Anderson v. Enhanced Recovery Company, LLC et al

Filing 28

OPINION & ORDER denying 23 deft Verizon Wireless 2nd Motion to Dismiss. Signed by District Judge Nancy G. Edmunds. (CBet)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

CANDACE ANDERSON,
Case No. 15-13732
Plaintiffs,
Honorable Nancy G. Edmunds
v.
ENHANCED RECOVERY COMPANY, LLC,
MRS BPO, LLC, and CELLCO
PARTNERSHIP d/b/a VERIZON
WIRELESS,
Defendants.
/

OPINION AND ORDER DENYING DEFENDANT VERIZON WIRELESS'S SECOND
MOTION TO DISMISS DEFENDANT VERIZON WIRELESS,
PURSUANT TO FED. R. CIV. P. 12(b)(6) [23]

This matter is before the Court on Defendant Verizon Wireless's second motion to
dismiss pursuant to Fed. R. Civ. P. 12(b)(6). (Docket no. 23.) Plaintiff filed a response on
February 12, 2016, and Defendant Verizon Wireless filed a reply on February 23, 2016.
(Dkt. nos. 25, 26.) The Court held a hearing on this matter on April 13, 2016.
I.

FACTS
Plaintiff Candace Anderson brought this action on October 21, 2015, and filed a first

amended complaint on December 17, 2015. (Dkt. no. 15.) Plaintiff is an individual and
resident of Oakland County, Michigan. Defendant MRS BPO, LLC ("MRS"), is in the
business of collecting debts and conducts business in Michigan. (Am. Compl. ¶ 4; MRS
BPO Answer ¶ 4.) Plaintiff alleges that Defendant Enhanced Recovery Company, LLC
("ERC") is also a company that collects debts and conducts business in Michigan. (Am.

Compl. ¶ 4.) Plaintiff voluntarily dismissed ERC from this action with prejudice on
December 24, 2015. (Dkt. no. 19.) Defendant Cellco Partnership d/b/a Verizon Wireless
("Verizon" or "Defendant Verizon") is "a general partnership formed under the laws of the
State of Delaware," "has four partners in total and is indirectly, wholly owned by Verizon
Communications Inc." (Verizon Wireless's Corp. Disclosure St., dkt. no. 9.)
This matter involves the collection on a Verizon account established in Plaintiff's
name. (Am. Compl. ¶ 7.) Plaintiff alleges that her identity was stolen sometime prior to April
2014 and that the opening of the account stems from that identity theft. (Am. Compl. ¶ 9.)
Plaintiff alleges the following series of events:
•

On or around May 2014, Plaintiff "filed a police report and disputed the account
and others with Verizon directly." (Am. Compl. ¶ 10.)

•

On May 27, 2014, Verizon sent an email to Plaintiff "stating that Verizon
completed an investigation and concluded that Ms. Anderson is not responsible
for the account." (Am. Compl. ¶ 11.)

•

Plaintiff "has engaged in repeated efforts to identify the perpetrator and to free
herself of the debt collectors, including ERC and MRS, who have attempted to
collect from her" and "[d]espite [her] efforts, ERC and MRS have continued
their unlawful collection attempts." (Am. Compl. ¶¶ 12, 13.)
Verizon has not yet filed an answer, but with respect to Plaintiff's allegations of identity

theft, Verizon's second motion to dismiss takes issue with Plaintiff's explanation of events,
noting that its own "investigation of the matter showed indicia that Plaintiff may have
committed 'first party fraud', thereby making her a cooperating perpetrator, as opposed to
an innocent victim, in the context of an alleged identity theft situation." (Def. Verizon's
Second Mot. Dismiss n.1, dkt. no. 23.)
Plaintiff's complaint alleges that prior to October 21, 2014, Verizon engaged ERC to

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collect a debt1 owed by Plaintiff and/or ERC purchased the debt from Verizon. (Am. Compl.
¶¶ 16, 17.) On or about October 21, 2014, ERC sent a collection letter addressed to
Plaintiff, indicating that Plaintiff owed a principal balance of $1,401.74 and an additional
$252.31 in collection fees. (Am. Compl. ¶¶ 20, 21.)
Plaintiff alleges that prior to April 24, 2015, Verizon engaged MRS to collect a debt
owed by Plaintiff and/or MRS purchased the debt. (Am. Compl. ¶¶ 27-30.) On or about April
24, 2015, MRS sent a collection letter to Plaintiff indicating that the principal balance of
$1,401.74 and collection fees of $252.31 were due and owing. (Am. Compl. ¶¶ 31, 33.) On
May 5, 2015, Plaintiff responded to the collection letter by disputing the collection, and
requesting specific documents to verify the debt, as well as an accounting statement for the
debt, showing the collection fees that had been added and for what purpose. (Am. Compl.
¶ 37.) Plaintiff alleges that after receiving Plaintiff's dispute letter, MRS contacted Verizon
to obtain verification of the debt. (Am. Compl. ¶ 38.) In response, Verizon produced to MRS
a single billing statement. (Am. Compl. ¶ 39.) Plaintiff alleges that Verizon falsely
represented that the alleged debt belonged to Plaintiff by producing the billing statement
in response to the dispute letter. (Am. Compl. ¶ 40.) MRS produced the billing statement
from Verizon to Plaintiff. (Am. Compl. ¶ 42.) Plaintiff alleges that she informed MRS that
she was a victim of identity theft and did not open the account, yet MRS failed to verify that
Plaintiff owed the debt. (Am. Compl. ¶ 43.)
MRS continued collection efforts against Plaintiff and sent a second collection letter
on or around June 5, 2015. (Am. Compl. ¶ 44.) The second letter indicated that Plaintiff

