Horowitz et al v Continental Casualty Company et al
Filing
42
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 12/28/2015. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
ROBERT HOROWITZ, et al.
:
v.
:
Civil Action No. DKC 14-3698
:
CONTINENTAL CASUALTY
COMPANY, et al.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this case are
multiple motions to dismiss filed by the following defendants:
Selzer
Gurvitch
Rabin
Wertheimer
Polott
&
Obecny,
P.C.
(“Selzer”) (ECF No. 11); Bregman, Berbert, Schwartz & Gilday,
LLC
(“Bregman”)
(“Eccleston”)
(ECF
(ECF
No.
No.
12);
Eccleston
and
21);
and
Continental
Wolf,
Casualty
P.C.
Company
(“Continental”) (collectively, the “Defendants”) (ECF No. 24).
Also
pending
Plaintiffs
is
a
Robert
motion
and
for
Cathy
extension
Horowitz
“Horowitzes” or “Plaintiffs”).
of
time
filed
(collectively,
(ECF No. 35).
by
the
The relevant
issues have been fully briefed, and the court now rules, no
hearing being deemed necessary.
following
reasons,
granted.
Plaintiffs’
denied as moot.
Defendants’
motion
Local Rule 105.6.
motions
for
to
extension
For the
dismiss
will
be
of
will
be
time
I.
Background
A.
Factual Background
Unless otherwise noted, the following facts are taken from
the first amended complaint.
(ECF No. 5).
Additional facts
will be discussed in the analysis section.
The parties’ long and winding journey to this suit began as
a contract, employment, and tort action brought in state court
by Plaintiffs against the McLean School of Maryland, Inc. (the
“School”)
for
conduct
occurring
in
2008.
Plaintiffs
were
represented in this initial suit by the Zipin Law Firm, LLC (the
“Zipin Firm”).
In 2012, following the conclusion of the suit
against the School, Plaintiffs filed a legal malpractice and
breach of fiduciary duty action against the Zipin Firm in state
court.
The
Zipin
Firm,
through
its
own
attorneys,
filed
a
counterclaim to collect unpaid legal fees Plaintiffs owed for
the
Zipin
Continental,
Firm’s
as
work
the
in
Zipin
their
Firm’s
suit
against
insurer,
the
retained
School.
and
paid
Eccleston to defend the Zipin Firm in the malpractice suit.
(ECF Nos. 5 ¶ 15; 24-1, at 4).
Selzer and Bregman.
Plaintiffs were represented by
(ECF No. 5 ¶ 23).
In November 2013,
following mediation, Plaintiffs and the Zipin Firm entered into
a Settlement Agreement and Release (the “Settlement”).
5-2).
Relevant here, the Settlement stated:
2
(ECF No.
As consideration for the terms and
conditions set forth in this Settlement
Agreement, the PARTIES agree that ROBERT AND
CATHY HOROWITZ will be paid $125,000.00 by
check issued by [Continental] on behalf of
THE ZIPIN LAW FIRM, LLC; and that THE ZIPIN
LAW FIRM, LLC will be paid $62,500.00 by
ROBERT AND CATHY HOROWITZ, said payment to
be made by check not later than 15 business
days
following
receipt
and
deposit
of
[Continental’s] $125,000.00 check by ROBERT
AND CATHY HOROWITZ.
(Id. ¶ 18).
their
As a result of the Settlement, Plaintiffs dismissed
malpractice
counterclaim
to
claim
collect
and
a
the
fee.
Zipin
(ECF
Firm
No.
dismissed
24-3,
at
the
43).1
Plaintiffs received the $125,000.00 check from Continental, but
they did not provide any of the stipulated payment to the Zipin
Firm.
(ECF No. 5 ¶ 61).
Following
Horowitzes
“circuit
in
the
Settlement,
the
Circuit
court”)
to
Selzer
Court
collect
for
unpaid
Plaintiff’s suit against the Zipin Firm.
4).
filed
suit
Montgomery
legal
against
County
work
done
the
(the
in
(ECF Nos. 5 ¶ 55; 24-
The Horowitzes filed a counterclaim against Selzer and
1
In reviewing a motion to dismiss, “a federal court may
consider matters of public record such as documents from prior
state court proceedings.”
