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Nix v. McCabe Trotter & Beverly PC

United States District Court, D. South Carolina, Charleston Division

September 5, 2018

Alan G. Nix, Plaintiff,
McCabe Trotter & Beverly PC and Todd M. Musheff LLC, Defendants.



         This action was originally filed by the Plaintiff, pro se, in the South Carolina Court of Common Pleas, Charleston County. The case was subsequently removed to this Court by the Defendants on May 17, 2018, asserting federal question jurisdiction on the ground that Plaintiff is asserting a claim under the Fair Debt Collections Practices Act (FDCPA), 15 U.S.C. § 1692, et. seq. See 28 U.S.C. § 1441(a) and (c). Shortly thereafter, the Defendants filed a Rule 12 motion to dismiss the Complaint.

         As the Plaintiff is proceeding pro se, a Roseboro order was entered by the Court on May 30, 2018, advising Plaintiff of the importance of a dispositive motion and of the need for him to file an adequate response. Plaintiff was specifically advised that if he failed to file an adequate response, the Defendants' motion may be granted, thereby ending his case. After receiving an extension of time to file his response, Plaintiff filed a response in opposition to the Defendants' motion on July 19, 2018. Defendants' filed a reply memorandum that same date.

         The Defendants' motion is now before the Court for disposition.[1]


         When considering a Rule 12 motion to dismiss, the Court is required to accept the allegations in the pleading as true, and draw all reasonable factual inferences in favor of the party opposing the motion. The motion can be granted only if the party opposing the motion has failed to set forth sufficient factual matters to state a plausible claim for relief “on its face”. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). See also Vogt v. Greenmarine Holding, LLC, 318 F.Supp.2d 136, 144 (S.D.N.Y. 2004) [ “[O]n a motion to dismiss, the Court does not weigh the strength of the evidence, and simply considers whether the [claim] alleges sufficient facts which, if true, would permit a reasonable fact finder to find [the party seeking dismissal of the claim] liable.”]. Further, the Federal Court is also charged with liberally construing a complaint filed by a pro se litigant to allow for the development of a potentially meritorious case. See Cruz v. Beto, 405 U.S. 319 (1972); Haines v. Kerner, 404 U.S. 519 (1972).

         Even so, the requirement of liberal construction does not mean that the Court can ignore a clear failure in the pleadings to allege facts which set forth a Federal claim, nor can the Court assume the existence of a genuine issue of material fact where none exists. Weller v. Dep't of Social Services, 901 F.2d 387 (4th Cir. 1990). Here, after careful review and consideration of the pleadings in this case and the arguments of the parties, and in light of the requirements of Rule 12 and the liberal construction given to pro se pleadings, the undersigned finds for the reasons set forth hereinbelow that the Defendants' motion should be granted.

