United States District Court, N.D. Alabama, Southern Division
DEMETRIUS D. CALDWELL, et al., Plaintiffs,
REDSTONE FEDERAL CREDIT UNION, et al., Defendants.
MEMORANDUM OPINION AND ORDER 
H. ENGLAND, III UNITED STATES MAGISTRATE JUDGE.
January 30, 2018, Defendants Redstone Federal Credit Union
(“Redstone”) and the Law Office of C. Howard
Grisham (“Grisham”) moved for partial dismissal
of Plaintiffs' Second Amended Class Action Complaint,
(doc. 75), under Fed.R.Civ.P. 12(b)(6) for failure to state a
claim as to six of the eight named plaintiffs. (Docs. 76
& 79). Plaintiffs filed a response opposing both motions,
(doc. 84), and both Defendants replied, (docs. 87 & 88).
Plaintiffs have also moved for leave to file a sur-reply,
(doc. 89), which is opposed by Defendants, (docs. 91 &
92). Plaintiffs moved for, (doc. 93), and were granted, (doc.
94), leave to file a supplemental opposition brief, (doc.
95), and Defendants have filed supplemental replies, (docs.
96 & 97). Finally, Plaintiffs have moved for leave to
file a sur-reply to their supplemental opposition brief,
(doc. 98), which Defendants also oppose, (docs. 99 &
motions are fully briefed and ripe for review. For the
reasons stated more fully below, the motions to dismiss are
GRANTED IN PART and DENIED IN PART.
Standard of Review
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,
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 1949 (2009) (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955 (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, 129 S.Ct. at
1949 (citations and internal quotation marks omitted).
“Nor does a complaint suffice if it tenders
‘naked assertions]' devoid of ‘further
factual enhancement.'” Id. (citing
Bell Atl. Corp., 550 U.S. at 557, 127 S.Ct. 1955).
Additionally, “[i]n alleging fraud or mistake, a party
must state with particularity the circumstances constituting
fraud or mistake.” Fed.R.Civ.P. 9(b).
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, 129 S.Ct. at 1949 (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, 127 S.Ct. at
1965 (“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, 129 S.Ct. at 1950.
court accepts all factual allegations as true on a motion to
dismiss under Rule 12(b)(6). See, e.g., Grossman v.
Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000).
However, legal conclusions unsupported by factual allegations
are not entitled to that assumption of truth. Iqbal,
556 U.S. at 678, 129 S.Ct. at 1950.
October 29, 2015, Plaintiffs Demetrius and Sabrina Caldwell
(the “Caldwells”) initiated this action on behalf
of themselves and a purported class against Redstone and
Grisham, alleging five counts including a bankruptcy count of
contempt for violating discharge injunctions and a count for
violations of the Fair Debt Collection Practices Act
(“FDCPA”). (Doc. 1). Defendants moved to dismiss
the Caldwells' claims, (docs 7 & 10), and the
undersigned granted those motions in part and denied them in
part on October 17, 2016, dismissing all but the two claims
identified above. (Doc. 30).
14, 2017, Plaintiffs amended their complaint, adding six
additional named plaintiffs: Jane B. Locklin, Bart Reeves,
Davis A. Mitchell, Jeremy D. Holland, Jessalyn Hooper, and
Lorondo Brazelton (collectively, the “New
Plaintiffs”). (Doc. 48 at ¶¶ 5-10). While the
Amended Complaint alleged generally that the New Plaintiffs
had been subjected to Defendants' attempts to collect
debts discharged in bankruptcy, it did not identify how
Defendants had done so. Both Defendants moved to dismiss.
(Docs. 51 & 53). Granting Defendants' alternative
motions for a more definite statement, the undersigned
ordered Plaintiffs to file an amended complaint “which
should include the factual basis for the New Plaintiffs'
claims that Defendants wrongfully attempted to collect the
debts they discharged in bankruptcy.” (Doc. 73 at 8).
On January 30, 2018, Plaintiffs filed their Second Amended
Complaint, containing the facts below. (Doc. 75).
the New Plaintiffs filed a Chapter 7 bankruptcy petition in
the Northern District of Alabama. (Doc. 75 at ¶ 14).
