Nix v. McCabe Trotter & Beverly PC et al
Filing
34
ORDER AND OPINION adopting 26 the Report and Recommendation of Magistrate Judge Bristow Marchant, granting 9 Defendant's Motion to Dismiss, denying 25 Plaintiff's Motion to Amend. AND IT IS SO ORDERED. Signed by Honorable Richard M Gergel on 10/23/2018.(sshe, )
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
Alan G. Nix,
Plaintiff,
V.
McCabe Trotter & Beverly, P.C. and
Todd M. MusheffLLC,
Defendant.
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Civil Action No. 2:18-1360-RMG
ORDER AND OPINION
This matter is before the Court on the Report and Recommendation ("R & R") of the
Magistrate Judge (Dkt. No. 26) recommending that the Court grant Defendants' Motion to Dismiss
(Dkt. No. 9). For the reasons set forth below, the Court adopts the R & Ras the order of the Court.
I.
Background
Plaintiff Alan G. Nix owns a home subject to the Churchill Park Homeowners' Association,
Inc., ("Churchill") a homeowners' association ("HOA") that charges annual assessments pursuant
to the HOA's covenants and restrictions ("CRs"). (Dkt. No. 1-1at5, 16, 59.) The HOA employs
Defendant McCabe, Trotter & Beverly, P.C. ("MTB") to represent it in the collection of
assessments. (Id. at 6) Todd. M. Musheff ("Musheff'), whose law firm is named as a Defendant
here, 1 wrote the letter at issue in this action. (Id. at 12.)
On February 16, 2017, Plaintiff filed a "Scam Report" with the South Carolina Department
of Consumer Affairs, alleging that the HOA's former management company, LPPM, Inc., refused
to validate the company it was working for when it sent certain letters in 2016. (Dkt. No. 1-1 at
1
There are no allegations in the Complaint that Musheff s firm was involved in collecting the
debts alleged owed to Churchill, and instead the Complaint focuses on Musheff s actions on behalf
ofMTB. (SeeDkt.No.1-1 atifif5-25.)
21 - 26.) Musheff responded to the complaint in a letter to the South Carolina Department of
Consumer Affairs dated April 27, 2017, 2 denying the charge and noting the ongoing litigation
between the parties. (Id. at 10 - 11.) The letter further noted that there is different nomenclature
for the neighborhoods at Churchill Park and that the HOA has used management companies. (Id.)
Documents attached to the Complaint also show that the management company for the HOA
changed from LPPM to Gold Crown Management, Inc. on December 21, 2016. (Id. at 12- 13.)
Plaintiff alleges that the letter dated April 27, 2017, violated the Fair Debt Collection
Practices Act ("FDCPA"), 15 U.S.C. § 1692. Plaintiff seems to allege that the letter was a debt
collection letter and, in responding to Plaintiffs consumer complaint, made a misrepresentation
that violated the FDCPA, such as by alluding to Gold Crown as the HOA's management company.
The Magistrate Judge recommended granting the motion to dismiss, and Plaintiff filed objections.
(Dkt. Nos. 26, 31.)
II.
Legal Standard
A.
Motion to Dismiss
Rule 12(b)(6) of the Federal Rules of Civil Procedure permits dismissal if the complaint
fails "to state a claim upon which relief can be granted." Such a motion tests the legal sufficiency
of the complaint and "does not resolve contests surrounding the facts, the merits of the claim, or
the applicability of defenses .... Our inquiry then is limited to whether the allegations constitute 'a
short and plain statement of the claim showing that the pleader is entitled to relief."' Republican
Party ofNC. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (quotation marks and citation omitted).
In a 12(b)(6) motion, the Court is obligated to "assume·the truth of all facts alleged in the complaint
2
Plaintiff references this letter both as being sent on May 9, 2017, and as dated April 27, 2017.
(Dkt. No. 1-1 at~~ 5 - 7.)
and the existence of any fact that can be proved, consistent with the complaint's allegations." E.