         Plaintiff alleges in his Complaint that he (and his wife) were Defendants in a foreclosure action by his Homeowners Association (Churchill Park) due to the failure of the Nixs to pay assessments owed to the Homeowners Association. See Complaint, ¶¶ 8-10, and attached Exhibit D. The Defendant McCabe, Trotter & Beverly, PC was the law firm representing the Homeowners Association in that lawsuit. Plaintiff further alleges that the Defendant Todd Musheff, who was at that time special counsel to McCabe, Trotter & Beverly, [2] appeared at a hearing in the foreclosure case on behalf of the Plaintiff on May 4, 2017. Id., ¶ 11, and attached Exhibit A. Plaintiff alleges that Gold Crown Management, Inc. was Churchill Parks' management company at the time of this hearing, and that Gold Crown did not send him an invoice for the assessments allegedly owed to Churchill Parks during 2017. Id., ¶ ¶ 14-19. Plaintiff alleges that when Musheff was asked by the Judge at the hearing the amount of debt allegedly owed by the Nixs, he responded that it was in the “ballpark” of $ 5, 000. Id., ¶ ¶ 20-21, and attached Exhibit A, p. 5. Plaintiff alleges, however, that Churchill Parks' accounting list showed a balance owing on the account as of May 12, 2017 of only $2, 209.08, substantially less than the “$5, 000, in that ballpark” statement of Musheff at the hearing of May 4, 2017. Id., ¶ ¶ 22-23, and attached Exhibit B. Plaintiff alleges that at the time of the May 4, 2017 hearing, the Defendants included $1, 900 in attorney's fees, $661.75 in attorney costs, and $ 183.45 in interest, which when totaled with the amount of assessments owed is how Musheff came up with the $5, 000 “ballpark” figure. Id., ¶ 25, and attached Exhibit H. Plaintiff alleges that he is a consumer as defined in 15 U.S.C. § 1692a (3), that the Defendants are debt collectors as defined in 15 U.S.C. § 1692a(6), and that the Defendants therefore violated the FDCPA by falsely representing the amount owed by the Nixs at the Court hearing and by falsely representing that the Plaintiff was obligated to pay Churchill Parks certain fees, expenses, and/or attorneys fees. Plaintiff further alleges that the Defendants improperly attempted to collect the debt when in fact Churchill Parks was precluded from enforcing the debt by contract and operation of law. Plaintiff seeks monetary damages against the Defendants. See generally, Complaint, with attached Exhibits.

         Even liberally construed, the allegations of Plaintiff's Complaint fail to set forth a “plausible” claim under the FDCPA against these Defendants. Iqbal, 129 S.Ct. at 1949 [Claim subject to dismissal where Plaintiff fails to set forth sufficient factual matters to state a plausible claim for relief “on its face”]. While Defendants do not contest that attorneys may be considered “debt collectors” as that term is defined by the FDCPA, Plaintiff's allegations fail to provide sufficient facts to establish a plausible claim that the Defendants used “any false, deceptive, or misleading representation or means in connection with the collection of any debt, ” or used “unfair or unconscionable means to collect or attempt to collect any debt”. 15 U.S.C. § § 1692(e) and (f).

         First, although Plaintiff alleges Musheff falsely represented to the Court that the Nixs owed the $5, 000 “ballpark” figure cited by Musheff at the court hearing, Plaintiff's own exhibits establish the basis for Musheff's statement. See Complaint, attached Exhibits D and H.[3] While Plaintiff alleges that the Homeowners Association account balance listing for May 2017 only showed a balance owing of $2, 209.08, that does not make Musheff's statement at the May 2017 hearing “false, deceptive, or misleading”, as Plaintiff has himself provided another exhibit showing where the total debt owed included not just the past-due assessment balance, but also interest on the unpaid amount, late fees and other charges, costs, and attorneys fees. Cf., Plaintiff's Exhibits B and H. Moreover, the “ballpark” figure cited by Musheff at the hearing was not intended to be a specific amount owed, but was merely the attorney advising the court of the general amount of debt at issue in the lawsuit. Even so, as is shown by Plaintiff's own exhibits (attached to his Complaint), he was fully aware of how the debt he owed was being calculated and what it included at the time of the hearing. Cf. Fields v. Wilber Law Firm, PC, 383 F.3d 562, 565 (7th Cir. 2004) [Holding that “[t]o collect attorney's fees from [plaintiff], [defendant law firm] necessarily had to specify an amount that it intended to charge (or had already charged) for its services. [Plaintiff], of course, could negotiate this payment or contest the reasonableness of the fees . . . [b]ut when a debtor has contractually agreed to pay attorneys fees and collection costs, a debt collector may . . . state those fees and costs and include that amount in [a] dunning letter. Doing so does not violate the FDCPA. Indeed, refusing to quantify an amount that the debt collector is trying to collect could be construed as falsely stating the amount of the debt”]; see also Park v. McCabe, Trotter and Beverly, PC, No. 17-657, 2018 WL 3912356, at * 6 (D.S.C. Aug. 14, 2018) [Noting that it could be a violation of the FDCPA to fail to explain a lump sum amount included in a collection letter, and that a “simple way” to avoid this problem and comply with § § 1692(e) and (f) is to itemize the various charges that comprise the total amount of the debt].

