J. OWEN FORRESTER, Senior District Judge.
This matter is before the court on Defendant's motion to dismiss [15]; Defendant's motion to dismiss second amended complaint [19]; and the Non-Final Report and Recommendation of Magistrate Judge Russell G. Vineyard [23].
Having read and considered the Non-Final Report and Recommendation of Magistrate Judge Russell G. Vineyard, it is ADOPTED as the ORDER of this court. The court DENIES AS MOOT Defendant's motion to dismiss [15]. The court DENIES Defendant's motion to dismiss second amended complaint [19].
RUSSELL G. VINEYARD, United States Magistrate Judge.
Attached is the Non-Final Report, Recommendation, and Order of the United States Magistrate Judge made in this action in accordance with 28 U.S.C. § 636(b)(1), Fed.R.Civ.P. 72(b), and this Court's Local Rule 72. Let the same be filed and a copy, together with a copy of this Order, be served upon counsel for the parties.
Pursuant to 28 U.S.C. § 636(b)(1), each party may file written objections, if any, to the Report and Recommendation within fourteen (14) days of the receipt of this Order. Should objections be filed, they shall specify with particularity the alleged error or errors made (including reference by page number to the transcript if applicable) and shall be served upon the opposing party. The party filing objections will be responsible for obtaining and filing the transcript of any evidentiary hearing for review by the district court. If no objections are filed, the Report and Recommendation may be adopted as the opinion and order of the district court and any appellate review of factual findings will be limited to a plain error review. United States v. Slay, 714 F.2d 1093 (11th Cir.1983) (per curiam).
The Clerk is directed to submit the Report and Recommendation with objections, if any, to the district court after expiration of the above time period.
Plaintiff Julius Kuria ("Kuria") brings this action against Palisades Acquisitions XVI, LLC ("Palisades") alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. and the Georgia Fair Business Practices Act ("GFBPA"), O.C.G.A. § 10-1-399 (2000). [Doc. 14]. Pending before the Court are Palisades' motions to dismiss the first amended complaint and the second amended complaint, [Docs. 15 & 19], and Kuria's motion for leave to file the second amended complaint pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure, [Doc. 20]. For the following reasons, Kuria's motion for leave to file the second amended complaint [Doc. 20] is
Palisades is a Delaware corporation with its principal office in New Jersey. [Doc. 16 ¶ 5]. Palisades' sister company is named "Palisades Collection, LLC," and is located at the same address in Englewood, New
On December 1, 2008, Palisades sued Kuria in the State Court of Clayton County, Georgia for an amount allegedly due on a credit card account formerly owned by Providian that Palisades had purchased. [Doc. 16 ¶¶ 6, 10]. Kuria denies owing the sums claimed by Palisades or any debt to Providian. [Id. at ¶ 11]. When Kuria requested discovery, Palisades voluntarily dismissed the state court action on October 30, 2009, purportedly because it had no documentation substantiating the existence or validity of the debt aside from an entry on an electronic spreadsheet containing similar information about many other accounts. [Id. at ¶¶ 16-18].
On November 24, 2009, Kuria filed the instant suit alleging violations of the FDCPA and the GFBPA.
On March 29, 2010, Kuria, without leave of court or Palisades' consent, filed a second amended complaint adding only additional factual allegations to support the FDCPA and GFBPA claims. [Doc. 16]. On April 9, 2010, Palisades filed a motion to dismiss the second amended complaint prior to a ruling on the motion to dismiss the first amended complaint. [Doc. 19]. On April 21, 2010, Kuria moved for nunc pro tunc leave to file the second amended complaint. [Doc. 20].
