Liable v. Rockport Financial, LLC

Filing 21

MEMORANDUM AND ORDER (See Full Order) IT IS HEREBY ORDERED that Defendant Rockport Financial, LLC's Motion to Dismiss [ECF No. 15 ] is DENIED. Signed by District Judge E. Richard Webber on 8/12/15. (EAB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
MERIDITH LIABLE
Plaintiff,
v.
ROCKPORT FINANCIAL, LLC d/b/a
REGIONAL CREDIT SERVICES, INC.
Defendant.

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CASE NO.: 4:15-CV-00306-ERW

MEMORANDUM AND ORDER
This matter comes before the Court on Defendant Rockport Financial, LLC’s Motion to
Dismiss Plaintiff’s First Amended Complaint [ECF No. 15].
I.

BACKGROUND
This lawsuit arises out of a debt collection letter allegedly sent by Defendant Rockport

Financial, LLC (“Defendant”) to Plaintiff Meridith Liable (“Plaintiff”) in an attempt to collect a
debt relating to services provided to Plaintiff by Specialists In Gastroenterology [See ECF No.
13-1]. According to Plaintiff, the letter included the following phrase: “A $3.00 convenience fee
will be added to credit/debit card payments” [ECF Nos. 13 at ¶ 8; 13-1].
In February 2015, Plaintiff initiated this lawsuit by filing her “Class Action Complaint”
in this Court [ECF No. 1]. Plaintiff’s Motion for Class Certification has been held in abeyance
pending further Orders of this Court [ECF No. 12]. Following Defendant’s first Motion to
Dismiss [ECF No. 8], Plaintiff filed her “First Amended Class Action Complaint” [ECF No. 13].
In her First Amended Complaint, Plaintiff alleges the “notification and collection of the $3.00
convenience fee is unlawful” [ECF No. 13 at ¶ 9]. The Amended Complaint also states,

“Defendant is not authorized either by law or by the agreement creating the debt to impose a
convenience fee against Plaintiff” [ECF No. 13 at ¶ 12]. The Amended Complaint further
asserts, “Defendant’s convenience fee demand is in violation of 15 [U.S.C.] §[] 1692f(1) for
engaging in deceptive practices, making false representation that it was entitled to receive
compensation for payment by credit or debit card, or by collecting an amount that was not
authorized by contract or permitted by law” [ECF No. 13 at ¶ 13]. Additionally, the Amended
Complaint alleges, “In its attempts to collect the alleged debt from Plaintiff, Defendant has
violated § 1692e(2) and § 1692f(1) of the FDCPA by using false impressions to characterize the
amount of the debt and by attempting to collect an amount not permitted by law” [ECF No. 13 at
¶ 35].
On May 25, 2015, Defendant filed the pending Motion to Dismiss pursuant to Federal
Rule of Civil Procedure (“FRCP”) 12(b)(6) for failure to state a claim [ECF No. 15].
II.

STANDARD
Under FRCP 12(b)(6), a party may move to dismiss a claim for “failure to state a claim

upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). The notice pleading standard of
FRCP 8(a)(2) requires a plaintiff to give “a short and plain statement showing that the pleader is
entitled to relief.” To meet this standard and to survive a Rule 12(b)(6) motion to dismiss, “a
complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and
citation omitted). “A claim has facial plausibility 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. A court accepts “as true all of the factual allegations contained in the complaint,”
and affords the non-moving party “all reasonable inferences that can be drawn from those

