Opinion
CIVIL ACTION NO. C-08-347.
January 26, 2009
ORDER
On this day came on to be considered Defendants' Irene Alonzo, Cristina Yeverino, and State Finance Company, Ltd.'s motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). For the reasons set forth below, Defendants' motions are DENIED.
I) Jurisdiction
The Court has federal subject matter jurisdiction over this lawsuit pursuant to 28 U.S.C. § 1331, because Plaintiff alleges that Defendants violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA").
II) Facts
Plaintiff Johnnie Stewart alleges in her Complaint that several debt collection agencies and their employees violated the FDCPA and Texas Finance Code § 392.304 in their communications with Stewart over debts allegedly owed by her. Material to this motion, Plaintiff alleges that Economy Finance Co. and two of its employees, Irene Alonzo and Cristina Yeverino, sent a letter dated March 1, 2008 notifying Stewart that she is behind in her payments by $69.20. (D.E. 1, p. 8.) Stewart alleges that she did not contract for the original transactions and does not owe the above-stated amounts. (D.E. 1.) As a result of these communications, Stewart states that she suffered "headaches, nausea, embarrassment, aggravation of her hypertension, and aggravation of the stress she was already suffering from personal injuries to her family." (D.E. 1, p. 10.)
Defendants, in their Answer, note that "Economy Finance Co. is an assumed name under which Defendant State Finance Co[.] does business." To avoid confusion, this Court will refer to Defendant as Economy Finance Co. (D.E. 40, p. 2.)
III) Procedure
On October 27, 2008, Plaintiff filed her original complaint with the Court, bringing claims against nineteen defendants, including Irene Alonzo, Cristina Yeverino, and Economy Finance. (D.E. 1.) At the initial pretrial conference, Plaintiff made an oral motion to dismiss both Alonzo and Yeverino, which the court granted, leaving Economy Finance as one of the remaining defendants.
IV) Discussion a) Rule 12(b)(6) Motions to Dismiss
"To survive a Rule 12(b)(6) motion to dismiss, a complaint `does not need detailed factual allegations,' but must provide the plaintiff's grounds for entitlement to relief — including factual allegations that when assumed to be true `raise a right to relief above the speculative level.'" Cuvillier v. Sullivan, 503 F.3d 397, 401 (5th Cir. 2007.) (citing Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007)). "Conversely, `when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.'" Cuvillier, 503 F.3d at 401 (citingTwombly, 127 S.Ct. at 1966 (internal citations and quotations omitted)). In deciding a motion to dismiss "[w]e must accept all well-pleaded facts alleged in the complaint as true and must construe the allegations in the light that is most favorable to the plaintiff." Cent. Laborers' Pension Fund v. Integrated Elec. Servs., 497 F.3d 546, 550 (5th Cir. 2007) (citing Plotkin v. IP Axess Inc., 407 F.3d 690, 696 (5th Cir. 2005)). "Nevertheless, `[w]e do not accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions.'" Id.
b) Rule 12(c) Judgment on the Pleadings
Pursuant to Federal Rule of Civil Procedure 12(c), a party may move for judgment on the pleadings "[a]fter the pleadings are closed — but early enough not to delay trial." Fed.R.Civ.P. 12(c). In considering a 12(c) motion for judgment on the pleadings, "the Court must base its decision solely on the pleadings. Such a motion may be granted only if the moving party clearly establishes that no issue of material fact remains to be resolved and that it is entitled to judgment as a matter of law. In reviewing a motion for judgment on the pleadings, a district court must view the facts presented in the light most favorable to, and draw all reasonable inferences in favor of, the nonmoving party." Brittan Comm'ns Intern. Corp. v. Southwestern Bell Telephone Co., 177 F.Supp.2d 580, 584 (S.D. Tex. 2001.) (citations omitted.) See also In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) ("The standard for reviewing [a Rule 12(c)] motion is the same as that for a Rule 12(b)(6) motion to dismiss for failure to state a claim. The central issue is whether, in the light most favorable to the plaintiff, the complaint states a valid claim for relief.") (citations omitted.)
c) Fair Debt Collections Practices Act (FDCPA)
The purposes of the Fair Debt Collection Practices Act ("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); Wade v. Regional Credit Ass'n, 87 F.3d 1098, 1099 (9th Cir. 1996). The Fifth Circuit has stated that the FDCPA "is designed to protect consumers who have been victimized by unscrupulous debt collectors, regardless of whether a valid debt actually exists." McCartney v. First City Bank, 970 F.2d 45, 47 (5th Cir. 1992).
In order to prevail on a FDCPA claim, the plaintiff must prove the following: (1) the plaintiff has been the object of collection activity arising from consumer debt; (2) the defendant is a debt collector defined by the FDCPA; and (3) the defendant has engaged in an act or omission prohibited by the FDCPA. Matter of Mayer, 199 B.R. 616, 619 (E.D. La. 1996); Sibley v. Firstcollect, Inc., 913 F.Supp. 469, 471 (M.D. La. 1995).
