NEAL v. PARAGON REVENUE GROUP
Filing
4
MEMORANDUM OPINION, ORDER, AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE L. PATRICK AULD on 01/11/2016; that Plaintiff's Application to Proceed In Forma Pauperis (Docket Entry 1 ) is granted for the limited purpose of allowing the Court to consider a recommendation of dismissal. IT IS RECOMMENDED that this action be dismissed for failure to state a claim pursuant to 28 U.S.C. § 1915(e)(2)(B). (Garland, Leah)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
CRYSTAL E. NEAL,
Plaintiff,
v.
PARAGON REVENUE GROUP,
Defendant.
)
)
)
)
)
)
)
)
)
1:15-CV-1047
MEMORANDUM OPINION, ORDER, AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
This
case
comes
before
the
undersigned
United
States
Magistrate Judge on Plaintiff’s Application for Leave to Proceed In
Forma Pauperis (Docket Entry 1), in conjunction with her pro se
Complaint (Docket Entry 2).
For the reasons that follow, pauper
status will be granted solely for the purpose of recommending
dismissal pursuant to 28 U.S.C. § 1915(e)(2)(B) for failure to
state a claim.
I. LEGAL BACKGROUND
“The federal in forma pauperis statute, first enacted in 1892
[and now codified at 28 U.S.C. § 1915], is intended to guarantee
that no citizen shall be denied access to the courts ‘solely
because his poverty makes it impossible for him to pay or secure
the costs.’”
Nasim v. Warden, Md. House of Corr., 64 F.3d 951, 953
(4th Cir. 1995) (en banc) (quoting Adkins v. E.I. DuPont de Nemours
& Co., 335 U.S. 331, 342 (1948)).
“Dispensing with filing fees,
however, [is] not without its problems.
Parties proceeding under
the statute
d[o]
not face
ordinary litigants.
the
same
financial
constraints
as
In particular, litigants suing in forma
pauperis d[o] not need to balance the prospects of successfully
obtaining relief against the administrative costs of bringing
suit.”
Nagy v. Federal Med. Ctr. Butner, 376 F.3d 252, 255 (4th
Cir. 2004). To address this concern, the in forma pauperis statute
obliges “the [C]ourt . . . [to] dismiss the case at any time if
[it] determines . . . the action . . . fails to state a claim on
which relief may be granted.”
28 U.S.C. § 1915(e)(2).
A plaintiff “fails to state a claim on which relief may be
granted,”
28
U.S.C.
§
1915(e)(2)(B)(ii),
by
not
alleging
“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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)).
“Where a complaint pleads facts that are ‘merely
consistent with’ a defendant’s liability, it ‘stops short of the
line
between
possibility
and
plausibility
of
“entitlement
to
relief.”’” Id. (quoting Twombly, 550 U.S. at 557). The applicable
standard,
thus,
“demands
more
than
the-defendant-unlawfully-harmed-me accusation.”
an
Id.
unadorned,
Moreover,
“the tenet that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal conclusions.
2
Threadbare recitals of the elements of a cause of action, supported
Id.1
by mere conclusory statements, do not suffice.”
II. DISCUSSION
Plaintiff’s
Complaint
seeks
relief
under
the
Fair
Debt
Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), and
the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (“FCRA”).
(Docket Entry 2 at 1; see also id. at 3–6 (setting forth two causes
of action under FCRA and one under FDCPA).)
It also purports to
assert a state-law claim for violations of the “North Carolina
Consumer Collection Practices Act.”
(See id. at 4.)
In sum, the Complaint alleges that, in July 2015, Plaintiff
pulled her credit report, which indicated a derogatory account with
Defendant Paragon Revenue Group (“Paragon”).
(Id. at 2.)
The
Complaint further alleges that Plaintiff filed a dispute letter
with three credit reporting agencies, and that she sent Paragon a
letter “asking them to send [her] information about this derogatory
account.”
(Id.)
