Davis v. Schwab et al

Filing 24

Memorandum Opinion and Order granting 9 Motion to Dismiss. The court further ORDERS that all pending motions in this action be, and are hereby, denied as moot. (Ordered by Judge John McBryde on 2/26/2013) (dnw)

.s~:DJs~';:rj~i-c'r C~(-~) tJ~=tT

NORnmF2,r Dt3TJ;ICT OF TEXAS
~··-'-············-············-l
!

I

i

I

FEB 26 2013
IN THE UNITED STATES DISTRICT COpRT
L
~ ..~ ...
J
NORTHERN DISTRICT OF TEXAS
CLERK, U.S. DISTRiCT COURT
FORT WORTH DIVISION
By

_

Deputy

----_....:.--...:.-_...

MAYFORD K. DAVIS,

_--

§
§

Plaintiff,

§
§

VS.

§

JOHN SCHWAB, ET AL.,

NO. 4:12-CV-740-A

§
§
§

Defendants.

§

MEMORANDUM OPINION
and
ORDER
Now before the court for consideration is the motion of
defendants, John Schwab (nSchwab n ), NCO Financial Systems, Inc.
(nNcon), and Inovision-Medclr Portfolio Group, LLC (nInovision n ),
to dismiss the complaint of plaintiff, Mayford K. Davis.

The

motion seeks dismissal of claims against Schwab for (1) improper
service on Schwab, and (2) lack of personal jurisdiction over
Schwab.

The motion also seeks dismissal of all claims alleged by

plaintiff against all defendants for failure to state a claim,
pursuant to Rule 12(b) (6) of the Federal Rules of Civil
Procedure.

Having considered the complaint, the motion and

supporting brief, plaintiff's response, and defendants' reply,
the court concludes that the motion to dismiss under Rule
12(b) (6) for failure to state a claim should be granted, and the
complaint should be dismissed with prejudice.

1.

Background
Plaintiff initiated this action by filing a complaint in
this court against defendants, alleging that defendants violated
the Fair Credit Reporting Act ("FCRA"), 15 U.S.C.

§

1681, and the

Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C.

§

1692,

by obtaining plaintiff's credit report without a permissible
purpose and without plaintiff's consent or knowledge.
Plaintiff makes the following factual allegations:
On or about May 17, 2011, plaintiff obtained his consumer
credit report from Equifax, TransUnion, and Experian, three
credit reporting agencies.

Plaintiff discovered an entry on the

Experian report "connected to" defendants that plaintiff did not
know about and had not authorized.

After examining the credit

reports, plaintiff discovered that defendants had obtained his
credit report in April 2009.

On or about July 24, 2012,

plaintiff mailed a certified letter to defendants regarding his
intent to file a lawsuit against them.

On or about August 7,

2012, plaintiff received a letter from Dawn M. Rhodenbaugh
("Rhodenbaugh"), a consumer affairs representative, on behalf of
defendant Schwab, stating that lithe above referenced account is
closed in our office.

II

Compl. at 5,

2

~

23.

On or about August 8,

2012, plaintiff mailed another certified letter "regarding Notice
of Impending Lawsuit."

Id. at , 24.
II.
Grounds of the Motion

Defendants contend that the complaint should be dismissed
because, even liberally construed, the complaint fails to allege
facts that can support a claim under FDCPA or FCRA, and because
plaintiff's allegations actually support permissible conduct
under FCRA.
III.
Analysis
A.

Standard of Review
Rule 8(a) (2) of the Federal Rules of civil Procedure

provides, in a general way, the applicable standard of pleading.
It requires that a complaint contain "a short and plain statement
of the claim showing that the pleader is entitled to relief,"
Fed. R. civ. P. 8(a) (2),

"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)
quotation marks and ellipsis omitted).

(internal

Although a complaint need

not contain detailed factual allegations, the "showing"
contemplated by Rule 8 requires the plaintiff to do more than
simply allege legal conclusions or recite the elements of a cause
of action.

See Twombly, 550 U.S. at 555 & n.3.

3

Thus, while a

court must accept all of the factual allegations in the complaint
as true, it need not credit bare legal conclusions that are
unsupported by any factual underpinnings.
556 U.S. 662, 679 (2009)

See Ashcroft v. Iqbal,

("While legal conclusions can provide

the framework of a complaint, they must be supported by factual
allegations.")
Moreover, to survive a motion to dismiss for failure to
state a claim, the facts pleaded must allow the court to infer
that the plaintiff's right to relief is plausible.
U.S. at 679.

