Williams et al v. Web Equity Holdings, LLC et al
Filing
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OPINION AND ORDER granting 22 Motion to Dismiss. Signed by District Judge Marianne O. Battani. (KDoa) Modified on 8/5/2014 (KDoa).
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
ERNEST J. WILLIAMS, ERNEST J.
WILLIAMS, JR., PATTY WILLIAMS, and
UMIKA BREED,
Plaintiff,
CASE NO. 2:13-cv-13723
v.
HON. MARIANNE O. BATTANI
WEB EQUITY HOLDINGS, LLC,
RICHARD ROOSEN, PAUL VARCHETTI,
LYNN OLIVIER, and ROOSEN
VARCHETTI & OLIVIER, PLLC,
Defendants.
_________________________________/
OPINION AND ORDER GRANTING
DEFENDANTS’ MOTION TO DISMISS
Before the Court is Defendants Web Equity Holdings, Inc.; Richard Roosen; Paul
Varchetti; Lynn Olivier; and Roosen, Varchetti & Olivier, PLLC’s Motion to Dismiss
Plaintiffs’ Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6).
Dismiss, ECF No. 22).
(Defs.’ Mot.
Plaintiffs Ernest J. Williams, Ernest J. Williams Jr., Patty
Williams, and Umika Breed filed the instant action alleging violations of the Fair Debt
Collection Practices Act (“FDCPA”) and several claims under Michigan state law arising
out of Defendants’ attempts to collect a credit card debt. The Court previously granted
Plaintiffs leave to amend their complaint, whereby Plaintiffs voluntarily dismissed Umika
Breed from the action and added several allegations to their FDCPA claim. Shortly
thereafter, Defendants filed their second motion to dismiss. For the reasons stated
below, Defendants’ motion to dismiss Plaintiff’s FDCPA claim is GRANTED, and the
Court DECLINES to exercise supplemental jurisdiction over the remaining state law
claims.
I.
STATEMENT OF FACTS
Plaintiffs Ernest J. Williams (“Father”) and Patty Williams (“Mother”) are the
parents of Ernest James Williams, Jr. (“Son”), all of whom reside in Flint, Michigan. On
April 12, 2011, Defendant Web Equity Holdings (“Web”), through its attorneys
Defendant Roosen, Varchetti & Olivier, PLLC (“RVO”), filed an action against “Ernest J.
Williams” to collect a defaulted credit card debt. The complaint included an “Affidavit of
Account,” signed by Paul Varchetti, one of the named partners of RVO.
The first
summons was issued against “Ernest J. Williams” at 5103 Forest Side Drive in Flint,
which is the address of the Father and Mother.
Soon thereafter, an attorney
representing the Father responded by letter to Defendants that the “Ernest J. Williams”
residing at 5013 Forest Drive did not owe the debt.
Consequently, Web sought an order for alternative service of “Ernest J. Williams”
at 526 Crapo Street in Flint, the last known residence of the Son. However, the Son did
not respond. Therefore, on December 2, 2011, Defendants obtained a default judgment
against the Son in the amount of $1,658.96. A copy of the judgment was mailed to 526
Crapo. Subsequently, RVO proceeded to collect the judgment by garnishing the tax
refunds of Son. The judgment was satisfied on July 9, 2013.
On August 30, 2013, Plaintiffs filed a nine count complaint in this Court alleging
violation of the FDCPA, invasion of privacy by intrusion upon seclusion, violations of the
Michigan Occupation Code, violations of the Michigan Debt Collection Practices Act,
abuse
of
process,
conspiracy,
fraudulent
misrepresentation,
innocent
misrepresentation, and defamation. The Court heard oral argument on Defendants’ first
motion to dismiss on December 11, 2013.
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Two weeks later, it issued an opinion
granting-in-part and denying-in-part the motion.
Specifically, the Court barred any
claims disputing the validity of the underlying state court judgment.