According to the Complaint, in September 2015,
Plaintiff again pulled her credit report and discovered that the
1
Although the Supreme Court has reiterated that “[a] document
filed pro se is to be liberally construed and a pro se complaint,
however inartfully pleaded, must be held to less stringent
standards than formal pleadings drafted by lawyers,” Erickson v.
Pardus, 551 U.S. 89, 94 (2007) (citations and internal quotation
marks omitted), the United States Court of Appeals for the Fourth
Circuit has “not read Erickson to undermine Twombly’s requirement
that a pleading contain more than labels and conclusions,”
Giarratano v. Johnson, 521 F.3d 298, 304 n.5 (4th Cir. 2008)
(internal quotation marks omitted) (dismissing pro se complaint).
3
derogatory account still appeared.
(Id.)
Finally, the Complaint
alleges in conclusory fashion, that Paragon, “directly and through
other entities, ha[s] been attempting to collect on what [it] now
claim[s] to be a balance of approximately $5,000.”
(Id.)
Upon review, the undersigned has identified a number of
deficiencies
including
in
the
Plaintiff’s
lack
Plaintiff’s claims.
of
IFP
factual
Application
information
and
to
Complaint,
substantiate
The undersigned has also determined that
Plaintiff’s IFP Application and Complaint are virtually identical
in both form and substance to another pauper application and
complaint that Plaintiff filed pro se in this Court (the “Capital
One Action”), see Neal v. Capital One Bank USA NA, No. 1:15CV837,
Docket Entries 1 (in forma pauperis application), 2 (complaint)
(M.D.N.C. Oct. 7, 2015).
In fact, the two complaints materially
differ only in that they name different defendants and the Capital
One Action references an unattached exhibit. (Compare Docket Entry
2, with Capital One, No. 1:15CV837, Docket Entry 2.)
Because the
two actions share so many similarities and suffer from many of the
same
deficiencies,
the
undersigned
will
undertake
a
brief
discussion of the Capital One Action as a backdrop for recommending
dismissal of this case.
A.
Similarities in the Actions
After reviewing Plaintiff’s complaint in the Capital One
Action (the “Capital One Complaint”), the undersigned held a
4
hearing
to
deficiencies.
afford
Plaintiff
an
opportunity
to
address
its
(See Text Order dated October 9, 2015 in Capital
One, 1:15CV837 (M.D.N.C. 2015).)
At said hearing, Plaintiff
appeared pro se and “indicated that she prepared the [Capital One]
Complaint by using a template and case that she found online, and
that she could provide additional factual information to support
her claims.2”
Capital One, No. 1:15CV837, 2015 WL 9239815, at *2
(M.D.N.C. Dec. 17, 2015).
The undersigned then reviewed the
Capital One Complaint with Plaintiff, and she conceded that it
contained several deficiencies, including:
1. Plaintiff had no basis for alleging that the defendants are
“not authorized to do business in North Carolina;”
2. Plaintiff had no basis for alleging that “Capital One [ ]
is an unknown entity;”
3. the Capital One Complaint had an errant numbering scheme
because it contained no paragraphs numbered 9 through 29;
4. the Capital One Complaint contained a deficiency where it
stated, “Neither [d]efendant has ever provided to Plaintiff an
accounting of the alleged debt nor any contract or other legal
justification for attempting to collect it,” because it did not
specify the defendant(s) to whom Plaintiff referred; and
2
The Clerk’s Office recorded the hearing. (See [Capital One,
1:15CV837,] Minute Entry dated Oct. 26, 2015.)
5
5. Plaintiff conceded that she used an online template and
legal case to draft her claim under the purported “North Carolina
Consumer Collection Practices Act,” which listed a Florida statute,
see Consumer Collection Practices, Fla. Stat. § 559.55 et seq., and
that she simply substituted “North Carolina” for “Florida” in
asserting that claim.
Id. at *2-3.