         Plaintiff also alleges in his Complaint that the Defendants violated the FDCPA by attempting to collect the amount claimed because Churchill Park was “precluded from enforcing the debt by contract and operation of law”. Complaint, ¶ 30(b). However, Plaintiff has provided no factual allegations in his Complaint whatsoever to establish the plausibility of any such claim. Frey v. City of Herculaneum, 44 F.3d 667, 671 (8th Cir. 1995) [“Complaint must contain facts which state a claim as a matter of law and must not be conclusory”]; House v. New Castle County, 824 F.Supp. 477, 485 (D.Md. 1993) [Conclusory allegations insufficient to maintain claim]; see also Dickson v. Microsoft Corp., 309 F.3d 193, 213 (4th Cir. 2002)[Plaintiff has burden of alleging facts sufficient to state all the elements of a claim]. Plaintiff's Complaint alleges, and as is also reflected in Attachment A to the Complaint, that the Defendants represented Churchill Park (the name of the Homeowners Association), which was attempting to collect unpaid assessments from the Plaintiff and his wife. Attorney Musheff and the Plaintiff both appeared at the hearing before the Charleston County Master In Equity on May 4, 2017, again all as alleged in the Complaint. Plaintiff further alleges (and has provided as Exhibit B to the Complaint to establish) that as of May 12, 2017 (the approximate date of the hearing) the amount of past due assessment (including fines) was either $2, 209.08 (as alleged in the Complaint) or $2, 259.08 (as shown on Exhibit B).[4] Plaintiff's Complaint further alleges (and the transcript attached to the Complaint as Exhibit A clearly shows) that during the Court hearing Musheff stated that, assuming they were going to have a reasonable amount of time before trial, they would have “an accounting as to Churchill Park”, and when asked by the Court “what amount of debt are we talking about?”, he responded “$5, 000, in that ballpark”. Plaintiff himself also includes as an allegation in his Complaint that at the time of the May 4, 2017 hearing he was fully aware that the amount he was alleged to owe included attorneys fees, interest and costs, all of which in fact brought his total amount due to somewhere in the “ballpark” of $5, 000. See Complaint, ¶ 25, and attached Exhibit H.

         Additionally, there are no allegations whatsoever in the Complaint to show that Churchill Park was precluded from enforcing this debt “by contract or operation of law”, as Plaintiff conclusorily alleges. See Harper v. United States, 423 F.Supp. 192, 196 (D.S.C. 1976)[“[W]here the claims in a complaint are insufficiently supported by factual allegations, these claims may be properly dismissed by summary dismissal”]. Indeed, the Homeowners Association Covenants and Restrictions (CCRs) specifically provide that each property owner agrees to timely pay to the Association annual assessments or charges, special assessments, and specific assessments; that each owner also agrees to pay reasonable fines as may be imposed; and that all assessments “shall accrue late charges, interest [and] costs, including without limitation, reasonable attorneys fees actually incurred”. See Complaint, Exhibit L; see also Plaintiff's Exhibit 5 (Attached to Complaint in C.A. No. 2:18-1360).[5] The CCR further provides that in the event an assessment remains unpaid after thirty days, the Association may institute suit to collect such amounts and foreclose its lien. Id.[6]

