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Ferrell v. Midland Funding, LLC

United States District Court, N.D. Alabama, Southern Division

May 22, 2015

CHARISSA FERRELL, Plaintiff,
v.
MIDLAND FUNDING, LLC, et al., Defendants.

MEMORANDUM OPINION AND ORDER[1]

JOHN H. ENGLAND, III, Magistrate Judge.

Plaintiff Charissa Ferrell initiated this action against Defendants Midland Funding, LLC and Midland Credit Management, Inc. (collectively "Midland" or "Defendants"). (Doc. 1). Ferrell asserts seven claims pursuant to the Fair Debt Collection Practices Act ("FDCPA") as well as various state law claims. ( Id. ). Defendants move to dismiss three of Ferrell's FDCPA claims and her state law claim for invasion of privacy pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure. (Doc. 8). The motion is fully briefed and ripe for review. (Docs. 8, 11, & 14). For the reasons stated below, the motion, (doc. 8), is GRANTED IN PART AND DENIED IN PART.

I. Standard of Review

Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." "[T]he pleading standard Rule 8 announces does not require detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" are insufficient. Iqbal, 556 U.S. at 678 (citations and internal quotation marks omitted). "Nor does a complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Id. (citing Bell Atl. Corp., 550 U.S. at 557).

Federal Rule of Civil Procedure 12(b)(6) permits dismissal when a complaint fails to state a claim upon which relief can be granted. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal, 556 U.S. at 678 (citations and internal quotation marks omitted). A complaint states a facially plausible claim for relief "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citation omitted). The complaint must establish "more than a sheer possibility that a defendant has acted unlawfully." Id .; see also Twombly, 550 U.S. at 555 ("Factual allegations must be enough to raise a right to relief above the speculative level."). Ultimately, this inquiry is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.

II. Factual Background[2]

Ferrell's claims are based on a state court lawsuit Midland filed against her to collect a debt she did not owe and for false credit reporting related to that debt. According to the complaint, Midland engages in a practice of purchasing debt for pennies on the dollar and initiating collection lawsuits on those debts. (Doc. 1 at ¶¶18-44). The purchase agreement between the original creditor and the first debt buyer states there is no promise or representation as to the accuracy of the information sold. ( Id. at ¶ 21). Therefore, it can be inferred that Midland initiates many of these lawsuits not knowing if it actually owns the debt it is attempting to collect.[3]

Specifically, Ferrell alleges Midland asserted it was the owner of a debt she allegedly owed and sought to collect $3, 471.20 plus court costs, but Midland did not own the debt. ( Id. at ¶¶ 49-51, 66). She further asserts Midland knew she had never done business with Midland and did not owe the debt in question, and there was no mention in the lawsuit that the entity who sold the debt to Midland disclaimed the accuracy of the records. ( Id. at ¶¶ 52-53 61). Ferrell also alleges Midland never intended to offer any evidence to prove its case, but the case, like the others, was filed to obtain a settlement from a consumer (who is usually pro se ) or a default judgment on a debt Midland could not prove it has any right to collect on. ( Id. at ¶ 56-60).

Ferrell further alleges Midland made numerous misrepresentations and false statements during the lawsuit. Specifically, Ferrell contends Midland misrepresented that a debt was owed, that it had standing to bring the lawsuit, and that it intended to offer evidence to prove its case. ( Id. at ¶¶62, 65-66, 68-69). Ferrell contends Midland brought the case as part of a strategy and policy of "scattershot litigation" designed to sue consumers who owe no debt to Midland in order to coerce or deceive the consumer into paying a debt not owed or to receive a judgment against the consumer. ( Id. at ¶ 70). Additionally, Ferrell alleges Midland knew or should have known the statute of limitations had run before it filed suit against Ferrell. ( Id. at ¶ 55).

The case was set for trial on December 11, 2014. (Doc. 1 at ¶80). Midland understood that Ferrell disputed the debt, but made the conscious choice to continue with the lawsuit even though it knew the case was meritless. ( Id. at ¶¶ 76, 79). At all times Ferrell was prepared for trial and Midland was not. ( Id. at ¶¶ 81-82). Prior to trial Midland provided its counsel no proof it owned the debt, no proof Ferrell owed the debt, and no evidence or witnesses. ( Id. at ¶¶ 84-86). At trial, Midland offered no evidence or witness testimony. ( Id. at ¶¶ 87-96). Instead, Midland told the court to enter judgment in Ferrell's favor. ( Id. at ¶ 97). The judge entered judgment in Ferrell's favor, closing the case. ( Id. at ¶¶98-99).

Ferrell also alleges Midland falsely reported credit information before, during, and after the lawsuit regarding this debt. (Doc. 1 at ¶ 100). Midland knew Ferrell owed no money on this debt, but reported the information so Ferrell would pay the debt. ( Id. at ¶¶ 101-104).

Ferrell further alleges Midland knew the natural, desired consequence of its actions would be that Ferrell would be harassed, oppressed, and abused by its actions, including the filing of a meritless lawsuit, the filing of a lawsuit on a debt not owed by Ferrell or owned by Midland, by false credit reporting, by factual misrepresentations in the lawsuit, and by threatening to take Ferrell's property and wages. (Doc. 1 at ¶ 113).

III. Analysis

A. Count 1: 15 ...


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