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Stennett v. Midland Funding, LLC

United States District Court, W.D. Kentucky, Louisville

March 29, 2017

MICHAEL STENNETT PLAINTIFF
v.
MIDLAND FUNDING, LLC DEFENDANT

          MEMORANDUM OPINION

          Charles R. Simpson III, Senior Judge.

         I. Introduction

         Michael Stennett filed this claim alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. Compl. ¶ 1, ECF No. 1.[1] Midland Funding, LLC (“Midland”) moves to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), asserting that Stennett's complaint is barred by the FDCPA's one-year statute of limitations. Mot. Dismiss 1, ECF No. 7. Stennett responded, ECF No. 14. Midland replied, ECF No. 16. For the reasons below, the Court will grant Midland's motion to dismiss and will dismiss Stennett's claims with prejudice.

         II. Legal Standard

         Federal Rule of Civil Procedure 12(b)(6) permits a party to move to dismiss a cause of action for “failure to state a claim upon which relief can be granted.” To survive a motion to dismiss, a complaint must contain sufficient facts to state a claim that is “plausible on its face.” Bell Atl. Corp. v. Twombly, 55 U.S. 544, 570 (2007). A complaint states a plausible claim for relief when the court may “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A court is not required to accept legal conclusions or “threadbare recitals of the elements of a cause of action.” Id. When resolving a motion to dismiss, the court must “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Wesley v. Campbell, 779 F.3d 421, 428 (6th Cir. 2015) (quoting Directv, Inc. v. Treesch, 487 F.3d 471, 476 (6th Cir. 2007)). Generally, a motion to dismiss for failure to state a claim is “an inappropriate vehicle for dismissing a claim based upon the statute of limitations. But, sometimes the allegations in the complaint affirmatively show that the claim is time-barred.” Cataldo v. United States Steel Corp., 676 F.3d 542, 547 (6th Cir. 2012).

         III. Background

         On March 9, 2010, Midland filed suit against Stennett in the Meade County, Kentucky Circuit Court in an attempt to collect a charged-off credit card. Compl. ¶¶ 4, 6, ECF No. 1. On December 14, 2011, Midland obtained a default judgment against Stennett. Id. ¶ 8. On December 27, 2011, Midland filed a judgment lien in connection with the default judgment. Id. ¶ 12. The default judgment awarded Midland its court costs but did not specify an amount. Id. ¶ 15. The judgment lien included court costs of $413.62. Id. ¶ 14. Midland did not file a bill of costs with the court and did not serve a bill of costs on Stennett. Id. ¶¶ 19-20. On October 18, 2016, Stennett filed the present complaint. Civil Cover Sheet, ECF No. 1-1.

         Stennett alleges that Midland violated the FDCPA by (1) “including court costs in the amount due in the Judgment Lien where no Bill of Costs was filed in the Meade Circuit Court Case, ” and (2) “maintaining a judgment lien that misrepresents the amount due in the Judgment Lien.” Compl. ¶ 22, ECF No. 1. Stennett cites Currier v. First Resolution Inv. Corp., 762 F.3d 529, 535 (6th Cir. 2014) for the position that “[m]aintaining an invalid lien against a debtor's home falls comfortably within the kinds of practices Congress has identified as unfair under [the FDCPA].” Id.

         IV. Analysis

         Midland now moves to dismiss Stennett's complaint. Mot. Dismiss, ECF No. 7. Midland argues that the FDCPA's statute of limitations bars Stennett's claim. Id. at 2. In support of this argument, it asserts that (1) the FDCPA's statute of limitations runs from the date the judgment lien was filed, (2) “maintaining” a judgment lien is not a “discrete act” that starts the running of the FDCPA's statute of limitations each day the lien is in place, (3) the continuing-violation doctrine does not apply to FDCPA claims, and (4) Currier does not apply to this case. Id. at 6, 9, 11, 14. Stennett responded without directly addressing Midland's arguments. He instead argues that it was Midland's failure to file a bill of costs that created the FDCPA violation and that the statute of limitations only began to run after the five years passed during which Midland could file a bill of costs. Resp. Mot. Dismiss 2-4, ECF No. 14.

         A. Whether the FDCPA's Statute of Limitations Began to Run from the Date Midland Filed the Judgment Lien

         Turning to Midland's first argument, it asserts that the FDCPA's statute of limitations began to run from the date the judgment lien was filed. Mot. Dismiss 6, ECF No. 7. The FDCPA provides that an action to enforce liability under its provisions may be brought “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). An FDCPA claim will not be time barred so long as it alleges “a discrete violation of the FDCPA within the limitations period.” Purnell v. Arrow Fin. Servs., LLC, 303 F. App'x 297, 301 (6th Cir. 2008) (citations omitted). A “later effect[] of an earlier time-barred violation” does not constitute a discrete violation of the FDCPA. Malone v. Cavalry Portfolio Servs., LLC, No. 3:14-CV-00428-CRS, 2015 WL 7571881, at *2 (W.D. Ky. Nov. 24, 2015) (citing Slorp v. Lerner, Sampson & Rothfuss, 587 F. App'x 249, 259 (6th Cir. 2014)). Other courts outside this circuit have held that filing an invalid judgment lien is a discrete violation of the FDCPA. See, e.g., Osinubepi-Alao v. Plainview Fin. Servs., Ltd., 44 F.Supp.3d 84, 91 (D.D.C. 2014) (holding that “the act of placing a lien on a debtor's property is its own separate and discrete violation”); Fontell v. Hassett, 870 F.Supp.2d 395, 404 (D. Md. 2012) (“[I]t makes sense that the limitations period would begin at the time the lien was placed on Plaintiff's property, since this was the definitive action taken by Defendants that is alleged to constitute an abusive debt collection practice.”); Weiner v. McCoon, No. 06-CV-1328-IEG (POR), 2007 WL 2782843, at *4 (S.D. Cal. Sept. 24, 2007) (holding that the statute of limitations began to run on the date that the lien was filed).

         Midland asserts that Stennett's FDCPA claims accrued in December 2011, when it filed the judgment lien. Mot. Dismiss 2, ECF No. 7. Thus, Midland argues that Stennett's complaint, filed almost five years later, is barred by the FDCPA's statute of limitations. Id. The Court agrees that the most recent discrete act that Midland took, according to the complaint, was filing the judgment lien on December 27, 2011. Compl. ¶ 12, ECF No. 1. This discrete act began the statute of limitations period. The statute of limitations ran until December 27, 2012, before Stennett filed suit.

         B. Whether Maintaining a Judgment Lien is a Discrete Act for ...


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