The undersigned then afforded Plaintiff an opportunity to
amend her Capital One Complaint to address its deficiencies,
including to “allege factual matter regarding [the d]efendants’
purported ‘willful’ violations of the FCRA, and, . . . factual
matter regarding the actual damages she incurred as a result of
[the d]efendants’ purported ‘negligent’ violations of the FCRA,
including details about any credit denials and how those denials
resulted in financial losses.”
Id. at *3.
Upon review of Plaintiff’s amended complaint in the Capital
One Action (the “Amended Capital One Complaint”), the undersigned
determined that it failed to correct many of the deficiencies
contained in the Capital One Complaint and failed to provide enough
factual information to support her FCRA and FDCPA claims.
*3-6.
Id. at
Notably, “[w]ith regard to the lack of factual matter, the
Amended [Capital One] Complaint purport[ed] to assert two causes of
action under the FCRA and one under the FDCPA, but d[id] not
provide enough facts to sufficiently allege any of those claims.”
6
Id. at *4.
Accordingly, after analyzing the Amended Capital One
Complaint, the undersigned determined that Plaintiff failed to
sufficiently state a claim for relief under either the FCRA or
FDCPA.
Id. at *6.
B. The Instant Complaint
Turning now to the instant action, Plaintiff again fails to
state a claim for relief.
The Complaint in this case contains
numerous deficiencies identical to the ones identified in the
Capital One Action.
For example, the Complaint:
1. alleges that Paragon “is an unknown entity, not authorized
to do business in North Carolina” (Docket Entry 2, ¶ 6), without
any factual matter to support this allegation (see id. at 1-6);
2. has an errant numbering scheme because it contains no
paragraphs numbered 9 through 29 (see id.), even though paragraphs
numbered 30, 34, 38, and 42 “reallege” the preceding paragraphs as
if paragraphs numbered 9 through 29 appeared in the Complaint (id.,
¶¶ 30, 34, 38, 42);
3. purports to allege a claim under the “North Carolina
Consumer
Collection
Practices
Act”
(id.
at
4),
even
though
Plaintiff admitted in the Capital One Action that she relied on a
Florida statute, see Capital One, 2015 WL 9239815, at *3;3
3
The Complaint’s caption only names Paragon as a defendant
(see Docket Entry 2 at 1), but alleges that “Trans union Equifax
Experian” violated the purported “North Carolina Consumer
Collection Practices Act” (id. at 4).
7
4. deficiently states, “Neither Defendant has ever provided to
Plaintiff an accounting of the alleged debt nor any contract or
other legal justification for attempting to collect it” (Docket
Entry 2 at 2), thereby suggesting multiple Defendants exist,
without specifying the supposed Defendant(s) to which Plaintiff
refers (see id.);
With regard to the lack of factual matter, as discussed below,
the instant Complaint, like the Amended Capital One Complaint, does
not provide sufficient facts to allege a claim under either the
FCRA or the FDCPA.
(See id. at 1-6.)
Thus, the undersigned
recommends dismissal of this case under section 1915(e)(2)(B) for
failure to state a claim.
See, e.g., Iqbal, 556 U.S. at 678
(mandating that plaintiffs provide “factual matter” to support
claims and deeming “legal conclusions” and “conclusory statements”
insufficient).
i. FCRA Claims
Plaintiff’s first FCRA claim alleges that Paragon “willfully
violated the FCRA” by committing one or more of four proscribed
actions.
(Docket Entry 2 at 5.)
The factual allegations in the
Complaint do not support this claim.
For example, the Complaint
contends that Paragon failed to inform the consumer reporting
agencies that Plaintiff disputed the reported information.
(Id.)
Factually, however, the Complaint only alleges that “[Plaintiff]
sent a letter to [Paragon] asking them to send [her] information
8
about
[her]
derogatory
account
and
once
again
no
further
information was received,” but that Paragon “stated that [her]
account had been charged off,” and Paragon “has informed Plaintiff
that it can find no record of Plaintiff’s account.”
