Beavers v. Midland Funding LLC et al
ORDER granting defendants' motion to dismiss Beavers' FDCPA claim as time- barred and dismisses her state law AFDCPA and ADTPA claims without prejudice. The Court will enter judgment accordingly. Signed by Judge Susan Webber Wright on 6/13/2017. (jak)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
MIDLAND FUNDING, LLC; MIDLAND *
CREDIT MANAGEMENT, INC.; and
LLOYD & MCDANIEL, PLC,
OPINION AND ORDER
Mary Beavers brings this action against Midland Funding, LLC, Midland
Credit Management, Inc., and Lloyd & McDaniel alleging these defendants
violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq.,
the Arkansas Fair Debt Collection Practices Act (AFDCPA), Ark. Code Ann. § 1724-501 et seq., and the Arkansas Deceptive Trade Practices Act (ADTPA), Ark.
Code Ann. § 4-88-101 et seq., in their attempts to collect an alleged credit card
debt she owed.
The matter is before the Court on motion [doc.#7] of defendants to dismiss
Beavers’ complaint on several grounds, including that her FDCPA claim is timebarred. Beavers has responded in opposition to defendants’ motion and defendants
have replied to Beavers’ response. For the reasons that follow, the Court grants
defendants’ motion to dismiss Beavers’ FDCPA claim as time-barred and declines
to exercise supplemental jurisdiction over her state law AFDCPA and ADTPA
An action under the FDCPA must be brought “within one year from the date
on which the violation occurs.” 15 U.S.C. § 1692k(d). This one-year limitations
period is triggered when the debt collector had “its last opportunity to comply with
the FDCPA.” Mattson v. U.S. West Communications, Inc., 967 F.2d 259, 261 (8th
Beavers filed this action alleging violations of the FDCPA on December 8,
2016. In her complaint, Beavers alleges that over one year earlier, on December 2,
2015, defendants filed a debt collection action against her in state court on a credit
card debt she does not owe and that the filing of the collection action violated the
FDCPA, the AFDCPA, and the ADTPA. Beavers was served with the complaint,
which included an alleged false affidavit, on December 10, 2015, within one year
of filing this action.
In Mattson, the Eighth Circuit determined that once abusive letters were placed
in the mail, the debt collector’s conduct with respect to any violations of the FDCPA was
complete. Id. The Court found that the date on which the debt collector mailed the
letters was its last opportunity to comply with the FDCPA, and the mailing of the letters,
therefore, triggered § 1692k(d). Id.
Defendants argue that any alleged false statements in its debt collection
action were made and communicated when the action was filed and as that was the
last opportunity for defendants to comply with the FDCPA, the statute of
limitations began to run on the date when the collection action was filed. Beavers,
in turn, argues that an FDCPA claim based on the filing of a debt collection action
begins to run on the date the complaint is served, not filed, and that because she
was not served with the complaint until December 10, 2015, her FDCPA claim is
Courts are split as to when the FDCPA’s one-year statute of limitations in
cases based on an underlying debt collection action begins to run (and, apparently,
are split about Mattson). Some courts hold that the limitations period in such cases
begins to run upon the filing date of the collection action. See, e.g., Naas v.
Stolman, 130 F.3d 892, 893 (9th Cir. 1997) (relying, in part, on Mattson and
holding that the “[f]iling a complaint is the debt collector’s last opportunity to
comply with the Act, and the filing date is easily ascertainable”); Tyler v. DH
Capital Management, Inc., 736 F.3d 455, 463 (6th Cir. 2013) (citing Mattson and
holding that violation of FDCPA that arose through debt collection action occurred
at filing of complaint rather than when debtor was served with complaint). Other
courts hold that the limitations period begins to run when the complaint is served,
as opposed to when the complaint is filed. See, e.g., Johnson v. Riddle, 305 F.3d
1107, 1113-14 (10th Cir. 2002) (holding that where the plaintiff’s FDCPA claim
arises from the instigation of a debt collection action, the plaintiff does not have a
complete and present cause of action and thus no violation occurs within the
meaning of § 1692k(d) until the plaintiff has been served, noting that if the statute
of limitations began to run when the complaint was filed, the debt collector could
effectively block any action under the federal statute by filing suit and then
delaying service); Serna v. Law Office of Joseph Onwuteaka, P.S., 732 F.3d 440,
445 (5th Cir. 2013) (comparing Mattson and noting that “when a debt collector files
suit against an alleged debtor in contravention of § 1692i(a)(2), no harm
immediately occurs because the debtor likely has no knowledge of the suit and has
no need to act” and “[b]ecause the harm of responding to a suit in a distant forum
arises only after receiving notice of that suit, a ‘violation’ does not arise under §
1692i(a)(2) until such time as the alleged debtor receives notice of the suit.”).
