Lusky v. SEB Legal

Filing 15

MEMORANDUM DECISION AND ORDER- denying 5 Motion to Dismiss for Failure to State a Claim. Pretrial Conference set for 1/13/2016 at 10:30 AM in Rm 7.400 before Magistrate Judge Brooke C. Wells. Signed by Magistrate Judge Brooke C. Wells on 12/2/2015. (las)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, NORTHERN DIVISION
SAMANTHA LUSKY,

v.

MEMORANDUM DECISION AND
ORDER DENYING MOTION TO
DISMISS AND SETTING IPT
CONFERENCE

SEB LEGAL, LLC,

Case No. 1:15-cv-55-BCW

Plaintiff,

Defendant.
Magistrate Judge Brooke Wells
All parties have consented to having United States Magistrate Judge Brooke C. Wells
conduct all proceedings in this case, including entry of final judgment, with appeal to the United
States Court of Appeals for the Tenth Circuit.1 Before the court is Defendant SEB Legal, LLC’s
(“Defendant”) motion to dismiss.2 The court has carefully reviewed the written memoranda
submitted by the parties in relation to this motion. Pursuant to civil rule 7-1(f) of United States
District Court for the District of Utah’s Rule of Practice, the court concludes that oral argument
is not necessary and will determine the motion on the basis of the written memoranda. For the
reasons set forth more fully below, the Court DENIES Defendants’ Motion to Dismiss.
BACKGROUND
On or about October 2014, Defendant was retained by landlord Mary Kosmas to attempt
to collect on a default judgment that was entered by the Third District Court, State of Utah in
Kosmas v. Jones, case no. 130907119, in favor of Ms. Kosmas against Plaintiff and other
individuals for debts owed for rent on 4636 South Stratton Drive, Holladay, UT 84117.3

1

See docket no. 10; 28 U.S.C. § 636(c); F.R.C.P. 73.
Docket no. 5.
3
The Court notes that the Complaint nor Defendant’s Motion sets forth which court entered the default judgment.
However, the Court assumed it was Utah State Court and obtained verification of the same. Therefore, the Court will
take judicial notice of Utah State case and has attached the Court’s docket as Exhibit 1 to the decision for reference.
2

The default judgment was entered on January 17, 2014. On October 17, 2014, counsel
entered its appearance in Utah State Court and filed a Notice of Judgment that same day. Also
on October 17, 2014, Defendant sent Plaintiff a letter which stated that Plaintiff owed $4,839.25
and that “this amount will increase each and every month until paid in full.”4 In addition, the
letter contained the following:
Please review your records on this matter and forward to this office the above
amount to close this matter. Unless you notify this office within thirty (30) days
after receiving this notice that you dispute the validity of the debt or any portion
thereof, this office will assume the debt is valid. If you notify this office in
writing within thirty (30) days from receiving this notice, this office will: obtain
verification of the debt or obtain a copy of a judgment and mail you a copy of
such judgment or verification. If you request this office in writing within thirty
(30) days after receiving this notice, this office will provide you with the name
and address of the original creditor, if different from the current creditor.5
On October 27, 2014, ten days after sending the written notice to Plaintiff, Defendant
filed an Application for Writ of Garnishment against Plaintiff. The Court granted the
Application on October 28, 2014. Plaintiff then filed a Motion to Set Aside Default Judgment
and Request for Hearing. The matter was fully briefed and ultimately denied by the Court.
Plaintiff now brings this lawsuit alleging violations of the Fair Debt Collections Practices
Act, 15 U.S.C. §1692, et seq. (“FDCPA”). Specifically Plaintiff’s Complaint alleges “[w]ithin
the last year, Defendant took multiple actions in an attempt to collect a debt from Plaintiff.
Defendant’s conduct violated the FDCPA in multiple ways, including the following:
Overshadowing the disclosures required by 15 U.S.C. §1692(g) during the thirty-day dispute
period, including filing a garnishment against Plaintiff within the thirty-day period and failing to

4
5

Exh. no. 1, docket no. 5.
Id.