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allegations” when considering a motion to dismiss. Jackson v. Nixon, 747 F.3d 537, 540-41 (8th
Cir. 2014) (internal quotations and citation omitted). However, the Court is “not bound to accept
as true a legal conclusion couched as a factual allegation.” Carton v. Gen. Motor Acceptance
Corp., 611 F.3d 451, 454 (8th Cir. 2010) (internal citation 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 (internal citation omitted). Additionally, “some factual allegations may be so
indeterminate that they require further factual enhancement in order to state a claim.” Braden v.
Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009).
A well-pleaded complaint may not be dismissed even if it appears proving the claim is
unlikely and if the chance of recovery is remote. Bell Atlantic v. Twombly, 550 U.S. 544, 556
(2007). However, where the allegations on the face of the complaint show “there is some
insuperable bar to relief, dismissal under Rule 12(b)(6) is appropriate.” Young v. St. John’s
Mercy Health Sys., No. 10-824, 2011 WL 9155, at *4 (E.D. Mo. Jan. 3, 2011) (internal citation
omitted). Further, if a claim fails to allege one of the elements necessary to recovery on a legal
theory, that claim must be dismissed for failure to state a claim upon which relief can be granted.
Crest Constr. II, Inc. v. Doe, 660 F.3d 346, 355 (8th Cir. 2011). Bare assertions constituting
merely conclusory allegations failing to establish elements necessary for recovery will not
suffice. See id. (“Plaintiffs, relying on facts not in the complaint, make bare assertions that
[defendants] were not just lenders, but owners that controlled the RICO enterprise . . . these
assertions are more of the same conclusory allegation . . . ”). Courts must assess the plausibility
of a given claim with reference to the plaintiff’s allegations as a whole, not in terms of the
plausibility of each individual allegation. Zoltek Corp. v. Structural Polymer Grp., 592 F.3d
893, 896 n.4 (8th Cir. 2010) (internal citation omitted). This inquiry is “a context-specific task

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that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal,
556 U.S. at 679.
III.

DISCUSSION
A. Plaintiff’s § 1692e(2) Claim
Defendant first claims Plaintiff has “failed to state a claim for a violation of § 1692e(2),”

arguing the conduct alleged by Plaintiff (sending a collection letter imposing a $3.00
convenience fee on credit and debit card payments) does not violate § 1692e(2) as a matter of
law. In support of its argument, Defendant relies heavily on Lee v. Main Accounts, Inc., 124
F.3d 855 (6th Cir. 1997). At issue in Lee was language in a debt collection letter imposing a 5%
charge if the consumer paid with a credit card. Id. at *1. In affirming the district court’s
granting of summary judgment in favor of the defendant, the Sixth Circuit Court of Appeals
determined the nature of the 5% transaction fell “outside the scope of § 1692e(2),” adding, “Nor
did this language amount to an ‘attempt’ to collect an extra fee under § 1692f(1).” Id. In
determining the language in the letter did not violate the FDCPA, the Sixth Circuit emphasized
the consumer’s option of choosing from various payment methods (not all of which involved a
fee), as well as the identity of the fee collector and recipient of the fee. The court stated, “First,
the five-percent transaction fee mentioned in the letter is not a fee collected by [the defendant],
but a third-party charge triggered when the debtor chose the option of paying by credit card.
Secondly, [the defendant] did not force Lee to pay any surcharge and would not have received
any additional compensation from the credit card fee.” Id.
Relying on Lee, Defendant asserts Plaintiff’s § 1692e(2) claim should be dismissed
because “Plaintiff had payment options available to her that did not require her to pay a
convenience fee” [ECF No. 16 at 4]. In supporting its contention, Defendant notes, “Neither the

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letter nor the Complaint stated that convenience fees would be charged for payment methods
other than credit and debit card payments” [ECF No. 16 at 4]. As a result, Defendant concludes,
“Plaintiff’s Complaint failed to state a claim because Defendant’s convenience fee was clearly
identified to Plaintiff, and she would only incur the fee if she voluntarily exercised one of the
multiple payment options given, some of which did not require the payment of the convenience
fee” [ECF No. 16 at 7].
The logic of Lee does not require the dismissal of Plaintiff’s § 1692e claim at this
particular point in time. As noted above, the Sixth Circuit emphasized both the issue of choice
(payment options) and the issue of whether the creditor would receive additional compensation
from the convenience fee. Based on the collection letter attached to this lawsuit, Plaintiff
appeared to have payment options, but even if the Court were to assume this, the question of
whether Defendant would receive additional compensation from the convenience fee would still
be unanswered.

