Lloyd v. Midland Funding, LLC et al (TV3)
Filing
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MEMORANDUM AND OPINION as set forth in following order. Signed by Chief District Judge Thomas A Varlan on 1/7/15. (ABF)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
LAUREN B. LLOYD,
)
)
Plaintiff,
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v.
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MIDLAND FUNDING, LLC,
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MIDLAND CREDIT MANAGEMENT, INC., )
and ENCORE CAPITAL GROUP, INC.,
)
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Defendants.
)
No.: 3:12-CV-566-TAV-HBG
MEMORANDUM OPINION
This civil action is before the Court on Midland Funding LLC’s Motion to
Dismiss or, in the Alternative, Motion for Summary Judgment [Doc. 65], plaintiff’s
Motion to Alter or Amend Judgment [Doc. 68], and plaintiff’s objections to two orders
entered by the magistrate judge [Docs. 43, 64].
I.
Background1
In 2010, Midland Funding brought an action against plaintiff in the General
Sessions Court of Blount County, Tennessee, to collect a debt of $7,288.72 [Doc. 1-1 ¶¶
10–11; Doc. 62 p. 2]. Before the scheduled court date of October 6, 2010, plaintiff and
Midland Funding entered into an agreement for plaintiff to pay $4,000.00 in satisfaction
of the entire debt [Doc. 1-1 ¶ 12]. On October 5, 2010, Midland Funding’s counsel
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Although the Court discusses certain facts relevant to the Court’s analysis, the Court presumes
familiarity with the facts of this case as well as the analysis underlying the Court’s memorandum
opinion and accompanying order [Docs. 62, 63].
confirmed the receipt of the $4,000.00 payment and stated, “[o]ur office will cease all
legal actions, if such actions have been initiated” [Doc. 1-1 p. 17; Doc. 62 p. 2]. The next
day, however, a default judgment was entered against plaintiff in favor of Midland
Funding in the Blount County General Sessions Court [Doc. 62 p. 2]. Based on the
available evidence, this Court previously found “that the initial entry of the default
judgment against plaintiff was inadvertent” [Id. at 32].
Over a year later, plaintiff attempted to obtain a home loan for $175,000.00 from
her credit union [Id. at 2]. It was at this time that plaintiff discovered that a default
judgment for $7,288.67 had been entered against her on October 6, 2010 [Id.]. Plaintiff
commenced this action in the Circuit Court for Blount County, Tennessee, on September
27, 2012, alleging that “[a]s a direct result of the default judgment in favor of Midland
Funding and its presence on [her] credit report, the credit union informed [her] that it
would make the loan to her only at a higher interest rate than it would have made the loan
had the judgment not been present on her credit report” [Id. at 2–3].
Defendants timely removed the action to this Court on the basis of federal
question and supplemental jurisdiction [Id. at 3].
Plaintiff’s complaint asserted the
following claims: breach of contract, common law fraud, defamation, abuse of process,
violations of the Fair Debt Collection Practices Act (“FDCPA”), and violations of the
Fair Credit Reporting Act (“FCRA”) [Doc. 1-1 p. 7–14].
In the Court’s previous
memorandum opinion (“Opinion”) and order [Docs. 62, 63], the Court dismissed
plaintiff’s claims against all defendants under the FCRA and Tennessee state law and for
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punitive damages, and dismissed plaintiff’s claims against defendants Encore and
Midland Credit Management, Inc. under the FDCPA.
Plaintiff’s FDCPA claims against Midland Funding were not adjudicated [see
Docs. 62, 63, 65 ¶ 3], and they are the source of Midland Funding’s present motion to
dismiss or, in the alternative, for summary judgment [Doc. 65 ¶¶ 4, 6]. The parties
appear to agree that these FDCPA claims are premised upon the exact same factual
allegations as the FDCPA claims against Encore and Midland Credit Management, Inc.,
which the Court previously found to be time-barred [See id. ¶ 4; Doc. 71 p. 2, 4]. Due to
the claims’ similarity and to avoid a trial on these remaining claims alone, plaintiff
agreed to allow Midland Funding to file its present motion despite the parameters of the
scheduling order [See Doc. 71 p. 2]. Plaintiff’s response to the motion re-alleges each
and every argument made in her response to defendants’ previous motion for summary
judgment [Id. at 4].
