Molinari v. Stone & Hinds, PC (TV2)
Filing
34
MEMORANDUM AND OPINION as set forth in following order. Signed by Chief District Judge Thomas A Varlan on 11/22/16. (ABF)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
SHANNON MOLINARI,
Plaintiff,
v.
STONE & HINDS, P.C.,
Defendant.
)
)
)
)
)
)
)
)
)
No.:
3:16-CV-133-TAV-CCS
MEMORANDUM OPINION
This civil action is before the Court on defendant’s Amended Motion to Dismiss
[Doc. 22]. Plaintiff filed a response in opposition to defendant’s motion [Doc. 27], and
defendant replied [Doc. 30]. For the reasons below, the Court will grant the motion to
dismiss.
I.
Background1
In 2008, Ford Motor Credit Company, LLC (“Ford”) brought an action against
plaintiff in the General Sessions Court of Wilson County, Tennessee, to collect an owed debt
[Doc. 1-1]. The debt was reduced to a final judgment, and the same court—at the request of
defendant, on behalf of Ford—subsequently issued two writs of wage garnishment in 2013
and 2015, respectively, to plaintiff’s employers, Dell and Insight Global [Docs. 1-1, 1-2].
1
For the purposes of the motion to dismiss, the Court takes plaintiff’s factual allegations
as true. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (noting that “when ruling on a
defendant’s motion to dismiss, a judge must accept as true all factual allegations contained in the
complaint” (citations omitted)). To the extent that plaintiff’s factual allegations essentially
consist of legal conclusions, however, the Court will not assume the truth of those assertions.
Additionally, the Court will only recite facts necessary to decide the current motion to dismiss.
These writs were served upon the employers’ agents within the state of Tennessee [Docs. 11, 1-2].
Plaintiff moved from Tennessee to Texas in 2011, and in 2013, she notified defendant
that she had become a legal resident of Texas [Doc. 1 ¶ 22]. Plaintiff’s wages continued to
be withheld after she moved [Id. ¶ 25]. Accordingly, on October 27, 2015, plaintiff brought
suit in the U.S. District Court for the Western District of Texas against defendant, alleging
violations of the Federal Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, and
the Texas Debt Collection Act (“TDCA”), Tex. Fin. Code § 392 [Id. ¶¶ 37, 57–79].
Defendant filed a motion to dismiss the action or, in the alternative, to transfer venue
pursuant to 28 U.S.C. § 1406(a), due to lack of personal jurisdiction [Doc. 4]. On March 18,
2016, Judge Pitman of the Western District of Texas sustained defendant’s objections to lack
of personal jurisdiction and consequently transferred the action to this Court [Doc. 9].2
Plaintiff claims that defendant is “currently conducting business in the State of Texas
as a debt collector” and is therefore bound by the regulations governing Texas debt collectors
[Doc. 1 ¶ 5]. Plaintiff asserts—and defendant does not dispute—that debt collectors must
pay a bond before conducting business in Texas, and defendant is not bonded in Texas [Id. ¶
10]. Additionally, defendant does not deny that Texas courts may not order the garnishment
of wages—other than for child support or spousal support—under the Texas Constitution.
See Tex. Const. art. XVI, § 28 (“No current wages for personal service shall ever be subject
2
In particular, Judge Pitman held that the court did not have specific jurisdiction over
defendant because “[d]efendant’s conduct exclusively occurred in Tennessee. Though
[d]efendant has not rescinded the writs of garnishment served upon Tennessee employers,
[d]efendant has not ‘availed itself’ of the benefits of the state of Texas” [Id. at 30].
2
to garnishment, except for the enforcement of court-ordered: (1) child support payments; or
(2) spousal maintenance.”).
The parties are in disagreement, however, as to whether defendant is subject to these
restrictions—and consequently in violation of the FDCPA and TDCA—based upon the
garnishing of plaintiff’s wages while she resides in Texas pursuant to the Tennessee state
court judgment. Plaintiff claims that defendant “ha[s] not satisfied the legal requirements to
collect any debt in the State of Texas” and is therefore acting in violation of the TDCA by
“collecting a debt by using false, misleading, unfair and unconscionable debt collection
conduct and representations” [Doc. 1 ¶¶ 9, 29].
