Pralle v. Cooling & Winter, LLC et al
Filing
38
OPINION AND ORDER denying 22 defendant Cooling & Winter, LLC's Motion to Dismiss Plaintiff's Complaint; denying 25 defendant Cooling and Winter, LLC's Motion for Sanctions Pursuant to Federal Rule of Civil Procedure 11. Cooling & Winter, LLC shall file a responsive pleading to plaintiff's Complaint within fourteen (14) days of the date of this Opinion and Order. See Opinion and Order for details. Signed by Judge John E. Steele on 5/2/2017. (AMB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
WILLIAM PRALLE,
Plaintiff,
v.
Case No: 2:16-cv-865-FtM-99CM
COOLING & WINTER, LLC, a
Georgia limited liability
company,
Defendants.
OPINION AND ORDER
This matter comes before the Court on defendant Cooling &
Winter,
LLC's
Motion
to
Dismiss
Plaintiff's
Complaint
and
Memorandum of Law in Support (Doc. #22) filed on February 3, 2017.
Plaintiff filed a Response in Opposition (Doc. #27) on March 20,
2017.
Also before the Court is Cooling & Winter, LLC’s Motion for
Sanctions Pursuant to Federal Rule of Civil Procedure 11 (Doc.
#25) filed on March 7, 2017.
Plaintiff filed a Response in
Opposition (Doc. #33) on March 21, 2017.
On April 7, 2017,
defendant filed a Notice of Supplemental Authority. (Doc. #37.)
For the reasons set forth below, both motions are denied.
I.
On December 7, 2016, plaintiff William Pralle (plaintiff or
Pralle) filed a Complaint (Doc. #1) pursuant to the Fair Debt
Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. and the
Florida Consumer Collection Practices Act (FCCPA), Fla. Stat. §
559.55 et seq. against defendants Cooling & Winter, LLC (C&W) and
Midland Funding, LLC (Midland). Plaintiff alleges that he incurred
a financial obligation payable to World’s Foremost Bank (id. ¶ 9),
and
that
the
obligation
was
subsequently
assigned
and/or
transferred to defendant Midland for collection, (id. ¶ 10).
Midland filed suit against plaintiff in the County Court of the
Twentieth Judicial Circuit in and for Charlotte County, Florida,
Case Number 14-000296-CC. (Id. ¶ 11.) This lawsuit was eventually
resolved pursuant to a settlement agreement between Midland and
plaintiff (“the Settlement Agreement”).
(Id. ¶ 12; Doc. #1-1.)
The Settlement Agreement provided that, beginning October 2, 2015,
plaintiff would pay Midland $200.00 a month for twelve months,
totaling $2,400.00.
(Doc. #1-1.)
Plaintiff alleges that he fully
complied with the terms of the Settlement Agreement.
(Doc. #1, ¶
13.)
Despite
plaintiff’s
full
compliance
with
Agreement, Midland hired C&W as new counsel.
the
Settlement
(Id. ¶ 14.)
C&W
sent plaintiff correspondence dated April 8, 2016, which plaintiff
describes as a “dunning letter.”
(Id.)
Plaintiff asserts that
the letter misleadingly and falsely stated that plaintiff owed a
balance of $7,263.86 on the obligation.
(Id.)
The letter did not
make any reference to the Settlement Agreement.
(Id. ¶ 15.)
As
a result of the letter, plaintiff asserts he incurred additional
2
attorney
fees
for
time
Settlement Agreement.
spent
reviewing
the
letter
and
the
(Id. ¶ 16.)
II. Motion to Dismiss
Defendant C&W asserts that plaintiff’s Complaint should be
dismissed
for
lack
of
subject
matter
jurisdiction
because
plaintiff lacks constitutional standing to bring this action.
(Doc. #22, pp. 8-15.)
Alternatively, C&W asserts that plaintiff’s
Complaint should be dismissed for failure to state claims upon
which relief may be granted.
(Id. at 15-19.)
with each argument presented by C&W.
A. Count I:
Plaintiff disagrees
(Doc. #27.)
Article III Standing
Count I of the Complaint alleges that C&W violated the FDCPA
by sending the April 8, 2016 letter to plaintiff’s attorney which
“falsely and misleadingly misrepresent[ed] an amount that was not
due and seeking to collect same.”
(Doc. #1, ¶ 18.)
The letter,
attached to both the Complaint and the Motion to Dismiss, stated
plaintiff’s account “is being serviced by” C&W and that Midland
was the current owner of the account.