         Significantly, instead of addressing the grounds for dismissal of his case as argued by the Defendants, in his response opposing the Defendants' motion to dismiss Plaintiff sets forth numerous arguments about how the state court foreclosure action by the Homeowners Association was handled, whether or not the Homeowners Association itself was properly named in that lawsuit, whether counsel appropriately made an appearance in that case, whether his state case should have been reopened and whether the state master in equity made proper rulings in his case, and whether the evidence in that case was properly presented or handled.[7] However, Plaintiff contested the validity of the debt, the Homeowner Association's right to foreclose on his property, and the foreclosure action itself in that state court action, all of which resulted in a judgment being entered in that case on November 9, 2017. See Churchill Park v. Alan G. Nix, Defendant, et al., No. 2017-CP-10-4031, HTTPS://JCMSWEB.charleston (last checked August 28, 2018).[8] Therefore, even if Plaintiff was attempting to raise or present defenses to the underlying foreclosure on his property through the filing of this lawsuit, [9] he had the opportunity to present his defenses to the foreclosure at issue in the hearings held before the state court, and he may not relitigate those claims now in this federal lawsuit. Hilton Head Center of South Carolina, Inc. v. Public Service Commission of South Carolina, 362 S.E.2d 176, 177 (S.C. 1987) [Under the doctrine of res judicata “[a] litigant is barred from raising any issues which were adjudicated in the former suit and any issues which might have been raised in the former suit”']. Under 28 U.S.C. § 1738, known as the Full Faith and Credit Statute, federal courts must give the same preclusive effect to a state court judgment as another court of that state would give. Therefore, any such claims would be subject to dismissal pursuant to the doctrine of res judicata, as the pleadings in the case at Bar and in the state court foreclosure action show that the parties or such parties' privies[10] in this action and the state court foreclosure action are the same, there is identity of the subject matter, and there was an adjudication on the merits in the state court action. Riedman Corp. v. Greenville Steel Structures, Inc., 419 S.E.2d 217, 218 (S.C. 1992) [res judicata established where there is identity of the parties, identity of the subject matter, and there was an adjudication of the issue in the former suit].

         Moreover, Plaintiffs claims are further barred by the doctrine of collateral estoppel, which “prevents a party from re-litigating in a subsequent suit an issue actually and necessarily litigated and determined in a prior action”. Jinks v. Richland County, 585 S.E.2d 281, 285 (S.C. 2003); Nelson v. QHG of S.C., Inc.,608 S.E. 855, 858 (S.C. 2005) [Holding that plaintiff's claims were barred by collateral estoppel due to grant of summary judgment in prior state court action]; see also Stone v. Roadway Express,627 S.E.2d 695, 698 (S.C. 2006) [“Collateral estoppel prevents a party from re-litigating in a subsequent suit an issue actually and necessarily litigated and determined in a prior action”] (quoting Jinks v. Richland County, supra); cf. United States v. Mendoza, 464 U.S. 154, 159 n. 4 (1984) [“Defensive use of collateral estoppel occurs when a defendant seeks to prevent a plaintiff from relitigating an issue the plaintiff has previously litigated unsuccessfully in another action against ... a different party”]; Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 326 (1979). Further, to the extent Plaintiff is seeking, through the filing of this lawsuit, a review of the judgement entered in his case by the state court, federal district courts do not hear “appeals” from state court actions. See District of Columbia Court of Appeals v. Feldman,460 U.S. 462, 476-82 (1983)[a federal district court lacks authority to review final determinations of state or local courts because such review can only be conducted by the Supreme Court of the United States under 28 U.S.C. § 1257]; Rooker v.Fidelity Trust Co., 263 U.S. 413 (1923). Thus, Plaintiff may not use this civil action to challenge the determinations or rulings of the state courts. See Anderson v.Colorado, 793 F.2d 262, 263 (10th Cir. 1986) [“It is well settled that federal district courts are without authority to review state court judgments where the relief sought is in the nature of appellate review.”]; Brinkmann v. Johnston, 793 F.2d 111, 113 (5th Cir. 1986); see also Wise v. Bravo,666 F.2d 1328, 1333 (10th Cir.1981); Gurley v. Superior Court of Mecklenburg County, 411 F.2d 586, 587-588 & nn. 2-4 (4th Cir. 1969) [holding that federal district courts and United States ...

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