Accordingly, with nothing new to consider, the Court hereby
incorporates its analysis from its previous memorandum opinion [Doc. 62 p. 28–30] and
finds that plaintiff’s FDCPA claims against Midland Funding are time-barred by the
statute of limitations.
This determination does not resolve the case, however. Plaintiff has asked the
Court to reconsider its dismissal of her breach of contract claim, which the Court will
review under Rule 59(e) because it was filed within twenty-eight days of the Court’s
order. Plaintiff has also objected to the magistrate judge’s orders imposing evidentiary
sanctions and refusing to reopen discovery [Docs. 43, 64].
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II.
Analysis
In its Opinion, the Court dismissed plaintiff’s breach of contract claim, finding it
preempted by the FCRA [Doc. 62 p. 26]. The Court explained that the FCRA preempts
state-law claims that involve a subject matter regulated under § 1681s-2, relating to the
responsibilities of those who furnish information to consumer reporting agencies [See id.
at 24–25 (discussing the FCRA’s preemption clauses, including 15 U.S.C.
§ 1681t(b)(1)(F), which provides, “No requirement or prohibition may be imposed under
the laws of any State . . . with respect to any subject matter regulated under . . . section
1681s-2 of this title, relating to the responsibilities of persons who furnish information to
consumer reporting agencies”)].
Under § 1681s-2, furnishers must provide accurate
information and take certain actions upon notice of a dispute. See 15 U.S.C. § 1681s-2(a)
and (b). The Court found plaintiff’s breach of contract claim preempted because her
alleged damages for that claim—paying a higher interest rate on her home loan—“are
directly related to defendants’ alleged reporting of her default judgment” [Doc. 62 p. 26].
Plaintiff claims the Court committed “clear error of law” in so finding [Doc. 68 p.
3]. In support, plaintiff makes two arguments. First, plaintiff argues that the FCRA does
not preempt breach of contract claims. She relies on Cipollone v. Liggett Group, Inc.,
505 U.S. 504 (1992), and the plurality’s analysis of a similarly-worded preemption
provision [See Doc. 68 p. 3–6; Doc. 74 p. 1–4]. Defendants respond that the plurality
opinion in Cipollone “lends the Plaintiff no support” as it “involved an interpretation of a
vastly different federal statute” [Doc. 72 p. 4]. In addition, defendants cite many district
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court decisions, including from the Eastern District of Tennessee, that have found certain
contract claims to be preempted by the FCRA [See id. at 2–5].
Second, plaintiff argues that even if contract claims may be preempted by the
FCRA, plaintiff’s claim is not preempted because it “is based entirely on Defendants’
conduct in obtaining a judgment against Plaintiff in breach of the settlement agreement
entered into by the parties” [Doc. 68 p. 8]. Plaintiff also claims that the Court’s Opinion
is internally inconsistent, arguing that the Court “failed to consider that its own Opinion
had determined that plaintiff’s breach of contract claim was not based on subject matter
regulated by the FCRA” [Doc. 74 p. 4]. Defendants respond that the Court did not
improperly consider the source of plaintiff’s damages in its preemption analysis and that
“the crux of the breach of contract allegations” is directly related to the alleged reporting
of her default judgment [See Doc. 72 p. 5–8].
“A district court may grant a Rule 59(e) motion to alter or amend judgment only if
there is: ‘(1) a clear error of law; (2) newly discovered evidence; (3) an intervening
change in controlling law; or (4) a need to prevent manifest injustice.’” Henderson v.
Walled Lake Consol. Schs., 469 F.3d 479, 496 (6th Cir. 2006) (quoting Intera Corp. v.
Henderson, 428 F.3d 605, 620 (6th Cir. 2005)). Rule 59 motions “are not intended as a
vehicle to relitigate previously considered issues . . . and are not the proper vehicle to
attempt to obtain a reversal of a judgment by offering the same arguments previously
presented.” Kenneth Henes Special Projects Procurement v. Cont’l Biomass Indus., Inc.,
86 F. Supp. 2d 721, 726 (E.D. Mich. 2000) (emphasis and citation omitted); see also
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Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir. 1998)
(noting that a Rule 59(e) motion “is not an opportunity to re-argue a case” nor an avenue
to raise arguments that “could have, but [were] not” raised before); Beltowski v.