Additionally, plaintiff argues that, by
garnishing her wages, defendant is “collecting a debt they cannot legally collect in Texas,”
and thereby “maliciously, willfully, and/or negligently violating the Fair Debt Collection
statutes in an attempt to collect [p]laintiff’s alleged debt” [Id. ¶¶ 25, 31].
Defendant states that plaintiff has failed to point to any such action by defendant,
“other than the undisputed fact the [defendant] applied for, and obtained from the Tennessee
state court, writs of garnishment as to two of [plaintiff’s employers]” [Doc. 22 ¶ 2].
Consequently, defendant moves this Court to dismiss plaintiff’s claims pursuant to Federal
Rule of Civil Procedure 12(b)(6), arguing that plaintiff has failed to state a claim upon which
relief can be granted because “[w]age garnishment of Texas residents by other courts is not
prohibited,” and the continuing garnishment of wages does not qualify as the institution of a
legal action [Id. ¶ 11].
3
II.
Standard of Review
Rule 8(a)(2) of the Federal Rules of Civil Procedure sets forth a liberal pleading
standard. Smith v. City of Salem, 378 F.3d 566, 576 n.1 (6th Cir. 2004). It requires only “‘a
short and plain statement of the claim showing that the pleader is entitled to relief,’ in order
to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it
rests.’”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original)
(quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Detailed factual allegations are not
required, but a party’s “obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’
requires more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Id. at 555 (alteration in original) (quoting Papasan v. Allain,
478 U.S. 265, 286 (1986)). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’
devoid of ‘further factual enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(alteration in original) (quoting Twombly, 550 U.S. at 557)).
In deciding a Rule 12(b)(6) motion to dismiss, the Court must determine whether the
complaint contains “enough facts to state a claim to relief that is plausible on its face.”
Twombly, 550 U.S. at 570. In doing so, the Court “construe[s] the complaint in the light
most favorable to the plaintiff, accept[s] its allegations as true, and draw[s] all reasonable
inferences in favor of the plaintiff.” Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir.
2007) (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.”
Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556).
“Determining whether a complaint states a plausible claim for relief will . . . be a context4
specific task that requires the reviewing court to draw on its judicial experience and common
sense.” Id. at 679 (citation omitted).
III.
Analysis
Defendant argues that plaintiff’s claims should be dismissed under Rule 12(b)(6)
primarily based on the Full Faith and Credit Clause of the United States Constitution [Doc.
22 pp. 5–10]. Thus, the Court will begin by giving an overview of the Full Faith and Credit
Clause and related law, then it will apply the law to this case.
A.
Full Faith and Credit Clause
The Full Faith and Credit Clause states: “Full faith and credit shall be given in each
state to the public acts, records, and judicial proceedings of every other state.” U.S. Const.
art. I, § 1. It demands that “a properly proven foreign judgment or final, enforceable order
must be recognized and given effect coextensive with that to which it is entitled in the
rendering state.” Daus v. Daus, No. 05–13–00060–CV, 2014 WL 2109379, at *2 (Tex. App.
May 14, 2014).
Wage garnishment continues from, and is ancillary to, an original garnishment
order—it is not a free-standing, legal action. See Pitts v. Dallas Nurseries Garden Ctr., Inc.,
545 S.W.2d 34, 37 (Tex. Civ. App. 1976) (“[P]ost-judgment garnishment is ancillary to the
original proceedings and is the extension and enforcement of the trial court’s judgment.”).
Thus, the continued garnishment of an individual’s wages is not categorized as the institution
of an original legal action.
Consequently, pursuant to the Full Faith and Credit Clause, Texas courts have
repeatedly held that they may not interfere with the enforcement of sister states’ valid
5
garnishment orders, even when a Texas court would not have been permitted to issue the
same order against a Texas resident. See Daus, 2014 WL 2109379, at *3 (“The confirmation
of an order from a foreign court may result in the garnishment of a Texas resident’s wages
even though a Texas court would be limited or precluded from issuing the same substantive
order against a Texas resident.”); Knighton v. Int’l Bus. Machines Corp., 856 S.W.2d 206,
207 (Tex. App. 1993) (“The issue is when no action has been requested to enforce the valid
judgment of a sister state, should Texas courts interfere with such enforcement because the
judgment contains an income deduction order. We conclude Texas courts should not.”);
Baumgardner v. S. Pac. Ry. Co., 177 S.W.2d 317, 319–20 (Tex. Civ. App. 1943) (according
full faith and credit to a valid Arizona judgment and holding that a Texas employee’s wages
could be garnished despite Texas’s contrary policy).