Walker v. Kelly, 589 F.3d 127, 139
(4th Cir. 2009).
This is particularly true where, as here,
Defendants seek dismissal pursuant to the doctrines of res
judicata and collateral estoppel.
See Brooks v. Arthur, 626
th
F.3d 194, 200 (4
Cir. 2010) (“[W]hen entertaining a motion to
dismiss on the ground of res judicata, a court may take judicial
notice of facts from a prior judicial proceeding when the res
judicata defense raises no disputed issue of fact.” (citation
and internal quotation marks omitted)).
3
Bregman alleging malpractice in the suit against Zipin Firm,
asserting inter alia that the Settlement was illegal.
24-4, at 6; 24-5).
(ECF Nos.
At a hearing on October 29, 2014, Judge
Michael D. Mason granted summary judgment in favor of Selzer and
Bregman and entered judgment against the Horowitzes.
24-4, at 18-19; 24-6, at 57-70).
(ECF Nos.
The Horowitzes filed a motion
to alter or amend the judgment, which the court denied.
Horowitzes’
appeal
is
currently
pending
before
the
Court
The
of
Special Appeals and was scheduled for argument on December 9,
2015.
On July 30, 2014, while the suit was ongoing in circuit
court, the Horowitzes filed a complaint against Continental with
the Maryland Insurance Administration (the “MIA”) challenging
the
legality
statutes.
Settlement
of
(ECF
did
the
No.
not
Settlement
24-7).
violate
under
The
MIA
“Maryland’s
laws,” and Plaintiffs requested a hearing.
10).
Maryland
determined
insurance
insurance
that
the
regulatory
(ECF Nos. 24-9; 24-
To date, it appears that no hearing has taken place.
On November 14, 2014, Selzer filed a request for a writ of
execution of the Horowitzes’ personal property to execute on the
judgment entered by the circuit court.
at 23).
(ECF Nos. 5 ¶ 111; 11-4,
The circuit court issued a writ of execution, and
Plaintiffs assert that, over the next few weeks, deputies from
the Montgomery County Sheriff’s Office attempted to execute the
4
writ through allegedly threatening and deceptive means.
(ECF
No. 5 ¶¶ 112-120).
B.
Procedural History
On November 25, 2014, Plaintiffs commenced this action by
filing a complaint, which was subsequently amended.
5).
(ECF No.
The first amended complaint asserts that all Defendants:
violated the Fair Debt Collection Practices Act (“FDCPA”) (Count
I);
violated
the
Maryland
Consumer
Debt
Collection
Act
(the
“MCDCA”) (Count III); violated the Maryland Consumer Protection
Act
(the
“MCPA”)
(Count V).
(Count
IV);
and
committed
civil
conspiracy
The complaint also seeks declaratory judgment (Count
II) and alleges that Selzer violated 42 U.S.C. § 1983 (Count
VI).
In
April
2015,
Defendants
motions to dismiss.
filed
responses
in
separately
filed
the
(ECF Nos. 11; 12; 21; 24).
opposition
(ECF
Nos.
27;
Defendants replied (ECF Nos. 30; 31; 38; 39).
pending
Plaintiffs
34;
36),
and
Plaintiffs have
also filed multiple motions for extension of time, including one
which is still pending.
II.
(ECF No. 35).
Standard of Review
The purpose of a motion to dismiss under Rule 12(b)(6) is
to test the sufficiency of the complaint.
Charlottesville,
464
F.3d
480,
483
(4th
Presley v. City of
Cir.
2006).
A
plaintiff’s complaint need only satisfy the standard of Rule
5
8(a), which requires a “short and plain statement of the claim
showing that the pleader is entitled to relief.”
8(a)(2).
Fed.R.Civ.P.
“Rule 8(a)(2) still requires a ‘showing,’ rather than
a blanket assertion, of entitlement to relief.”
v. Twombly, 550 U.S. 544, 556 n.3 (2007).
Bell Atl. Corp.
That showing must
consist of more than “a formulaic recitation of the elements of
a cause of action” or “naked assertion[s] devoid of further
factual enhancement.”
Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citations and internal quotation marks omitted).
At this stage, all well-pleaded allegations in a complaint
must be considered as true, Albright v. Oliver, 510 U.S. 266,
268 (1994), and all factual allegations must be construed in the
light
most
favorable
to
the
plaintiff.