With regard to the first and second elements, the FDCPA provides the following definitions. A "consumer" is "any natural person obligated or allegedly obligated to pay any debt." 15 U.S.C. § 1692a(3). "Debt" is defined as "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" 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 due another."Id. d) Texas Debt Collections Act
Section 392.304(a) of the TDCA provides that "a debt collector may not use a fraudulent, deceptive, or misleading representation that employs" certain practices, including "misrepresenting the character, extent, or amount of a consumer debt, or misrepresenting the consumer debt's status in a judicial or governmental proceeding" and using a "false representation or deceptive means to collect a debt or obtain information concerning a consumer." Tex. Fin. Code §§ 392.403(a)(8) and (19).
The Texas Debt Collection Act ("TDCA") defines a "consumer" as "an individual who has a consumer debt." Tex. Fin. Code § 392.001(1). "Consumer debt" is defined as "an obligation, or an alleged obligation, primarily for personal, family, or household purposes and arising from a transaction or alleged transaction." Tex. Fin. Code § 392.001(2). The statute defines a "debt collector" as "a person who directly or indirectly engages in debt collection and includes a person who sells or offers to sell forms represented to be a collection system, device, or scheme intended to be used to collect consumer debts." Tex. Fin. Code § 392.001(6).
V) Legal Analysis a) Because Defendants Alonzo and Yeverino have already been dismissed, Defendants' motions with respect to these two parties are moot.
Plaintiff voluntarily dismissed Alonzo and Yeverino on December 18, 2008. (D.E. 35.) Therefore, Defendants' motion to dismiss and motion for judgment on the pleadings with respect to Alonzo and Yeverino are denied as moot.
b) Because a question of fact exists as to whether Economy Finance is a "debt collector" under the FDCPA, the Court cannot grant Economy Finance's Rule 12(b)(6) Motion to Dismiss.
The FDCPA applies only to "debt collectors." "The term `debt collector' means any person who . . . regularly collects or attempts to collect . . . debts owed or due or asserted to be owed or due another." Thus, "[o]rdinarily, the FDCPA protects consumers against only those entities that collect debts for third parties." Fleeger v. Bell, 95 F.Supp.2d 1126 (D.Nev. 2000).See also Hester v. Graham, Bright Smith, P.C., 289 Fed.Appx. 35 (5th Cir. 2008) (defining a debt collector as "someone who regularly collects or attempts to collect debts owed to a third person.")
Here, Defendants contend that Economy Finance was simply collecting its own debt, so it cannot be liable under the FDCPA. (D.E. 41) Plaintiff disputes this, however, alleging that Economy Finance is a "debt collector" as defined by 15 U.S.C. § 1692a(6) because it "regularly attempt[s] to collect debts alleged to be due another." (D.E. 1, p. 4) In deciding a motion to dismiss "[w]e must accept all well-pleaded facts alleged in the complaint as true and must construe the allegations in the light that is most favorable to the plaintiff." Cent. Laborers' Pension Fund v. Integrated Elec. Servs., 497 F.3d 546, 550 (5th Cir. 2007) (citing Plotkin v. IP Axess Inc., 407 F.3d 690, 696 (5th Cir. 2005)). Thus, we must accept Plaintiff's claims that Economy Finance Co. was collecting debts due to a third party. "The motion to dismiss should not be granted unless the plaintiff would not be entitled to relief under any set of facts that he could prove consistent with the complaint." Johnson v. Johnson, 385 F.3d 503, 529 (5th Cir. 2004.) Therefore, this motion to dismiss will not be granted.
c) Because a question of fact exists as to whether Defendant violated the Texas Debt Collections Act, the Court cannot grant Economy Finance's Rule 12(b)(6) motion to dismiss.
Defendant contends that Plaintiff's claims under the Texas Debt Collections Act should be dismissed because Plaintiff fails to allege any particular violations of the TDCA. On the contrary, Plaintiff alleges that defendants violated TDCA § 392.304(a)(19), which states that "a debt collector may not use fraudulent, deceptive, or misleading representation . . . using any other false representation or deceptive means to collect a debt or obtain information concerning a customer." Plaintiff alleges that Economy Finance mailed Plaintiff a collection letter demanding payment of "charges that she did not contract for" (D.E. 1, p. 8.) Because Plaintiff has alleged that Economy Finance falsely represented a debt owed by Plaintiff, Plaintiff has alleged a particular violation of TDCA § 392.304(a)(19). Defendant's motion to dismiss is therefore denied.
d) Because the standard for deciding a Rule 12(c) motion is the same as that for a Rule 12(b)(6) motion, Defendants' Rule 12(c) motion must fail for the same reasons that their Rule 12(b)(6) motion fails.
"The standard for deciding [a Rule 12(c)] motion is the same as that for a Rule 12(b)(6) motion." In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) Therefore, just as with a Rule 12(b)(6) motion, this Court must view the evidence "in the light most favorable to the plaintiff," in determining whether the complaint states a valid claim for relief. Great Plains Trust Co. v. Morgan Stanley Dean Witter Co., 313 F.3d 305, 312 (5th Cir. 2002) "Pleadings should be construed liberally, and judgment on the pleadings is appropriate only if there are no disputed issues of fact and only questions of law remain." Id. Therefore, for the same reasons this Court denies Defendants' Rule 12(b)(6) motion to dismiss, this Court must also deny Defendants' Rule 12(c) motion for judgment on the pleadings.
VI) Conclusion
For the reasons set forth above, Defendants' motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) are hereby DENIED.
SIGNED and ORDERED.