Godfredson v. Jbc Legal Group, P.C.

387 F.Supp.2d 543

Peder GODFREDSON et al., Plaintiffs, v. JBC LEGAL GROUP, P.C., et al., Defendants.

No. 504CV390FL1.

United States District Court, E.D. North Carolina, Western Division.

August 15, 2005.

COPYRIGHT MATERIAL OMITTED

Christopher W. Livingston, White Oak, NC, for Peder Godfredson, Harold McNeil, Benjamin Walker, Gary Frost, Shawn Lambe, Michael Juiliano, Jr., Jean Strand, Holley Nisley, Individually and on behalf of all others similarly situated, plaintiffs.

William A. Blancato, McCall, Doughton & Blancato, P.L.L.C., Winston-Salem, NC, Michael C. Griffin, McGuire Woods, LLP, Charlotte, NC, for JBC Legal Group, PC, fka JBC & Associates, PC, Jack Boyajian, Marv Brandon, Esq., Ray "Ray Barkley", defendants.

ORDER

FLANAGAN, Chief Judge.

This matter comes now before the court on defendants' motion to dismiss several counts of plaintiffs' complaint for failure to state a claim upon which relief can be granted and for improper venue, and to strike portions of the complaint as redundant, immaterial, impertinent, and scandalous [DE # 14], filed August 6, 2004. Plaintiffs have responded to the motion, and defendants have replied. In this posture the matter is ripe for ruling. For the reasons stated below, defendants' motion to dismiss is granted in part and denied in part.

STATEMENT OF THE CASE

Plaintiffs initiated this action in Cumberland County Superior Court on April 14, 2004, against defendants JBC Legal Group, P.C. (hereinafter "JBC"), Jack Boyajian, Marv Brandon, and Ray Barkley, alleging violations of the federal Fair Debt Collection Practices Act (hereinafter "FDCPA"), 15 U.S.C. § 1692, the North Carolina Debt Collection Act (hereinafter "NCDCA"), N.C.G.S. § 58-70, the North Carolina Unfair and Deceptive Trade Practices Act (hereinafter "NCUDTPA"), N.C.G.S. §§ 75-1.1, 75-50 to 56, the federal Racketeer Influenced and Corrupt Organizations Act (hereinafter "RICO"), 18 U.S.C. § 1961 et seq., the North Carolina RICO Act (hereinafter "NC RICO"), N.C.G.S. § 75D-1 et seq., civil fraud, civil conspiracy, and civil extortion. Defendants filed notice of removal to the U.S. District Court, Eastern District of North Carolina, on June 10, 2004, pursuant to 28 U.S.C. § 1441, alleging that various of plaintiffs' claims arose under federal law. On August 6, 2004, defendants filed the instant motion to dismiss for failure to state a claim and to strike paragraphs from the complaint [DE # 14]. On the same date, defendants also filed a motion to dismiss defendants Jack Boyajian, Marv Brandon and Wayne Franklin for lack of personal jurisdiction [DE # 16].¹

On December 10, 2004, plaintiffs filed a motion for class certification, asserting that various of the claims brought in the complaint were brought on behalf of a nationwide class with respect to the federal claims, and a statewide class with respect to those claims brought under North Carolina law [DE # 33]. On December 30, 2004, defendants filed a consent motion seeking to extend time to respond to the motion for class certification until 20 days after the court's ruling on the instant motion to dismiss [DE# 35]. The case was reassigned to the undersigned on January 6, 2005.

On April 26, 2005, plaintiffs filed a motion to strike defendant Boyajian's affidavit in support of defendants' motion to dismiss for lack of personal jurisdiction [DE # 40]. By order entered July 12, 2005, the undersigned denied plaintiffs' motion to strike the affidavit. By order entered July 13, 2005, the undersigned granted in part and denied in part defendants' motion to dismiss for lack of personal jurisdiction [DE # 16]. The order was granted as to defendants Brandon and Franklin, who were dismissed from the action, and denied as to defendant Boyajian.

STATEMENT OF THE FACTS

The undisputed facts in this case are as follows: defendant JBC Legal Group is a professional corporation engaged in the practice of law, including but not limited to debt collection activities. Defendant Jack Boyajian is a licensed attorney and president of defendant JBC. The nine individual plaintiffs are, variously, residents of North Carolina, South Carolina, Indiana, Utah, and Colorado.