In Knighton, a Florida court dissolved the plaintiff and his former wife’s marriage and
ordered the plaintiff to pay a weekly sum for alimony. 856 S.W.2d at 208. The plaintiff later
moved to Texas and remained a Texas resident from that time forward. Id. He refused to
pay alimony as ordered by the Florida court, and his ex-wife brought a motion for contempt
seeking enforcement of the judgment. Id. The trial court then entered an income deduction
order that directed the plaintiff’s employer to garnish his wages.
Id.
The plaintiff
subsequently filed suit in Texas against his former wife and his employer, “seeking a
declaratory judgment that the Florida orders constituted an illegal garnishment in violation of
the laws and the Texas Constitution.” Id.
Upholding the trial court’s grant of summary judgment in favor of the defendants, the
Texas Court of Appeals in Knighton noted that “[w]hen a foreign judgment appears to be a
6
valid, final, and subsisting judgment, its introduction makes a prima facie case for the party
seeking to enforce it, and the burden is on the party resisting the judgment to establish that it
is not final and subsisting.” Id. at 210. The plaintiff in Knighton did not dispute the Florida
judgment’s finality, and he conceded that the judgment was entitled to full faith and credit.
Id. Rather, the plaintiff asserted that “the judgment entered by the Florida court cannot be
enforced in Texas by the garnishment of wages, which is against the public policy of this
State except for the payment of child support.”3 Id.
The court rejected this argument and set forth the following analysis: “In the instant
case, the Texas courts need do nothing to enforce the valid Florida judgment. Knighton’s
employer . . . is subject to the jurisdiction of the Florida court and [the defendant’s] only
request is that Texas courts not interfere.”
Id. at 210.
The court distinguished these
circumstances from a “case wherein a party is seeking a Texas court order garnishing wages
for the enforcement of a valid foreign judgment. That situation is clearly a different matter
because Texas courts would then be asked to do an act which violates our constitution.” Id.
Consequently, the Texas court did not interfere with the Florida judgment, and it allowed the
plaintiff’s wages to be garnished pursuant to the Florida court order while the plaintiff
resided in Texas. Id.
3
Plaintiff argues that defendant misapplies Knighton because “that subject of the
garnishment was for ‘alimony,’ which Texas garnishment law allows” [Doc. 27 ¶ 19]. The Court
notes, however, that when Knighton was decided, Texas only allowed the garnishment of wages
for the payment of child support. Since Knighton was rendered, Texas amended Article 16,
Section 28 of its constitution to permit Texas courts to order wage garnishments for the purpose
of spousal support. Tex. Const. art. XVI, § 28. Consequently, plaintiff’s argument in this
respect is misguided.
7
Additionally, as noted in Knighton, “[a] state cannot deny full faith and credit to
another state’s judgment solely on the ground that it offends the public policy of the state
where it is sought to be enforced.” Id. at 209 (internal citation omitted). Rather, “[t]he Full
Faith and Credit Clause requires that a valid judgment or final order from one state be
enforced in other states regardless of the laws or public policy of the other states.” Daus,
2014 WL 2109379, at *2.
In sum, a Texas resident’s wages can be garnished pursuant to a foreign court’s order,
in spite of Texas’s public policy against the garnishment of wages for most purposes.
Texaco, Inc. v. LeFevre, 610 S.W.2d 173, 176 (Tex. Civ. App. 1980).
B.
Application
Here, as in Knighton, plaintiff does not dispute the validity or finality of the
Tennessee judgment. 856 S.W.2d at 209. Rather, plaintiff argues that the garnishment of her
wages after she moved to Texas violates the FDCPA and TDCA because the Texas
Constitution does not allow wage garnishment of this type and because defendant is not
bonded in Texas.4
4
Plaintiff argues that defendant must follow Texas debt collection regulations and
procedures because “[d]efendant was collecting an alleged debt from [p]laintiff when they knew
she was a Texas resident and they are doing business in Texas” [Doc. 27 ¶ 2]. The continued
garnishment of plaintiff’s wages after she became a Texas citizen, however, flowed from the
Tennessee state court judgment. See Pitts v. Dallas Nurseries Garden Ctr., Inc., 545 S.W.2d 34,
37 (Tex. Civ. App. 1976) (“[P]ost-judgment garnishment is ancillary to the original proceedings
and is the extension and enforcement of the trial court’s judgment.”). Refusing to rescind writs
of garnishment served upon plaintiff’s Tennessee employers after she moved to Texas does not
amount to “doing business in Texas” [Doc. 9 p. 4].