Shore Mias., Inc. v. JD. Assocs. Ltd. P 'ship, 213 F.3d 175, 180 (4th Cir. 2000). However, while
the Court must accept the facts in a light most favorable to the non-moving party, it "need not
accept as true unwarranted inferences, unreasonable conclusions, or arguments." Id.
To survive a motion to dismiss, the complaint must state "enough facts to state a claim to
relief that is plausible on its face. " Bell At!. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although
the requirement of plausibility does not impose a probability requirement at this stage, the
complaint must show more than a "sheer possibility that a defendant has acted unlawfully. "
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint has "facial plausibility" where the
pleading "allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged." Id.
B.
Pro Se Pleadings
This Court liberally construes complaints filed by prose litigants to allow the development
of a potentially meritorious case. See Cruz v. Beto, 405 U.S. 319 (1972); Haines v. Kerner, 404
U.S. 519 (1972). The requirement ofliberal construction does not mean that the Court can ignore
a clear failure in the pleadings to allege facts which set forth a viable claim, nor can the Court
assume the existence of a genuine issue of material fact where none exists. See Weller v. Dep 't of
Social Services, 901F.2d387 (4th Cir. 1990).
C.
Report and Recommendation
The Magistrate Judge makes only a recommendation to this Court. The recommendation
has no presumptive weight, and the responsibility for making a final determination remains with
this Court. See Mathews v. Weber, 423 U.S. 261 , 270 - 71 (1976). This Court is charged with
making a de nova determination of those portions of the Report and Recommendation to which
specific objection is made. Additionally, the Court may "accept, reject, or modify, in whole or in
part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(l). In
the absence of any specific objections, "a district court need not conduct a de nova review, but
instead must only satisfy itself that there is no clear error on the face of the record in order to accept
the recommendation." See Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th
Cir. 2005) (internal quotation omitted).
Plaintiff filed objections (Dkt. No. 31), and therefore the R & R is reviewed de nova.
III.
Discussion
To make out a claim under the FDCP A, a plaintiff must prove that:
( 1) plaintiff has been the object of collection activity arising from consumer debt;
(2) defendant is a debt collector as defined by the FDCP A, and;
(3) defendant has engaged in an act or omission prohibited by the FDCPA
See Chatman v. GC Servs., LP, 57 F. Supp. 3d 560, 565 (D.S.C. 2014). In relevant part here, the
FDCP A prohibits a debt collector from using "any false, deceptive, or misleading representation
or means in connection with the collection of any debt," or from using "unfair or unconscionable
means to collect or attempt to collect any debt." 15 U.S.C.A. § 1692(e); §1692(f). Courts must
review whether a communication is misleading through the lens of the least sophisticated
consumer. Russell v. Absolute Collection Servs., Inc., 763 F.3d 385, 394 - 95 (4th Cir. 2014).
Debt collectors are also prohibited from engaging in conduct which would harass or abuse an
individual in connection with collecting a debt. 15 U.S.C.A. § 1692(d).
Here, Defendants made no false, deceptive or misleading representations or used any unfair
or unconscionable means in attempting to collect a debt. As the Magistrate Judge correctly held,
this Complaint does not involve an attempt to collect a debt and therefore does not implicate the
FDCP A. Instead, Complaint focuses on a letter sent by MTB to the South Carolina Department
of Columbia Affairs to defend itself against a complaint the Plaintiff filed. (Dkt. No. 1-1 at 10 -
11.) While there is no bright-line rule, "[d]etermining whether a communication constitutes an
attempt to collect a debt is a ' commonsense inquiry' that evaluates the ' nature of the parties'
relationship,' the ' [objective] purpose and context of the communication [ ],' and whether the
communication includes a demand for payment." Lovegrove v. Ocwen Home Loans Servicing,
L. L. C., 666 F. App 'x 308, 311 (4th Cir. 2016) (citations omitted). While the letter here included
a bolded note on the bottom that "this communication is for the purpose of collecting a debt" and
"any information obtained will be used for that purpose," there is no other indication that the letter
has anything to do with collecting a debt. (Dkt. No. 1-1- at 10 - 11 .) The letter does not reference
any amount and does not request any payment from Plaintiff. Indeed, the letter was not even sent
to Plaintiff, and was instead sent to a state agency to resolve a consumer complaint. Plaintiff only
received the letter because a director at the Department of Consumer Affairs attached the letter to
an email regarding Plaintiff's complaint. (Dkt. No. 1-1 at 17.) The letter therefore was not an
attempt to collect a debt and Plaintiff's claim under the FDCP A fails.