Iqbal, 556

To allege a plausible right to relief, the facts

pleaded must suggest liability; allegations that are merely
consistent with unlawful conduct are insufficient.
U.S. at 566-69.

Twombly, 550

"Determining whether a complaint states a
[is] a context-specific task

plausible claim for relief .

that requires the reviewing court to draw on its judicial
experience and common sense."
B.

Iqbal, 556 U.S. at 679.

Applying the Standards to the Amended Complaint
Proceeding on the basis of the information before the court

in plaintiff's complaint, the court finds that plaintiff's
allegations for his FDCPA and FCRA claims fall short of the
pleading standards and fail to state a claim upon which relief
may be granted.

4

1.

FDCPA Claims

Plaintiff alleges that defendants violated section 1692e(2)
and 1692e(10) of FDCPA by obtaining plaintiff's consumer credit
report "under false and misleading representations," using
"deceptive means in an attempt to collect an alleged debt,"
utilizing "Unfair Practices in the attempt to collect an alleged
debt," and failing "to adequately validate the alleged debt."
Compl. at 5.

The purposes of FDCPA are "to eliminate abusive

debt collection practices by debt collectors, to insure that
those debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged, and to
promote consistent state action to protect consumers against debt
collection abuses."

15 U.S.C.

§

1692{e).

section 1692e

provides:
A debt collector may not use any false, deceptive, or
misleading representation or means in connection with the
collection of any debt.
without limiting the general
application of the foregoing, the following conduct is a
violation of this section:

***
(2) The false representation of-(A) the character, amount, or legal status of
any debt; or
(B) any services rendered or compensation
which may be lawfully received by any debt
collector for the collection of a debt.

***

5

(10) The use of any false representation or
deceptive means to collect or attempt to collect
any debt or to obtain information concerning a
consumer.
Plaintiff alleges nothing in his complaint that could support a
theory that defendants made false or misleading representations
to him in connection with collecting a debt.
few,

Plaintiff alleges

if any, facts that defendants made any representations to

him regarding a debt that could be considered false, misleading,
or deceptive.

The only communication mentioned by plaintiff with

regards to his FDCPA claim is that he received the letter from
Rhodenbaugh in response to a letter that he sent to defendants
Rhodenbaugh's letter made no representations to plaintiff other
than the statement that "the above-reference account is closed"
There is no mention in the complaint of any other activity on the
part of defendants related to plaintiff and the FDCPA claim.
Plaintiff does little more than recite the elements of the cause
of action he alleges, and his FDCPA claim must be dismissed.
2.

FCRA Claims

Plaintiff alleges that defendants obtained his consumer
credit report without a permissible purpose, in violation of 15
u.s.C.

§§

1681b, 1681n, and 16810.

Under the FCRA, a debt

collector or collection agency may access a consumer's credit
report for a permissible purpose.

15 U.S.C.

§

1681b.

Defendants argue that (I) plaintiff fails to allege why
defendants lacked a permissible purpose to access his consumer
6

credit report, and (2) that the facts alleged show that
defendants had a permissible purpose to access plaintiff's
consumer credit report.

Plaintiff alleges that defendants lacked

a permissible purpose for obtaining his consumer credit report
because" [t]here does not exist an account with the Defendant
that provides them a right to collect" any debt.
34.

Compl. at 6, ~

However, plaintiff also alleges within his cause of action

that defendants' counsel had responded to a letter written by
plaintiff and explained that defendants had a permissible purpose
for obtaining the consumer credit report because defendants were
reviewing an alleged medical debt owed by plaintiff.
39.

Id. at 7, ~

A debt collector or collection agency has a permissible

purpose in obtaining a consumer credit report if it "intends to
use the information in connection with a credit transaction
involving the consumer on whom the information is to be furnished
and involving the . . . review or collection of an account of,
the consumer."

15 U.S.C.

§

1681b(a) (3) (A).

See Norman v.

Northland Group, Inc., No. 12-10057, 2012 WL 5195965, at *1 (5th
Cir. Oct. 22, 2012).

Plaintiff alleges no other facts regarding

whether defendants had a permissible purpose for accessing his
credit report.

Thus, between plaintiff's failure to allege

adequate facts and plaintiff's own allegations that defendants
were reviewing his account in regards to a debt, plaintiff has

7

not stated a claim under FeRA, and his complaint should be
dismissed.
IV.
Order
Therefore,
The court ORDERS that defendants' motion to dismiss be, and
is hereby, granted in all respects.
The court further ORDERS that all pending motions in this
action be, and are hereby, denied as moot.
SIGNED February 26, 2013.

Judge

8