Crenshaw v. Portfolio Recovery Assocs., LLC

433 F.Supp.3d 1057

Coretta CRENSHAW, Plaintiff

v.PORTFOLIO RECOVERY ASSOCIATES, LLC; Midland Funding, LLC; and Midland Credit Management Inc., Defendants

CIVIL ACTION NO. 1:18-CV-00113-GNS-HBB

United States District Court, W.D. Kentucky, Bowling Green Division.

Signed January 9, 2020

James H. Lawson, Lawson at Law, PLLC, James R. McKenzie, James R. McKenzie Attorney, PLLC, Louisville, KY, for Plaintiff.

Joseph N. Tucker, Marisa E. Main, Robert B. Herrick, Dinsmore & Shohl LLP, Louisville, KY, for Defendants.

MEMORANDUM OPINION AND ORDER

Greg N. Stivers, Chief Judge

This matter is before the Court on Plaintiff's Motion to Dismiss (DN 31), Defendants' Motions for Summary Judgment (DN 32, DN 33), Defendants' Motions for Leave to Seal Documents (DN 34, DN 36), and Defendants' Motions for Leave to File a Sur-Reply and for Oral Argument (DN 41, DN 44). These motions are now ripe for adjudication. For the reasons that follow, Plaintiff's motion to dismiss is GRANTED , Defendants' motions for summary judgment are DENIED AS MOOT , Defendants' motions for leave to seal documents are GRANTED , and Defendants' motions for leave to file sur-reply and for oral argument are DENIED .

I. BACKGROUND

A. Statement of Facts

Plaintiff Coretta Crenshaw ("Crenshaw") previously defaulted on credit card debt, which debt was purchased by Defendants Portfolio Recovery Associates, LLC ("Portfolio") and Midland Funding, LLC, ("Midland Funding"). (Am. Compl. ¶ 11, DN 22). On November 5, 2013, Midland Funding filed suit against Crenshaw in Barren District Court, ultimately receiving a default judgment in the amount of $703.14. (Am. Compl. ¶¶ 35-41). On November 4, 2015, Portfolio filed suit against Crenshaw in Barren District Court, receiving a default judgment in the amount of $776.18. (Am. Compl. ¶¶ 12-17). On June 19, 2018, Crenshaw reviewed a tri-merge credit report that showed both default judgments and tradelines as provided by Portfolio and Defendant Midland Credit Management ("Midland Credit") on behalf of Midland Funding. (Am. Compl. ¶¶ 18-20, 42-43).

B. Procedural History

On August 16, 2018, Crenshaw filed a complaint against Portfolio, Midland Funding, and Midland Credit (collectively "Defendants") alleging multiple violations of the Fair Debt Collection Practices Act. (Compl. ¶¶ 27, 34, DN 1). On April 3, 2019, Crenshaw filed an amended complaint. (Am. Compl.). On September 13, 2019, Crenshaw moved to dismiss her claims with prejudice as to all defendants pursuant to Fed. R. Civ. P. 41(a)(2). (Pl.'s Mot. Dismiss, DN 31). Later that same day, all Defendants moved for summary judgment.

(Defs.' Mots. Summ. J., DN 32, DN 33).¹ Defendants then moved for leave to seal documents related to the motions for summary judgment. (Defs.' Mots. Leave Seal, DN 34, DN 36).² Defendants responded in opposition to Crenshaw's motion to dismiss, and Crenshaw replied. (Defs.' Resp. Pl.'s Mot. Dismiss, DN 38, DN 39; Pl.'s Reply Mot. Dismiss, DN 40). Finally, Defendants moved for leave to file a sur-reply and for oral argument regarding Crenshaw's motion to dismiss. (Defs.' Mots. Leave Sur-Reply & Oral Arg., DN 41, DN 44). Crenshaw responded in opposition, and Defendants replied. (Pl.'s Resp. Defs.' Mots. Leave Sur-Reply & Oral Arg., DN 42, DN 45; Defs.' Reply Mots. Leave Sur-Reply & Oral Arg., DN 43, DN 46)

II. JURISDICTION

The Court has subject matter jurisdiction over this action via federal question pursuant to 28 U.S.C. § 1331. The Amended Complaint alleges violations of the FDCPA, which presents a federal question. (Am. Compl. ¶¶ 54-56).

III. DISCUSSION

A. Voluntary Dismissal with Prejudice

Crenshaw has moved to voluntarily dismiss all claims with prejudice as to all Defendants pursuant to Fed. R. Civ. Pro. 41(a)(2). Defendants oppose this motion claiming they will suffer "legal prejudice" if it is granted.