See
Harrison
v.
Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.
1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134
(4th Cir. 1993)).
In evaluating the complaint, unsupported legal
allegations
not
need
be
accepted.
Revene
Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989).
v.
Charles
Cnty.
Legal conclusions
couched as factual allegations are insufficient, Iqbal, 556 U.S.
at 678, as are conclusory factual allegations devoid of any
reference to actual events.
604
F.2d
844,
847
(4th
United Black Firefighters v. Hirst,
Cir.
1979);
see
also
Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009).
Francis
v.
“[W]here the
well-pleaded facts do not permit the court to infer more than
6
the mere possibility of misconduct, the complaint has alleged—
but
it
has
not
relief.’”
‘show[n]’—‘that
Iqbal,
8(a)(2)).
556
U.S.
the
at
pleader
679
is
entitled
(quoting
to
Fed.R.Civ.P.
Thus, “[d]etermining whether a complaint states a
plausible claim for relief will . . . be a context-specific task
that
requires
the
reviewing
experience and common sense.”
court
to
draw
on
its
judicial
Id.
III. Analysis
A.
Res Judicata
Defendants Selzer and Bregman argue that all of Plaintiffs’
claims against them in Counts I through V are barred by the
doctrine of res judicata or claim preclusion.
Claim preclusion
“bars the relitigation of a claim if there is a final judgment
in a previous litigation where the parties, the subject matter
and causes of action are identical or substantially identical as
to issues actually litigated and as to those which could have or
should have been raised in the previous litigation.”
v.
Andrulonis,
193
Md.App.
601,
internal quotation marks omitted).
617
(2010)
Andrulonis
(citations
and
Thus, under Maryland law,
claim preclusion “embodies three elements: (1) the parties in
the
present
litigation
are
the
same
or
in
privity
with
the
parties to the earlier litigation; (2) the claim presented in
the current action is identical to that determined or that which
could have been raised and determined in the prior litigation;
7
and (3) there was a final judgment on the merits in the prior
litigation.”
Comptroller of Treasury v. Sci. Applications Int’l
Corp., 405 Md. 185, 195-96 (2008) (quoting R&D 2001, LLC v.
Rice,
402
Md.
648,
663
(2008)).
The
doctrine
is
meant
to
“restrain[] a party from litigating the same claim repeatedly
and ensure[] that courts do not waste time adjudicating matters
which have been decided or could have been decided fully and
fairly.”
Anne Arundel Cnty. Bd. of Educ. v. Norville, 390 Md.
93, 107 (2005).
Obviously, Selzer and Bregman were parties in the state
court suit.
Further, there was a final judgment on the merits
in their favor.2
apply
where,
counterclaims.
as
Plaintiffs argue that claim preclusion does not
here,
(See
ECF
the
No.
earlier
27,
at
claims
3).
were
permissive
Under
Maryland’s
permissive counterclaim rule,
[W]here a defendant could have brought a
counterclaim in the first action but failed
to do so, he is not precluded from bringing
that claim in a subsequent action unless
“successful prosecution of the second action
would nullify the initial judgment or would
impair rights established in the initial
action.”
2
Plaintiffs do not argue to the contrary even though they
note there is an appeal pending before the Court of Special
Appeals.
In Maryland, “the pendency of an appeal does not
affect the finality of a judgment for res judicata [or
collateral estoppel] purposes.”
Campbell v. Lake Hallowell
Homeowners Ass’n, 157 Md.App. 504, 525 (2004).
8
Hawkins v. Citicorp Credit Servs., Inc., 665 F.Supp.2d 518, 525
(D.Md. 2009) (emphasis added) (quoting Sheahy v. Primus Auto.
Fin.
Serv.
Inc.,
284
F.Supp.2d
278,
280
(D.Md.
Plaintiffs’ argument is unpersuasive for two reasons.
2003)).
First, in
instances when courts have found that claim preclusion did not
apply,
the
judgment
party
in
Acceptance
did
the
not
initial
Corp.,
376
actually
suit.
Md.
bring
See
558,
567
a
counterclaim
Moore
(2003)
v.
Nissan
(noting
to
Motor
that
the
defendant “neither sought nor received any affirmative relief”
in the initial action); Rowland v. Harrison, 320 Md. 223 (1990)
(counterclaim
action).