Furthermore, even if the letter did constitute an attempt to collect a debt, there was no
misrepresentation. Documents attached to the Complaint demonstrate that Plaintiff was informed
on December 30, 2016, before filing the Scam Report, that Gold Crown Management was the new
management company.
(Dkt. No. 1-1 at 53 .) Therefore, there was no misrepresentation if
Defendants were referring to Gold Crown as the management company.
As the Magistrate
correctly found, the letter further did not harass or abuse Plaintiff in connection with collecting a
debt, and instead was a letter sent to a third-party state agency laying out the HOA' s position
regarding Plaintiff's complaint. 3
3
Plaintiff also makes extensive objections to abbreviations and other uncontroverted statements
used in the R & R. The Magistrate used the phrase "Churchill Park" as an abbreviation for the
HOA, the Churchill Park Homeowners' Association, Inc. Furthermore, Plaintiff seems to ignore
Plaintiff also filed a motion to consolidate cases 4 and amend his complaint on September
7, 2018. (Dkt. No. 25.) The Plaintiff failed to include a proposed amended complaint or explain
which new claims or new defendants he sought to add. Furthermore, Plaintiff waited over seven
weeks after the motion to dismiss had been fully briefed to file his motion to amend. While Rule
15 states that leave to amend should be "freely given when justice so requires," a district court
may deny the leave for reasons "such as undue delay, bad faith or dilatory motive on the part of
the movant, repeated failure to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of the allowance of the amendment, futility of
amendment, etc." Glaser v. Enzo Biochem, Inc., 464 F.3d 474, 480 (4th Cir. 2006). Here, Plaintiff
waited for seven weeks until after the motion to dismiss had been fully briefed for the Magistrate
Judge to issue an R & R in the parallel case 2:18-1352. Furthermore, Plaintiff seemingly seeks to
relitigate issues already raised and disposed of in state court. Plaintiffs motion to consolidate and
amend his complaint is therefore denied.
Finally, the Magistrate Judge correctly held that any attempt by the Plaintiff to relitigate or
"appeal" his state foreclosure action in this Court is barred by res judicata, collateral estoppel and
the Rooker-Feldman doctrine. (Dkt. No. 26 at 8 - 12.) To the extent the state action is still
pending, the Court must abstain from interfering with its ongoing proceedings. (Id. at 12 - 13.)
the distinction between the HOA, which pursued the foreclosure action, and the name of the
neighborhood the development in which he lives. Finally, Plaintiff objects repeatedly that there is
no evidence that Churchill is a homeowners ' association. However, Plaintiff admits as such in his
Complaint. (Dkt. No. 1-1- at ~19.)
4
Plaintiff sought to consolidate this case with the parallel and related pending action, Nix v.
McCabe Trotter & Beverly PC, et al., 2:18-cv-1352.
IV.
Conclusion
For the foregoing reasons, the R & R of the Magistrate Judge (Dkt. No. 26) is ADOPTED
as the order of the Court the Court GRANTS Defendant's Motion to Dismiss (Dkt. No. 9), and
DENIES Plaintiffs Motion to Amend (Dkt. No. 25).
AND IT IS SO ORDERED.
Richard Mark
United States District Court Judge
October V , 2018
Charleston, South Carolina
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