Palisades has moved to dismiss the second amended complaint because Kuria failed to obtain either its consent or leave of court prior to amending the complaint as required by Rule 15(a)(1) of the Federal Rules of Civil Procedure. [Doc. 19-1 at 5]. Kuria argues that he was not required to obtain leave to file the second amended complaint because under Rule 15(a)(1) he was entitled to amend the complaint as a matter of course within 21 days after serving it on the defendant or within 21 days of defendant filing a motion to dismiss under Rule 12(b)(6). [Doc. 20 at 3-4; Doc. 21 at 2]. However, recognizing that the Court
Rule 15(a)(1) states:
Fed.R.Civ.P. 15(a)(1) (2009). Kuria's argument that the second amended complaint was properly filed under Rule 15(a)(1) overlooks the fact that the rule permits a party to amend its pleading "once" as a matter of course and requires that the amendment occur within 21 days after serving the pleading or 21 days after service of a responsive pleading or designated motion, "whichever is earlier." Id. "The 21-day periods to amend once as a matter of course after service of a responsive pleading or after service of a designated motion are not cumulative." Fed. R.Civ.P. 15 advisory committee's notes, 2009 amends.
Thus, Kuria's argument that the second amendment to the complaint falls within the scope of Rule 15(a)(1) would require the Court to view the first amended complaint, instead of the original complaint, as the first pleading in this case. Kuria asserts that such a view is proper in light of the fact that the original complaint was filed naming the wrong defendant (Palisades Collection, LLC), therefore, the first amended complaint (naming the proper defendant, Palisades Acquisitions XIV, LLC) was actually the first "pleading" in the chain of complaints for the purposes of Rule 15(a)(1) because it was the first complaint "accepted by" Palisades Acquisitions XVI, LLC. [Doc. 20 at 3-4]. Kuria cites no authority in support of this argument, and his contention is contrary to the plain language of Rule 15(a)(1) as well as a common-sense application of the rule to these facts. Furthermore, viewing the first amended complaint as a new Rule 15 "pleading" is inconsistent with the relation back argument Kuria advances in response to Palisades' contention that this action is time barred, as discussed infra.
However, Kuria has also moved for leave to amend the complaint under Rule 15(a)(2), and to allow the amendment to be granted after the fact and made retroactive to the date that the second amended complaint was filed (an amendment nunc pro tunc). In circumstances where a party is not authorized to amend as a matter of course, Rule 15(a)(2) provides that a party may amend its complaint only by leave of court or by written consent of the adverse party. Fed.R.Civ.P. 15(a). Rule
Kuria's motion for leave to amend nunc pro tunc is due to be granted because there is no apparent bad faith, dilatory motive, undue prejudice to Palisades, or other sufficient cause to deny leave to amend. See Lamoureux v. AnazaoHealth Corp., 250 F.R.D. 100, 103 (D.Conn.2008) (granting plaintiffs motion to amend complaint nunc pro tunc where leave was required under Rule 15 and "plaintiffs' amendments do not materially change the scope of the litigation . . . [but rather] help clarify the positions of the respective plaintiffs") (citing Foman, 371 U.S. at 182, 83 S.Ct. 227; Sapiro v. Encompass Ins., 221 F.R.D. 513, 517-18 (N.D.Cal.2004); Bell v. Executive Comm. of United Food & Commercial Workers Pension Plan for Emps., 191 F.Supp.2d 10, 13 (D.D.C.2002)). Kuria's second amended complaint changes none of the claims asserted, and it changes none of the legal theories under which plaintiff intends to proceed. Rather Kuria's amendments add additional factual information to support the allegations in the complaint, ostensibly in response to Palisades' motion to dismiss for failure to adequately state a claim. [Doc. 20 at 5]. Palisades could not be said to have suffered any prejudice considering that it has already received the amended complaint and responded with a motion to dismiss. [Id.; Doc. 19]. Granting Kuria's motion for leave to amend would provide for more efficient resolution of the instant litigation consistent with the spirit of Rule 15 by allowing this Court to address Palisades's pending motion to dismiss the second amended complaint. Palisades has also cited no grounds upon which this Court might properly deny leave to amend.
Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of an action when the complaint fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). In considering a motion to dismiss, the court must accept the plaintiff's allegations as true and construe the complaint in the plaintiff's favor. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Duke v. Cleland, 5 F.3d 1399, 1402 (11th Cir.1993). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quotation marks, citations, and brackets omitted). To survive a motion to dismiss, a complaint must "`give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Id. at 555, 127 S.Ct. 1955 (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).
"Rule 8(a)(2) of the Federal Rules of Civil Procedure requires that a pleading contain `a short and plain statement of the claim showing that the pleader is entitled to relief.'" Broner v. Washington Mut. Bank, FA, 258 Fed.Appx. 254, 256 (11th Cir.2007) (per curiam) (unpublished) (quoting Fed.R.Civ.P. 8(a)(2)).
129 S.Ct. at 1949-50 (internal marks and citations omitted).
Palisades advances three grounds on which to dismiss Kuria's second amended complaint: (1) Palisades is not a "debt collector" under the FDCPA; (2) merely filing a lawsuit to collect a debt is not a violation of the FDCPA or GFBPA;
Palisades asserts that it is a "creditor" under FDCPA, not a "debt collector," therefore, Kuria cannot state a claim for which relief can be granted against it under either the FDCPA or GFBPA. [Doc. 15-1 at 5-6; Doc. 19-1 at 5-6]. 15 U.S.C. § 1692a reads in part:
15 U.S.C. § 1692a.
The FDCPA is generally inapplicable to a "creditor" unless that entity has used a third-party name to collect its own debt. Russell-Allgood v. Resurgent Capital Svcs., L.P., 515 F.Supp.2d 1307, 1310-11 (N.D.Ga.2007). Therefore, Palisades presumptively is not liable under the FDCPA for collection actions undertaken on its own debts and in its own name. However, a "creditor" may be treated as a "debt collector" under the FDCPA if the creditor bought a debt already in default at the time of purchase for the purpose of collecting it directly. Bates v. Novastar/Nationstar Mortgage, LLC, Civil Action File No. 1:08-CV-1443-TWT, 2008 WL 2622810, at *6 (N.D.Ga. June 24, 2008) ("The FDCPA definitions for creditor and debt collector are separate but overlap, allowing for the possibility that a creditor could also be a `debt collector' subject to the statute, if the debt was already in default at the time the creditor acquired it.") (citing Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir.1985); Monroe v. CitiMortgage, Inc., No. 8:07-cv-0066-SCB-TGW, 2007 WL 1560194 at *2 (M.D.Fla. May 29, 2007)). See also Schlosser v. Fairbanks Capital Corp., 323 F.3d 534, 536 (7th Cir.2003) ("the Act treats assignees as debt collectors if the debt sought to be collected was in default when acquired by the assignee, and as creditors if it was not."); Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 106 (9th Cir. 1996); McCorriston v. L.W.T., Inc., No. 8:07-cv-160-T-27EAJ, 2008 WL 3243865, at *5 (M.D.Fla. Aug. 7, 2008).
Neither Kuria nor Palisades dispute that Palisades is a third-party buyer of the debt originally claimed to be owed by Kuria to Providian Bank. [Doc. 15-1 at 1-2; Doc. 16 ¶¶ 9-11]. Kuria alleges, and Palisades does not dispute, that the debt was in default when Palisades purchased it. [Doc. 16 ¶ 21; Doc. 17 at 5-6; Doc. 18 at 2]. Viewing all facts alleged in the complaint as true, and construing the complaint in Kuria's favor, Palisades is not exempt as a matter of law from the FDCPA and GFBPA violations alleged by Kuria because there is authority in this and other jurisdictions holding that a third party who buys debt already in default may be liable for FDCPA violations as a "debt collector" despite having "creditor" status. See Bates, 2008 WL 2622810, at *6 et al. cited supra. Palisades' motion to dismiss cannot therefore be granted on this basis.
