Filed: May 19, 2016
Latest Update: Mar. 02, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 15-2171 ABDUL CONTEH; DADAY CONTEH, Plaintiffs - Appellants, v. SHAMROCK COMMUNITY ASSOCIATION, INC.; NAGLE & ZALLER, P.C., Defendants - Appellees. Appeal from the United States District Court for the District of Maryland, at Baltimore. Beth P. Gesner, Magistrate Judge. (1:14-cv-00794-BPG) Submitted: April 29, 2016 Decided: May 19, 2016 Before KEENAN, WYNN, and THACKER, Circuit Judges. Affirmed in part, vacated in part, and re
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 15-2171 ABDUL CONTEH; DADAY CONTEH, Plaintiffs - Appellants, v. SHAMROCK COMMUNITY ASSOCIATION, INC.; NAGLE & ZALLER, P.C., Defendants - Appellees. Appeal from the United States District Court for the District of Maryland, at Baltimore. Beth P. Gesner, Magistrate Judge. (1:14-cv-00794-BPG) Submitted: April 29, 2016 Decided: May 19, 2016 Before KEENAN, WYNN, and THACKER, Circuit Judges. Affirmed in part, vacated in part, and rem..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-2171
ABDUL CONTEH; DADAY CONTEH,
Plaintiffs - Appellants,
v.
SHAMROCK COMMUNITY ASSOCIATION, INC.; NAGLE & ZALLER, P.C.,
Defendants - Appellees.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Beth P. Gesner, Magistrate Judge.
(1:14-cv-00794-BPG)
Submitted: April 29, 2016 Decided: May 19, 2016
Before KEENAN, WYNN, and THACKER, Circuit Judges.
Affirmed in part, vacated in part, and remanded by unpublished
per curiam opinion.
E. David Hoskins, Steven B. Isbister, THE LAW OFFICES OF E.
DAVID HOSKINS, LLC, Baltimore, Maryland, for Appellants. Craig
B. Zaller, Brian R. Fellner, NAGLE & ZALLER, P.C., Columbia,
Maryland, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Abdul and Daday Conteh (Conteh) appeal the magistrate
judge’s order dismissing their complaint that featured claims
under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.
§§ 1692-1692p (2012), the Maryland Consumer Debt Collection Act,
Md. Code Ann., Com. Law §§ 14-201 to -204 (2013), and the
Maryland Consumer Protection Act (MCPA), Md. Code Ann., Com. Law
§§ 13-101 to -501 (2013). Conteh’s claims stem from Nagle &
Zaller, P.C. (“Nagle”) filing a writ of execution to satisfy a
judgment in favor of Shamrock Community Association (“Shamrock”)
for condominium homeowner payments that Conteh failed to timely
pay. Conteh’s complaint alleged that the judgment principal and
amount owed on the judgment as listed in the writ of execution
exceeded the actual judgment principal and amount owed on the
judgment. The parties consented to the resolution of the
complaint by a magistrate judge. Pursuant to Fed. R. Civ. P.
12(b)(6), the magistrate judge dismissed Conteh’s complaint in
its entirety.
We review de novo the district court’s dismissal for
failure to state a claim under Fed. R. Civ. P. 12(b)(6). Sec’y
of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700,
705 (4th Cir. 2007). “[W]hen ruling on a defendant’s motion to
dismiss, a judge must accept as true all of the factual
allegations contained in the complaint.” Erickson v. Pardus,
2
551 U.S. 89, 94 (2007). “While a complaint attacked by a Rule
12(b)(6) motion to dismiss does not need detailed factual
allegations, . . . a formulaic recitation of the elements of a
cause of action will not do” and the complaint must contain
“enough facts to state a claim to relief that is plausible on
its face.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555, 570
(2007). Having reviewed the record and the relevant case law,
we affirm the magistrate judge’s order in part, vacate in part,
and remand for further proceedings.
I.