Regarding the
phone calls made by Defendants, the Court granted leave for Plaintiffs to amend their
complaint to allege violations within the applicable one-year limitations period. Plaintiffs
filed a second amended complaint on February 10, 2014, and soon thereafter,
Defendants filed the instant motion to dismiss. Defendants now seek dismissal of the
federal claim and request that the Court decline to exercise supplemental jurisdiction
over the remaining state law claims and dismiss them without prejudice.
II.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) allows district courts to dismiss a
complaint which fails “to state a claim upon which relief can be granted.” To survive a
motion to dismiss for failure to state a claim under Rule 12(b)(6), the plaintiff must show
that his complaint alleges facts which, if proven, would entitle him to relief. First Am.
Title Co. v. DeVaugh, 480 F.3d 438, 443 (6th Cir. 2007). “A complaint must contain
either direct or inferential allegations with respect to all material elements necessary to
sustain a recovery under some viable legal theory.” Weiner v. Klais & Co., 108 F.3d 86,
88 (6th Cir. 1997).
When reviewing a motion to dismiss, the Court “must construe the complaint in
the light most favorable to the plaintiff, accept all factual allegations as true, and
determine whether the complaint contains enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although
the federal procedural rules do not require that the facts alleged in the complaint be
detailed, “‘a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief’
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requires more than labels and conclusions, and a formulaic recitation of a cause of
action's elements will not do.’” Twombly, 550 U.S. at 555; Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (“Threadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice.”).
III.
ANALYSIS
The Fair Debt Collection Practices Act (“FDCPA”) prohibits the use of “false,
deceptive, or misleading representation or means in connection with the collection of
any debt.” 15 U.S.C. § 1692e. The standard applicable to FDCPA claims is “whether
the ‘least sophisticated consumer’ would be misled by defendant’s actions.” Wallace v.
Washington Mut. Bank, F.A., 683 F.3d 323, 326-27 (6th Cir. 2012) (quoting Harvey v.
Great Seneca Fin. Corp., 453 F.3d 324, 329 (6th Cir. 2006)). An action to enforce the
FDCPA must be brought “within one year from the date on which the violation occurs.”
15 U.S.C. § 1692k(d).
In the amended complaint, Plaintiffs allege that Defendants violated several
sections of the FDCPA by harassing Plaintiffs via telephone and continuing to contact
the Father and Mother after they hired an attorney.
They further assert that the
individual Defendants are liable as agents of RVO under the doctrine of respondeat
superior.
Defendants assert that Plaintiffs failed to sufficiently allege any violations of the
FDCPA within the one-year statute of limitations. Alternatively, Defendants claim that
the amended complaint fails to allege any specific conduct against the individual
Defendants. Instead, Defendants claim it refers only the allegedly unlawful actions of
Web and RVO. After review, the Court finds Defendants’ first argument dispositive.
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A.
Facts Alleged in the Amended Complaint
In its prior opinion, the Court ordered Plaintiffs to amend their complaint to
include allegations of conduct in violation of the FDCPA within the one-year statute of
limitations. Plaintiffs’ amended complaint contains the following relevant allegations:
57.
Based upon information and belief, WEB made collection calls to
FATHER’s residence in June 2013.
58.
In June 2013, FATHER received several calls in the morning which
appeared on his Comcast TV display as “private call.”
59.
Upon answering the calls, a person would come on the line and ask
to speak with Ernest Williams.
60.
FATHER asked who was calling.
61.
The caller verified that she was speaking with Ernest Williams and
then disclosed that she was calling in regards to a $1800.00 debt
owed to WEB by Ernest Williams.
62.
FATHER explained on numerous occasions that he did not owe any
debt and that the caller had the wrong Ernest Williams.
63.
FATHER believes that he spoke with WEB collectors in the
mornings of June 5, June 9, June 10 of 2013.
64.
MOTHER believes that she also spoke with WEB collectors in the
late afternoon on June 2, and June 17, 2013.
65.
When FATHER and MOTHER answered calls from WEB the caller
ID number appeared as private.
66.
Although FATHER and MOTHER did not keep contemporaneous
calls logs, they have reviewed their phone records for the time
period of August 2012 through August 2013 and they believed
WEB called them numerous times, with the most recent calls on the
above noted dates.
