Rollins v. Midland Funding, LLC, 4:14CV01976 ERW

MARY ROLLINS, Plaintiff, v. MIDLAND FUNDING, LLC, Defendant.

No. 4:14CV01976 ERW

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

June 3, 2015

MEMORANDUM AND ORDER

This matter comes before the Court on Defendant Midland Funding, LLC's "Motion to Dismiss First Amended Complaint" [ECF No. 16], and Plaintiff Mary Rollins's "Motion for Remand" [ECF No. 20].

I. BACKGROUND

This lawsuit arises out of a previously-adjudicated state court collection suit brought by Midland Funding, LLC¹ ("Midland") against Mary Rollins ("Rollins") for collection of a supposed debt. According to Rollins, Midland filed the collection suit, "Cause No. 14JE-AC02736," on June 5, 2014, in the Circuit Court for Jefferson County, alleging the following: (1) Midland was the assignee of GE Capital Retail Bank ("GE Capital"), the original creditor; (2) there was an agreement between GE Capital and Rollins; (3) GE Capital, and subsequently Midland, had made demand for payment of an outstanding sum of $561.37, but Rollins hadfailed and refused to pay [ECF No. 15 at ¶ 15]. Midland obtained default judgment against Rollins.

In October 2014, Rollins initiated the present action by filing suit against Midland in the Circuit Court for Jefferson County, "seek[ing] to challenge [Midland's] litigation misconduct, including but not limited to false representations about the validity and amount of the debt [Rollins] allegedly owed, that went unnoticed by the trial court" [ECF No. 6 at ¶ 2].² On November 26, 2014, Midland removed the case to this Court, pursuant to 28 U.S.C. §§ 1331, 1441, and 1446 [ECF No. 1]. Subsequently, Rollins filed her First Amended Complaint, which, like the original petition, alleges the violation of the Fair Debt Collections Practices Act ("FDCPA") [ECF No. 15].

Rollins alleges various conduct by Midland during the collection suit litigation. According to Rollins, Midland failed to attach an affidavit from the original creditor, as well as a "contract or agreement purportedly existing between the original creditor and [Midland]," the attachment of which Rollins claims was required by Missouri law [ECF No. 15 at ¶¶ 16, 20-21]. Similarly, Midland allegedly failed to attach any records of assignment of Rollins's debt from the original creditor to Midland [ECF No. 15 at ¶ 22]. Relatedly, Rollins claims the "affidavit of indebtedness" Midland did attach was "not made by anyone with personal knowledge about the debt, although [Midland] falsely and deceptively claimed in the affidavit that it did have such personal knowledge" [ECF No. 15 at ¶ 19]. Thus, Rollins alleges Midland sued on the "alleged debt without any way to substantiate the balance owed or even confirm that there was indeed a debt in the first place," adding Midland lacked: (1) valid proof of assignment; (2) valid proof the debt was even owed; and (3) "the required contract needed to obtain judgment" [ECF No. 15 at¶¶ 23, 25]. Further, Rollins claims Midland knew it lacked the required evidence and "intend[ed] to take advantage of [Rollins's] dire economic circumstances and unsophistication," knowing Rollins neither had "the resources to hire an attorney to decipher [Midland's] [] affidavit of indebtedness," nor had the ability to "decipher the [] affidavit on her own" [ECF No. 15 at ¶¶ 26-28]. The First Amended Complaint also states, "[Midland] filed the Collection Suit and, in its Motion to Default . . . , actively and falsely represented to the Court (via the [] affidavit of indebtedness that [Midland] did present to the Court) that [Midland] had standing and sufficient proof as to the validity and amount of the debt" [ECF No. 15 at ¶ 29]. "But for these false representations," Rollins argues, Midland "would not have obtained judgment against Plaintiff" [ECF No. 15 at ¶ 30].

Thus, Rollins argues Midland, through this alleged conduct, has violated the FDCPA, 15 U.S.C. § 1692d-f, in particular, by: (1) "[u]tilizing false, unfair, and misleading representation in connection with the collection of a debt"; (2) "[e]ngaging in deceptive and harassing conduct in the collection of a debt"; and (3) "us[ing] unfair and unconscionable practices to attempt to collect the debt" [ECF No. 15 at ¶ 38].³ Rollins claims she has incurred actual damages including, but limited to, anxiety, frustration, and worry, and she seeks relief in the form of actual damages, statutory damages, costs, and reasonable attorney's fees [ECF No. 15 at ¶ 32].

