United States District Court, W.D. Kentucky, Louisville
MEMORANDUM OPINION AND ORDER
THOMAS B. RUSSELL, Senior District Judge.
Plaintiff Ralph Blackburn brought this action against Defendant Mapother & Mapother, P.S.C. for violations of the Federal Debt Collection Practices Act (FDCPA). Defendant moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted, due to: (1) the applicable statute of limitations and (2) Plaintiff's failure to state a plausible violation of the FDCPA.
The Court will summarize relevant facts as Plaintiff presents them. Mapother was retained to collect a debt Plaintiff owed to Capital One Auto Finance. On May 25, 2010, Plaintiff and Defendant entered into an agreement through counsel to resolve the account for $5, 250.00, to be paid over thirty $175.00 monthly installments due on the 27th of each month. That same day, Defendant accepted Plaintiff's first payment via a check by phone.
Payments were accepted without incident until Defendant returned Plaintiff's September 2012 payment without explanation. On June 6, 2013, Plaintiff, by its counsel, sent a letter to Defendant requesting that the settlement be honored. On June 19, 2013, Defendant sent a letter in response refusing to honor the settlement. Defendant also advised that the account was in default and the full balance was due.
Defendant moves to dismiss pursuant to Rule 12(b)(6) on statute of limitations grounds and for failure to state a claim upon which relief may be granted. When considering a 12(b)(6) motion to dismiss, courts must "construe the complaint in the light most favorable to the plaintiff" and "accept all well-pleaded factual allegations as true." La. Sch. Emps.' Ret. Sys. v. Ernst & Young, LLP, 622 F.3d 471, 477 (6th Cir. 2010). The Court will draw all reasonable inferences in favor of the plaintiff. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).
Congress enacted the FDCPA to eliminate "the use of abusive, deceptive, and unfair debt collection practices by [ ] debt collectors." 15 U.S.C. § 1692(a). The FDCPA provides a one-year statute of limitations running "from the date on which the violation occurs." 15 U.S.C. § 1692k(d). Generally, no extensions are given. See Ruth v. Unifund CCR Partners, et al., 604 F.3d 908, 910 (6th Cir. 2010). Plaintiff concedes that this one-year statute of limitations applies and that there are no applicable grounds for an exception. Plaintiff filed this action on January 23, 2014. Therefore, to comply with the statute of limitations, any alleged violation of the FDCPA must have occurred on or after January 23, 2013.
Plaintiff argues that although his payment was refused in September 2012, his claim did not ripen until June 19, 2013, when Defendant denied Plaintiff's attempt to enforce the agreement. Defendant argues that this is an impermissible attempt to "piggy back" an FDCPA claim on correspondence about an earlier, time-barred FDCPA violation.
The Court must determine whether Plaintiff successfully alleged a "discrete violation of the FDCPA within the limitations period" or merely a "later effect[ ]" of an earlier time-barred violation. Purnell v. Arrow Fin. Servs., LLC, 303 F.Appx. 297, 301-02 (6th Cir. 2008). The narrow question before the Court is whether Defendant's June 2013 correspondence with Plaintiff constituted a discrete act.
To explain the difference between a discrete violation and a later effect, the Sixth Circuit in Purnell discussed Ledbetter v. Goodyear Tire & Rubber Co, Inc., 550 U.S. 618 (2007), a Title VII action. In Ledbetter, the Supreme Court held that "the lesser paychecks plaintiff received within the limitations period were not themselves acts of intentional discrimination, but were alleged to be the effects of prior discriminatory acts that occurred outside the limitations period." 303 F.Appx. at 302. In Purnell, the plaintiff alleged that the defendant repeatedly reported an unverified debt to the credit bureau. The Sixth Circuit allowed part of the plaintiff's claims to go forward, noting, "It is not the taint of the original decision to report the debt, but the repeated reporting of the debt within the limitations period that is the basis for plaintiff's claims." Id. at 303. Here, Plaintiff alleges "wrongful demand for the full account balance" in June 2013. E.C.F. No. 1. It is not the taint of the original decision to refuse payment but rather the wrongful demand for full payment within the limitations period that is the basis for Plaintiff's claim.
The Supreme Court, in the Title VII context, has explained that discrete acts within the statute of limitations period that are related to prior acts are not barred so long as the acts are "independently discriminatory." See Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 113 (2002). Although related to Defendant's alleged refusal to accept the September 2012 payment, the June 2013 demand for full payment is an independent debt collection act that Plaintiff alleges was abusive, deceptive, or unfair within the meaning of the FDCPA.
For these reasons, the Court finds that the Defendant's alleged demand for payment in full is a discrete act occurring within the statute of limitations. However, Plaintiff's § 1692e claim for false and misleading representations is only advanced with regard to Defendant's act of offering the settlement agreement to Plaintiff in May 2010. Because this act occurs outside the statute of limitations period, the Court will dismiss Plaintiff's § 1692e claim as time-barred. In ...