District courts within the Eighth Circuit also appear to be split as to when
the FDCPA’s statute of limitations in cases based on a debt collection action
begins to run. Cf. Boldon v. Riverwalk Holdings, Ltd, Civ. No. 15-2105, 2016 WL
900639, at *4 (D. Minn. March 9, 2016) (determining that a new FDCPA
limitations period began to run on the date complaint was filed as that was
defendants’ last opportunity to comply with the FDCPA), and Knobbe v. Bank of
America, N.A., No. 8:05cv489, 2007 WL 2822750, at *7 (D. Neb. Sept. 26, 2007)
(rejecting plaintiff’s argument that any attempt to engage in a collection, including
any court action, is a continuing violation and citing Naas as holding that “oneyear statute of limitations began to run on judgment debtors’ FDCPA claim against
judgment creditor and its attorneys as of filing of judgment creditor’s complaint in
state court debt collection suit, on which claim was based”), with Anderson v.
Gamache & Myers, P.C., No. 4:07cv336, 2007 WL 1577610, at *8 (E.D. Mo. May
31, 2007) (finding Johnson’s reasoning and interpretation of Mattson persuasive
and noting that “[i]f the statute of limitations were to run while a defendant
delayed service, the result would be absurd and in contradiction of the policy
behind the FDCPA” and that “the date of service is a precise and easily
ascertainable date.”), and Wyles v. Excalibur I, LLC, No. Civ. 05-2798JRTJJG,
2006 WL 2583200, at *3 (D. Minn. Sept. 7, 2006) (finding, under the reasoning in
Mattson, that plaintiff’s cause of action accrued the date she was served with the
collection action, because that was the last opportunity for the debt collector to
comply with the FDCPA).
Perhaps the most detailed analysis of the limitations issue before the Court
was set forth by the Sixth Circuit in Tyler, 736 F.3d 455. In finding that a violation
of the FDCPA that arose through a debt collection action occurred at the filing of
the complaint rather than when the debtor was served with the complaint, the Sixth
Circuit reasoned as follows:
First, filing a complaint may cause actual harm to the debtor: a pending legal
action, even pre-service, could be a red flag to the debtor's other creditors
and anyone who runs a background or credit check, including landlords and
employers. The debt collector may also use the pending legal action to
pressure a debtor to pay back the debt informally, without serving the
complaint—precisely the type of unfair practice prohibited by the FDCPA.
See 15 U.S.C. § 1692e(5) (“The threat to take any action that cannot legally
be taken or that is not intended to be taken.”).
Second, the alternative to dating violations from the filing of the complaint
can become factually complicated. An “attempt to collect” will often occur
before service of process. A debt collector who attempts to serve process
but does not follow proper procedure or fails to find the debtor at all is
surely attempting to collect a debt. The debt collector's procedural failures
or the debtor's success in escaping service should not be relevant to the
viability of an FDCPA claim. Dating the violation to the filing of the action
is more easily administrable … and, in the vast majority of cases, will accord
with the debt collector's intent at the time of filing. Courts have applied a
similar bright-line-rule approach in determining when the statute of
limitations accrues for harassing collection letters. Instead of running from
the date of receipt, the statute runs from the mailing date, as it is “fixed by
objective and visible standards” and “easy to determine.” Mattson v. U.S.
West Commc'ns, 967 F.2d 259, 261 (8th Cir.1992).
Third, there is no good reason to protect debt collectors who have filed
complaints but not yet served process. As the purpose of the FDCPA “is to
regulate the actions of debt collectors,” Naas, 130 F.3d at 893, the focus
should be on the debt collector's actions, not on the awareness of the debtor.
Filing suit is good evidence of an attempt to collect, and the complaint is
good evidence of the details of that attempt. If the debt collector truly filed
accidently or prematurely, the FDCPA's “bona fide error” exception is better
suited to protect the collector than a legal rule that delays triggering a
violation until service of process. See 15 U.S.C. § 1692k(c).
Id. at 464.