2

explain to Plaintiff what effect, if any, the garnishment would have on her rights to dispute…”6
In response to Plaintiff’s lawsuit, Defendant has filed the instant Motion to Dismiss.7
STANDARD OF REVIEW
In considering a motion to dismiss under Rule 12(b)(6), all well-pleaded factual
allegations, as distinguished from conclusory allegations, are accepted as true and viewed in the
light most favorable to the non-moving party.8 Plaintiff must provide “enough facts to state a
claim to relief that is plausible on its face.”9 In essence, a plaintiff must offer sufficient factual
allegations to “raise a right to relief above the speculative level.”10 However, the court “need not

accept conclusory allegations without supporting factual averments.”11 Thus, “[t]he court’s
function on a Rule 12(b)(6) motion is not to weigh potential evidence that the party might
present at trial, but assess whether the plaintiff’s complaint alone is legally sufficient to state a
claim for which relief may be granted.”12 “Therefore, in assessing a motion to dismiss, a court
should disregard conclusory statements of law, even if they are couched as facts, and then consider
whether the remaining specific factual allegations, if presumed to be true, plausibly provide a claim
that the defendant is liable.”13 “Thus, the mere metaphysical possibility that some plaintiff could
prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the
court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for
these claims.”14

6

Complaint, docket no. 2 at ¶ 8-9.
Docket no. 5.
8
Ruiz v. McDonnell, 299 F.3d 1173, 1181 (10th Cir. 2002).
9
Bell Atlantic Corp. v. Twombly 550 U.S. 544, 547 (2007).
10
Id., at 555.
11
Southern Disposal, Inc., v. Texas Waste, 161 F.3d 1259, 1262 (10th Cir. 1998).
12
Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).
13
Wilkerson v. Utah, Gateway, No. 2:13-cv-666-DN-BCW, 2013 WL 6185040 at *2 (D. Utah November 26,
2013)(unpublished).
14
Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)(italics in original).
7

3

ANALYSIS15
Defendant moves for dismissal of Plaintiff’s claims under Rule 12(b)(6) of the Federal
Rules of Civil Procedure. Defendant argues that Plaintiff has failed to state a claim against upon
which relief can be granted because defendant’s written notice and subsequent filing of an
application for writ of garnishment did not overshadow the written notice requirements of the
FDCPA.
The statute at issue is 15 U.S.C. §1692g, validation of debts:
(a) Notice of debt; contents
Within five days after the initial communication with a consumer in
connection with the collection of any debt, a debt collector shall, unless the
following information is contained in the initial communication or the
consumer has paid the debt, send the consumer a written notice containing—
(1) The amount of debt;
(2) The name of the creditor to whom the debt is owed;
(3) A statement that unless the consumer, within thirty days after receipt of
the notice, disputes the validity of the debt, or any portion thereof, the debt
will be assumed to be valid by the debt collector;
(4) A statement that if the consumer notifies the debt collector in writing
within the thirty-day period that the debt, or any portion thereof, is
disputed, the debt collector will obtain verification of the debt or a copy of
a judgment against the consumer and a copy of such verification or
judgment will be mailed to the consumer by the debt collector; and
(5) A statement that, upon the consumer’s written request within the thirtyday period, the debt collector will provide the consumer with name and
address of the original creditor, if different from the current creditor.

15

There was some commentary in the briefs as to whether Defendant by including information not contained in the
Complaint converted this Motion to Dismiss into a Motion for Summary Judgment . However, Plaintiff seems to
agree that this motion is properly considered as a Motion to Dismiss. See docket no. 11 (“Plaintiff agrees with the
procedural law cited by Defendant in its Motion.”). Upon review, the Court finds that any facts that have been
asserted that are outside of the Complaint are facts are public record or otherwise proper for the Court to take
judicial notice of. Therefore, the Court does not consider Defendant’s motion a motion for summary judgment but
rather a motion to dismiss as currently plead. See MOORE’S FEDERAL PRACTICE, §12.34[2] (“In deciding
whether to dismiss, the court may consider only the facts alleged in the pleadings, documents attached as exhibits or
incorporated by reference in the pleadings, and matters of which the judge may take judicial notice.”); Tal v. Hogan,
453 F.3d 1244, 1265, n. 24 (10th Cir. 2006)(On a motion to dismiss the court may “take judicial notice of its own
files and records, as well as facts which are a matter of public record.”).