(Id. at 2.)
The Complaint does not allege that Plaintiff informed Paragon in
that letter (or otherwise) that she disputed the information about
her derogatory
account.
(See
id.)
Moreover,
the Complaint
contains no factual matter supporting the allegation that Paragon
failed to inform the consumer reporting agencies that Plaintiff
disputed her alleged derogatory account.
(See id. at 1-6.)
Next, the Complaint alleges that Paragon “willfully violated
the FCRA” by “negligently failing to conduct an investigation with
respect to the disputed information” regarding Plaintiff’s alleged
derogatory
account.
(Id.
at
5.)
Under
the
FCRA,
“[a]fter
receiving notice pursuant to section 1681i(a)(2) . . . of a dispute
with regard to the completeness or accuracy of any information
provided by a person to a consumer reporting agency, the person
shall
conduct
information.”
an
15
investigation
U.S.C.
§
with
respect
to
the
1681s-2(b)(1)(A).
disputed
“Before
the
expiration of the 5-business-day period beginning on the date on
which a consumer reporting agency receives notice of a dispute from
any consumer or a reseller . . .,
the agency shall provide
notification of the dispute to any person who provided any item of
information in dispute.”
15 U.S.C. § 1681i(a)(2)(A).
9
Relative to
this
alleged
violation,
the
Complaint
alleges
only
that
“[Plaintiff] sent a letter to [Paragon] asking them to send [her]
information abut [her] derogatory account.” (Docket Entry 2 at 2.)
As noted above, the Complaint does not allege that Plaintiff
disputed the account information in this letter. Even assuming the
letter triggered Paragon’s investigative duties, the Complaint does
not allege facts showing Paragon violated that duty.
Instead, the
Complaint alleges only that Paragon found no information about
Plaintiff’s account.
Further,
the
(Id. at 2.)
Complaint
alleges
that
Paragon
“willfully
violated the FCRA” by, “after receiving notice . . . of a dispute
with regard to the completeness or accuracy of any information
provided by a person to a consumer reporting agency, failing to
review all relevant information provided by the consumer reporting
agencies.”
that
(Docket Entry 2 at 5.)
consumer
reporting
agencies
The Complaint does not allege
provided
any
information
to
Paragon for review or that Paragon did not review Plaintiff’s
derogatory account.
(See id. at 1-6.)
To the contrary, the
Complaint alleges that Paragon “informed Plaintiff that it [could]
find no record of Plaintiff’s account.”
(Id. at 2.)
Lastly, the Complaint alleges that Paragon “willfully violated
the FCRA” by, “after receiving notice . . . of a dispute with
regard to the completeness or accuracy of any information provided
by a person to a consumer reporting agency, failing to direct such
10
consumer reporting agencies to delete inaccurate information about
[P]laintiff pertaining to the account.”
(Id. at 5.)
Again, even
assuming Plaintiff’s letter constituted such notice, the Complaint
states that Paragon could “find no record of Plaintiff’s account”
(id. at 2), and does not contend that Paragon failed to direct
consumer reporting agencies to delete inaccurate information about
Plaintiff’s account (see id. at 1-6).
Plaintiff’s second FCRA claim alleges that Paragon violated
the
four
provisions
described
instead of “willfully.”
above
by
acting
“negligently,”
(Compare id. at 4-5 (first FCRA claim
alleging willful violations), with id. at 5-6 (second FCRA claim
alleging negligent violations).)
Again, for the reasons noted
above, Plaintiff fails to provide sufficient factual matter to
indicate that Paragon committed any violation of the FCRA, whether
willful or negligent. (See id. at 1-6.)
contains
insufficient
facts
regarding
Moreover, the Complaint
the
willfulness
of
any
alleged violation, as required to recover “any actual damages
sustained by the consumer,” 15 U.S.C. § 1681n(a)(1)(A), or the
“actual damages” Plaintiff allegedly suffered as a result of
Paragon’s negligent actions, as required to recover under 15 U.S.C.
