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Wade v. Account Resolution Corp.

United States District Court, E.D. Missouri, Eastern Division

August 19, 2016

THOMAS WADE, Plaintiff,
v.
ACCOUNT RESOLUTION CORPORATION, et al., Defendants.

          MEMORANDUM AND ORDER

          JOHN A. ROSS UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Defendants Dennis J. Barton and the Barton Law Group, LLC’s Motion to Dismiss. (Doc. No. 11) The motion is fully briefed and ready for disposition. For the following reasons, the motion will be denied.

         Background

         Plaintiff Thomas Wade brings this action against Defendants Account Resolution Corporation (“ARC”), [1] Dennis J. Barton, and the Barton Law Group, LLC, for alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”). Plaintiff alleges that on or about September 16, 2014, a default judgment was taken against him in a state collection action brought by ARC to collect a debt on behalf of SLUCare. (Complaint (“Compl.”), Doc. No. 1 at ¶¶ 7, 8) According to the Affidavit of Claim, no interest was accruing on the debt prior to any judgment being taken. (Id. at ¶ 9) When the default judgment was entered, however, Defendants added $190.14 in pre-judgment interest. (Id. at ¶ 10) Plaintiff contends that Defendants had no legal authority to add pre-judgment interest to the default judgment. Defendants argue the Court need not reach the merits of Plaintiff’s claim because it is time-barred.

         Legal standard

         A Rule 12(b)(6) motion challenges the adequacy of a complaint on its face. A limitations defense may properly be raised in a 12(b)(6) motion to dismiss when it “appears from the face of the complaint itself that the limitation period has run.” R.W. Murray Co. v. Shatterproof Glass Corp., 697 F.2d 818, 821 (8th Cir. 1983); see also Jessie v. Potter, 516 F.3d 709, 713 n. 2 (8th Cir. 2008); Varner v. Peterson Farms, 371 F.3d 1011, 1016 (8th Cir. 2004). For the purposes of a 12(b)(6) motion to dismiss, the Court takes all facts alleged in the complaint as true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007); Joyce v. Armstrong Teasdale, LLP, 635 F.3d 364, 365 (8th Cir. 2011).

         Discussion

         Defendants contend that Plaintiff’s complaint is time-barred because it was filed on August 31, 2015, one year and eighteen days after Plaintiff was served on August 13, 2014 with the petition and affidavit in the state court collection action. (Doc. No. 12 at 3-4) Plaintiff responds that the service date is relevant only where the FDCPA claim is based on allegations in the complaint in the state court action. Here, Plaintiff argues his claim is not based on the contents of Defendants’ pleadings, but rather on the entry of default judgment awarding interest on September 16, 2014. (Doc. No. 16 at 2) Defendants reply that any FDCPA violation that arose from Defendants seeking interest accrued when Plaintiff was served with the state court petition, which specifically alleged that interest was due. (Doc. No. 18 at 2)

         An action under the FDCPA must be brought “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). The statute of limitations is triggered in the Eighth Circuit when the debt collector had “its last opportunity to comply with the FDCPA.” Ness v. Gurstel Chargo, P.A., 933 F.Supp.2d 1156, 1165 (D. Minn. 2013) (citing Mattson v. U.S. W. Commc’ns, Inc., 967 F.2d 259, 261 (8th Cir. 1992). In this case, Defendants’ last such opportunity was when they obtained default judgment against Plaintiff on September 16, 2014. See Coble v. Cohen & Slamowitz, LLP, 824 F.Supp.2d 568, 570 (S.D.N.Y. 2011) (holding that the debtors’ FDCPA claims accrued, and the one-year limitations period began to run, when the consumer collection law firm obtained default judgments against them in state-court debt collection actions). This action was filed on August 31, 2015, within the one-year limitations period.

         Further, Plaintiff plausibly alleges that Defendants violated the FDCPA when they added pre-judgment interest to the default judgment when according to the affidavit of claim, no interest was accruing on the debt prior to judgment. See, e.g., Hasbrouck v. Arrow Fin. Servs. LLC, 09 Civ. 748(GLS), 2010 WL 1257885, at *1-3 (N.D.N.Y. Mar. 26, 2010) (FDCPA applies to statements in affidavits submitted by debt collector in default judgment application.); Gargiulo v. Forster & Garbus Esqs., 651 F.Supp.2d 188, 191-92 (S.D.N.Y. 2009) (applying FDCPA to statements in affidavits submitted by defendant law firm in default judgment application); Stolicker v. Muller, Muller, Richmond, Harms, Myers, and Sgroi, P.C., 04 Civ. 733(RHB), 2005 WL 2180481, at *4-5 (W.D. Mich. Sept. 9, 2005) (same). Thus, Defendants’ motion to dismiss will be denied.

         Accordingly, IT IS HEREBY ORDERED that Defendants Dennis J. Barton and the Barton Law Group, LLC’s Motion to Dismiss [11] is DENIED.

         IT IS FURTHER ORDERED that no later than September 9, 2016, counsel shall file with the Clerk of the Court a joint proposed scheduling plan. All dates required to be set forth in the plan shall be within the range set forth below for Track 2: Standard.

         The parties’ joint proposed scheduling ...


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