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Plaintiff does not concede that the debt is owed; she refers to it as an "alleged debt"
in the amended complaint. (Am. Compl. ¶ 16.)
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owed the same amounts. (Am. Compl. ¶ 44.)
Plaintiff alleges the following as to Defendant Verizon, regarding both ERC's and
MRS's collection activities:
•

Verizon engaged ERC, and later MRS, to collect the debt after Verizon had
already concluded that Plaintiff did not owe the alleged debt. (Am. Compl.
¶¶ 18, 29.)

•

ERC's and MRS's false representations regarding the amount of the debt
owed were a direct result of "Verizon's false representations to ERC [and
MRS] that [Plaintiff] owed the alleged debt and Verizon's failure to notify
ERC [and later, MRS,] that, upon Verizon's own investigation, [Plaintiff] did
not owe the alleged debt; and/or . . ERC's [and MRS's] own actions in
falsely representing that [Plaintiff] owed the alleged debt." (Am. Compl. ¶¶
24, 36.)

•

In response to the dispute letter, Verizon produced to MRS a single billing
statement as purported verification of the alleged debt and by producing
the billing statement in response to the dispute letter, Verizon falsely
represented that the alleged debt belonged to Plaintiff. (Am. Compl. ¶¶ 39,
40.)

Plaintiff's single claim against Defendant Verizon arises under Count III, in which she
alleges violation of the Michigan Collection Practices Act (MCPA), Mich. Comp. Laws §
445.252. Defendant Verizon moves for dismissal arguing that Verizon is not subject to and
did not violate the MCPA, where Plaintiff does not allege that Verizon communicated
directly with her, the debtor, in an attempt to collect the debt at issue.
II. LEGAL STANDARD
Defendant Verizon brings this motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6),
alleging the "failure to state a claim upon which relief can be granted." Fed. R. Civ. P.
12(b)(6). The Sixth Circuit noted that under the United States Supreme Court's heightened
pleading standard laid out in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft
v. Iqbal, 556 U.S. 662 (2009), “a complaint only survives a motion to dismiss if it contains
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sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its
face.” Estate of Barney v. PNC Bank, Nat'l Assoc., 714 F.3d 920, 924-25 (6th Cir. 2013)
(internal quotations and citations omitted). The court in Estate of Barney goes on to state
that under Iqbal, “[a] claim is plausible 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. (internal quotations and citations omitted). Furthermore, while the "plausibility
standard is not akin to a ‘probability requirement,’ . . . it asks for more than a sheer
possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678. “[W]here the
well-pleaded facts do not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled
to relief.’” Estate of Barney, 714 F.3d at 925 (citing Iqbal, 556 U.S. at at 679; quoting Fed.
R. Civ. P. 8(a)(2)). If the plaintiffs do "not nudge[ ] their claims across the line from
conceivable to plausible, their complaint must be dismissed." Twombly, 550 U.S. at 570.
Finally, the Court must keep in mind that “on a motion to dismiss, courts are not bound to
accept as true a legal conclusion couched as a factual allegation.” Id. at 555 (citation
omitted).
III.

ANALYSIS
Plaintiff argues that Defendant Verizon's actions violated the Michigan Collection

Practices Act (MCPA), including Mich. Comp. Laws § 445.252, when Verizon made false
representations related to the debt. (Am. Compl. ¶¶ 36, 40, 48.) The MCPA is "an Act to
regulate the collection practices of certain persons . . . ." Mich. Comp. Laws Ch. 445. It
defines a "regulated person" as "a person whose collection activities are confined and are
directly related to the operation of a business other than that of a collection agency . . . ."
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Mich. Comp. Laws § 445.251(g). Plaintiff alleges that Verizon is a "regulated person" under
the Act. Defendant Verizon conceded both at the hearing and in its response that, for
purposes of the instant motion, it is a "regulated person" as contemplated in Mich. Comp.
Laws § 445.251.2 (Def.'s Mot. Dismiss 5, dkt. no. 23.) Yet Defendant Verizon argues that
even a "regulated person" "must have violated at least one of the prohibitions contained in
MCL 445.252 if liability is to be imposed on that individual or entity." (Def.'s Mot. Dismiss
5, dkt. no. 23.)
Section 445.252 enumerates several actions that violate the Act and the applicable
provision here is subpart (e):
Sec. 2. A regulated person shall not commit 1 or more of the following acts:
(e) Making an inaccurate, misleading, untrue, or deceptive statement or claim
in a communication to collect a debt or concealing or not revealing the purpose
of a communication when it is made in connection with collecting a debt.
Mich. Comp. Laws § 445.252(e).
Verizon reads into subsection (e) a requirement that it have made the communications
at issue directly to the debtor. For this argument, Verizon relies on subsection 445.252(a),
which prohibits "[c]ommunicating with a debtor in a misleading or deceptive manner, . . ."3
(Emphasis added.) Defendant Verizon argues that it cannot have violated the Act because