(Doc. #1-2, p. 1.)
The
letter continued that “[w]e are required to provide some additional
information pertaining to this account.”
information
were
statements
balance” was $7,263.86.
recipient
to
INFORMATION.”
the
(Id.)
following
(Id.)
that
the
(Id.)
Included in the
“balance”
and
“current
The letter further directed the
page
for
“IMPORTANT
DISCLOSURE
That important information included the
3
statements that “This is an attempt to collect a debt” and that
payments and correspondence should be mailed to a certain address
in Georgia.
(Id. at 2.)
Plaintiff alleges that this letter caused
him to incur additional attorney fees for the time to review the
letter and the Settlement Agreement.
Defendant
asserts
that
(Doc. #1, ¶ 16.)
because
the
letter
was
sent
to
plaintiff’s attorney, plaintiff does not have standing to bring
the claims.
(Doc. #22, pp. 13-14.)
The Court rejects this
argument. See Miljkovic v. Shafritz & Dinkin, P.A., 791 F.3d 1291,
1302-03 (11th Cir. 2015) (finding that the FDCPA applies to a debt
collector’s communications with a consumer’s attorney to the same
extent as the debt collector’s communications with the consumer
himself).
C&W further asserts that plaintiff does not have standing to
bring this action under the principles announced in Spokeo, Inc.
v. Robins, 136 S. Ct. 150 (2016).
(Doc. #22, pp. 8-15.)
The Court
disagrees.
To establish Article III standing, a “plaintiff must have (1)
suffered an injury in fact, (2) that is fairly traceable to the
challenged conduct of the defendant, and (3) that is likely to be
redressed by a favorable judicial decision.”
Spokeo, 136 S. Ct.
at 1547 (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61
(1992)).
See also Nicklaw v. Citimortgage, Inc., 839 F.3d 998,
1001–02 (11th Cir. 2016).
Defendant asserts that plaintiff fails
4
to
sufficiently
allege
the
first
and
second
requirements
of
constitutional standing.
The alleged injury must consist of “‘an invasion of a legally
protected interest’ that is ‘concrete and particularized’ and
‘actual or imminent, not conjectural or hypothetical.’” Spokeo,
136 S. Ct. at 1548 (quoting Lujan, 504 U.S. at 560).
This holds
true regardless of whether the alleged injury is tangible or
intangible.
See id. at 1549; Sierra Club v. Morton, 405 U.S. 727,
738 (1972).
“Where, as here, a case is at the pleading stage, the
plaintiff must ‘clearly . . . allege facts demonstrating’ each
element” of standing.
Spokeo, 136 S. Ct. at 1547 (quoting Warth
v. Seldin, 422 U.S. 490, 518 (1975) (omission in original)).
Eleventh Circuit has summarized Spokeo as follows:
In Spokeo, the Supreme Court vacated the
decision of the Court of Appeals and remanded
the issue of whether a plaintiff sufficiently
alleged a concrete injury where the plaintiff
claimed a statutory violation of the Fair
Credit Reporting Act (“FCRA”). 136 S. Ct. at
1545–46. The plaintiff alleged that a website
had published inaccurate information about
him.
Id. at 1544.
The Supreme Court
emphasized
that
in
addition
to
being
particularized,
intangible
injuries,
including statutory violations, must still be
concrete. Id. at 1548 (“A ‘concrete’ injury
must be ‘de facto’; that is, it must actually
exist.”). The Supreme Court stated that “both
history and the judgment of Congress play
important roles” in determining whether an
intangible harm is concrete, explaining that
“it is instructive to consider whether an
alleged
intangible
harm
has
a
close
relationship to a harm that has traditionally
been regarded as providing a basis for a
5
The
lawsuit in
at 1549.
plaintiff
procedural
violation,
or present
1550.
English or American courts.” Id.
The Supreme Court held that the
there had only alleged a “bare
violation” of the FCRA because the
on its own, may not cause any harm
a material risk of harm. Id. at
Perry v. Cable News Network, Inc., --- F.3d ----, No. 16-13031,
2017 WL 1505064, at *2 (11th Cir. Apr. 27, 2017).
In Perry, plaintiff brought suit under the Video Privacy
Protection Act (VPPA) and did not allege any additional harm beyond
the statutory violation.
Id.
The Eleventh Circuit held that this
was sufficient to allege a concrete injury for standing purposes.