8
Defendant has not, however, requested that a Texas court enforce its order. Despite
plaintiff’s contention to the contrary, defendant does not need to do anything else to have its
Tennessee judgment recognized.5 Defendant did not file a debt collection action in Texas,
and it did not file an application for a writ of garnishment in a Texas court.6 It has not
instituted legal proceedings in Texas. Rather, defendant has “asked only that Texas give full
faith and credit to the order” rendered in Tennessee. Daus, 2014 WL 2109379, at *3. As
stated by Judge Pitman, “Defendant obtained writs of garnishment from a Tennessee court,
reduced those writs to judgment against a Tennessee resident, and served the writs upon
employers (Dell and Insight Global) that maintain offices in Tennessee” [Doc. 9 p. 4]. In
filing claims against defendant for the continuing garnishment of her wages, plaintiff
essentially asks this Court to interfere with the admittedly valid Tennessee judgment.
5
Plaintiff contends that the Good Faith and Credit Clause is not applicable because
defendant never filed or abstracted its Tennessee judgment in Texas [Doc. 27 pp. 11–13].
Although defendant could have chosen to enroll the judgment in Texas under the Uniform
Enforcement of Foreign Judgments Act (“UEFJA”), it instead served wage attachments upon
plaintiff’s employers in Tennessee, in accordance with Tennessee law, which is an acceptable
alternative method of wage garnishment. See Mensah v. MCT Fed. Credit Union, 446 Md. 525,
531 (2016) (“An alternative garnishment method [to the UEFJA] that MCT sought to utilize
involved the satisfaction of the money judgment through wage attachment served on the
employer’s . . . Maryland resident agent.”). The fact that plaintiff thereafter lived in Texas does
not undermine the Tennessee judgment’s validity or finality.
6
This point, among others, differentiates the current case from Collins v. Erin Capital
Mgmt., LLC, 991 F. Supp. 2d 1195 (S.D. Fla. 2013), as cited by plaintiff in her response to
defendant’s motion to dismiss [Doc. 27 ¶ 3]. In Collins, the defendant allegedly failed to register
as a debt collector and obtain the relevant Florida license before initiating garnishment actions
against the plaintiffs. 991 F. Supp. 2d at 1204. In contrast, here, defendant obtained writs of
garnishment from a Tennessee state court, reduced the writs to a judgment, and served them
upon plaintiff’s employers in Tennessee [Doc. 9 p. 4]. Defendant has not filed a wage
garnishment action in Texas state court.
9
This Court finds that it must give full faith and credit to the Tennessee state court
judgment and that it should not interfere with “the extension and enforcement of the trial
court’s judgment,” Pitts, 545 S.W.2d at 37, for “no action has been requested to enforce the
valid judgment.” Knighton, 856 S.W.2d at 207. This outcome is appropriate even though
the Tennessee state court ordered the garnishment of plaintiff’s wages. Id.
Plaintiff’s claims under the FDCPA and the TDCA are strictly based upon
defendant’s alleged failure to follow Texas debt collection procedures and its continuing
garnishment of plaintiff’s wages while she resides in Texas [Doc. 1]. As discussed herein,
defendant has not failed to comply with the FDCPA and TDCA under the facts presented.
Even while construing the complaint in the light most favorable to plaintiff and accepting her
factual allegations as true, Directv, 487 F.3d at 476, the Court finds that plaintiff has failed to
plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S.
at 570. Consequently, plaintiff has failed to state a claim upon which relief can be granted,
and this Court finds that her complaint must be dismissed pursuant to Rule 12(b)(6).
IV.
Conclusion
For the reasons stated herein, the Court will GRANT defendant’s Amended Motion
to Dismiss [Doc. 22]. Accordingly, the Clerk will be DIRECTED to CLOSE this case.
ORDER ACCORDINGLY.
s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE
10
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?