Selzer
was
Here,
and
dismissed
Plaintiffs
Bregman
in
without
did
state
bring
court,
judgment against the Horowitzes.
prejudice
a
in
counterclaim
and
the
court
initial
against
entered
(ECF No. 24-4, at 19-20).
Moreover, this action is a second suit that would nullify the
initial judgment or impair rights established in the earlier
suit.
See
Hawkins,
current
suit,
circuit
court’s
if
665
F.Supp.2d
successful,
judgment.
at
would
Much
525-26.
directly
like
in
Plaintiffs’
contradict
Hawkins,
the
Plaintiffs
“implicitly seek[] to nullify a portion of the prior judgment by
asserting that [their] liability . . . was contrary to law and
seeking damages for the efforts to collect.”
claim
preclusion
is
applicable
counterclaim rule.
9
despite
Id. at 526.
Maryland’s
Thus,
permissive
Plaintiffs also argue that claim preclusion does not apply
because they are bringing “different claims” than were raised in
the state court proceeding.
(See ECF No. 27, at 11-13).
When
determining if claim preclusion applies, Maryland courts use the
transactional approach articulated in the Restatement (Second)
of Judgments § 24.
“Under the transactional approach, if the
two claims or theories are based upon the same set of facts and
one would expect them to be tried together ordinarily, then a
party must bring them simultaneously.”
of Educ., 390 Md. at 108.
“broad, inclusive test.”
601
F.Supp.2d
634,
641
Anne Arundel Cnty. Bd.
The approach has been termed a
W. Md. Wireless Connection v. Zini,
(D.Md.
2009).
Maryland
courts
have
indicated that claims involve the same “transaction” when they
are
“related
Arundel
Cnty.
in
time,
Bd.
of
space,
Educ.,
origin,
390
Md.
internal quotation marks omitted).
or
motivation.”
at
109
(citations
Anne
and
Here, although Plaintiffs
present some slightly different legal theories than were raised
in the state court action, the claims all arise from the same
transaction: Selzer and Bregman’s representation of Plaintiffs
in their suit against the Zipin Firm.
See Gonsalves v. Bingel,
194 Md.App. 695, 711 (2010) (quoting Restatement (Second) of
Judgments § 24 cmt. a) (“The present trend is to see claim in
factual terms and to make it coterminous with the transaction
regardless of the number of substantive theories, or variant
10
forms
of
relief
flowing
from
those
available to the plaintiff.”).
theories,
that
may
be
Accordingly, all claims against
Selzer and Bregman in Counts I through V will be dismissed.
B.
Collateral Estoppel
All
Defendants
bringing
some
argue
claims
by
that
the
Plaintiffs
related
are
precluded
doctrine
of
from
collateral
estoppel, also known as issue preclusion, because the circuit
court ruled on the issues presented and entered judgment against
Plaintiffs.
Specifically, Defendants assert that the circuit
court held that the Settlement was legal and that Plaintiffs
waived any objection to it by accepting the $125,000 payment.
(ECF No. 24-6, at 60-65).
“When an issue of fact or law is
actually litigated and determined by a valid and final judgment,
and
the
determination
determination
Crane,
Inc.
omitted).
is
v.
is
conclusive
Puller,
169
essential
in
a
to
the
subsequent
Md.App.
1,
26
judgment,
action.”
(2006)
the
John
(citations
Collateral estoppel is rooted in common law, and its
scope is determined by the appropriate state law.
Housley v.
Holquist, No. 10-1881, 2012 WL 3239887, at *3 (D.Md. Aug. 3,
2012) (citing Janes v. State, 350 Md. 284 (1984)).
“[A] federal
court must give to a state-court judgment the same preclusive
effect as would be given that judgment under the law of the
State in which the judgment was rendered.”
Migra v. Warren City
School Dist. Bd. of Educ., 465 U.S. 75, 81 (1984).
11
In Maryland, the defense of collateral estoppel depends on
the answers to four questions:
“(1) Was the issue decided in the prior
adjudication
identical
with
the
one
presented in the action in question?
(2) Was there a final judgment on the
merits?
(3) Was the party against whom the plea is
asserted a party or in privity with a party
to the prior adjudication?
