United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
CHARLES A. SHAW, District Judge.
This is an action under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. ("FDCPA"), with supplemental state law claims for abuse of process and conversion. The case is before the Court on a motion to dismiss filed by remaining defendant Dennis J. Barton, III ("Barton"), for lack of subject matter jurisdiction under Rule 12(b)(1), Federal Rules of Civil Procedure, and for failure to state a claim upon which relief can be granted under Rule 12(b)(6), Fed.R.Civ.P. Barton asserts that the Rooker-Feldman doctrine deprives the Court of subject matter jurisdiction, and that plaintiff Lois Mueller's ("plaintiff") allegations fail to state a claim under the FDCPA and state law. Plaintiff opposes the motion and it is fully briefed. For the following reasons, the motion to dismiss for lack of subject matter jurisdiction will be denied, and the motion to dismiss for failure to state a claim will be granted in part and denied in part.
The First Amended Complaint ("Complaint") alleges that Barton, an attorney, violated the FDCPA in several different ways in connection with collection of a debt plaintiff owed to St. Anthony's Medical Center ("St. Anthony's") for medical services. In summary, plaintiff alleges that Barton, former defendant Roger Weiss, and former defendant Consumer Adjustment Company, Inc. ("CACi"), acquired her debt from St. Anthony's; that Barton filed suit against her in the Circuit Court of St. Louis County, Missouri (the "state court suit") in St. Anthony's name without disclosing Weiss and/or CACi's status as the real parties in interest, and entered into a consent judgment with plaintiff; and that Weiss or CACi later sold the debt to former defendant Senex Services Corp ("Senex"), which also began collection efforts even though plaintiff was making monthly payments to Barton under the consent judgment.
More specifically, plaintiff alleges that Barton sent her a collection letter in October 2012 which stated that he represented St. Anthony's with respect to collection of $6, 747.43, but the statement was false because St. Anthony's did not hire Barton and at all relevant times Barton was actually representing Weiss and CACi. Plaintiff alleges that the collection letter was on Barton's letterhead and appeared to be signed by him, but that Barton was not personally involved in drafting or signing the letter, and neither he nor another attorney in his office had personally reviewed plaintiff's file. Plaintiff also alleges the letter was deceptive and confusing because it did not inform her that Barton and CACi were actively assessing interest against plaintiff on the debt, did not include any safe harbor language informing plaintiff that as a result of accruing interest the balance would be higher on the date plaintiff received the letter, and failed to accurately state the amount of the debt because as of the date of the letter, the balance Barton was trying to collect was materially higher than the balance identified in the letter.
Plaintiff alleges that the debt was assigned from St. Anthony's to Weiss or CACi before December 10, 2012, and the assignment document specified that CACi and/or Weiss were to file suit in their own name as assignee of the debt. Barton filed a petition in state court against plaintiff on December 10, 2012, naming only St Anthony's as the plaintiff even though St. Anthony's no longer owned the debt. Barton signed the petition as "Attorney for Plaintiff" even though, according to plaintiff, St. Anthony's did not hire Barton and Barton never actually represented St. Anthony's. Barton took a consent judgment against plaintiff in the state court suit in St. Anthony's name on January 14, 2013, and plaintiff alleges the judgment included interest charges not authorized by Missouri law or by the agreement between plaintiff and St. Anthony's.
The consent judgment stated that execution would be stayed if plaintiff paid Barton $50 per month, and plaintiff alleges she has made the monthly payments starting in February 2013. Plaintiff alleges that when she appeared in court and talked with Barton, he told her the $50 payments would pay down the principal of the debt, and did not mention that most of the $50 payment would go toward the interest that was accruing on the debt. Plaintiff alleges that the consent judgment did not indicate interest would accrue on the debt while she was making the $50 payments, and appeared to indicate that interest would only accrue if the judgment were executed upon. Plaintiff further alleges she requested that Barton provide her with receipts for her payments, but he refused to do so in order to (1) hide that he was charging her a high rate of interest on the judgment, and (2) obscure that plaintiff's payments were not going to St. Anthony's, but instead were being kept by CACi and Barton.
Plaintiff also alleges that within a short time of obtaining judgment against her in the state court suit, Barton and/or CACi sold or transferred the debt to defendant Senex, but failed to inform Senex they had taken judgment on the debt and that plaintiff was paying on the judgment as agreed. Plaintiff alleges that in December 2013, long after she entered into and was paying on the consent judgment, Senex called her and sent her a collection letter, demanding that she pay the debt in full.