§ 1681o(a)(1).
(See Docket Entry 2 at 1-6.)4
4
Thus, the Court
Plaintiff’s Complaint alleges, in conclusory fashion, that
Plaintiff incurred “credit denials, credit delays, inability to
apply for credit, inability to qualify for specific employment,
financial loss, loss of use of funds, mental anguish, humiliation,
a loss of reputation, and expenditures for attorney’s fees and
11
should
dismiss
Plaintiff’s
1915(e)(2)(B)(ii).
FCRA
claims
under
28
U.S.C.
§
See Golden v. NCO Fin. Sys., No. 1:12CV1097,
2013 WL 4519774, at *2 (M.D.N.C. Aug. 26, 2013) (unpublished)
(recommending dismissal of FCRA claims where complaint “contain[ed]
only a bald assertion that [the d]efendant acted willfully and that
[the p]laintiff suffered actual damages”), recommendation adopted,
slip op. (M.D.N.C. Sept. 13, 2013) (Schroeder, J.); James v.
Paragon Revenue Grp., No. 1:12CV1371, 2013 WL 3243553, at *3
(M.D.N.C.
June 26,
2013)
(unpublished)
(same),
recommendation
adopted, slip op. (M.D.N.C. July 23, 2013) (Schroeder, J.); King v.
Equable Ascent Fin., LLC, No. 1:12CV443, 2013 WL 2474377, at *4
(M.D.N.C. June 10, 2013) (unpublished) (Eagles, J.) (same).
ii. FDCPA Claim
Plaintiff’s FDCPA claim (see Docket Entry 2 at 3) fails for
two main reasons.
First, the Complaint alleges that “Defendant
[Paragon] is a debt collector within the meaning of the FDCPA, 15
U.S.C. § 1692a(6)” (Docket Entry 2 at 3), but fails to explain how
Paragon falls under the statutory definition of “debt collector”
(see
id.).
The
FDCPA
defines
a
debt
collector
as
one
who
costs.” (Docket Entry 2 at 2.) However, the Complaint does not
allege that Paragon’s actions “affected [Plaintiff’s] ability to
get a specific loan or line of credit or interfered with [her]
ability to . . . get a specific job,” King v. Equitable Ascent
Fin., LLC, No. 1:12CV443, 2013 WL 2474377, at *4 (M.D.N.C. June 10,
2013) (unpublished) (Eagles, J.) (dismissing FCRA claim based on
the defendant’s negligent conduct because the plaintiff failed to
“allege[] any facts to support his claim for actual damages”).
(See Docket Entry 2 at 1-6.)
12
“regularly collects or attempts to collect . . . debts owed or due
or asserted to be owed or due another.”
15 U.S.C. § 1692a(6).
“Where the holder of a debt attempts to collect its own
accounts, as [the Complaint alleges that Paragon] has done here, it
is not a debt collector under the FDCPA.”
1:14CV495,
2015
WL
2374614,
at
*6
Bagwell v. Dimon, No.
(M.D.N.C.
May
18,
2015)
(unpublished) (first citing Wilson v. Draper & Goldberg, P.L.L.C.,
443 F.3d 373, 379 n.2 (4th Cir. 2006) (“[A] company’s own efforts
to collect overdue payments from its own delinquent clients would
not ordinarily make it a ‘debt collector’ under the [FDCPA], which
specifically refers to those who collect debts ‘owed or due or
asserted
to
be
owed
or
due
another.’”
(quoting
15
U.S.C.
§ 1692a(6)); and then citing Scott v. Wells Fargo Home Mortg. Inc.,
326
F.
Supp.
well-settled
.
2d
.
709,
.
718
that
(E.D.