(4) Was the party against whom the plea is
asserted given a fair opportunity to be
heard on the issue?”
Bryan v. State Farm Mut. Auto. Ins. Co., 205 Md.App. 587, 592
(2012) (quoting Colandrea v. Wilde Lake Cmty. Ass’n, 361 Md. 371
(2000)).
As an affirmative defense, Defendants bear the burden
of proof to demonstrate that these elements are met.
Plaintiffs
do not dispute that the second and third elements are met.
Plaintiffs argue that the first element is not met because
the issue decided in the state court proceeding was not the same
as
the
issues
presented
here.
They
contend
that
the
first
amended complaint asserts legal theories that were not raised in
the state court proceeding.
Collateral estoppel requires that
the issue was “actually litigated and determined” in the prior
proceeding.
Janes,
350
Md.
at
295.
An
issue
may
be
collaterally estopped even if a plaintiff did not raise that
particular legal theory in the prior proceeding because “the
concern of collateral estoppel law is with the preclusion of
duplicative
fact-finding.”
Puller,
12
169
Md.App.
at
27-28
(citations
and
internal
quotation
marks
omitted).
In
adjudicating the cross-motions for summary judgment, the circuit
court
ruled
payment
that
under
the
Plaintiffs’
acceptance
of
Settlement
constituted
a
argument that the Settlement was illegal.
60).
the
$125,000.00
waiver
of
their
(ECF No. 24-6, at 59-
Further, the circuit court held that the Settlement was
not a violation of Maryland insurance laws.
(Id. at 60-65).
Plaintiffs had extensive opportunity to litigate these issues as
evidenced
by
the
extensive
state
court
docket
transcript from the hearing before Judge Mason.
24-6).
and
detailed
(ECF Nos. 24-4;
Accordingly, the first element of collateral estoppel
has been met as to the issues of Plaintiffs’ waiver of their
illegality argument and the Settlement’s legality under Maryland
insurance law.
Plaintiffs also contend that they were not given a full and
fair opportunity to be heard in the circuit court.
argument is unpersuasive.
Plaintiffs’
Plaintiffs filed a motion for summary
judgment on their counterclaim and presented their arguments at
a hearing.
and
The Circuit Court’s ruling was thorough, detailed,
extensively
discussed
relevant
precedent.
Moreover,
Plaintiffs filed a motion to alter and amend the circuit court’s
judgment, which was fully briefed and denied.
20-22).
(ECF No. 24-4, at
Plaintiffs were afforded a full opportunity to present
arguments before the circuit court on the issues they raised in
13
their
counterclaim.
The
requirements
of
collateral
estoppel
have been satisfied, and Plaintiffs cannot relitigate the issue
of whether they waived their illegality argument by accepting
the $125,000 payment under the Settlement.
Thus, Plaintiffs
cannot now argue that the Settlement was illegal.
Plaintiffs
are correct, however, that the first amended complaint contains
some
claims
that
Settlement.
do
not
depend
on
any
claim
Accordingly,
the
illegality
that
the
on
relies
of
the
illegality of the Settlement will be dismissed.
C.
Plaintiffs’ Failure to State a Claim
Defendants also argue that Plaintiffs’ complaint should be
dismissed for failure to state a claim, particularly because
Plaintiffs
are
collaterally
Settlement
was
illegal.
estoppel
warrants
estopped
Defendants
dismissal
of
all
from
arguing
that
contend
that
counts
because
the
collateral
all
of
Plaintiffs’ allegations are grounded in the illegality of the
Settlement.
Defendants are correct that many of the allegations
in the first amended complaint are based on the illegality of
the Settlement, and thus are precluded.
However, the first
amended complaint contains several claims that do not rely on
the
Settlement’s
illegality
and
considerations under Rule 12(b)(6).
that
warrant
further
The following analysis for
Counts I through V will be limited to Defendants Continental and
Eccleston
because
Plaintiffs’
claims
14
in
these
counts
against
Defendants
Selzer
and
Bregman
are
fully
judicata and are therefore dismissed.
precluded
by
res
Plaintiffs’ § 1983 claims
against Selzer in Count VI will also be considered below.
1.