Each owed money to Redstone and/or Grisham. (Id. at
¶ 15). Each Plaintiff received a discharge from the
Bankruptcy Court. (Id. at 18). Nevertheless,
Redstone- which had been mailed a copy of the discharge
orders in each case-used Grisham to attempt to collect the
discharged debt. (Id. at ¶¶ 19-20).
Jane B. Locklin (“Locklin”)
obtained a judgment against Locklin on June 17, 2005, and
recorded the judgment on June 27, 2005. (Id. at
¶ 26). Locklin filed for Chapter 7 bankruptcy on January
8, 2007, and received a discharge of Redstone's debt on
April 18, 2007. (Id. at ¶¶ 27-28).
Defendants revived the judgment on March 17, 2015, and later
recorded the revived judgment in the Madison County Probate
Office. (Id. at ¶ 29). In April 2015,
Defendants sent Locklin correspondence demanding payment of
the debt. (Id. at ¶ 30).
Bart Reeves (“Reeves”)
recorded a judgment against Reeves on January 10, 2010, in
the Morgan County Probate Court. (Id. at ¶ 31).
Reeves filed for Chapter 7 bankruptcy on August 26, 2011,
receiving a discharge of Redstone's debt on November 29,
2011. (Id. at ¶¶ 32-33). Defendants have
neither satisfied the judgment nor filed pleadings with any
probate court or the Circuit Court of Madison County
indicating that Reeves's debt was discharged in
bankruptcy. (Id. at ¶ 34).
Davis A. Mitchell (“Mitchell”)
recorded a judgment in the Morgan County Probate Court on
December 22, 2008. (Id. at ¶ 35). Mitchell
filed for Chapter 7 bankruptcy on May 18, 2013, and received
a discharge of Redstone's debt on August 14, 2013.
(Id. at ¶¶ 36-37). As with Reeves,
Defendants have not satisfied the judgment, nor have they
filed pleadings in the Circuit Court of Morgan County or any
probate court indicating the debt was discharged.
(Id. at ¶ 38). Additionally, the judgment has
attached to real property Mitchell acquired after the
discharge of his debt. (Id. at ¶ 39).
Jeremy D. Holland (“Holland”)
recorded a judgment against Holland in the Morgan County
Probate Court on June 1, 2011. (Id. at ¶ 40).
Holland filed for Chapter 7 bankruptcy on December 27, 2011.
(Id. at ¶ 41). He then received a discharge of
Redstone's debt on March 27, 2012. (Id. at
¶ 42). Defendants have not satisfied the judgment or
filed pleadings in the Circuit Court of Morgan County or any
probate court reflecting the debt was discharged in
bankruptcy, and Holland's credit report reflects he still
owes the $22, 867 amount of the judgment. (Id. at
Jessalyn Hooper (“Hooper”)
formerly known as “Jessalyn N. Mobley, ” filed
for Chapter 7 bankruptcy on June 8, 2005, and received a
discharge of a judgment recorded against him by Defendants on
May 3, 2005 in the Madison County Probate Court.
(Id. at ¶¶ 44-46). Defendants have not
satisfied the judgment or filed pleadings in the District
Court of Madison County or any probate court to reflect that
the debt has been discharged. (Id. at ¶ 47). As
with Mitchell, Hooper obtained real property after the
discharge to which the judgment has attached. (Id.
at ¶ 48).
Lorondo Brazelton (“Brazelton”)
recorded a judgment against Brazleton in the Madison County
Probate Court on May 1, 2007. (Id. at ¶ 49).
Brazleton filed for Chapter 7 bankruptcy on August 1, 2007,
and received a discharge of Redstone's debt on November
14, 2007. (Id. at ¶¶ 50-51). Defendants
have not satisfied the judgment or filed pleadings in the
District Court of Madison County or any probate court
indicating the debt has been discharged. (Id. at
contend the New Plaintiffs have failed, for various reasons,
to articulate actionable violations of the discharge
injunctions and the FDCPA. As a preliminary matter, though,
the undersigned will address Plaintiffs' motions for
leave to file sur-replies.