Plaintiff alleges she learned for the first time in December 2013 that Barton, contrary to his numerous prior representations, never actually represented St. Anthony's with respect to the debt he took steps to collect. Plaintiff also alleges that Barton filed the state court suit for the improper collateral purpose of harassing and intimidating her into paying a debt and/or related charges such as interest that she did not owe. Count I of the Complaint asserts that Barton's debt collection activities involved false representations and unfair practices in violation of several sections of the FDCPA. Counts II and III assert state law claims for abuse of process and conversion, respectively.
A. The Court has Subject Matter Jurisdiction Over the Complaint
Barton first moves to dismiss plaintiff's Complaint for lack of subject matter jurisdiction under Rule 12(b)(1), Fed.R.Civ.P. The purpose of a Rule 12(b)(1) motion is to bring a threshold question of jurisdiction before the Court, as "judicial economy demands that the issue be decided at the outset rather than deferring it until trial." Osborn v. United States , 918 F.2d 724, 729 (8th Cir. 1990). "A district court has the authority to dismiss an action for lack of subject matter jurisdiction on any one of three separate bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Johnson v. United States , 534 F.3d 958, 962 (8th Cir. 2008) (internal quotation marks and citation omitted). "Jurisdictional issues, whether they involve questions of law or of fact, are for the court to decide." Osborn , 918 F.2d at 729. Barton does not challenge the factual allegations of plaintiff's Complaint under his 12(b)(1) motion, but supplements it with the state court suit petition and consent judgment. Thus, the second basis applies here.
Barton argues that the Court lacks jurisdiction over the Complaint in its entirety under the Rooker-Feldman doctrine because the relief she requests would effectively reverse the state court decision or void its ruling. Barton is incorrect. The Supreme Court has stated that Rooker-Feldman "is a narrow doctrine." Lance v. Dennis , 546 U.S. 459, 464 (2006). "It applies only to cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.' Exxon Mobil Corp. v. Saudi Basic Indus. Corp. , 544 U.S. 280, 284 (2005)." Riehm v. Engelking , 538 F.3d 952, 965 (8th Cir. 2008). "The doctrine does not apply to cases that raise independent issues." MSK EyEs Ltd. v. Wells Fargo Bank, Nat'l. Ass'n , 546 F.3d 533, 539 (8th Cir. 2008) ("MSK").
The Rooker-Feldman doctrine does not bar plaintiff's claims premised on Barton's alleged improper activities in filing the state court suit and in collecting under the consent judgment. Although plaintiff complains of injuries caused by the state court suit and judgment, her claims do not seek review and rejection of that judgment. Plaintiff does not challenge the state court's issuance of the consent judgment or seek to have it overturned. The Eighth Circuit has explained the critical distinction between claims that attack the decision of a state court and those that attack an adverse party's actions in obtaining and enforcing that decision:
If a federal plaintiff asserts as a legal wrong an allegedly erroneous decision by a state court, and seeks relief from a state court judgment based on that decision, Rooker-Feldman bars subject matter jurisdiction in federal district court. If, on the other hand, a federal plaintiff asserts as a legal wrong an allegedly illegal act or omission by an adverse party, Rooker-Feldman does not bar jurisdiction.
Riehm , 538 F.3d at 965 (cited case omitted).
Here, plaintiff's claims fall into the second category because they assert allegedly unlawful conduct committed by Barton, that does not require the Court to overturn the state court's judgment. Because the state court's judgment would still be intact even if Barton committed unlawful acts in obtaining and enforcing it, plaintiff's claims do not seek "review and rejection" of the judgment. See Exxon Mobil , 544 U.S. at 284. Also, "[i]t is possible to conclude [the defendant] committed various torts in enforcing the judgment without concluding the judgment itself is invalid." MSK , 546 F.3d at 539. Plaintiff's claims are independent and not barred by Rooker-Feldman because they allege unlawful conduct only in seeking and executing the [state] order.' Riehm , 538 F.3d at 965." MSK , 546 F.3d at 539. Barton's motion to dismiss for lack of subject matter jurisdiction will be denied.
B. Rule 12(b)(6) - Motion to Dismiss for Failure to State a Claim
1. Legal Standard - Rule 12(b)(6)
The purpose of a motion to dismiss for failure to state a claim is to test the legal sufficiency of the complaint. To survive a motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570 (2007)). "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. This obligation requires a plaintiff to plead "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555. A complaint "must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Id. at 562 (quoted case omitted).