Fed. R. Civ. P. 41(a)(2) provides that "[e]xcept as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper." Whether to grant such a dismissal is within the sound discretion of the district court. Banque de Depots v. Nat'l Bank of Detroit , 491 F.2d 753, 757 (6th Cir. 1974). The district court should not approve voluntary dismissal if the defendant will suffer "plain legal prejudice" as a result of a dismissal without prejudice. Grover v. Eli Lilly & Co. , 33 F.3d 716, 718 (6th Cir. 1994) (citations omitted). When assessing plain legal prejudice, the court should consider factors such as: (1) the defendant's effort and litigation expenses, (2) excessive delay and lack of diligence on the part of plaintiff, (3) insufficient explanation of the need for dismissal, and (4) whether a motion for summary judgment has been filed by defendant. Id. (citing Kovalic v. DEC Int'l, Inc. , 855 F.2d 471, 474 (7th Cir. 1988) ). "These factors are only a guide, however, and the trial judge ultimately retains discretion to grant the motion to dismiss." Malibu Media, LLC v. [Redacted] , 705 F. App'x 402, 407 (6th Cir. 2017) (citing Rosenthal v. Bridgestone/Firestone, Inc. , 217 F. App'x 498, 502 (6th Cir. 2007) ).

At first glance, these factors appear to weigh slightly against granting the voluntary motion to dismiss with prejudice. First, this case has been pending for more than one year, and Defendants claim they have spent substantial sums of money in defense—roughly $25,000 by Portfolio and $21,000 collectively by Midland Funding and Midland Credit. (Defs.' Resp. Pl.'s Mot Dismiss). All Defendants are represented by the same counsel, however, so it does appear that litigation costs are split between all three Defendants. Second, beyond the one-year timeline and lack of expert witness by Crenshaw, Defendants have not demonstrated excessive delay or a lack of diligence on the part of Crenshaw. Third, Crenshaw does not provide any explanation for why she is requesting to have all of her claims dismissed. Fourth, Defendants have filed a motion summary judgment, but they did not do so until after Crenshaw's motion to dismiss was already filed with the Court. On the other hand, Crenshaw waited to file the motion to dismiss until the day of the deadline for filing dispositive motions (Scheduling Order 4, DN 15).

Taken together, these factors likely weigh in favor of Defendants and against granting the voluntary motion to dismiss. It is unclear, however, if these factors are fully applicable to the case at hand. Crenshaw has moved to dismiss all of her claims against all defendants with prejudice. As such, it is unclear what "legal prejudice" Defendants could possibly face from such an outcome. On that point, most of the case law relied upon by Defendants deals with motions to dismiss without prejudice.³ Most notably, in Williams v. Midland Funding, LLC , No. 5:18-CV-530-JMH, 2019 WL 4197207 (E.D. Ky. Sept. 4, 2019), a sister court dealt with a nearly identical situation that involved the same plaintiffs' attorneys and two of the same defendants—Midland Funding and Midland Credit. As highlighted by Defendants, the court there declined to dismiss because the defendants suffered significant expenses to defend the litigation and there was a pending motion for summary judgment. Id. at *2. What Defendants do not acknowledge, however, is that in Williams the plaintiff attempted to have the case dismissed without prejudice , such that the defendants faced a risk of being forced to relitigate the very same case. Id. at *1. Crenshaw here has moved to dismiss her case with prejudice. Moreover, the Williams court emphasized that plaintiff's counsel were unable to reach the plaintiff, and there was therefore no indication before the Court that the plaintiff requested the dismissal. Id. Crenshaw, by contrast, has moved through counsel for the present dismissal.

Similarly, in Grover , which is the seminal Sixth Circuit case applying the referenced factors, the Court found that the defendants would suffer legal prejudice if the case was dismissed without prejudice given the several years spent litigating the case and certifying a question to the Ohio Supreme Court. Grover , 33 F.3d at 718. Even so, the remedy was still to dismiss the plaintiff's claims, just with prejudice rather than without it. Id. The Court further clarified that plain legal prejudice required more than "facing the mere prospect of a second lawsuit." Id. (citations omitted). Defendants here face no prospect of a second lawsuit by Crenshaw because she has moved to dismiss with prejudice.

Defendants also cite to other cases analyzing motions to dismiss with prejudice. These cases, however, are unfavorable for Defendants. Most notably, in Majors v. Professional Credit Management, Inc. , No. 4:17-CV-00270-AGF, 2018 WL 1251914 (E.D. Mo. Mar. 12, 2018), the court was asked to deny the plaintiff's motion to dismiss with prejudice and to instead rule on the motion for summary judgment. Id. at *2. The court declined to do so, noting that "the Court sees little to be gained from such an expense of judicial resources, as a dismissal with prejudice is a final judgment on the merits with res judicata effect." Id. (citation omitted).

Likewise, in N.S. by & through S.S. v. D.C. , 272 F. Supp. 3d 192 (D.D.C. 2017), the court dealt with the plaintiffs' voluntary request to dismiss with prejudice under Fed. R. Civ. P. 41(a)(2). Id. at 193. The court faced both factual and legal uncertainty that made it difficult to apply the Grover factors to the facts before it. Id. at 197. The Court, however, found that deciding those tough issues was unnecessary:

Normally, Rule 41(a)(2) requests ask to dismiss cases without prejudice, thus allowing plaintiffs to refile the same case and re-raise the same issues. Under such circumstances, the quandaries just discussed would pose great difficulties. Happily, however, the Court need not resolve either the legal or the factual dispute today. This is because plaintiffs have requested that the Court dismiss this case

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