Motions for leave to file sur-replies (Docs. 89 &
have moved for leave to file a sur-reply to Defendants'
replies to the original motion, (doc. 89), and to
Defendants' responses to their supplemental opposition
brief, (doc. 98).
their first motion for leave to file a sur-reply, (doc. 89),
Plaintiffs contend they should be allowed to file the
proposed sur-reply attached to their motion, (doc. 89-1),
because Defendants have raised additional issues in their
reply briefs, mischaracterized the holding of a case, and
misinterpreted the law on lien enforcement. (Doc. 89 at
¶ 1). Defendants point out that the reply briefs contain
no new issues and that, to the extent they are arguably
incorrect on the law, the court can determine that without
the need for a sur-reply. (Docs. 91 & 92).
second motion for leave to file a sur-reply is based on their
contention they “feel compelled to respond to certain
statements made in Defendants' Responses” to their
supplemental response brief. (Doc. 98 at ¶ 1). In their
motion, filed almost a month after Defendants' responses,
Plaintiffs contend Defendants argue questions of fact, cite
an abrogated case,  and again misstate the law. (Id.
at ¶¶ 1-2). Opposing the motion, Grisham responds
by noting Plaintiffs have failed to identify a basis other
than a desire to respond for their sur-reply. (Doc. 99 at
¶ 1). Grisham then defends its response on the merits.
(Id. at ¶¶ 2-5). Redstone notes the delay
between the responses and motion for leave, adopts
Grisham's arguments, and reasserts its arguments against
Plaintiffs' prior motion for leave. (Doc. 100).
undersigned has considered the arguments Plaintiffs offer for
the necessity of sur-replies, and none are compelling.
Therefore, both motions are
Count I - Contempt of Discharge Injunction
Defendants argue none of the conduct
alleged by Plaintiffs violated the discharge injunction. As
to Reeves, Mitchell, Holland, Hooper, and Brazelton,
Defendants state that they did not take any actions at all,
and omissions of the kind Plaintiffs allege are insufficient
to state a contempt claim. They separately argue they did not
violate the injunction as to Locklin (the only New Plaintiff
alleging an affirmative act by Defendants) because the
judgment lien Locklin references was specifically not avoided
in her bankruptcy and their actions related to an in
rem proceeding against the property, not against Locklin
personally. Plaintiffs assert the totality of the
circumstances shows that Defendants' inaction with
respect to the non-Locklin New Plaintiffs was intended to
pressure them into repaying the discharged debts and in any
event Defendants' lack of adequate policies and
procedures to avoid inadvertent violations itself violated
the injunction. (Doc. 84 at 8). As to Locklin, Plaintiffs
dispute the judgment lien could legally be revived at all and
that it was a prohibited continuation of an action to collect
debt as a personal liability of the debtor. (Id. at
11-13). Additionally, they state the letter sent by Grisham
to Locklin violated the injunction because, notwithstanding
its formal designation, the effect of the letter was to
pressure Locklin into repaying the discharged debt; because
that determination should be made on a fully-developed
factual record, Plaintiffs argue, it is inappropriate for
dismissal under Rule 12(b)(6). (Id. at 13-14).
discharge in a bankruptcy case:
(1) voids any judgment at any time obtained, to the extent
that such judgment is a determination of the personal
liability of the debtor with respect to any debt discharged
under section 727, 944, 1141, 1228, or 1328 of this title,
whether or not discharge of such debt is waived;
(2) operates as an injunction against the commencement or
continuation of an action, the employment of process, or an
act, to collect, recover or offset any such debt as a
personal liability of the debtor, whether or not discharge of
such debt is waived; and
(3) operates as an injunction against the commencement or
continuation of an action, the employment of process, or an
act, to collect or recover from, or offset against, property
of the debtor of the kind specified in section 541(a)(2) of
this title that is acquired after the commencement of the
case, on account of any allowable community claim, except a
community claim that is excepted from discharge under section
523, 1228(a)(1), or 1328(a)(1), or that would be so excepted,
determined in accordance with the provisions of sections
523(c) and 523(d) of this title, in a case concerning the
debtor's spouse commenced on the date of the filing of
the petition in the case concerning the debtor, whether or
not discharge of the debt based on such community claim is
11 U.S.C. § 524(a). In the Eleventh Circuit, “the
test for whether a creditor violates the discharge injunction
under 11 U.S.C. § 524(a)(2) is whether the objective
effect of the creditor's action is to pressure a debtor
to repay a discharged debt.” In re McLean, 794
F.3d 1313, 1321-22 (11th Cir. 2015). To state a claim for
contempt of the discharge injunction, a plaintiff must allege
facts supporting that a ...