Opinion
Case No. 1:04CV00159.
February 28, 2005
ORDER
Defendants Barnes Banking Company and Angelika Bennett have filed a motion to dismiss the federal and state claims brought against them by pro se plaintiff Paul Lietz. For the reasons set forth below, the Court GRANTS defendants' motion.
BACKGROUND
On January 3, 2004, plaintiff requested and received a $1,500 cash advance on his credit card from defendant Barnes Banking Company ("Barnes"). Following the transaction, Barnes discovered that plaintiff was not eligible to receive cash advances on his credit card and therefore demanded that plaintiff return to the bank and pay the $1,500. Plaintiff asserts that he sent defendants a letter disputing the fact that he owed any money.
On January 29, defendant Angelika Bennett ("Bennett") sent a demand letter to plaintiff. Bennett is an employee of Barnes whose responsibilities include collecting on debts owed to the bank. In her demand letter, Bennett stated that unless plaintiff returned the $1,500, Barnes would report the matter to the Syracuse Police Department as a theft. Plaintiff failed to respond to the letter, and Bennett, acting on behalf of Barnes, contacted the Syracuse Police Department. According to a police report dated February 11, 2004, Bennett asked a police officer whether circumstances surrounding plaintiff's cash advance might constitute fraud. Bennett was informed that there did not appear to be any fraud involved because plaintiff apparently received the cash due to an error by the bank teller.
Barnes ultimately brought a small claims action against plaintiff to recover the cash advance, and on April 1, 2004, judgment was entered against plaintiff in the amount of $1,606. According to Barnes, that judgment remains unsatisfied.
On November 22, 2004, the Court granted plaintiff's request to proceed in forma pauperis. Plaintiff then filed a pro se complaint with the Court, asserting both federal and state law claims against defendants. Plaintiff's federal claims are grounded in the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C.A. §§ 1692a- 1692o (2004). Plaintiff's state law claims allege defamation, slander, and libel. This case is now before the Court for a ruling on defendants' motion to dismiss.
ANALYSIS
Defendants argue that plaintiff's complaint should be dismissed for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). "Dismissal of a pro se complaint for failure to state a claim is proper only where it is obvious that the plaintiff cannot prevail on the facts he has alleged and it would be futile to give him an opportunity to amend." Perkins v. Kan. Dep't of Corr., 165 F.3d 803, 806 (10th Cir. 1999). When reviewing the sufficiency of a complaint, the Court "presumes all of plaintiff's factual allegations are true and construes them in the light most favorable to the plaintiff." Hall v. Bellmon, 935 F.2d 1106, 1109 (10th Cir. 1991). Because plaintiff is proceeding pro se, the Court must also construe his pleadings liberally and hold them to a less stringent standard than formal pleadings drafted by lawyers. Id. at 1110. However, "[t]he broad reading of the plaintiff's complaint does not relieve [him] of the burden of alleging sufficient facts on which a recognized legal claim could be based." Id.
A. Plaintiff's Federal Claims
Plaintiff presents multiple claims based on violations of the FDCPA by both Bennett and Barnes. Specifically, plaintiff alleges that (1) Bennett, acting in her official capacity and as an individual, and Barnes violated section 1692e(7) of the Fair Debt Collection Practices Act ("FDCPA") by using false, deceptive, and misleading practices in connection with the collection of a debt; (2) Bennett, acting in her official capacity and as an individual, and Barnes violated section 1692f of the FDCPA by using unfair or unconscionable methods of collection; (3) Barnes is vicariously liable for Bennett's violation of sections 1692e(7) and 1692f of the FDCPA; (4) defendants violated section 1692(g)(b) of the FDCPA by failing to verify the debt before carrying out collection activities; and (5) defendants committed an abuse of process by failing to verify the debt as required by section 1692(g)(b) of the FDCPA.Defendants argue that plaintiff's federal claims must be dismissed because, as a matter of statutory definition, the provisions of the FDCPA do not apply to defendants. The Court agrees with defendants. The FDCPA was enacted 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.A. § 1692(e). Within the FDCPA, a "creditor" is "any person who offers or extends credit creating a debt or to whom a debt is owed," id. § 1692a(4), and a "debt" is "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment,"id. § 1692a(5).
The term "debt collector" under the FDCPA means "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." Id. § 1692a(6). The term specifically includes creditors who use names other than their own — such as a third party name — to collect on their own debts. Id.; Montgomery v. Huntington Bank, 346 F.3d 693, 698 (6th Cir. 2003). And the term excludes "any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor." 15 U.S.C.A. § 1692a(6)(A).
In interpreting the above provisions, courts have held that the FDCPA applies to third-party collectors of debts, but not to creditors using their own names to collect their own debts.Montgomery, 346 F.3d at 698-99. Legislative history of the FDCPA indicates that
Congress intended to target third-party or independent collectors of delinquent debts because unlike creditors, whose actions are often restrained by their desire to protect their good will, independent collectors will generally have no future contact with the consumer and are therefore likely to place less importance on the consumer's opinion of their debt collection tactics.Alvano v. Am. Bank, No. 89-2340-O, 1989 WL 156815 (D. Kan. Nov 3, 1989); see also Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985) ("The legislative history of section 1692a(6) indicates conclusively that a debt collector does not include the consumer's creditors." (citation and quotation omitted)). Consistent with these holdings, courts have found that banks generally do not constitute "debt collectors" under the FDCPA: "To this, the federal courts are in agreement: A bank that is `a creditor is not a debt collector for the purposes of the FDCPA and creditors are not subject to the FDCPA when collecting their accounts'" Montgomery, 346 F.3d at 699 (quoting Stafford v. Cross Country Bank, 262 F. Supp. 2d 776, 794 (W.D.Ky. 2003) (further citations omitted)); see also Zsamba v. Cmty. Bank, 63 F. Supp. 2d 1294, 1300 (D.Kan. 1999).
Based on the foregoing, defendant Barnes is not a "debt collector" subject to liability under the FDCPA. Barnes, as an original consumer creditor of plaintiff, acted to collect a debt in its own name. Plaintiff has not alleged the involvement of any third-party collector or any other facts to bring Barnes within the FDCPA's purview. Defendant Bennett likewise fails to qualify as a "debt collector" given that the term excludes "any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor." 15 U.S.C.A. § 1692a(6)(A). Plaintiff clearly acknowledged in his complaint that Bennett "is an employee working for Defendant Barnes Bank as a collection agent."
As a matter of law, liability can only attach under the FDCPA to those who meet the statutory definition of a "debt collector." Thus, even if plaintiff's factual allegations are true, the FDCPA does not supply a legal remedy, and all claims grounded in the FDCPA must be dismissed.
B. Plaintiff's State Law Claims
The remaining claims in plaintiff's complaint are grounded in state law. Specifically, plaintiff alleges that defendants committed (1) defamation and/or libel per se by suggesting that plaintiff is a thief; (2) defamation and/or slander per se by suggesting that plaintiff acted fraudulently; and (3) defamation, slander, and/or libel per quod by suggesting that plaintiff is a thief and that plaintiff acted fraudulently. The Court has no independent basis for asserting jurisdiction over these state law claims. These claims are best suited for resolution in a state forum, and, accordingly, they are dismissed without prejudice.See Alvano 1989 WL 156815, at *2 (dismissing plaintiff's FDCPA claims and remanding remaining state law claim for determination in state court); see also 28 U.S.C. § 1367(c)(3) (2004).CONCLUSION
Defendants' motion is GRANTED, and this matter is hereby DISMISSED by the Court.
IT IS SO ORDERED.