Id.
The Court found that the structure and purpose of the VPPA
provided
actionable
rights,
constituted a concrete harm.
and
that
violation
of
the
VPPA
Id. at *3.
In Church v. Accretive Health, Inc., 654 F. App’x 990 (11th
Cir. 2016), the Eleventh Circuit examined whether a plaintiff had
standing to bring a claim under the FDCPA arising from receipt of
a letter advising her that she owed a debt, but not including
certain
disclosures
required
by
the
FDCPA.
The
Court
first
addressed defendant’s argument that “Church’s injury [was] not
sufficiently concrete to support Article III standing because
Church
incurred
no
actual
violation of the FDCPA.”
damages
Id. at 992.
from
Accretive
The Eleventh Circuit stated:
The FDCPA creates a private right of action,
which Church seeks to enforce.
The Act
requires that debt collectors include certain
disclosures in an initial communication with
6
Health’s
a debtor, or within five days of such
communication.
The FDCPA authorizes an
aggrieved debtor to file suit for a debt
collector's failure to comply with the Act.
Thus, through the FDCPA, Congress has created
a new right—the right to receive the required
disclosures in communications governed by the
FDCPA—and a new injury—not receiving such
disclosures.
It
is
undisputed
that
the
letter
Accretive Health sent to Church did not
contain
all
of
the
FDCPA's
required
disclosures.
Church has alleged that the
FDCPA governs the letter at issue, and thus,
alleges she had a right to receive the FDCPArequired disclosures.
Thus, Church has
sufficiently alleged that she has sustained a
concrete —i.e., “real”—injury because she did
not
receive
the
allegedly
required
disclosures. The invasion of Church's right
to receive the disclosures is not hypothetical
or
uncertain;
Church
did
not
receive
information to which she alleges she was
entitled.
While this injury may not have
resulted in tangible economic or physical harm
that courts often expect, the Supreme Court
has made clear an injury need not be tangible
to be concrete.
Rather, this injury is one
that Congress has elevated to the status of a
legally cognizable injury through the FDCPA.
Accordingly, Church has sufficiently alleged
that she suffered a concrete injury, and thus,
satisfies the injury-in-fact requirement.
Id. at 994-95 (internal footnotes and citations omitted).
The Court finds this persuasive as to this case.
Plaintiff
has a right under the FDCPA to receive information from a debt
collector that is not “false, deceptive, or misleading.” 15 U.S.C.
§ 1692e.
Specifically, as relevant to this matter, it is a
violation of the FDCPA for a debt collector to give a “false
representation of
. . . the character, amount, or legal status of
7
any debt . . . .”
Id. § 1692e(2).
The Court finds that receipt
of a “false representation” of “the character, amount, or legal
status of any debt,” id., from a debt collector is an injury “that
Congress has elevated to the status of a legally cognizable injury
through the FDCPA,” Church, 654 F. App’x at 995.
See also Hall v.
Glob. Credit & Collection Corp., No. 8:16-cv-1279-T-30AEP, 2016 WL
4441868, at *3-4 (M.D. Fla. Aug. 23, 2016) (finding defendant’s
receipt of a communication that contained false and misleading
information in violation of the FDCPA was an injury sufficient to
confer standing);
Bowse v. Portfolio Recovery Assocs., LLC, No.
15 C 4037, --- F. Supp. 3d ----, 2016 WL 6476545, at *1 (N.D. Ill.
Nov. 2, 2016), appeal docketed, No. 17-1866 (7th Cir. Apr. 26,
2017); Munoz v. Cal. Bus. Bureau, Inc., No. 1:15-cv-01345-BAM,
2016 WL 6517655, at *5-6 (E.D. Cal. Nov. 1, 2016); Prindle v.
Carrington Mortg. Servs., LLC, No. 3:13-cv-1349-J-34PDB, 2016 WL
4369424, at *7-11 (M.D. Fla. Aug. 16, 2016).
Plaintiff has alleged that the letter he received was false
and misleading in violation of the FDCPA.
As in Perry, this is an
injury sufficient to confer standing under Article III. See Perry,
2017 WL 1505064, at *3; see also Prindle, 2016 WL 4369424, at *8
(“By prohibiting such practices and providing consumers with a
right
to
sue
for
violations
of
that
prohibition,
the
FDCPA
implicitly confers on consumers the right to be free from those
practices when they receive debt-collection communications from
8
debt collectors.” (citation omitted)).