4

15 U.S.C § 1692g(b) states, in relevant part, “[a]ny collection activities and
communications during the 30 day period may not overshadow or be inconsistent with the
disclosure of the consumer’s right to dispute the debt or request the name and address of the
original creditor.”
Defendant argues that based on case law the filing of the application for writ of
garnishment 10 days after the collection letter was sent did not improperly overshadow with the
consumer’s right to dispute the debt. As support, Defendant cites several cases. However, upon
review of those cases, the Court agrees with Plaintiff that all but one of the cases Defendants
cites present different factual situations that the instant case. Specifically, as support for its
arguments, Defendant relies heavily on Ferree v. Marianos, an unpublished opinion by the 10th
Circuit Court of Appeals. 16
In Ferree, the Court held that 15 U.S.C. § 1692(g) was not violated where validation
notice was provided as an attachment to the pleadings in a foreclosure action.17 In so holding, the
10th Circuit set forth the objective standard for review in FDCPA cases. The 10th Circuit stated
claims under the FDCPA are to be “measured by how the ‘least sophisticated consumer’ would
interpret the notice received from the debt collector.” And “the test is how the least sophisticated
consumer-one not having the astuteness of a ‘Philadelphia lawyer’ or even the sophistication of
the average, everyday, common consumer-understands the notice he or she receives.”18 In
upholding the lower court’s dismissal, the Court in Ferree, noted that plaintiff conceded that the
“thirty-day period to dispute the debt, explained in the notice, and the twenty-day period to
respond to the summons and petition set out in the summons ‘are not mutually exclusive.’” The
Court held “[t]he information contained in the notice was not obscured or contradicted simply
16

NO. 97-6061, 129 F.3d 130 (10th Cir. 1997)(unpublished).
No.
18
Id. at *1.
17

5

because it was provided as an attachment to the foreclosure proceedings. Even the least
sophisticated consumer receiving the two communications in the same envelope… ‘would
sufficiently examine the entire contents of the envelope, and uncover the enclosed validation
notice.’”19 Therefore, according to Defendant, “[i]f the Ferree court could not find
overshadowing when the two documents were sent in the same envelope then it is clear that
defendant’s actions (sending the documents ten (10) days apart) would not constitute
overshadowing under the FDCPA.”20
In contrast, Plaintiff cites a case from the Second Circuit Court of Appeals that Plaintiff
argues is more closely aligned with the current posture of case law under the FDCPA and the
facts of the instant case. In Ellis v. Soloman and Soloman, P.C.,21 the Court applied the “least
sophisticated consumer test” and found “the validation notice is overshadowed where a debt
collector serves a consumer with process initiating a lawsuit during the validation period, without
clarifying that commencement of the lawsuit has no effect on the information conveyed in the
validation notice.”22 The Court further noted, “[d]efendants did not have to serve Ellis during
the validation period; they could have waited until the validation period expired. It is difficult to
discern what tactical advantage was gained by commencing a lawsuit when the validation period
had only two weeks to run, especially since the return date on the summons was not until…a full
month after the validation period expired. Of course, debt collectors may continue collection
activities, including commencing litigation, during the validation period, but in doing so the debt
collector must not transgress §1692g(b)’s proscription of collections activities that ‘overshadow

19

Id. at *2.
Reply, docket no. 12 at p. 3.
21
591 F.3d 130 (2nd Cir. 2010)
22
Id. at 136.
20