Statutory Violations (Counts I, III, IV)
Plaintiffs’
Continental
complaint
and
Eccleston
includes
violated
many
various
allegations
provisions
that
of
the
FDCPA, MCDCA, MCPA, the Maryland Collection Agency Licensing Act
(“MCALA”),
and
the
Maryland
Unfair
Insurance
Practices
Act.
Plaintiffs assert that Continental and Eccleston’s “liability to
plaintiff[s] is grounded on their using unlawful practices as
third party debt collectors to collect on [the Zipin Firm’s]
consumer debt with the Horowitzes.”
8).
Most
of
Plaintiffs’
(ECF Nos. 34, at 8; 36, at
statutory
claims
depend
Settlement’s illegality and therefore are precluded.
on
the
The first
amended complaint makes the following allegations, which are not
precluded:
Neither
Continental
nor
required
license
a
as
Eccleston
debt
obtained
collector
under
the
the
Maryland Collection Agency Licensing Act (ECF No. 5 ¶¶
12, 18);
Each defendant failed to identify itself “as a debt
collector
that
was
making
efforts
to
collect
a
consumer debt” in violation of the FDCPA (Id. ¶ 43);
and
15
Eccleston sought “sanctions, beyond the debt amount,
against [Plaintiffs] for not paying the Zipin [Firm]
consumer debt, a direct violation of the FDCPA at 15
U.S.C. § 1692f(1)” (Id. ¶ 65).
“To succeed on a FDCPA claim a plaintiff must demonstrate
that
‘(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.’”
Stewart v. Bierman, 859 F.Supp.2d 754, 759 (D.Md. 2012) (quoting
Dikun v. Streich, 369 F.Supp.2d 781, 784-85 (E.D.Va. 2005)).
“debt
collector”
is
“any
person
.
.
.
in
any
business
A
the
principal purpose of which is the collection of any debts, or
who
regularly
collects
or
attempts
to
collect,
directly
or
indirectly, debts owed or due or asserted to be owed or due
another.”
15 U.S.C. § 1692a(6).
Plaintiffs do not plead facts showing that Eccleston and
Continental were debt collectors under the FDCPA.
Continental
provided insurance coverage for the Zipin Firm, and Eccleston
defended the Zipin Firm in Plaintiffs’ malpractice suit.
A law
firm can be a debt collector under the FDCPA if it is in the
business
activity.
(applying
of
regularly
See
the
Heintz
FDCPA
engaging
v.
“to
Jenkins,
attorneys
16
in
consumer-debt-collection
514
U.S.
291,
who
‘regularly’
299
(1995)
engage
in
consumer-debt-collection
activity”
(emphasis
859
(applying
the
F.Supp.2d
at
761
initiating foreclosure suits);
added));
FDCPA
to
a
Stewart,
law
firm
Bradshaw v. Hilco Receivables,
LLC, 765 F.Supp.2d 719, 724-25 (D.Md. 2011) (applying the FDCPA
to a law firm that was in the business of buying consumer debt
and initiating suits to collect).
Plaintiffs fail plead facts
showing that Continental and Eccleston engage in debt collection
activities at all, let alone as a regular course of business.
Moreover,
“[i]t
is
well
established
that
‘the
threshold
requirement for application of the [FDCPA] is that prohibited
practices are used in an attempt to collect a debt.’”
Bradshaw,
765 F.Supp.2d at 725 (quoting Mabe v. G.C. Servs. Ltd. P’ship,
32 F.3d 86, 87-88 (4th
Cir. 1994)).
Plaintiffs assert that
Eccleston represented the Zipin Firm in its action to recover
unpaid fees, but Mr. Zipin and other lawyers at the Zipin Firm
represented themselves in the fee-recovery portion.
ECF No. 21-7, at 8).
(See, e.g.,
Plaintiffs have not alleged facts, beyond
conclusory accusations, that Continental and Eccleston undertook
any debt collection activities.
Rather, Plaintiffs argue that
Continental and Eccleston’s actions were covered by the FDCPA
because they attempted to enforce the Settlement, but such an
argument
F.Supp.2d
is
unavailing.
150,
“enforcement
of
153-54
a
See
Fleet
(D.Mass.
Settlement
17
Nat.
2003)
rather
Bank
v.
(noting
than
a
Baker,
263
that
the
generic
debt
collection action compels the finding that the FDCPA does not
apply”).