Further, plaintiff in this
case has alleged an additional injury by alleging that the letter
caused
him
to
incur
additional
attorney
fees
to
examine
contents and re-examine the Settlement Agreement.
its
It is clear
from the face of the Complaint that this injury is directly
traceable to the letter sent by defendant. Accordingly, the Court
denies C&W’s Motion to Dismiss for lack of standing.
B. Failure to State a Claim
1. Count I: FDCPA
Defendant also alleges that Count I is not sufficient to state
a claim upon which relief may be granted.
(Doc. #22, pp. 15-16.)
Defendant asserts that the letter, as a matter of law, contained
no false or misleading information.
(Id.)
The Court disagrees.
Under Federal Rule of Civil Procedure 8(a)(2), a Complaint
must contain a “short and plain statement of the claim showing
that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2).
This obligation “requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not
do.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(citation omitted).
To survive dismissal, the factual allegations
must be “plausible” and “must be enough to raise a right to relief
above the speculative level.”
Id. at 555.
See also Edwards v.
Prime Inc., 602 F.3d 1276, 1291 (11th Cir. 2010).
“more
than
an
unadorned,
This requires
the-defendant-unlawfully-harmed-me
9
accusation.”
Ashcroft
v.
Iqbal,
556
U.S.
662,
678
(2009)
(citations omitted).
In deciding a Rule 12(b)(6) motion to dismiss, the Court must
accept all factual allegations in a complaint as true and take
them in the light most favorable to plaintiff, Erickson v. Pardus,
551 U.S. 89 (2007), but “[l]egal conclusions without adequate
factual support are entitled to no assumption of truth,” Mamani v.
Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011) (citations omitted).
“Threadbare
recitals
of
the
elements
of
a
cause
of
action,
supported by mere conclusory statements, do not suffice.” Iqbal,
556 U.S. at 678.
with
a
“Factual allegations that are merely consistent
defendant’s
plausible.”
liability
fall
short
of
being
facially
Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th
Cir. 2012) (citations omitted).
Thus, the Court engages in a two-
step approach: “When there are well-pleaded factual allegations,
a court should assume their veracity and then determine whether
they plausibly give rise to an entitlement to relief.”
Iqbal, 556
U.S. at 679.
C&W asserts that plaintiff’s FDCPA claim should be dismissed
because the “conduct alleged in the Complaint is on its face not
false, deceptive, or misleading under section 1692e of the FDCPA
as a matter of law.”
(Doc. #22, p. 15.)
However, nothing on the
face of the Complaint or its attachments establishes that there is
no false, deceptive, or misleading statement in the letter.
10
C&W’s
reliance on Miljkovic is misplaced.
Miljkovic found that the
document at issue was not misleading or deceptive as “[i]t [did]
not erroneously state the amount of the debt owed.”
Miljkovic,
791 F.3d at 1306 (citing Kojetin v. C U Recovery, Inc., 212 F.3d
1318, 1318 (8th Cir. 2000)).
of law in this case.
The same cannot be said as a matter
Defendant has cited no case which holds as
a matter of law that the “current balance” of a debt after a
settlement agreement is the original amount and not the settlement
amount.
Defendant also asserts that the letter was not false or
misleading
in
any
way
because,
pursuant
to
the
Settlement
Agreement, defendant had the right to pursue the initial debt
amount plus court costs if plaintiff defaulted on the terms of the
Settlement Agreement.
(Doc. #22, pp. 15-16.)
Nothing in the four
corners of the Complaint or the Settlement Agreement attached to
it establish that plaintiff had defaulted on the terms of the
Settlement Agreement, thereby making the initial amount of the
debt due.
Indeed, the Complaint alleges no such default by
plaintiff. (Doc. #1, ¶¶ 13-16.)
Therefore, the Court finds that plaintiff has stated a claim
upon which relief can be granted under the FDCPA.
dismiss Count I is denied.
11
The motion to
2. Count II:
FCCPA
Count II alleges that C&W violated the FCCPA by “claiming,
attempting, and enforcing a debt known no longer to be legitimate”
since defendant was “attempting to collect an alleged Debt from
Pralle while knowing the Debt was paid in full.”
(Doc. #1, ¶ 21.)
C&W asserts that plaintiff’s FCCPA claim is frivolous because “the
conduct alleged is not actionable as a matter of law and because
the claim is barred by Florida’s litigation privilege.”
#22, p. 16.)