67.
WEB made these calls and attempted to collect a debt after
knowing that FATHER was represented by counsel and that
FATHER was a third party stranger to the debt.
(Am. Compl. ¶¶ 57-67, ECF No. 17).
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Contrary to the Court’s order, Plaintiffs failed to allege that the Father’s credit
report was adversely affected within the limitations period, stating only that Defendants
caused harm to the Father’s credit without providing a date or time period. Thus, the
only remaining theories of liability alleged in the amended complaint are (1) that the
phone calls constituted harassment in violation of § 1692d(5), and (2) that Defendants
unlawfully continued to communicate with the Father and Mother even after the Father
notified Defendants that he did not owe the debt and hired an attorney in violation of §§
1692b(3) & (6).
B.
Sufficiency of the Allegations
1.
Harassment
Plaintiffs first argue that Defendants harassed them via telephone.
Section
1692d of the FDCPA provides that a “debt collector may not engage in any conduct the
natural consequence of which is to harass, oppress, or abuse any person in connection
with the collection of a debt.” 15 U.S.C. § 1692d. Specifically, it prohibits “[c]ausing a
telephone to ring or engaging any person in telephone conversation repeatedly or
continuously with intent to annoy, abuse, or harass any person at the called number.” §
1692d(5).
Plaintiffs’ amended complaint alleges five phone calls in June 2013. There are
no allegations that Defendants threatened Plaintiffs or used inappropriate language
during the calls. In fact, there are no allegations regarding anything Defendants may
have said over the phone during conversations with the Father or Mother.
Plaintiffs’ theory of harassment rests solely on the frequency of the calls.
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Thus,
Unfortunately for Plaintiffs, five calls in a one-month period, as a matter of law, is
insufficient to make out a violation of § 1692d(5) for harassment. The frequency of calls
in this case does not rise to the level that would annoy, abuse, or harass a reasonable
person, especially where there are no allegations regarding the content of the calls.
See Pugliese v. Prof’l Recovery Serv., Inc., 2010 WL 2632562, *10 (E.D. Mich. June 29,
2010) (350 calls in an eight month period even after the plaintiffs asked the collector to
cease calling found insufficient as a matter of law to establish violation of FDCPA);
Tucker v. CBD Grp., Inc., 710 F. Supp. 2d 1301, 1303 (M.D. Fla. 2010) (57 calls and 6
messages to the plaintiff found not harassing even though defendant called 7 times a
day).
Indeed, as observed by one court, “[a]ny call from a debt collector may be
presumed unwelcome, but that alone is insufficient to constitute a violation of the
FDCPA.” Martin v. Select Portfolio Serving Holding Corp., 2008 WL 618788, *6 (S.D.
Ohio March 3, 3008). Although the Father may have experienced irritation at having the
same name as the debtor, Defendants do not violate the FDCPA simply by contacting
the wrong party. See Kukawa v. Palisades Collection, LLC, 614 F. Supp. 2d 788, 792
(E.D. Mich. 2008) (“The aggravation plaintiff likely suffered as a result of having the
same name as the debtor simply does not make out a violation of the FDCPA.”).
2.
Continued Contact/Representation by Attorney
Plaintiffs next assert that Defendants continued to call the Father and Mother
even after Defendants were notified that the Father did not owe the debt. Section
1692b of the FDCPA provides in relevant part:
Any debt collector communicating with any person other than the
consumer for the purpose of acquiring location information about the
consumer shall –
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…
(3) not communicate with any such person more than once unless
requested to do so by such person or unless the debt collector reasonably
believes that the earlier response of such person is erroneous or
incomplete and that such person now has correct or complete location
information;
…
(6) after the debt collector knows the consumer is represented by an
attorney with regard to the subject debt and has knowledge of, or can
readily ascertain, such attorney’s name and address, not communicate
with any person other than that attorney, unless the attorney fails to
respond within a reasonable period of time to communication from the
debt collector.
