Karas v. Pittenger Law Group, LLC

Filing 18

OPINION MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Defendants Motion to Dismiss, [Doc. No. 4], is granted. IT IS HEREBY FURTHER ORDERED that this matter is dismissed. 4 Signed by District Judge Henry Edward Autrey on 3/19/18. (CLA)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
SCOTT KARAS,
Plaintiff,
v.
PITTENGER LAW GROUP, LLC,
Defendant,

)
)
)
)
)
)
)
)
)

CASE NO. 4:17CV1392 HEA

OPINION, MEMORANDUM AND ORDER
This matter is before the Court on Defendant’s Motion to Dismiss, [Doc. No.
4]. Plaintiff opposes the Motion. For the reasons set forth below, the Motion is
granted.
Facts and Background1
Plaintiff filed this action in the Associate Circuit Court of St. Charles
County, Missouri alleging that Defendant violated Section 1692e of the Fair Debt
Collection Practices Act by filing a lawsuit in violation of an Arbitration
Agreement and Waiver of Jury Trial entered into by the parties. Defendant

The recitation of the facts is taken from Plaintiff’s Amended Complaint and is set forth for the
purposes of this motion only. It in no way relieves the parties of the necessary proof of the facts
in later proceedings.
1

removed the matter to this Court based on the Court’s federal question jurisdiction.
28 U.S.C. § 1331.
Plaintiff’s Petition alleges the following:
On December 22, 2016, Defendant filed a lawsuit against Plaintiff in the
Associate Division of the Circuit Court of St. Charles County. The lawsuit alleges
that Plaintiff executed and delivered to the Plaintiff in that case, OneMain
Financial Services, Inc. a promissory note on November 19, 2013, in the sum of
$2,676.75, plus interest. The promissory note included an arbitration agreement
and waiver of jury trial:
Under this agreement, both lender and I are voluntarily waiving any right to
a jury or judge trial of all claims and disputes covered by this arbitration
agreement and waiver of jury trial (“this Arbitration Agreement”) to the
fullest extent permitted by law.
The Arbitration Agreement also contains a section labeled MATTERS NOT
COVERED BY ARBITRATION:
Instead of pursuing arbitration, either Lender or I also have the option to
bring a lawsuit in court to seek to recover the monetary jurisdictional limit of
a small claims or equivalent court in my state (including costs and attorneys’
fees), provided that no relief other than such recovery is requested in such
lawsuit.
Plaintiff alleges that the Missouri jurisdictional small claims amount is
$5,000, that Defendant’s suit seeks the sum of $2,676.75 plus interest. Plaintiff
further alleges that the filing of the lawsuit by Defendant on behalf of OneMain

2

violates the Arbitration Agreement, therefore, Defendant violated the FDCPA by
taking legal action that cannot be taken.
Standard of Review
On a motion to dismiss under Rule 12(b)(6), the Court accepts as true the
factual allegations in the complaint and construes all reasonable inferences arising
therefrom most favorably to the plaintiff. Hager v. Ark. Dep't of Health, 735 F.3d
1009, 1013 (8th Cir. 2013) (citing Gross v. Weber, 186 F.3d 1089, 1090 (8th Cir.
1999)). The Court, however, need not accept as true wholly conclusory allegations,
Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or
legal conclusions that plaintiffs draw from the facts pled. Westcott v. City of
Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). In addition, the Court ordinarily
does not consider matters outside the pleadings on a motion to dismiss. See Fed. R.
Civ. P. 12(d). The Court may, however, consider exhibits attached to the complaint
and documents that are necessarily embraced by the pleadings, Mattes v. ABC
Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003), and may also consider public
records, Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007).
To survive a motion to dismiss, a complaint must contain “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 a complaint need not contain “detailed factual
allegations,” it must contain facts with enough specificity “to raise a right to relief
3

above the speculative level.” Id. at 555. “Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In sum, this
standard “calls for enough fact[s] to raise a reasonable expectation that discovery
will reveal evidence of [the claim].” Twombly, 550 U.S. at 556.
Discussion
Defendant’s motion to dismiss is based on the fact that the claim filed against
Plaintiff in the Associate Circuit Court is indeed within the MATTERS NOT
COVERED BY ARBITRATION. R.S.Mo. § 482.305 (the monetary jurisdictional
limit of Missouri’s small claims courts is “five thousand dollars, exclusive of
interest or costs . . . .”). Further, Defendant argues that even if it were not, the
Arbitration Agreement gives the parties the option of arbitrating the dispute, or
filing an action in the Circuit Court.
Plaintiff argues that the collection suit falls outside of the parameters of the
small claim exclusion. Plaintiff acknowledges that the suit asserted a claim and
sought to recover $4,344.20 (principal sum of $3,633.24 plus accrued interest in
the amount of $710.96), plus interest and attorneys’ fees. From this, Plaintiff urges
that the “accrued interest, additional continuing interest, and mounting attorneys’
fees amounts to greater than $5,000” Plaintiff’s argument, however misstates the
amount Defendant seeks in the small claims suit.
4

The Petition on Promissory Note, which the Court can consider in the
Motion to Dismiss as it is necessarily embraced by the pleadings and is also a
public document, request the balance due of $4,344.20, (principal sum of
$3,633.24, plus accrued interest in the amount of $710.96, plus interest and
attorneys’ fees and costs. Defendant’s Affidavit of Account, which is attached to
the Small Claim Petition, specifically requests attorneys’ fees in the amount of
$544.99. Excluding, per R.S.Mo. § 482.305, interest and costs, the total amount
sought to be recovered in the small claim suit is 4,889.19; the amount sought in the
small claim action is within the jurisdictional amounts for small claims in
Missouri, Plaintiff’s speculation notwithstanding. Defendant’s collection action is
indeed an Excluded Damages Lawsuit not subject to arbitration. Because
Defendant was within its rights to file the collection action in the Missouri
Associate Court, there has been no violation of the FDCPA as alleged in Plaintiff’s
Petition. The Petition fails to state a claim under Rule 12(b)(6) of the Federal
Rules of Civil Procedure.
Conclusion
Based upon the foregoing analysis, Plaintiff’s Petition fails to state any
viable claims. It must therefore be dismissed pursuant to Fed.R.Civ.P. Rule
12(b)(6).
Accordingly,
5

IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss, [Doc.
No. 4], is granted.
IT IS HEREBY FURTHER ORDERED that this matter is dismissed.
Dated this 19th Day of March, 2018.

HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE

6