Conteh’s complaint alleged that Nagle violated two
provisions of the FDCPA by filing a writ of execution that
listed an inflated judgment principal and amount due on the
judgment. Turning to Conteh’s first claim under the FDCPA, a
debt collector is prohibited from using “any false, deceptive,
or misleading representation or means in connection with the
collection of any debt.” 15 U.S.C. § 1692e. “Whether a
communication is false, misleading, or deceptive in violation of
§ 1692e is determined from the vantage of the ‘least
sophisticated consumer.’” Powell v. Palisades Acquisition XVI,
LLC, 782 F.3d 119, 126 (4th Cir. 2014) (internal quotation marks
omitted). When viewing a misstatement from the perspective of
the “least sophisticated consumer,” we “consider how a naive
consumer would interpret the statement.” Elyazidi v. SunTrust
3
Bank, 780 F.3d 227, 234 (4th Cir. 2015) (internal quotation
marks omitted). A misstatement must be material to sustain a
claim under 15 U.S.C. §1692e; that is, the misstatement must
have the potential to “frustrate [the least sophisticated]
consumer’s ability to intelligently choose his or her response,”
id. (internal quotation marks omitted), or must be the type of
misstatement that “would have been important to the consumer in
deciding how to respond to efforts to collect the debt,”
Powell,
782 F.3d at 127.
Although the magistrate judge stated the “least
sophisticated consumer” test, the magistrate judge erred by
relying on how Conteh actually acted when determining whether
Nagle’s misstatement regarding the judgment principal and amount
owed on the judgment was material. Instead, as stated in
Powell, the proper analysis requires consideration of the degree
to which the amount due on the debt was overstated and whether
the extent of the overstatement would have been material to the
least sophisticated consumer. Id. at 126-27 (noting that “mere
technical falsehoods” are not actionable and that a de minimis
misstatement might not be actionable but that an overstatement
of 50% “easily satisf[ied]” the materiality requirement). Here,
the writ of execution identified $1,748.98 as the amount Conteh
owed while Conteh’s amended complaint alleged that the amount
due on the judgment at the time the writ was filed was
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$1,583.96. Accordingly, the writ allegedly overstated the
amount owed by $165.02, or by 10.4%. While the degree of the
alleged overstatement is not as significant as the overstatement
in Powell, we conclude that an overstatement of 10.4% is
sufficient to be important to how the least sophisticated
consumer responds by causing confusion and a potential challenge
by the consumer to the writ. In so concluding, we note the
increased potential for confusion where the writ allegedly
identified a judgment principal from a prejudgment demand letter
even though the state court judgment awarded Shamrock a lesser
judgment principal than demanded. Therefore, we vacate the
magistrate judge’s dismissal of Conteh’s 15 U.S.C. § 1692e
claim.
Turning to Conteh’s second claim under the FDCPA, a debt
collector is prohibited from “engag[ing] in any conduct the
natural consequence of which is to harass, oppress, or abuse any
person in connection with the collection of a debt.” 15 U.S.C.
§ 1692d. Other circuits have concluded that the filing of a
debt collection action, or the threat of such action, does not
constitute harassment or abuse of the debtor where the debt
collector relies on valid state court proceedings. See Harvey
v. Great Seneca Fin. Corp., 453 F.3d 324, 330-31 (6th Cir. 2006)
(holding that filing of debt collection action did not
constitute harassment or abuse even when debt collector lacked
5
means to establish debt at time of filing action); Jeter v.
Credit Bureau Inc., 760 F.2d 1168, 1179 (11th Cir. 1985)
(holding that threat of legal action if debt not paid does not
harass or abuse the debtor). In the context of 15 U.S.C.
§ 1692f, we have found that a debt collector’s “enforce[ment]
[of] their contractual rights in compliance with state court
procedure” cannot plausibly be construed as “unfair or
unconscionable” conduct.
Elyazidi, 780 F.3d at 235. We apply
our holding in Elyazidi and adopt the position stated in Harvey
to conclude that a debt collector’s initiation of a state court
proceeding cannot legally constitute harassment, oppression, or
abuse of the debtor. 1 Accordingly, we affirm the magistrate
judge’s dismissal of Conteh’s claim under 15 U.S.C. § 1692d.
II.