6

or…[are] inconsistent with ‘the validation notice.’”23 Further, the Court reasoned “[c]larifying
that commencement of a lawsuit does not trump the validation notice will come at little or no
cost to debt collectors and will ensure that the consumer rights secured under the FDCPA are not
overshadowed or contradicted.”24
Here, upon review of the case law presented by the parties as well as the procedural
posture of the case, the Court is persuaded by the reasoning of the Ellis Court. Although the case
is not binding precedent, it seems that the facts of the Ellis case are more in line with the instant
case. Relying on the “least sophisticated consumer test” the Court is persuaded that like the
Ellis court, the filing of the writ of garnishment overshadowed the requirements of the FDCPA.
Based on the information contained in the collection letter, it is plausible that the “least
sophisticated” consumer would not have expected a writ of garnishment to be filed within the 30
day validation period. Rather, based on the language of the collection letter, the Court finds
Plaintiff has stated an adequate claim for relief that the least sophisticated consumer would have
believed that no collection activity would take place during the 30 day period described in the
letter. Basically, the language gives the impression that Plaintiff had 30 days to act or face
consequences. Thus, the writ of garnishment seems to be inconsistent and overshadow the
collection letter. Further, unlike the Ferree Court, where there were dual notices of sorts
contained in the same envelope, the notice in this case did not provide Plaintiff with sufficient
disclosure or anything to compare to indicate that other collection activity, including the filing of
a Writ of Garnishment could take place during the validation period.

23
24

Id. at 136-137.
Id. at 137.

7

Therefore, upon review of the Complaint in this case, the Court finds the plaintiff’s
complaint is legally sufficient to state a claim for which relief may be granted pursuant to Rule
12(b)(6). The motion to dismiss is denied.
CONCLUSION & ORDER
For the foregoing reasons, the Court finds that the filing of the Writ of Garnishment
within the validation period overshadowed the disclosure of the consumer’s right to dispute the
debt contained in the letter sent to Plaintiff. Thus, the Writ of Garnishment was filed in violation
of the FDCPA. Therefore, Defendant’s motion to dismiss is DENIED. Accordingly, an initial
pretrial conference will be held for scheduling purposes on January 13, 2015 at 10:30 AM.
IT IS SO ORDERED.
DATED this 2 December 2015.

Brooke C. Wells
United States Magistrate Judge

8

EXHIBIT 1

9

3RD DISTRICT COURT - SALT LAKE
SALT LAKE COUNTY, STATE OF UTAH
MARY KOSMAS vs. DAN JONES
CASE NUMBER 130907119 Eviction
________________________________________________________________________________
CURRENT ASSIGNED JUDGE
PAIGE PETERSEN
PARTIES
Plaintiff Represented
Represented
Defendant Defendant Defendant Defendant -

MARY KOSMAS
by: SAMUEL E BELL
by: MIKAH E HAMMOND
DAN JONES
SAMMIE LUSKY
MATT JONES
EMILY CHRISTENSEN

ACCOUNT SUMMARY
TOTAL REVENUE

Amount Due:
150.00
Amount Paid:
150.00
Credit:
0.00
Balance:
0.00
REVENUE DETAIL - TYPE: COMPLAINT 0K-2K
Amount Due:
75.00
Amount Paid:
75.00
Amount Credit:
0.00
Balance:
0.00
REVENUE DETAIL - TYPE: ONLINE ASSISTANCE
Amount Due:
20.00
Amount Paid:
20.00
Amount Credit:
0.00
Balance:
0.00
REVENUE DETAIL - TYPE: CERTIFIED COPIES
Amount Due:
1.00
Amount Paid:
1.00
Amount Credit:
0.00
Balance:
0.00
REVENUE DETAIL - TYPE: CERTIFICATION
Amount Due:
4.00
Printed: 12/01/15 12:02:54
Page 1