Defendant JBC acknowledges that it contacted each of the nine individual plaintiffs, either by letter or by phone, seeking collection on debts, either dishonored checks or, in one case, an allegedly dishonored car loan. Plaintiffs allege that defendants knew that the debts sought for collection had either been paid off in full, were beyond the applicable statutes of limitation for legal action for collection of debt, or simply never existed. Plaintiffs claim that when they sought to verify the alleged debts, defendants simply sent a validation letter, repeating the allegations of the original communications seeking payment but not providing copies of the alleged dishonored checks or other proof of debt. Plaintiffs admit that in one case, that of plaintiff Walker, defendant JBC did send a copy of the dishonored check, but claim that defendants knew or should have known that the check had been paid off in full.

As to the four individual plaintiffs who reside in North Carolina, three allege that they received dunning letters from defendant JBC seeking payment on debts. Plaintiff Strand alleges that she discovered a negative item on her credit report that, upon research, appears to have been caused by a report by defendant JBC. Plaintiffs do not allege in the complaint that defendant Boyajian personally communicated with plaintiffs. Nor do plaintiffs allege that they ever made any payment to defendants in response to defendants' demands, or that defendants ever commenced legal action against them to collect the contested debts.

COURT'S DISCUSSION

I. Standard of Review

The purpose of a motion to dismiss, under Federal Rule of Civil Procedure 12(b)(6), is to test the legal sufficiency of the complaint, not to resolve conflicts of fact or to decide the merits of the action. Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir.1999). The court may dismiss a complaint for failure to state a claim only if "it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). In considering a motion to dismiss, the court assumes the truth of all facts alleged in the complaint and the existence of any fact that can be proved, consistent with the complaint's allegations. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993). Nevertheless, while the court must take the facts in the light most favorable to the plaintiff, the court "need not accept the legal conclusions drawn from the facts [or] ... unwarranted inferences, unreasonable conclusions, or arguments." Eastern Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir.2000); see also Labram v. Havel, 43 F.3d 918, 921 (4th Cir.1995) (stating that the court is not required to accept "conclusory allegations regarding the legal effect of the facts alleged"). In this way, a motion to dismiss "allows a court to eliminate actions that are fatally flawed in their legal premises." Parham v. Pepsico, Inc., 927 F.Supp. 177, 178 (E.D.N.C.1995).

In resolving a motion to dismiss for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3), the court must draw all inferences in favor of the plaintiff, and "the facts must be viewed as the plaintiff most strongly can plead them." Three M Enterprises, Inc., v. Texas D.A.R. Enterprises, Inc., 368 F.Supp.2d 450, 454 (D.Md.2005). Ordinarily, venue in the federal courts is determined by the general venue statute, 28 U.S.C. § 1391. Id. at 455. With respect to cases removed to federal court from state court, however, venue is determined solely by the removal statute, 28 U.S.C. § 1441. See Polizzi v. Cowles Magazines, Inc., 345 U.S. 663, 665, 73 S.Ct. 900, 97 L.Ed. 1331 (1953) (holding that question of whether venue was proper under § 1391 was irrelevant to removed actions).

Federal Rule of Civil Procedure 12(f) allows the court, upon motion of the party or upon its own initiative, to "order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." The purpose of the motion to strike "is to avoid the waste of time and money that arises from litigating unnecessary issues." Simaan Inc. v. BP Products North America, Inc., 2005 WL 1166610 at *6 (M.D.N.C.) "The district court possesses considerable discretion in disposing of a Rule 12(f) motion to strike." Charles A. Wright and Arthur R. Miller, 5C Federal Practice and Procedure § 1382. However, motions to strike are "generally viewed with disfavor because striking a portion of a pleading is a drastic remedy." Waste Management Holdings, Inc. v. Gilmore, 252 F.3d 316, 347 (4th Cir.2001). Therefore, "[m]otions to strike are rather strictly considered and have often been denied even when literally within the provisions of Rule 12(f) where there is no showing of prejudicial harm to the moving party." Tivoli Realty Inc. v. Paramount Pictures, Inc., 80 F.Supp. 800, 803, (D.Del.1948).

II. Analysis

A. Count II — plaintiffs' claims for violation of the NCDCA and NCUDTPA

Defendants argue that plaintiffs' claims under the NCDCA and NCUDTPA must fail because of the exception for professional services rendered by members of a learned profession. The North Carolina Court of Appeals has held that a claim under the NCDCA, alleging improper practices in the specific context of debt collection, must also satisfy the requirements of a more general claim under the NCUDTPA. See Reid v. Ayers, 138 N.C.App. 261, 531 S.E.2d 231, 235 (2000). Under the NCUDTPA, "[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are...