On February 9, 2015, Midland filed the pending Motion to Dismiss, asking the Court to dismiss the case for lack of subject matter jurisdiction under Federal Rule of Civil Procedure ("FRCP") 12(b)(1), or, in the alternative, to dismiss the case for failure to state a claim under FRCP 12(b)(6). On March 13, Rollins filed her Motion to Remand, arguing a ruling in favor of Midland on the issue of subject matter jurisdiction requires the Court to remand the case back to state court rather than dismiss it altogether.

II. STANDARD

The purpose of a Rule 12(b)(1) motion is to allow the Court to address the threshold question of jurisdiction, as "judicial economy demands that the issue be decided at the outset rather than deferring it until trial." Osborn v. U.S., 918 F.2d 724, 729 (8th Cir. 1990). "A district court has the authority to dismiss an action for lack of subject matter jurisdiction on any one of three separate bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Johnson v. U.S., 534 F.3d 958, 962 (8th Cir. 2008) (internal quotation marks and citation omitted). "Jurisdictional issues, whether they involve questions of law or of fact, are for the court to decide." Osborn, 918 F.2d at 729.

Under FRCP 12(b)(6), a party may move to dismiss a claim for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). The notice pleading standard of FRCP 8(a)(2) requires a plaintiff to give "a short and plain statement showing that the pleader is entitled to relief." To meet this standard and to survive a Rule 12(b)(6) 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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citation omitted). "A claim has facial plausibility when the plaintiff pleads factual content thatallows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. A court accepts "as true all of the factual allegations contained in the complaint," and affords the non-moving party "all reasonable inferences that can be drawn from those allegations" when considering a motion to dismiss. Jackson v. Nixon, 747 F.3d 537, 540-41 (8th Cir. 2014) (internal quotations and citation omitted). However, the Court is "not bound to accept as true a legal conclusion couched as a factual allegation." Carton v. Gen. Motor Acceptance Corp., 611 F.3d 451, 454 (8th Cir. 2010) (internal citation omitted). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (internal citation omitted). Additionally, "some factual allegations may be so indeterminate that they require further factual enhancement in order to state a claim." Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009).

A well-pleaded complaint may not be dismissed even if it appears proving the claim is unlikely and if the chance of recovery is remote. Bell Atlantic v. Twombly, 550 U.S. 544, 556 (2007). However, where the allegations on the face of the complaint show "there is some insuperable bar to relief, dismissal under Rule 12(b)(6) is appropriate." Young v. St. John's Mercy Health Sys., No. 10-824, 2011 WL 9155, at *4 (E.D. Mo. Jan. 3, 2011) (internal citation omitted). Further, if a claim fails to allege one of the elements necessary to recovery on a legal theory, that claim must be dismissed for failure to state a claim upon which relief can be granted. Crest Constr. II, Inc. v. Doe, 660 F.3d 346, 355 (8th Cir. 2011). Bare assertions constituting merely conclusory allegations failing to establish elements necessary for recovery will not suffice. See id. ("Plaintiffs, relying on facts not in the complaint, make bare assertions that [defendants] were not just lenders, but owners that controlled the RICO enterprise . . . these assertions are more of the same conclusory allegation . . . "). Courts must assess the plausibilityof a given claim with reference to the plaintiff's allegations as a whole, not in terms of the plausibility of each individual allegation. Zoltek Corp. v. Structural Polymer Grp., 592 F.3d 893, 896 n.4 (8th Cir. 2010) (internal citation omitted). 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.

III. DISCUSSION

A. Motion to Dismiss [ECF No. 16]

1. The Rooker-Feldman Doctrine and Subject Matter Jurisdiction

Midland first argues the present FDCPA claim is barred by the Rooker-Feldman doctrine. According to Midland, Rollins's First Amended Complaint "attempts to re-litigate and undo the state court's determination and, thus, is inextricably intertwined with the state court judgment" [ECF No. 17 at 6]. More specifically, Midland states, "In order for [Rollins] to succeed in this case, she must establish that the state court pleadings were insufficient, and such a finding would undermine the Default Judgment" [ECF No. 17 at 7]. Thus, Midland concludes, Rollins's "claims must be summarily dismissed for lack of subject matter jurisdiction" [ECF No. 17 at 8]. In response, Rollins claims she "does not challenge the issuance of the judgment and does not seek to have that judgment overturned" [ECF No. 21 at 7]. Rather, Rollins argues her...