The Court adopts the reasoning of the Sixth Circuit in Tyler, finding it more
persuasive than that of Johnson and Serna (and other like-minded decisions), and
holds that the FDCPA’s one-year statute of limitations in cases based on an
underlying debt collection action begins to run upon the filing date of the
collection action rather than when the debtor was served with the complaint.2
Because Beavers did not file this action alleging a violation of the FDCPA until
December 8, 2016, more than one year after the state court collection action was
filed on December 2, 2015, her FDCPA claim is time-barred.
Although Tyler is a bankruptcy case, its reasoning is equally applicable in this
statute of limitations context. See, e.g., Toops v. Citizens Bank of Logan, Ohio, No. 2:14cv-2086, 2015 WL 1526411, at *2-3 (S.D. Ohio, April 2, 2015) (noting that “although
Tyler was indeed a bankruptcy case, the analysis in that case nevertheless led to a clear
holding that directs today’s disposition” that the FDCPA statute of limitations begins to
run at the time of filing of the complaint); Vaughn v. National Collegiate Student Loan
Trust 2006-3, No. 2:14-cv-194, 2014 WL 6686751, at *5 (E.D. Tenn., Nov. 26, 2014)
(noting that although the Sixth Circuit’s decision in Tyler arose in a bankruptcy
framework, “[t]he Sixth Circuit clearly stated its opinion was contrary to the reasoning of
Johnson and that the FDCPA statute of limitations begins to run at the time of filing,
rather than service.”).
Beavers argues her claims are also based on defendants’ conduct in the statecourt debt-collection action after she filed a pro se answer denying defendants’
allegations. In this respect, defendants appear to argue that after they filed their
debt collection action in state court, defendants violated the FDCPA (and the
AFDCPA and ADTPA) by (1) filing Plaintiff’s First Set of Request for
Admissions that did not advise Beavers that the matters would be admitted if she
did not timely respond, that had a Certificate of Service that was not filled out, and
that had an attached “form Verification (even though the Arkansas Rules of Civil
Procedure to not require Responses to Requests for Admission to be verified),”3
and (2) filing a motion for summary judgment based on the allegations in the
complaint, the affidavit attached to the complaint, and Beavers’ failure to respond
to the Request for Admissions.4
To the extent Beavers is arguing these litigation filings constitute new or
continuing violations of the FDCPA that extend the statute of limitations, that
argument is rejected. The one-year statute of limitations began to run as of the
The Court notes that procedural irregularities are not cognizable under the
FDCPA. See, e.g., Lena v. Cach, LLC, No. 14 C 01805, 2015 WL 4692443, at *5 (N.D.
Ill. Aug. 6, 2015) (if the debt collector violated a state rule of procedure, then the state’s
remedy is to be found in the state’s rules, not the FDCPA).
The state court denied that motion because there was no proof that the Request
for Admissions was served on Beavers.
filing of the debt collection action in state court and defendants’ litigation filings
do not constitute new or continuing violations. See Leonardo v. MSW Capital,
LLC, No. 16-cv-3845, 2017 WL 2062852, at *2 (D. Minn. May 12, 2017) (“When
an FDCPA claim involves misrepresentations in a debt-collection lawsuit, a new
violation is not committed merely because pleadings and memoranda are the
continuing effects of the initial violation” and “The plaintiff is not deceived or
abused anew each time the defendants reaffirm their deceptive statements
throughout the litigation.”).
As to Beavers’ state law AFDCPA and ADTPA claims, the Eighth Circuit
has held that when federal and state claims are joined and the federal claims are
dismissed, district courts should ordinarily dismiss the supplemental state claims
without prejudice to avoid needless decisions of state law as a matter of comity.
See, e.g., Figg v. Russell, 433 F.3d 593, 600 (8th Cir. 2006) (noting that when court
dismissed federal 42 U.S.C. § 1983 action, it should have exercised its discretion to
dismiss state-law claims without prejudice, leaving it to plaintiff to determine
whether to reassert them in state court). See also Gibson v. Weber, 433 F.3d 642,
647 (8th Cir. 2006) (“Congress unambiguously gave district courts discretion in 28
U.S.C. § 1367(c) to dismiss supplemental state law claims when all federal claims
have been dismissed...”). Accordingly, Beavers’ state law AFDCPA and ADTPA
claims will be dismissed without prejudice.
For the foregoing reasons, the Court grants defendants’ motion to dismiss
Beavers’ FDCPA claim as time-barred and dismisses her state law AFDCPA and
ADTPA claims without prejudice. The Court will enter judgment accordingly.
IT IS SO ORDERED this 13th day of June 2017.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE
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