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Brown v. LVNV Funding, LLC

United States District Court, E.D. Kentucky, Central Division, Lexington

October 6, 2014

APRIL BROWN, Plaintiff,


DANNY C. REEVES, District Judge.

This matter is pending for consideration of Defendant LVNV Funding, LLC's ("LVNV") motion to dismiss. [Record No. 7] LVNV argues that Plaintiff April Brown's Complaint fails to state a claim upon which relief may be granted. For the reasons discussed below, the defendant's motion will be granted.


On April 23, 2013, LVNV filed a Complaint in the Fayette District Court in an attempt to collect a debt owed by Brown.[1] [Record No. 7-2, p. 2] The debt arose in 2009 when Brown stopped making payments on a credit card issued by Citibank, N.A. On May 1, 2009, Citibank charged-off the $3, 618.33 debt.[2] [ Id. ]

On December 15, 2010, Citibank sold Brown's account to LVNV for approximately $181.00. [Record No. 8, p. 1] The parties dispute the amount due on the date that LVNV acquired the debt. According to Brown, Citibank had not imposed any interest on the credit card account between the charging-off and the sale to LVNV. [Record No. 1, p. 3] Brown argues that, as a result, Citibank "affirmatively waived any and all right it had to charge and accrue interest" on the debt. [ Id. ] However, LVNV's state court Complaint sought to recover $3, 657.33 as well as eight percent interest per annum from the date of charge-off. [Record No. 7-1, p. 2] LVNV's state court Complaint alleges, in its entirety:

1. The Defendant(s) is indebted to the Plaintiff under an agreement or account.
2. LVNV Funding LLC purchased this account. The original credit grantor is Citibank (South Dakota), N.A./WAMU.
3. Defendant(s) has failed to pay the plaintiff the remaining balance of its account in the sum of $3, 657.33, along with the interest at the annual rate of 8% from May 1, 2009, until the date of Judgment, then at 12% per annum on the Judgment until satisfied.

[Record No. 7-2] Brown contests both the balance of the principal amount of the debt and the accrual of interest. [Record No. 1]

On April 19, 2014, Brown filed the current action. [Record No. 1] Brown alleges that LVNV violated the FDCPA by: (i) attempting to collect unauthorized interest and a principal amount greater than the amount due; (ii) falsely representing the character, amount, and legal status of the debt and interest; and (iii) taking an "action that cannot legally be taken" in attempting to collect the debt and interest. [ Id. ]

LVNV moves for the dismissal of Brown's claims, alleging it had the right under Kentucky law[3] to seek payment of the debt and request the eight percent prejudgment interest in the collection proceeding. It argues that the act of seeking the full amount of the debt and requesting interest does not constitute a violation of the FDCPA. [Record Nos. 7, 12]


When evaluating a motion to dismiss under Rule 12(b)(6), a district court determines whether a complaint alleges "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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (1007)). The plausibility standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). Although the complaint need not contain "detailed factual allegations" to survive a motion to dismiss, "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." Twombly, 550 U.S. at 555 (internal quotation marks and alteration omitted).

In considering a 12(b)(6) motion, the Court is required to "accept all of plaintiff's factual allegations as true and determine whether any set of facts consistent with the allegations would entitle the plaintiff to relief." G.M. Eng'rs & Assoc., Inc. v. West Bloomfield Twp., 922 F.2d 328, 330 (6th Cir. 1990) (citation omitted). However, the Court need not accept as true legal conclusions cast in the form of factual allegations if those conclusions cannot be plausibly drawn from the facts, as alleged. See Iqbal, 556 U.S. at 678 ("[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions."); see also Papasan v. Allain, 478 U.S. 265, 286 (1986) (in reviewing a motion to ...

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