These factual questions are more appropriately handled at the summary

judgment stage. Indeed, the plaintiff’s claims in Lee were dismissed at summary judgment,
which lessens that decision’s applicability to this case’s present procedural posture.1 At this
point in time, the Court will refrain from applying the logic from Lee to dismiss Plaintiff’s §
1692e(2) claim. Therefore, this aspect of Defendant’s Motion will be denied.
B. Plaintiff’s § 1692f(1) Claim

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Similarly, in support of its Lee-based argument, Defendant also relies on Stricklin v. First Nat.
Collection Bureau, Inc., 2012 WL 1076679 (S.D. Ill. March 30, 2012). However, the Stricklin
case also involves adjudication at summary judgment, and the decision is at least partially based
on a party’s failure to provide the Court with evidence. Id. at *9 (“Stricklin has chosen not to
provide extrinsic factual evidence and so the Court cannot know whether a significant amount of
the population would be confused in spite of the fact it is not plainly confusing or plainly
violating the FDCPA.”). Thus, Stricklin is also inapplicable at this time.
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Similarly, Defendant also relies on Lee in asking the Court to dismiss Plaintiff’s §
1692f(1) claim. Citing Lee, the Defendant asserts the “convenience fee [here] is not the same as
the ‘interest, fee, charge, or expense incidental to the principal obligation’ contemplated by §
1692f(1) because the consumer is voluntarily choosing to authorize the transaction fee when
selecting one of the multiple methods to pay the debt” [ECF No. 16 at 6]. Defendant seeks to
characterize the $3.00 transaction fee as “the consumer and debt collector contracting for a
separate and additional service regarding the processing of a credit/debit card payment” [ECF
No. 16 at 7].
For the same reasons discussed above,2 the Court will not presently apply the logic from
Lee to dismiss Plaintiff’s § 1692f(1) claim.3 The other case cited by Defendant in support of its
argument, Lewis v. ACB Business Services, Inc., 911 F.Supp. 290, 293 (S.D. Ohio 1996), like
Lee, involved dismissal of claims at a later stage,4 where the “uncontradicted evidence proved
that any such fee, voluntarily chosen by the debtor if he or she chose this payment option, would
not be paid to [defendant] or any entity it controlled and was a standard fee charged by the
processor of the payment, an independent entity.” Lewis, 911 F.Supp. at 293. Thus, Lewis will
not be applied for the same reasons. Finally, Defendant cites a case involving the Federal Trade
Commission in arguing, “[T]he convenience fee language [here] fits the conditions set out by the
FTC” [ECF No. 16 at 7]. However, Defendant does not provide any legal authority convincing
the Court to use these purported FTC requirements in determining whether a claim under §

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Again, Lee is not directly applicable to this case’s procedural posture. The Lee decision, made
at the summary judgment phase, emphasized factual determinations not yet made in this case.
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The Court also notes the passage from Lee quoted by Defendant (in relation to the § 1692f(1)
claim) reflects a determination made by the Sixth Circuit on the basis of Ohio state law, and thus,
has no bearing on the present case [ECF No. 16 at 6]. See Lee, 125 F.3d at *1 (citing Ohio Rev.
Code Ann. § 1345.03(B)(5)).
4
In Lewis, the claims were dismissed through a motion for judgment as a matter of law.
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1692f(1) has been sufficiently stated. Therefore, the aspect of Defendant’s Motion relating to §
1692f(1) will be denied.
Accordingly,
IT IS HEREBY ORDERED that Defendant Rockport Financial, LLC’s Motion to
Dismiss [ECF No. 15] is DENIED.
Dated this 12th Day of August, 2015.

_______________________________________
E. RICHARD WEBBER
SENIOR UNITED STATES DISTRICT JUDGE

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