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Scherer v. Credit Bureau Systems Inc.

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

May 15, 2018

CREDIT BUREAU SYSTEMS, INC., et al., Defendants.



         This matter comes before the court on Defendant the Water Works Board of the City of Birmingham's “Motion to Dismiss.” (Doc. 9). Plaintiff Scherer alleges various state law claims against the Board arising out of a delinquent account that the Board deemed to belong to Ms. Scherer, which it ultimately turned over for collections. The Board has filed this motion to dismiss on the sole basis that Alabama's statute of limitations bars Ms. Scherer's claims against it. As explained below, the court concludes that the Board's motion to dismiss is due to be DENIED.


         As alleged in the Complaint, Plaintiff Kaori Scherer purchased a home in Vestavia, Alabama in June 2014. Upon purchasing the home, Ms. Scherer opened an account for water and sewer services for the property with the Defendant Birmingham Water Works Board. That account was the first and only account Ms. Scherer opened with the Board for that particular property. She always paid her monthly bill and never owed any past due amount on the account.

         However, sometime after purchasing the home, Defendant Credit Bureau Systems, Inc. began collection activities against Ms. Scherer for a water and sewer services account that Ms. Scherer contends did not belong to her. The debt was for a past-due amount of $46.00 on a second account on the same property, which Ms. Scherer alleges the Board incorrectly attributed to her name. The collection activities included reporting the alleged debt on Ms. Scherer's credit file with Defendants Equifax and Experian Information Services. The Board contends that this second account became delinquent in April 2014-approximately two months before Ms. Scherer purchased the property or opened any account pertaining to that property.

         Ms. Scherer made various attempts to dispute the alleged delinquency with the Board, CBS, and Defendants Equifax and Experian Information Services. The last dispute in which Plaintiff asked Equifax for the removal of the alleged debt was April 5, 2017. Despite Ms. Scherer's efforts, the Board and Credit Bureau Systems did not cease their attempts to collect on the debt.

         Unable to convince the Board that the second account did not belong to her, or to cease its collections efforts, Ms. Scherer filed her claims against the Board and the other Defendants on January 24, 2018. Her claims against the Board include negligent, reckless, and wanton debt collection activities; and negligent, reckless, and wanton training and supervision. She also asserts the Board is vicariously liable for the improper collection activities of Defendant CBS.


         A Rule 12(b)(6) motion to dismiss attacks the legal sufficiency of the complaint. Generally, the Federal Rules of Civil Procedure require only that the complaint provide “‘a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957) (quoting Fed.R.Civ.P. 8(a)). A plaintiff must provide the grounds of her entitlement, but Rule 8 generally does not require “detailed factual allegations.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley, 355 U.S. at 47). It does, however, “demand[ ] more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal 556 U.S. 662, 678 (2009). Pleadings that contain nothing more than “a formulaic recitation of the elements of a cause of action” do not meet Rule 8 standards nor do pleadings suffice that are based merely upon “labels or conclusions” or “naked assertions” without supporting factual allegations. Twombly, 550 U.S. at 555, 557.

         The Supreme Court explained that “[t]o 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 (quoting and explaining its decision in Twombly, 550 U.S. at 570). To be plausible on its face, the claim must contain enough facts that “allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. Although “[t]he plausibility standard is not akin to a ‘probability requirement, '” the complaint must demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” Id.

         III. ANALYSIS

         The sole issue before the court is whether Alabama's statute of limitations bars Ms. Scherer's claims against the Board. The court first recognizes that “[a] statute of limitations bar is an affirmative defense, and . . . plaintiffs are not required to negate an affirmative defense in their complaint.” La Grasta v. First Union Securities, Inc., 358 F.3d 840, 845 (11th Cir. 2004) (internal quotation marks omitted). Also, “a Rule 12(b)(6) dismissal on statute of limitations grounds is appropriate only if it is apparent from the face of the complaint that the claim is time-barred.” Id. (internal quotation marks omitted). Therefore, a statute of limitations defense is “generally not appropriate for evaluation on a motion to dismiss pursuant to Rule 12(b)(6.)” McMillian v. AMC Mortg. Servs., Inc., 560 F.Supp. 1210, 1213 (S.D. Ala. 2008).

         Because this court sits in diversity, Alabama substantive law, including the statute of limitations, governs these proceedings. See Mississippi Valley Title Ins. Co. v. Thompson, 802 F.3d 1248, 1251 n.2 (11th Cir. 2015). Alabama law provides a two-year statute of limitations for claims of negligence, wantonness, and vicarious liability. Ala. Code § 6-2-38(1), (n). The limitations period begins at the time the action “accrues.” Booker v. United Am. Ins. Co., 700 So.2d 1333, 1339 (Ala. 1997).

         In Alabama, the statute of limitations commences “on the date the first legal injury occurs, but not necessarily from the date of the act causing the injury.” Smith v. Medtronic, Inc., 607 So.2d 156, 159 (Ala. 1992) (citing Brotherhood of Locomotive Firemen & Enginemen v. Hammett, 140 So.2d 832 (1962)). Therefore, a defendant may take a particular action that eventually ...

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