Page 1 of 6

CASE NUMBER 130907119 Eviction
________________________________________________________________________________
Amount Paid:
4.00
Amount Credit:
0.00
Balance:
0.00
REVENUE DETAIL - TYPE: GARNISHMENT
Amount Due:
50.00
Amount Paid:
50.00
Amount Credit:
0.00
Balance:
0.00
CASE NOTE
PROCEEDINGS
10-18-13 Case filed
10-18-13 Judge TODD M SHAUGHNESSY assigned.
10-18-13 Filed: Complaint 0-2K - Amt in Cont $1685.00
10-18-13 Fee Account created
Total Due:
75.00
10-18-13 Fee Account created
Total Due:
20.00
10-18-13 COMPLAINT 0K-2K
Payment Received:
75.00
Note: Code Description: COMPLAINT 0K-2K, ONLINE ASSISTANCE
10-18-13 ONLINE ASSISTANCE
Payment Received:
20.00
10-18-13 Issued: Summons
Judge ROBERT FAUST
10-18-13 Note: ** SUMMONS ** Eviction Pick Up Basket
11-08-13 Filed return: Return Summons
Party Served: JONES, DAN
Service Type: Personal
Service Date: October 29, 2013
11-08-13 Filed return: Return Summons
Party Served: JONES, MATT
Service Type: Personal
Service Date: October 29, 2013
11-08-13 Filed return: Return Summons
Party Served: CHRISTENSEN, EMILY
Service Type: Personal
Service Date: October 29, 2013
11-08-13 Filed return: Return Summons
Party Served: LUSKY, SAMMIE
Service Type: Personal
Service Date: October 29, 2013
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CASE NUMBER 130907119 Eviction
________________________________________________________________________________
11-08-13 Filed: DMDC Certificate for Dan Jones
11-08-13 Filed: DMDC Certificate for Sammie Lusky
11-08-13 Filed: DMDC Certificate for Matt Jones
11-08-13 Filed: DMDC Certificate for Emily Christensen
11-08-13 Filed: **PROPOSED** Military Service Order (Emily Christensen)
11-08-13 Filed: **PROPOSED** Military Service Order (Sammie Lusky)
11-08-13 Filed: **PROPOSED** Military Service Order (Matt Jones)
11-08-13 Filed: **PROPOSED** Military Service Order (Dan Jones)
11-08-13 Filed: Plaintiff's Request For Nonpayment of Rent Hearing
11-12-13 Note: **Informed the plaintiff by phone that a military service
affidavit is required for each defendant, and an
immediate occupancy hearing will not be held because
defendants have not answered the complaint.**
11-18-13 Filed: Ex Parte Motion For Restitution
Filed by: KOSMAS, MARY
11-18-13 Filed: PROPOSED Default Certificate
11-18-13 Filed: PROPOSED Order of Restitution
11-19-13 Notice - NOTICE for Case 130907119 ID 15594083
We are unable to enter the default judgment/certificate in this
case for the following reasons:
Notes: A military service affidavit has not been filed.

Date: ____________________

______________________________
District Court Clerk

11-19-13 Notice - NOTICE for Case 130907119 ID 15594085
We are unable to enter the default judgment/certificate in this
case for the following reasons:
Notes: A military service affidavit has not been filed.

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CASE NUMBER 130907119 Eviction
________________________________________________________________________________
Date: ____________________
______________________________
District Court Clerk
11-19-13
11-26-13
11-26-13
11-26-13
11-26-13
01-02-14
01-02-14
01-02-14
01-06-14

01-06-14

01-06-14

01-06-14

01-17-14
01-17-14

01-17-14
Printed:

Filed: Default Rejection Notice
Filed: Military Ser Aff/Declaration (Emily Christensen)
Filed: Military Ser Aff/Declaration (Sammie Lusky)
Filed: Military Ser Aff/Declaration (Matt Jones)
Filed: Military Ser Aff/Declaration (Dan Jones)
Filed: Plaintiff's Affidavit of Damages
Filed: ** PROPOSED ** Judgment (blank)
Filed: Default Certificate
Filed order: Military Service Order (Emily Christensen)
Judge TODD M SHAUGHNESSY
Signed January 03, 2014
Filed order: Military Service Order (Sammie Lusky)
Judge TODD M SHAUGHNESSY
Signed January 03, 2014
Filed order: Military Service Order (Matt Jones)
Judge TODD M SHAUGHNESSY
Signed January 03, 2014
Filed order: Military Service Order (Dan Jones)
Judge TODD M SHAUGHNESSY
Signed January 03, 2014
Issued: Order of Restitution
Judge TODD M SHAUGHNESSY
Judgment #1 Entered $ 4729.00
Debtor:
DAN JONES
Debtor:
EMILY CHRISTENSEN
Creditor: MARY KOSMAS
Debtor:
MATT JONES
Debtor:
SAMMIE LUSKY
255.00 Late Fees
1,600.00 Rent
2,100.00 Treble damages
500.00 Damages
274.00 Costs
4,729.00 Judgment Grand Total
Filed judgment: Default Judgment
12/01/15 12:02:54
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Page 4 of 6

CASE NUMBER 130907119 Eviction
________________________________________________________________________________
Judge TODD M SHAUGHNESSY
Signed January 17, 2014
01-17-14 Case Disposition is Judgment
Disposition Judge is TODD M SHAUGHNESSY
01-17-14 Note: Order of Restitution signed and delivered to front
counter
01-21-14 Note: ** ORDER OF REST ** Eviction Pick Up Basket
02-07-14 Fee Account created
Total Due:
1.00
02-07-14 Fee Account created
Total Due:
4.00
02-07-14 CERTIFIED COPIES
Payment Received:
1.00
02-07-14 CERTIFICATION
Payment Received:
4.00
10-17-14 Filed: Appearance of Counsel/Notice of Limited Appearance
10-17-14 Filed: Notice of Default Judgment
10-17-14 Filed: Return of Electronic Notification
10-27-14 Filed: Application for Writ of Garnishment
10-27-14 Filed: Writ of Continuing Garnishment (Proposed) Sammie Lusky
10-28-14 Issued: Writ of Continuing Garnishment Sammie Lusky
Clerk malinat
10-28-14 Fee Account created
Total Due:
50.00
10-28-14 GARNISHMENT
Payment Received:
50.00
10-28-14 Filed: Return of Electronic Notification
11-06-14 Filed: Motion to Set Aside Judgment and Request for Hearing
Filed by: LUSKY, SAMMIE
11-06-14 Filed: Defendant's Affidavit in Support of Motion
11-06-14 Filed: Correspondence from defendants
11-06-14 Filed: ** PROPOSED ** Order Setting Aside Judgment
11-06-14 Filed: Request to Submit for Decision
11-06-14 Note: Request to Submit filed prematurely.
11-10-14 Filed return: Return of Service - Garnishment, TJX Companies
Party Served: DANI SNOW, AUTHORIZED PARTY
Service Type: Personal
Service Date: November 07, 2014
11-10-14 Filed: Return of Electronic Notification
11-25-14 Filed: Memorandum in Opposition to Motion to Set Aside Judgment
11-25-14 Filed: Return of Electronic Notification
12-03-14 Filed order: Order Denying Motion to Set Aside Judgment
Judge TODD M SHAUGHNESSY
Signed December 03, 2014
05-22-15 Judge PAIGE PETERSEN assigned.
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CASE NUMBER 130907119 Eviction
________________________________________________________________________________
06-19-15 Filed: Motion
Filed by: KOSMAS, MARY
06-19-15 Filed: Memorandum
06-19-15 Filed: Return of Electronic Notification
07-27-15 Filed: Request/Notice to Submit
07-27-15 Filed: Order (Proposed) To Disclose Employment
07-27-15 Filed: Return of Electronic Notification
07-29-15 Filed: Notice of Address Change
07-29-15 Filed: Return of Electronic Notification
08-03-15 Filed order: Order To Disclose Employment
Judge PAIGE PETERSEN
Signed August 03, 2015
08-03-15 Filed: Return of Electronic Notification

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