With respect to the MCDCA, Conteh’s amended complaint
alleged that the filing of and the misstatement in the writ of
execution violated Md. Code Ann., Com. Law §§ 14-202(6), (8).
The magistrate judge concluded that Nagle and Shamrock did not
1 On appeal, Conteh contends that the filing of the writ of
execution constituted harassment because Nagle knew there was no
equity in the condominium unit in seeking to force its sale to
satisfy the judgment in favor of Shamrock. We find no legal
authority supporting Conteh’s argument and decline to adopt the
argument, given that the alleged lack of equity in the
condominium at the time the writ was filed did not necessarily
foreclose Nagle from recovering all or part of the judgment owed
through the sale of the condominium.
6
violate § 14-202(6) because the filing of a writ of execution is
not a communication with the debtor and that no violation of
§ 14-202(8) occurred because, although the writ of execution may
have sought an amount in excess of the amount owed, the writ was
filed in an effort to recover a valid debt.
Under Md. Code Ann., Com. Law § 14-202(6), a debt
collector, in collecting or attempting to collect an alleged
debt, may not “[c]ommunicate with the debtor or a person related
to him with the frequency, at the unusual hours, or in any other
manner as reasonably can be expected to abuse or harass the
debtor.” As with Conteh’s claim under 15 U.S.C. § 1692d, we
conclude that a debt collector’s resort to state court
proceedings and the filing of a writ of execution cannot legally
constitute a communication that harasses or abuses the debtor.
Accordingly, we decline to address whether the filing of a writ
of execution constitutes a type of communication sufficient to
trigger the protections afforded by Md. Code Ann., Com. Law
§ 14-202(6); instead, we affirm the magistrate judge’s dismissal
on this alternative ground. Cf. Toll Bros., Inc. v. Dryvit
Sys., Inc., 432 F.3d 564, 572 (4th Cir. 2005) (noting that
appellate court may affirm a grant of summary judgment “on any
ground appearing in the record”).
Pursuant to Md. Code Ann., Com. Law § 14-202(8), a debt
collector may not “[c]laim, attempt, or threaten to enforce a
7
right with knowledge that the right does not exist.” A debt
collector violates this provision by placing a lien on the
debtor’s property for an amount in excess of the amount to which
the debt collector is rightfully entitled if the amount sought
exceeds the amount owed as a result of the debt collector’s
inclusion of an unauthorized type of charge. See Allstate Lien
& Recovery Corp. v. Stansbury, 101 A.3d 520, 529-30 (Md. Ct.
Spec. App. 2014) (holding that debt collector’s inclusion of
unauthorized $1,000 processing fee in filing of lien constituted
seeking right that did not exist for purposes of § 14-202(8)
even though lien was filed on valid debt). Although the writ of
execution allegedly sought an amount in excess of what Conteh
owed, because the magistrate judge dismissed the case prior to
discovery, it is not apparent from the record whether the
alleged misstatement of the amount owed was the result of a
typographical or mathematical error by Nagle or whether it was
the result of Nagle and Shamrock including a type of charge not
authorized by the underlying judgment on which they sought
satisfaction. Therefore, we vacate the magistrate judge’s
dismissal of Conteh’s claim under Md. Code Ann., Com. Law § 14-
202(8) and remand for further proceedings. 2
2 Because we vacate the dismissal of one of Conteh’s claims
under the MCDCA, we also vacate the magistrate judge’s dismissal
of Conteh’s claim under the MCPA. See Md. Code Ann., Com. Law
(Continued)
8
Accordingly, we affirm the magistrate judge’s order with
respect to the dismissal of Conteh’s claims under 15 U.S.C.
§ 1692d and Md. Code Ann., Com. Law § 14-202(6), but vacate the
order with respect to the dismissal of Conteh’s claims under 15
U.S.C. §1692e and Md. Code Ann., Com. Law § 14-202(8). We
remand for further proceedings consistent with this opinion. We
dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before
this court and argument would not aid the decisional process.
AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED
§ 13-301(14)(iii) (providing that plaintiff makes out viable
claim for violation of MCPA by pleading viable MCDCA violation).
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