Palisades asserts that Kuria's second amended complaint merely "recites the provisions of the [FDCPA]" without providing factual support sufficient to meet the standards for pleading elaborated in Twombly and Iqbal. [Doc. 19-1 at 7-8]. Palisades specifically argues that the second amended complaint essentially alleges that Palisades did not have documents sufficient to establish its prima facie case at the time it filed the state court suit, but the "mere filing of a lawsuit without the immediate means of proof is not a violation of the FDCPA." [Id. at 8 (citing Harvey v. Great Seneca Fin. Corp., 453 F.3d 324 (6th Cir.2006); and Deere v. Javitch, Block & Rathbone, LLP, 413 F.Supp.2d 886 (S.D.Ohio 2006))]. Under these cases, a plaintiff has not satisfactorily pled a FDCPA violation against a defendant similarly situated to the defendant in the instant case
Palisades also argues that filing a collection suit against the wrong debtor is not actionable under the FDCPA. [Doc. 19-1 at 8 (citing Gonzalez v. Erskine, CASE No. 08-20893-CIV, 2008 WL 6822207, at *3 (S.D.Fla. Aug. 7, 2008))]. In Gonzalez, the court granted a defendant's motion to dismiss under similar circumstances,
In Williams, the court distinguished Harvey and Deere in denying the defendant's motion to dismiss, explaining as follows.
Williams, 480 F.Supp.2d at 1022.
While Kuria's complaint here is not squarely on all fours with Williams in that it does not specifically allege that an affidavit attached to the state court lawsuit was not based on personal knowledge, it is strikingly similar in its allegation of a pattern and practice of abusive, scattershot litigation to collect debts. Kuria here alleges that Palisades' intent was not to "take its claims against Mr. Kuria to trial
Under 15 U.S.C. § 1692k(d), a plaintiff must file a claim alleging a FDCPA violation within one year of the date of the violation or the action will be barred. Maloy v. Phillips, 64 F.3d 607, 608 (11th Cir.1995) (per curiam). The parties do not dispute that the alleged FDCPA violation (the filing of the lawsuit against Kuria) occurred on December 1, 2008, the original complaint naming Palisades Collection, LLC (the wrong defendant) was timely filed on November 24, 2009, and that the first amended complaint naming Palisades Acquisitions XVI, LLC was filed after the expiration of the limitations period on March 9, 2010. [Doc. 17 at 14; Doc. 19-1 at 10-11]. Kuria argues that the first amended pleading naming Palisades Acquisitions XVI, LLC should be allowed to relate back to the date of the original complaint under Rule 15(c)(1)(C) to avoid being barred by the statute of limitations. [Doc. 17 at 14; Doc. 22].
Federal Rule of Civil Procedure 15(c) provides:
Fed.R.Civ.P. Rule 15(c).
The Supreme Court's recent opinion in Krupski v. Costa Crociere S.p.A. is particularly relevant to the instant case. ___ U.S. ___, 130 S.Ct. 2485, 177 L.Ed.2d 48 (2010). In Krupski, the plaintiff filed suit against a cruise line, naming as a defendant "Costa Cruises," the name printed on her ticket Id. at 2487 However, after the limitations period expired, counsel for Costa Cruises notified the plaintiff that the proper defendant was in fact an entity named "Costa Crociere." Id. As in the instant case, both defendants were represented by the same counsel. The plaintiff amended her complaint to name Costa Crociere as the defendant, and the district court granted Costa Crociere's motion to dismiss, holding that she "had not made a mistake about the proper party's identity because, although Costa Cruise had disclosed Costa Crociere's role in several court filings, she nonetheless delayed for months filing an amended complaint." Id. The Eleventh Circuit affirmed, holding that she "either knew or should have known of Costa Crociere's identity as a potential party because she furnished the ticket identifying it to her counsel well before the limitations period ended."
Id. at 2488-89.
The instant case likewise is one in which relation back is appropriate. Kuria timely filed suit against a defendant that for all purposes appeared to be named correctly in the original complaint,
For the foregoing reasons, Kuria's motion for leave to file the second amended complaint, [Doc. 20], is