Plaintiffs cannot invoke the FDCPA by baldly labeling
Defendants
as
debt
collectors
engaging
in
debt
collection
activities.
The only other statutory violation Plaintiffs allege, which
is
not
barred
by
issue
preclusion,
is
that
Continental
and
Eccleston failed to obtain a license as a debt collector in
violation of the MCALA.
license
whenever
the
Under the MCALA, “a person must have a
person
agency” within Maryland.
discussed
above,
does
business
as
a
collection
Md. Code., Bus. Reg. § 7-301.
Plaintiffs
do
not
plead
facts
showing
As
that
Continental or Eccleston were doing business as a collection
agency.
Rather, they were defending the Zipin Firm in their
malpractice
suit
and
attempting
to
enforce
the
Settlement.
Accordingly, Counts I, III, and IV will be dismissed.
2.
Declaratory Judgment (Count II)
Plaintiffs seek declaratory judgment on multiple issues.
(ECF No. 5 ¶¶ 76-95).
2201,
authorizes
a
The Declaratory Judgment Act, 28 U.S.C. §
district
court
to,
in
its
discretion,
“declare the rights and other legal relations of any interested
party
seeking
such
declaration.”
Plaintiffs’
request
declaratory judgment is deficient for multiple reasons.
for
First,
inasmuch as the complaint seeks declaratory judgment for the
alleged statutory violations, “declaratory and injunctive relief
18
is
not
available
under
the
FDCPA,
MCDCA,
or
the
Bradshaw, 765 F.Supp.2d at 733 (citation omitted).
the
aforementioned
principles
of
claim
and
MCPA.”
Furthermore,
issue
preclusion
apply regarding the allegations of the Settlement’s illegality.
In their opposition, Plaintiffs assert that declaratory judgment
is appropriate because the Settlement “is so legally specious
that
rights
existing
under
that
Settlement
will
have
to
be
clarified in the Count 2 Declaratory Judgment.”
(ECF No. 34, at
13).
Plaintiffs
This
is
the
exact
argument
collaterally estopped from making.
relying
are
Plaintiffs cannot request
declaratory
judgment
Settlement.
Accordingly, Count II will be dismissed.
3.
by
that
on
the
illegality
of
the
Civil Conspiracy (Count V)
Plaintiffs
allege
that
Defendants
engaged
in
a
civil
conspiracy “to coerce, induce, and require plaintiffs to enter
into and perform under the unlawful, unfair, and unconscionable
November
2013
Settlement”
and
to
violate
Plaintiffs’
“legal
rights set forth in the FDCPA; the [MCPA]; the [MCDCA]; and the
Unfair Trade Practices Insurance Act.”
(ECF No. 5 ¶¶ 105-106).
In Maryland, civil conspiracy is “a combination of two or more
persons
by
an
agreement
or
understanding
to
accomplish
an
unlawful act or to use unlawful means to accomplish an act not
in itself illegal, with the further requirement that the act or
the means employed must result in damages to the plaintiff.”
19
Hoffman v. Stamper, 385 Md. 1, 24 (2005) (citations and internal
quotation
marks
omitted).
In
addition,
the
plaintiff
must
“prove the commission of an overt act, in furtherance of the
agreement, that caused the plaintiff to suffer actual injury.”
Id. at 25.
In Maryland, conspiracy is not a distinct tort that can
sustain an award of damages in the absence of an underlying
action.
Alexander
&
Alexander,
Inc.
v.
B.
Dixon
Evander
&
Assocs., 336 Md. 635, 645 (1994) (“[A] conspiracy cannot be made
the subject of a civil action unless something is done which,
without
the
conspiracy,
would
give
a
right
of
action.”).
Because Plaintiffs cannot sustain a conspiracy claim independent
of the underlying claims, which will be dismissed, they have
failed to allege sufficiently that Defendants conspired against
them.
4.
42 U.S.C. § 1983 Claim Against Selzer (Count VI)
Plaintiffs
execution,
and
allege
the
violated § 1983.
that
sheriff’s
Selzer’s
request
deputies’
for
subsequent
a
writ
of
execution,
To state a claim under § 1983, a plaintiff
must allege that a right secured by the Constitution or laws of
the United States was violated, and that the alleged violation
was committed by a person acting under the color of state law.
See West v. Atkins, 487 U.S. 42, 48 (1988).
