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Nix v. McCabe Trotter & Beverly PC

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

September 10, 2018

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

          REPORT AND RECOMMENDATION

          BRISTOW MARCHANT, UNITED STATES MAGISTRATE JUDGE

         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 on May 30, 2018.

         As the Plaintiff is proceeding pro se, a Roseboro order was entered by the Court on May 31, 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]

         Discussion

         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.

         This matter arises out efforts by the Homeowners Association where Plaintiff lives to collect past due assessments from him. Plaintiff specifically objects to a letter that was sent by Attorney Todd Musheff (who was representing the Homeowners Association)[2] to the South Carolina Department of Consumer Affairs on or about April 27, 2017.[3] Plaintiff alleges that Musheff's letter was in response to a “Scam Report” filed by the Plaintiff on February 16, 2017, a copy of which is attached to his Complaint as Exhibit 2. See Complaint, ¶ 7, and attached Exhibit 2.[4] Plaintiff alleges, and the Exhibits attached to his Complaint show, that the Homeowners Association (Churchill Park) had retained Gold Crown Management, Inc. as the management company for the Homeowners Association. Complaint, ¶ ¶ 10-11, and attached Exhibit 11. Plaintiff apparently contends that another management company, Licensed Professional Property Management (LPPM), was (at least at one time) the management company for Churchill Park, and that LPPM was the registered agent for Churchill Park as of the time he filed his Scam Report with the South Carolina Department of Consumer Affairs on February 16, 2017. See Complaint, ¶ ¶ 14-15, and attached Exhibit 2. In the letter Musheff wrote to Consumer Affairs, he states that the company Plaintiff references in his Complaint (LPPM) was not managing the Association nor was it the Registered Agent for the Association at the time Plaintiff lodged his complaint with Consumer Affairs. See Complaint, ¶ ¶ 13-14, and attached Exhibit 1.[5]

         Plaintiff further alleges that in the third paragraph of his letter to Consumer Affairs, Musheff states that there is currently litigation between the Plaintiff and his Homeowners Association wherein the Association is trying to remedy Plaintiff's refusal to honor his obligations under the covenants of the Homeowners Association. Plaintiff has attached copies of those Covenants and Restrictions (CCRs) to his Complaint as Exhibit 18. See generally, Complaint, ¶ ¶ 17-20, and attached Exhibit 18. Plaintiff alleges that the reference in Musheff's letter is to a foreclosure action that had been filed by the Homeowners Association in state court. Id., ¶ 21, and attached Exhibits 4 and 5. Plaintiff further alleges, and Musheff's letter shows, that Musheff addressed other actions Plaintiff had taken regarding his various disputes with the Homeowners Association, including filing lawsuits and attempting to obtain criminal charges against the Association's attorneys. Id., ¶ ¶ 22-25, and attached Exhibits 1, 3, 19.

         In the claims portion of his Complaint, Plaintiff alleges that the Defendants violated the FDCPA because he is a consumer as defined in 15 U.S.C. § 1692a(3), the Defendants are “debt collectors” as defined in 15 U.S.C. § 1692a(6), and that the Defendants falsely represented the character, amount, and/or legal status of the debt Churchill Park claimed the Plaintiff owed under the CCR by falsely representing that Plaintiff was obligated to pay Churchill Park certain fees, expenses, and/or attorneys fees. Plaintiff further alleges that the Defendants violated the FDCPA by attempting to collect the debt when in fact Churchill Park was precluded from enforcing the debt by contract and operation of law, by communicating with a third party in connection with the collection of any debt without the prior consent of the consumer, and by engaging in conduct the natural consequence of which was to harass, oppress, or abuse the Plaintiff in connection with the collection of a debt. See Complaint ¶ ¶ 28-31; see also 15 U.S.C. § § 1692c(b), 1692d, 1692e, and 1692f Plaintiff seeks monetary damages. See generally Complaint, with attached Exhibits.