(Doc.
C&W also asserts that in order to succeed on his
FCCPA claim, plaintiff “will have to prove that Defendant asserted
the existence of legal right to enforce a debt that it knew did
not exist when it sent the CFPB Letter” and plaintiff will be
unable to prove this.
(Id. at 17.)
The FCCPA prohibits any person from claiming, attempting, or
threatening to enforce a consumer debt “when such person knows
that the debt is not legitimate.” Fla. Stat. § 559.72(9) (emphasis
added). Plaintiff’s Complaint alleges that the “acts and omissions
of the C&W attempting to collect an alleged Debt from Pralle while
knowing the Debt was paid in full constitutes a violation of the
FCCPA claiming, attempting, and enforcing a debt known no longer
to be legitimate.”
(Doc. #1, ¶ 21.)
At this stage of the
proceedings, this is sufficient to allege that C&W had knowledge
that the debt was not legitimate.
12
Whether or not plaintiff can
ultimately prove C&W’s knowledge is not an issue for determination
by a motion to dismiss.
Defendant also asserts that plaintiff’s FCCPA claim is barred
by Florida’s litigation privilege.
(Doc. #22, p. 18.)
Plaintiff
disagrees, asserting that the Florida litigation privilege does
not apply to plaintiff’s FCCPA claim because the letter was not
sent or used in the course of litigation.
(Doc. #27, pp. 8-9.)
A complaint need not rebut a potential affirmative defense.
Dismissal under Federal Rule of Civil Procedure 12(b)(6) on the
basis of an affirmative defense “is appropriate only if it is
apparent from the face of the complaint” that the affirmative
defense applies.
Tello v. Dean Witter Reynolds, Inc., 410 F.3d
1275, 1288 (11th Cir. 2005) (citation omitted).
Thus, at the
motion to dismiss stage, a complaint may be dismissed on the basis
of an affirmative defense “only if it appears beyond a doubt that
Plaintiffs can prove no set of facts” to refute the affirmative
defense.
Id. at 1288 n.13 (citation omitted).
It is not clear that the litigation privilege applies. 1
The
letter was sent after the underlying litigation had concluded,
1
The litigation privilege in Florida is an affirmative
defense that provides immunity for statements made during the
course of judicial proceedings that are relevant to the
proceedings.
Levin, Middlebrooks, Mabie, Thomas, Mayes &
Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So. 2d 606, 607-08 (Fla.
1994) (citation omitted). The heart of the rule is “the perceived
necessity for candid and unrestrained communications in [judicial]
proceedings, free of the threat of legal actions predicated upon
13
absent a default. E.g., N. Star Capital Acquisitions, LLC v. Krig,
611 F. Supp. 2d 1324, 1329 (M.D. Fla. 2009) (finding that Florida
Supreme Court would not apply Florida Litigation Privilege to
correspondence attempting to collect a debt served with the summons
and complaint).
But even if the Florida litigation privilege
applies, it is an affirmative defense which need not be rebutted
in a complaint.
The Complaint does not establish that plaintiff
can prove no set of facts which could refute such an affirmative
defense.
Accordingly, defendant C&W’s Motion to Dismiss (Doc. #22) is
denied.
III. Motion for Sanctions
C&W requests this Court impose sanctions against plaintiff
and plaintiff’s counsel for “filing a frivolous Complaint that
lacks Article III standing and fails to state a claim upon which
relief may be granted.”
(Doc. #25, p. 1.)
The Court has found
none of defendant’s arguments to be meritorious, and that the
Complaint is sufficient.
Defendant is entitled to no sanctions.
Accordingly, it is now
ORDERED:
1.
Defendant Cooling & Winter, LLC's Motion to Dismiss
Plaintiff's Complaint and Memorandum of Law in Support (Doc. #22)
those communications . . . .” Echevarria, McCalla, Raymer, Barrett
& Frappier v. Cole, 950 F.2d 380, 384 (Fla. 2007).
14
is DENIED. Defendant Cooling & Winter, LLC shall file a responsive
pleading to plaintiff’s Complaint within fourteen (14) days of the
date of this Opinion and Order.
2.
Defendant Cooling & Winter, LLC’s Motion for Sanctions
Pursuant to Federal Rule of Civil Procedure 11 (Doc. #25) is
DENIED.
DONE AND ORDERED at Fort Myers, Florida, this __2nd__ day of
May, 2017.
Copies: Counsel of record
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