Selzer asserts that
Plaintiffs fail to state a claim because Selzer’s actions were
20
not taken under the color of state law and because Plaintiffs
did not adequately plead the constitutionally protected rights
upon which Selzer allegedly infringed.
18).3
(ECF No. 11-1, at 17-
Plaintiffs aver that Selzer “jointly engaged with state
officials” and therefore acted under color of law.
at
21
(quoting
(1982))).
Lugar
v.
Edmonson
Oil,
457
(ECF No. 27,
U.S.
922,
941
Selzer contends that Plaintiffs misread the Supreme
Court’s holding in Lugar.
“Lugar
involved
(ECF No. 30, at 8).
a
§
1983
claim
alleging
the
unconstitutional deprivation of property under Virginia’s prejudgment attachment statute.
In Lugar, the Supreme Court held
that that unlawful application of the pre-judgment attachment
statute
did
not
constitute
successful § 1983 claim.”
(4th
1011
Cir.
1990)
the
state
action
required
for
a
Jones v. Poindexter, 903 F.2d 1006,
(citing
Lugar,
457
U.S.
at
940).
The
Supreme Court held that the plaintiff “did present a valid cause
of
action
under
constitutionality
§
of
1983
the
insofar
Virginia
as
he
statute[,
challenged
but]
he
did
the
not
insofar as he alleged only misuse or abuse of the statute.”
Lugar, 457 U.S. at 942 (emphasis added); see also Wyatt v. Cole,
3
Selzer’s motion to dismiss also asserts that the court
should abstain from deciding Plaintiffs’ § 1983 claim because it
was the subject of a pending counterclaim in the circuit court.
(ECF No. 11-1, at 15-17).
Plaintiffs since have withdrawn
voluntarily the relevant counterclaim, and Selzer concedes that
its abstention argument is moot. (ECF No. 30, at 8 n.2).
21
504 U.S. 158, 161-62 (1992) (noting that Lugar allowed § 1983
liability
for
constitutionally
affirmed
the
private
parties
infirm).
district
In
“if
the
Poindexter,
court’s
dismissal
statute
the
of
Fourth
a
§
was
Circuit
1983
action
against a private party who attempted to collect on a state
court judgment.
903 F.2d at 1011.
The Fourth Circuit held that
there was no viable § 1983 claim against the defendant because
the plaintiff alleged that the private party defendant illegally
and improperly used state statutes and processes.
The Fourth
Circuit also noted that a private party’s “use of state process
to attempt to enforce judgment” does not “rise to the level of
action under color of law.”
Here, Plaintiffs assert that Selzer violated their rights
through
the
alleged
improper
use
of
a
writ
of
execution.
Plaintiffs do not contend that the Maryland laws or procedures
themselves
federal
multiple
are
law.
unconstitutional
Rather,
allegations
the
that
or
first
Selzer
constitute
amended
and
the
123-127,
132,
134).
A
violation
of
complaint
contains
sheriff’s
deputies
violated applicable state statutes and rules.
118-119,
a
private
(See ECF No. 5 ¶¶
party’s
alleged
“unlawful invocation of statutory procedures does not constitute
action under color of state law as required for a § 1983 claim.”
Keystone Builders, Inc. v. Floor Fashions of Va., Inc., 829
F.Supp. 181, 182 (W.D.Va. 1993) (citing Poindexter, 903 F.2d at
22
1011); see also Martin v. Sessoms & Rogers, P.A., No. 5:09-CV480-D, 2010 WL 3200015, at *5 (E.D.N.C. Aug. 12, 2010) (citing
Lugar,
457
U.S.
at
941-42;
Poindexter,
903
F.2d
at
1011)
(dismissing a § 1983 claim against a private party because the
complaint “has done no more than allege that [the defendant]
‘misused
or
execution
abused’
against
North
real
Carolina’s
property”).
statutory
The
procedure
Fourth
for
Circuit’s
interpretation of Lugar is directly applicable to the analysis
here.
Accordingly, Plaintiffs’ § 1983 claims against Selzer
will be dismissed.
IV.
Conclusion
For the foregoing reasons, Defendants’ motions to dismiss
will be granted.
be denied as moot.
Plaintiffs’ motion for extension of time will
A separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
23
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