2

In the first Complaint, Plaintiff cited Mich. Comp. Laws 445.251(g)(ii), apparently
alleging that Verizon Wireless was a "state or federally chartered bank when collecting
its own claim." (Compl. ¶ 57, dkt. no. 1.) That provision was not cited in the amended
complaint and there is no allegation that Verizon is acting as a state or federally
chartered bank.
3

"(a) Communicating with a debtor in a misleading or deceptive manner, such as
using the stationery of an attorney or credit bureau unless the regulated person is an
attorney or is a credit bureau and it is disclosed that it is the collection department of the
credit bureau." Mich. Comp. Laws § 445.252(a).
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it did not "communicate" with the debtor (Plaintiff) in a misleading or deceptive manner.
Plaintiff, of course, reads the Act more broadly, noting that while subsections (a), (f) and
(g) prohibit certain actions in "[c]ommunicating with a debtor," subsection (e) prohibits
"[m]aking an inaccurate, misleading, untrue, or deceptive statement or claim in a
communication to collect a debt." (Pl.'s Resp. 11, dkt. no. 25, emphasis added.) The Act
defines "communicate" as "the conveying of information regarding a debt directly or
indirectly to a person through any medium." Mich. Comp. Laws § 445.251(c). A "person"
is defined as "an individual, sole proprietorship, partnership, association, or corporation."
Mich. Comp. Laws § 445.251(f).
Defendant has failed to provide legal authority clearly in support of its argument. The
cases cited by Defendant Verizon are factually distinguishable. For example, this Plaintiff
has plead enough facts to state a plausible claim that a false communication was made by
Defendant Verizon: Plaintiff alleged that Verizon notified her that she was not responsible
for the account, yet represented to MRS that Plaintiff owed the alleged debt.4 (Am. Compl.
¶¶ 11, 40, 48.) Cf. Newman v. Trott and Trott, P.C., 889 F. Supp. 2d 948 (E.D. Mich. 2012)
(the plaintiff failed to allege that the defendant violated any specific provision of the MCPA);
Capital One Bank USA, N.A. v. Ponte, Mich. Ct. App., unpublished, (Dec. 19, 2013) (No.
307664) (Def.'s Mot. Ex. 5, dkt. no. 23-6) (Michigan Court of Appeals found the plaintiff had
"made no specific factual allegations in his complaint, or at oral argument, that they
[defendants Capital One and Citibank] engaged in any conduct in violation of the Act

4

Defendant's arguments regarding the factual basis of these allegations are to be
resolved in Plaintiff's favor in this motion to dismiss. See Papasan v. Allain, 478 U.S.
265, 286 (1986) ("for the purposes of this motion to dismiss we must take all the factual
allegations in the complaint as true").
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[MCPA]." Id. at 5. The court also noted that the actions alleged against third-party
defendant Shermeta were actions that were "not directly concerned with Shermeta acting
as a debt collector and its collection of the debt owed by [plaintiff]." Id. at 6.)
The remaining issue is whether the alleged communication is the type of
communication proscribed by Mich. Comp. Laws. § 445.252(e). This alleged false
communication was made by Verizon in response to Plaintiff's dispute letter and was
ultimately, if indirectly, communicated to Plaintiff and "directly concerned" the collection of
a debt allegedly owed by Plaintiff. See Capital One Bank, No. 307664 at 6; Mich. Comp.
Laws § 445.252(e).
The Court finds that, in the context of these specific facts, the plain language of the
Act does not foreclose action against Defendant Verizon under Mich. Comp. Laws §
445.252. The alleged communication was directly concerned with the collection of a debtthat was its purpose- and Plaintiff has plead enough to state a plausible claim for relief
against Defendant Verizon.
IV. CONCLUSION
For the reasons set forth above, the Court DENIES Defendant Verizon Wireless's
motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) (dkt. 23).
So ordered.
s/Nancy G. Edmunds
Nancy G. Edmunds
United States District Judge
Dated: April 21, 2016
I hereby certify that a copy of the foregoing document was served upon counsel of record
on April 21, 2016, by electronic and/or ordinary mail.
s/Carol J. Bethel
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