived judgment; the New Plaintiffs have
nothing similar to support their claims. This is insufficient to state a claim for an FDCPA violation.
See Thompson v. Resurgent Capital Servs., L.P., No. 2:12-CV-01018-JEO, 2015 WL 1486974, at
*16 (N.D. Ala. Mar. 31, 2015) (collecting cases for the proposition that, under Rule 8(a), an
FDCPA claim requires allegations “reasonably apprizing Defendants of at least the nature and
substance of the statements, threats, and communications being challenged.”). As the contempt
claim relies on the same unspecified collection activity supporting the FDCPA claim, Plaintiffs
have likewise failed to state a claim for contempt of the discharge order. However, there is nothing
to suggest these plaintiffs could not allege facts sufficient to support their claims, and Plaintiffs in
fact state they are prepared to do so, (see doc. 61 at 10). Therefore, the motions to dismiss are
DENIED, and Plaintiffs will be permitted to amend their complaint to provide facts identifying
how Defendants attempted to collected the discharged debt from each of the new plaintiffs.5

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In a footnote in its motion to dismiss, Redstone briefly states that without factual support
for their claims, the new plaintiffs cannot demonstrate they are properly joined pursuant to Fed. R.
Civ. P. 20(a). (Doc. 53 at 6 n.1). Redstone fleshes this out in its reply, arguing noncompliance
with Rule 20(a) provides an independent basis to dismiss the new plaintiffs’ claims. (Doc. 62 at
5). Beyond the single-sentence footnote, this argument was entirely undeveloped—and therefore
waived—in the motion. See Flanigan's Enters., Inc. v. Fulton County, Ga., 242 F.3d 976, 987
n.16 (11th Cir. 2001). Consequently, it was raised for the first time in Redstone’s reply brief and
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Conclusion
For the reasons stated above, the motions to dismiss, (docs. 51 & 53), are DENIED. The
alternative motions for a more definite statement are GRANTED. Plaintiffs are ORDERED to
file an amended complaint by January 16, 2018, which should include the factual basis for the
New Plaintiffs’ claims that Defendants wrongfully attempted to collect the debts they discharged
in bankruptcy.
DONE this 2nd day of January, 2018.

_______________________________
JOHN H. ENGLAND, III
UNITED STATES MAGISTRATE JUDGE

is not properly before the court. See Herring v. Sec'y, Dep't of Corr., 397 F.3d 1338, 1342 (11th
Cir. 2005). In any event, Redstone’s argument does not alter the undersigned’s conclusion the
plaintiffs should be required to provide a more definite statement rather than have their claims
dismissed.

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