15 U.S.C. § 1692b.
The language of § 1692b(3) creates an exception for debt collectors seeking to
locate the debtor to contact persons they reasonably believe have such location
information. This, in turn, imposes a pleading burden on plaintiffs alleging a violation of
this section to provide facts to support an inference that the debt collector had no
reason to believe that the person knew the whereabouts of the debtor or that they
provided an incomplete or erroneous response.
As previously noted, Plaintiffs provided no allegations regarding the content of
the phone calls or whether the Father or Mother provided any information regarding the
whereabouts of the Son. From the face of the complaint, it may only be inferred that
Plaintiffs answered the phone, immediately informed whoever was on the line that they
did not owe any debt, and then hung up. There are no allegations that give rise to an
inference that Defendants unreasonably contacted the parents of the debtor to
determine his whereabouts.
Likewise, there are no allegations that the Father or
Mother truthfully did not have information regarding the location of the Son and that they
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conveyed this fact to Defendants. Consequently, this is insufficient to state a violation
of the FDCPA under § 1692b(3).
Plaintiffs also assert that Defendants violated the § 1692b by continuing to call
the Father and Mother after they were represented by an attorney. Section 1692b(6)
provides that once a “consumer” is represented by counsel, the debt collector shall not
contact any other person except that attorney. See Guerrero v. RJM Acquisitions, LLC,
499 F.3d 926, 935 n.2 (9th Cir. 2007) (noting that “when a debt collector knows that a
consumer has retained counsel with regard to the subject debt, he may not generally
contact anyone other than the attorney to determine the consumer’s whereabouts.”).
Importantly, this section applies only to “consumers,” which is defined under the FDCPA
as any natural person who is obligated or allegedly obligated to pay a debt. 15 U.S.C. §
1692a(3). The consumer in this case is the Son. However, the amended complaint
fails to allege that the Son ever contacted an attorney or that Defendants knew the Son
was represented by counsel. Therefore, Defendants’ calls to Plaintiffs did not violate
the FDCPA. The fact that the Mother and Father were represented by separate counsel
is of no import.
Consequently, Plaintiffs’ FDCPA claim fails.
C.
Remaining State Law Claims
Plaintiffs’ remaining claims fall under state law. The original basis for federal
subject matter jurisdiction over Plaintiffs’ case relied solely upon the federal cause of
action under the FDCPA and the Court’s simultaneous exercise of supplemental
jurisdiction over the state law claims. Now that the federal claim is dismissed, the Court
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must decide whether to continue exercising supplemental jurisdiction over Plaintiffs’
remaining claims.
The Sixth Circuit has held that “generally, ‘if the federal claims are dismissed
before trial . . . the state claims should be dismissed as well.’” Landefeld v. Marion Gen.
Hosp., Inc., 994 F.2d 1178, 1182 (6th Cir. 1993) (quoting Taylor v. First of Am. BankWayne, 973 F.2d 1284, 1287 (6th Cir. 1992)).
In deciding whether to exercise
jurisdiction over supplemental state law claims, “a district court should consider the
interests of judicial economy and the avoidance of multiplicity of litigation and balance
those interests against needlessly deciding state law issues.” Id. This decision is within
the discretion of the court. Id.
In the case at hand, the Court finds that the need to abstain from deciding issues
of state law outweigh any concerns regarding judicial economy. Consequently, the
Court declines to exercise jurisdiction over Plaintiffs’ remaining state law claims and
dismisses them without prejudice.
IV.
CONCLUSION
Accordingly, Defendants’ motion is GRANTED and Plaintiffs’ FDCPA claim is
DISMISSED WITH PREJUDICE.
In addition, the Court declines to exercise
supplemental jurisdiction over Plaintiffs’ remaining state law claims, and thus they are
DISMISSED WITHOUT PREJUDICE.
IT IS SO ORDERED.
Date: August 5, 2014
s/Marianne O. Battani
MARIANNE O. BATTANI
United States District Judge
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CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing Order was served upon counsel of record via the Court's ECF System to their
respective email addresses or First Class U.S. mail to the non-ECF participants on August 5, 2014.
s/ Kay Doaks
Case Manager
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