On a motion to dismiss, the Court accepts as true all of the factual allegations contained in the complaint, even if it appears that "actual proof of those facts is improbable, " id. at 556, and reviews the complaint to determine whether its allegations show that the pleader is entitled to relief. Twombly , 550 U.S. at 555-56; Fed.R.Civ.P. 8(a)(2). The principle that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions, however. Iqbal , 556 U.S. at 678 (stating "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice"). Although legal conclusions can provide the framework for a complaint, they must be supported by factual allegations. Id . Plausibility is assessed by considering only the materials that are "necessarily embraced by the pleadings and exhibits attached to the complaint[.]" Whitney v. Guys, Inc. , 700 F.3d 1118, 1128 (8th Cir. 2012) (quoted case omitted). "[T]he possible existence of a statute of limitations defense is not ordinarily a ground for Rule 12(b)(6) dismissal unless the complaint itself establishes the defense." Jessie v. Potter , 516 F.3d 709, 713 n.2 (8th Cir. 2008).
2. FDCPA Claims
a) Claims Based on the Initial Collection Letter are Time Barred
Any action brought to enforce a provision of the FDCPA must be filed "within one year from the date on which the violation occurs." 15 U.S.C. § 1692k(d). Plaintiff alleges that defendant's initial collection letter dated October 22, 2012 violated the FDCPA because it was sent by a nonattorney, misstated the amount of the debt owed, and included Barton's misrepresentation that he was St. Anthony's attorney. Complaint at 4-5. Barton moves to dismiss plaintiff's FDCPA claims based on the initial collection letter as time barred because the Complaint was filed over a year later, on December 19, 2013.
Plaintiff responds that her claims arising out of the initial collection letter are not time barred because the statute of limitations should be equitably tolled. In support, plaintiff argues that Mattson v. U.S. West Communications, Inc. , 967 F.2d 259, 262 (8th Cir. 1992), does not preclude equitable tolling and, if it did, this Court should not follow it "in light of the persuasive arguments recognized by the other Circuits on this issue." Pl.'s Resp. at 20.
In Mattson, the Eighth Circuit stated, "We are not at liberty to disregard the jurisdictional limitations Congress has placed upon the federal courts, however appealing it might be to interpret section 1692k(d) in such a way as to permit [plaintiff's] action to proceed." 967 F.2d at 262. Several decisions of this Court as well as other district courts in the Eighth Circuit have read Mattson to hold that the FDCPA's statute of limitations is jurisdictional and cannot be equitably tolled. See Ness v. Gurstel Chargo, P.A., 933 F.Supp.2d 1156, 1165 (D. Minn. 2013); Harris v. Barton, 2014 WL 3701037, at *3 (E.D. Mo. July 25, 2014); McCarty v. Barton, 2014 WL 2958165, at *2 (E.D. Mo. July 1, 2014); Spriggs v. Hosto & Buchan PLLC, 2014 WL 221982, at *3 (E.D. Ark. Jan. 21, 2014). Because Mattson is binding precedent, the Court declines plaintiff's invitation to ignore it.
Equitable tolling only applies to cases where the statute of limitations is not a jurisdictional bar. See Gassler v. Bruton , 255 F.3d 492, 495 (8th Cir. 2001). Because the limitations period of 15 U.S.C. § 1692k(d) is deemed jurisdictional in the Eighth Circuit, the Court does not address plaintiff's equitable tolling argument.
Plaintiff also argues that even absent equitable tolling, her FDCPA claims based on the October 22, 2012 letter concerning interest nondisclosure and Barton's failure to disclose that he did not represent St. Anthony's are not time barred. Plaintiff contends that the limitations period began to run from the state court hearing date of January 14, 2013, as this was Barton's last chance to correct misrepresentations in the letter concerning the accrual of interest on the debt and his status as St. Anthony's attorney. In support of her argument, plaintiff cites cases articulating the general principle that the statute of limitations begins to run on the date of the last opportunity for a debt collector to comply with the FDCPA. Plaintiff does not, however, cite any legal authority to support application of the principle in this case and the Court finds the argument unpersuasive in light of controlling precedent concerning the FDCPA statute of limitations with respect to collection letters. See Mattson , 967 F.2d at 261-62 (holding that the FDCPA limitations period begins to run on the date a challenged collection letter was mailed, and ends one day before the anniversary date of the mailing); Freyermuth v. Credit Bureau Servs., Inc. , 248 F.3d 767, 770 (8th Cir. 2001) (same).
For these reasons, the Complaint itself establishes that plaintiff's claims under the FDCPA based on the initial collection letter of October 22, 2012 are time barred and must be dismissed. This aspect of Barton's motion to dismiss will be granted.
b) Plaintiff's Claim Regarding the Amount of ...