         An attorney may be a debt collector under FDCPA. See Heintz v. Jenkins, 514 U.S. 291, 294 (1995) [Holding that the FDCPA may apply to attorneys engaged in debt-collection litigation]. The FDCPA prohibits a debt collector from using any false, deceptive, or misleading representation or means in connection with the collection of any debt, or from using unfair or unconscionable means to collect or attempt to collect any debt. 15 U.S.C. § § 1692(e) and (f). Plaintiffs Complaint fails to set forth sufficient facts to establish a plausible claim that the Defendants violated this statute. 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”]. Indeed, the letter from Musheff about which Plaintiff complains in his Complaint is not even seeking to collect a debt. Rather, as is clearly shown by both the allegations of the Complaint and by attached Exhibit 1 to the Complaint, this letter was a response written to the South Carolina Department of Consumer Affairs to a Scam Report that had been filed by the Plaintiff, wherein Plaintiff had complained that his Homeowners Association (“Churchill Park at Park West”), via “their management company” (LPPM, Inc.), had sent an invoice to him seeking payment of homeowners assessments owed. Plaintiff complained that Churchill Park at Park West was not listed with the Secretary of State and that LPPM had refused to provide details to him about the company. However, Musheff writes in the letter submitted in response to the Scam Report filed by the Plaintiff that Plaintiff is a homeowner in the Churchill Park neighborhood, that Plaintiff had repeatedly interacted with the management company for that neighborhood and was in fact at that time currently in litigation with his Homeowners Association, and further explaining the name of the Homeowners Association. Indeed, Plaintiff has himself attached as exhibits to his Complaint copies of state court documents showing where he was being sued by his Homeowners Association. See Complaint, attached Exhibits 4, 5, 6 and 14.[6] While Musheff's letter does contain form language at the bottom (in bold) that it is for the purpose of collecting a debt, it does not in fact attempt to collect any debt from the Plaintiff, but is merely a response to the Scam Report filed by Plaintiff with the South Carolina Department of Consumer Affairs wherein Plaintiff complains about being able to get in touch with his Homeowners Association.[7]

         Moreover, Plaintiffs own exhibits (attached to his Complaint) clearly show that he had been notified on December 30, 2016 (prior to having filed his Scam Report) that Gold Crown Management, Inc. had been selected to provide management services for the Homeowners Association, and providing contact information. See Plaintiff s Complaint, Exhibits 2, 7. As such, even if the FDCPA was somehow implicated in Musheff s letter of May 2017, in addition to this letter not containing any misleading information, there is also nothing in Plaintiffs allegations and his own exhibits which give rise to a plausible claim that he did not know who his Homeowners Association was or how to contact them. Cf. Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1060 (7th Cir. 2000) [Noting that even though, in deciding whether collection letters violate the FDCPA courts examine them from the stand point of an unsophisticated consumer, even an unsophisticated consumer is deemed to possess “rudimentary knowledge about the financial world” and to be “capable of making basic logical deductions and inferences”]; see also Fields v. Wilber Law Firm, PC, 383 F.3d 562, 564 (7th Cir. 2004).

         Plaintiff's additional claim that Musheff's letter was conduct, the natural consequence of which was to harass, oppress, or abuse him in connection with the collection of a debt, is also without merit. As is clearly shown by Plaintiff's allegations and attached exhibits, Musheff's letter was in response to a complaint Plaintiff had himself filed with the Department of Consumer Affairs. As noted by the Defendants in their motion to dismiss, Plaintiff “could not invite a response and then complain that responding violated the FDCPA”. Additionally, the letter at issue does not address the amount, status, or character of any debt owed by the Plaintiff, but only clarifies the name and status of the Homeowners Association in response to Plaintiff's Scam Report, while recounting the history of the dispute between Plaintiff and his Homeowners Association. As for Plaintiff's claim that this letter somehow violated the FDCPA because it was a communication with a third party in connection with the collection of a debt without the prior consent of the consumer, as already noted the letter was in response to a Scam Report Plaintiff had himself filed with Consumer Affairs - a report which required a response from the Homeowners Association. In any event, the FDCPA protects communications provided to consumer reporting agencies or for legitimate business needs. See 15 U.S.C. § § 1692d(3). The communication to the South Carolina Department of Consumer Affairs in this case is protected under this statute. See S.C.Code § 487-2; see also 15 U.S.C. § 1681b(a)(F).

         Significantly, instead of addressing the grounds for dismissal of his case as argued by the Defendants, in his response brief opposing the Defendants' motion to dismiss Plaintiff instead sets forth numerous arguments about how the related 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.[8]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. Allen G. Nix, Defendant, et al., No. 2017-CP-10-4031, HTTPS://JCMSWEB.charleston county.org/PublicIndex/CaseDetails.aspx (last checked August 28, 2018).[9] Therefore, even if Plaintiff was attempting to raise or present defenses to the underlying foreclosure on his property through the filing of this lawsuit, [10] 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 ...


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