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Smith v. Professional Debt Mediation Inc.

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

April 5, 2017




         This case is before the court on Defendant Professional Debt Mediation, Inc.'s ("PDMI") Motion for Judgment on the Pleadings (Doc. # 23) and Motion to Deposit Funds with the Court (Doc. # 32). Plaintiff has responded to the motions. (Docs. # 26, 36). Defendant PDMI has filed reply briefs supporting the motions. (Docs. # 27, 39).

         I. Procedural History

         In February 2016, Plaintiff filed a complaint against Defendants PDMI and Experian Information Solutions, Inc. ("Experian"). (See generally Doc. # 1). The complaint presents one cause of action against Experian and sixteen causes of action against PDMI. (See Id. at ¶¶ 60-131). According to Plaintiff, PDMI violated both the Fair Credit Reporting Act ("FCRA") and the Fair Debt Collection Practices Act ("FDCPA"). (See Id. at ¶¶ 60-102). Plaintiff also alleges that PDMI committed the following violations of Alabama state law: (1) invasion of privacy, (2) negligent hiring, training, and supervision of debt collectors, (3) wanton hiring, training, and supervision of debt collectors, and (4) intentional hiring, training, and supervision of incompetent debt collectors. (See Id. at ¶¶ 103-31).

         Defendant PDMI has moved for judgment on the pleadings for Plaintiffs four state-law claims. (Doc. # 23 at 1). PDMI first argues that the state-law causes of action are expressly preempted by the FCRA. (Id. at 6-12). Next, it contends that Plaintiffs hiring, supervision, and training tort claims fail to state a claim for relief because those claims seek tort damages for an action premised upon a breach of contract. (Id. at 12-13). PDMI also has requested that the court grant it leave to deposit $15, 000 with the court to provide complete relief for all of Plaintiffs claims, pursuant to Federal Rule of Civil Procedure 67. (Doc. # 32 at 1, 6).

         II. Background Facts

         In 2012, Plaintiff agreed to settle a consumer debt that was owned by Defendant PDMI and paid PDMI $2, 595. (Doc. # 1 at ¶¶ 21-23). PDMI agreed to "request manual deletion of any negative trade lines associated" with Plaintiff as a term of the settlement. (Id. at ¶ 24). Plaintiff later discovered that the consumer debt account remained on his Experian credit report. (Id. at ¶25). Plaintiff disputed his credit report, but "Experian kept the account on Plaintiffs credit report with a current balance owed." (Id. at ¶ 26).

         Plaintiff alleges that PDMI admitted on March 10, 2015 that he had paid the consumer debt indicated on his credit report. (Id. at ¶ 29). Yet, the settled debt remained on his credit report in June 2015. (Id. at ¶ 30). According to Plaintiff, "Defendants continued to report this negative information even with the proof from Defendant PDM[I] showing that the account was to be deleted." (Id. at ¶ 33). When Plaintiff called Defendants to report the error, they refused to admit that the settled debt account should be deleted from his credit report. (Id. at ¶ 28).

         Moreover, PDMI violated the settlement agreement by continuing its collection efforts after entering into the settlement. (Id. at ¶ 48). It misrepresented that Plaintiff still owed payment for the debt after he had agreed to and complied with the settlement. (Id. at ¶ 49). Plaintiffs complaint charges that PDMI "maliciously, willfully, intentionally, recklessly, and/or negligently" failed to review his disputes or reasonably investigate those disputes. (Id. at ¶ 35). According to Plaintiff, PDMI acted maliciously and willfully and conducted its actions "with either the desire to harm Plaintiff and/or with the knowledge that its actions would very likely harm Plaintiff"[1] (Mat¶59).

         Plaintiff claims that PDMI invaded his privacy, in violation of Alabama law, "by repeatedly and unlawfully attempting to collect a debt." (Id. at ¶ 106). Moreover, he claims that the company negligently, wantonly, and/or intentionally hired, trained, and supervised debt collectors "who were allowed or encouraged to violate the law." (Id. at ¶¶ 118, 124, 130). Plaintiffs complaint categorizes PDMI as a "furnisher" of information to credit reporting agencies for purposes of the FCRA and as a "debt collector" for purposes of the FDCPA. (Id. at ¶¶55, 67).

         III. Standard of Review

         Federal Rule of Civil Procedure 12(c) provides that a party may move for judgment on the pleadings after the pleadings are closed, but early enough not to delay trial. The standard is a familiar one. "Judgment on the pleadings is appropriate where there are no material facts in dispute and the moving party is entitled to judgment as a matter of law." Cannon v. City of W. Palm Beach, 250 F.3d 1299, 1301 (11th Cir. 2001); see Bank of New York Mellon v. Estrada, 2013 WL 3811999, at *1 (N.D. 111. July 22, 2013) ("A Rule 12(c) motion for judgment on the pleadings is 'designed to provide a means of disposing of cases when the material facts are not in dispute and a judgment on the merits can be achieved by focusing on the content of the pleadings and any facts of which the court will take judicial notice.'" (citations omitted)). The court must accept the facts alleged in the complaint as true and view them in the light most favorable to the nonmoving party. Cannon, 250 F.3d at 1301.

         A Rule 12(c) motion for judgment on the pleadings is analyzed the same as a Rule 12(b)(6) motion to dismiss. Griffin v. SunTrust Bank, Inc., 157 F.Supp.3d 1294, 1295 (N.D.Ga. 2015). Accordingly, to survive a motion for judgment on the pleadings, "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) (citation and internal quotations omitted); see also Losey v. Warden, 521 F.App'x 717, 719 (11th Cir. 2013) (applying the plausibility standard articulated in Iqbal to an appeal concerning a Rule 12(c) judgment on the pleadings).

         A complaint states a plausible claim for relief "when [a] 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. Although detailed facts are not needed, a plaintiff is obligated to provide as grounds for entitlement to relief more than mere labels and conclusions. Id. Formulaic recitations of the elements of a cause of action do not satisfy a plaintiffs burden. Id. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. at 679. A plausible claim for relief requires "enough ...

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