Bradshaw, No. 1:08 CV 2651, 2009 WL 5205368, at *4 (N.D. Ohio Dec. 23, 2009)
(“The motion for reconsideration should not provide the parties with an opportunity for a
second bite at the apple.”).
Having reviewed the record and relevant law, the Court will not analyze the merits
of plaintiff’s first argument involving Cipollone. “It is well-settled that ‘parties cannot
use a motion for reconsideration to raise new legal arguments that could have been raised
before a judgment was issued.’” Bank of Ann Arbor v. Everest Nat’l Ins. Co., 563 F.
App’x 473, 476 (6th Cir. 2014) (quoting Roger Miller Music, Inc. v. Sony/ATV Publ’g,
477 F.3d 383, 395 (6th Cir. 2007)). Plaintiff first raised the argument that the FCRA, in
light of Cipollone and related cases, does not preempt breach of contract actions in her
motion to alter or amend the judgment [Compare Doc. 30 p. 11–13, with Doc. 68 p. 3–6].
Despite the opportunity, plaintiff’s response to defendants’ motion for summary
judgment did not cite Cipollone or allude to such an argument [See Doc. 30]. The Court,
therefore, will not entertain this new argument.
Moreover, as plaintiff concedes, there is no controlling authority for this Court to
consider with respect to FCRA preemption of breach of contract claims [Doc. 74 p. 1].
Without controlling authority on point, the Court does not find that its view that breach of
contract actions may be preempted—a view shared by courts within and outside of this
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circuit—constitutes a clear error of law. See H.D.V.–Greektown, LLC v. City of Detroit,
No. 06-11282, 2010 WL 4792180, at *3 n.2 (E.D. Mich. Nov. 18, 2010) (“[B]ecause the
Court has not found–and the Plaintiffs have not presented–any controlling authority
directly on point, it does not agree with the Plaintiffs’ contention that the contrary
conclusion by the Court is a ‘clear error’ [under Rule 59(e)].”).
Nor is plaintiff’s second argument well-taken, as it rehashes points plaintiff
previously made. See Bank of Ann Arbor, 563 F. App’x at 476 (“[R]econsideration
motions cannot be used as an opportunity to re-argue a case.”). In plaintiff’s response to
defendants’ motion for summary judgment, plaintiff argued that her breach of contract
claim is not preempted because it is not “related in any way to credit reporting generally
or credit investigations” but is “based entirely on Defendants’ conduct in obtaining a
judgment against Plaintiff in breach of the settlement agreement” [Doc. 30 p. 12].
Plaintiff relies on this same argument in her motion to alter or amend the judgment [see
Doc. 68 p. 8], even though the Court previously rejected it [see Doc. 62 p. 25–26 (citing
Parker v. PHH Mortg. Corp., No. 4:11CV00439, 2014 WL 626594, at *3 (E.D. Ark. Feb.
18, 2014) (finding that the FCRA precluded the plaintiff from seeking damages that were
related to the defendant providing false information to credit agencies))].
In sum, because plaintiff has used her motion to introduce a new argument that
could have been presented earlier and to essentially reargue the case, the Court will deny
plaintiff’s motion.
Plaintiff has not shown that the Court’s memorandum opinion
contained a clear error of law, that there is newly discovered evidence or has been a
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change in controlling law, or that the Court’s decision must be amended to prevent
manifest injustice.
III.
Conclusion
For the reasons stated herein, the Court will GRANT Midland Funding LLC’s
Motion to Dismiss or, in the Alternative, Motion for Summary Judgment [Doc. 65] and
will DENY plaintiff’s Motion to Alter or Amend Judgment [Doc. 68]. Accordingly,
plaintiff’s objections to two of the magistrate judge’s orders [Docs. 43, 64] and
defendants’ Motion for Clarification [Doc. 54] will be DENIED as moot, and the Clerk
will be directed to CLOSE this case.
ORDER ACCORDINGLY.
s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE
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