Va.
creditors,
2003)
(“[T]he
mortgagors,
and
law
is
mortgage
servicing companies are not debt collectors and are statutorily
exempt from liability under the FDCPA.”)); see also Kirby v. SCA
Collections, No. 1:13CV1048, 2014 WL 1225317, at *4 (M.D.N.C. Mar.
25, 2014) (unpublished) (first citing Horton v. HSBC Bank, No.
1:11CV3210TWT, 2013 WL 2452273, at *8 (N.D. Ga. June 5, 2013)
(unpublished) (“Reciting the statutory definition without offering
any facts in support is insufficient to plausibly allege that
Defendants qualify as debt collectors under the FDCPA.
On this
basis alone, Plaintiff’s FDCPA claim should be dismissed.”); and
13
then citing Garcia v. Jenkins/Babb LLP, No. 3:11–CV–3171–N–BH, 2012
WL
3847362,
at
*7
(N.D.
Tex.
July
31,
2012)
(unpublished)
(“Plaintiffs’ description of the Jenkins/Babb Defendants as ‘debt
collectors’ is a legal conclusion which courts are not bound to
accept as true. . . . The factual allegations in the amended
complaint
are
insufficient
to
establish
that
any
of
the
Jenkins/Babb Defendants were either engaged ‘in any business the
principal purpose of which is the collection of any debts’ or that
they ‘regularly collect or attempt to collect debts.’ This failure
is fatal to the claim against them under Iqbal.”
(internal
ellipses omitted))), recommendation adopted, slip op. (M.D.N.C.
Apr. 14, 2014) (Schroeder, J.).
Second, the Complaint alleges that, “[when] the account was
closed, there was a disputed balance of [$]2,988.
[Paragon],
directly
and
through
other
Since then . . .
entities,
[has]
been
attempting to collect on what [it] now claim[s] to be a balance of
approximately $5000.”
(Docket Entry 2 at 2.)
The Complaint
provides no further details about this amount, Paragon’s attempted
collection of it, or any communication by Paragon (see id. at 1-6),
aside from Paragon “inform[ing] Plaintiff that it can find no
record of Plaintiff’s account” (see id. at 2).
The Complaint also
states that, on Plaintiff’s credit report, Paragon states that
Plaintiff has a “derogatory account” that has “been charged off.”
(Id.)
Without
more
factual
support,
14
these
allegations
are
insufficient to establish a claim that Paragon violated any of the
cited
FDCPA
provisions,
including
“falsely
representing
the
character, amount, or legal status of any debt,” “communicating or
threatening to communicate to any person credit information which
is known or which should be known to be false,” “use of any false
representation or deceptive means to collect or attempt to collect
any debt or to obtain information concerning a consumer,” “failure
to disclose in the initial written communication . . . that the
debt collector is attempting to collect a debt,” “collection of any
amount . . . unless such amount is expressly authorized by the
agreement creating the debt or permitted by law,” and failing to
send timely written notice of rights to dispute the debt (id. at 34).
In sum, the FDCPA claim in Plaintiff’s Complaint fails as a
matter of law.
See Nowlin v. Capital One, No. 1:13CV1108, 2014 WL
795771, at *3 (M.D.N.C. Feb. 27, 2014) (unpublished) (recommending
dismissal of FDCPA claim because the only non-conclusory factual
allegation in the complaint did not support finding that the
defendant
violated
any
of
the
cited
FDCPA
provisions),
recommendation adopted, slip op. (M.D.N.C. Mar. 26, 2014) (Eagles,
J.).
III. CONCLUSION
Plaintiff’s Complaint fails to state a claim.
IT
IS
THEREFORE
ORDERED
that
Plaintiff’s
Application
to
Proceed In Forma Pauperis (Docket Entry 1) is granted for the
15
limited purpose of allowing the Court to consider a recommendation
of dismissal.
IT IS RECOMMENDED that this action be dismissed for failure to
state a claim pursuant to 28 U.S.C. § 1915(e)(2)(B).
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
January
11 , 2016
16
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?