United States District Court, S.D. West Virginia, Charleston Division
December 28, 2016
COURTNEY ADKINS, Plaintiff,
CREDIT ACCEPTANCE CORPORATION, Defendant.
MEMORANDUM OPINION AND ORDER
E. JOHNSTON UNITED STATES DISTRICT JUDGE.
the Court is Defendant Credit Acceptance Corporation's
Partial Motion to Dismiss. (ECF No. 12.) For the reasons that
follow, the motion is GRANTED. Plaintiff may file an amended
pleading rectifying the deficiencies identified herein within
Courtney Adkins alleges that around May 2013, Defendant
Credit Acceptance Corporation (“Credit
Acceptance”) began making debt collection calls to her
personal cellular telephone number. (First Am. Compl. ¶
14.) Plaintiff claims that she did not owe a debt to Credit
Acceptance, nor had she provided her cell phone number
“during a transaction that created a debt.”
(Id. ¶ 22.) Nevertheless, Credit Acceptance
allegedly used an automatic telephone dialing system to make
hundreds of calls to Plaintiff's cell phone under the
pretense that Plaintiff was obligated to make payment on a
debt owed to it. (Id. ¶ 25.) During the calls,
Credit Acceptance would solicit payment in various ways, at
times asking if Plaintiff “wanted to make a payment,
” and at others asking “how much she wanted to
pay on the debt.” (Id. ¶ 24.)
brings this civil action on her own behalf and on behalf of a
putative class of individuals who received harassing debt
collection calls in similar circumstances. The Court has
jurisdiction under the Class Action Fairness Act. 28 U.S.C.
§ 1332(d)(2). The three-count First Amended Complaint
alleges violations of the Telephone Consumer Protection Act
(“TCPA”), (Count I), and the West Virginia
Consumer Credit and Protection Act (“WVCCPA”),
(Counts II and III). With regard to the WVCCPA claims, Count
II alleges misrepresentation of the amount of a claim in
violation of West Virginia Code § 46A-2-127 and is
brought as an individual claim and on behalf of the putative
class. Count III, an individual claim only, alleges
oppressive and abusive debt collection in violation of West
Virginia Code § 46A-2-125. Credit Acceptance moves to
dismiss both WVCCPA claims. The motion, having been fully
briefed, is ready for disposition.
Federal Rule of Civil Procedure 8(a)(2), a complaint must
contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
Allegations “must be simple, concise, and direct”
and “[n]o technical form is required.”
Fed.R.Civ.P. 8(d)(1). A motion to dismiss under Fed.R.Civ.P.
12(b)(6) tests the legal sufficiency of a civil complaint.
See Edwards v. City of Goldsboro, 178 F.3d 231, 243
(4th Cir. 1999). “[I]t does not resolve contests
surrounding the facts, the merits of a claim, or the
applicability of defenses.” Republican Party of
N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992)
(citing 5A Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1356 (1990)).
survive a motion to dismiss, a complaint must contain
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, 570
(2007)). A court decides whether this standard is met by
separating the legal conclusions from the factual
allegations, assuming the truth of only the factual
allegations, and then determining whether those allegations
allow the court to reasonably infer that “the defendant
is liable for the misconduct alleged.” Id.
While “Iqbal and Twombly do not
require a plaintiff to prove [her] case in the complaint,
” the complaint must “allege facts sufficient to
state elements of the claim.” SD3, LLC v. Black
& Decker (U.S.) Inc., 801 F.3d 412, 441 (4th Cir.
2015) (quoting Robertson v. Sea Pines Real Estate
Companies, Inc., 679 F.3d 278, 284 (4th Cir. 2012))
(internal quotation marks omitted).
Acceptance moves for the dismissal of Counts II and III for
two reasons, both related to the applicability of the WVCCPA.
Credit Acceptance's initial argument goes to standing.
Simply put, Credit Acceptance alleges that Plaintiff is not a
“consumer” under the WVCCPA and the relief
afforded under that statute is thus out of reach. Credit
Acceptance next argues that even if Plaintiff has standing on
Counts II and III, she fails to allege that any debt she
allegedly owed was incurred primarily for “personal,
family, or household purposes, ” a necessary element of
both causes of action. The Court will discuss each argument
in the order presented by Credit Acceptance.
Standing under the WVCCPA
WVCCPA exists “to protect consumers from unfair,
illegal, and deceptive acts or practices” of their
creditors. Dunlap v. Friedman's, Inc., 582
S.E.2d 841, 846 ( W.Va. 2003) (citation and internal
quotation marks omitted). Consistent with this policy,
“a plaintiff must be a consumer to bring a private
cause of action under the [WVCCPA].” McNeely v.
Wells Fargo Bank, N.A., 115 F.Supp.3d 779, 784 (S.D.
W.Va. 2015) (citing W.Va. Code § 46A-5-101(1) (2006)).
Counts II and III arise under Article 2 of the WVCCPA, which
defines “consumer” as “any natural person
obligated or allegedly obligated to pay any debt.”
W.Va. Code § 46A-2-122(a). The parties agree that
Plaintiff has no debtor-creditor relationship with Credit
Acceptance. Plaintiff thus has standing to bring Counts II
and III only if she was “allegedly obligated” to
pay a debt. Id.
Court does not write on a blank slate in defining this term.
“Courts consider a person ‘allegedly
obligated' to pay a debt when the creditor has
‘represented to [her] that [she] is personally liable
on the debt.” McNeely, 115 F.Supp.3d at 785
(quoting Fabian v. Home Loan Ctr., Inc., No.
5:14-cv-42, 2014 WL 1648289, at *6 (N.D. W.Va. Apr. 24,
2014)). In this manner, “[t]he term ‘alleged
obligation' extends the reach of the WVCCPA to certain
collection activities conducted without regard to whether the
debt is actually owed.” McGuire v. Jim Walter
Homes, LLC, No. 5:14-CV-14299, 2014 WL 5149725, at *7
(S.D. W.Va. Oct. 14, 2014) (citing Fabian, 2014 WL
1648289 at *6). This Court has repeatedly found that direct
solicitations from a creditor for payment are indicative of
an alleged obligation to pay a debt. McNeely, 115
F.Supp.3d at 785 (noting the absence of such solicitation as
one of several factors indicating that the plaintiff, who had
no debtor-creditor relationship with the defendant, lacked
standing under the WVCCPA).; McGuire, 2014 WL
5149725, at *7 (finding genuine issue of material fact
existed as to whether plaintiffs, who were repeatedly
solicited by a creditor to make payments on a debt, were
“allegedly obligated” to pay the debt); Croye
v. GreenPoint Mortgage Funding, Inc., 740 F.Supp.2d 788,
798 (S.D. W.Va. 2010) (finding factual issue existed as to
whether plaintiff was allegedly obligated to pay a debt not
actually owed, but nevertheless solicited by a creditor).
parties rely heavily on the Court's decision in
Croye. In Croye, a husband and wife
refinanced the mortgage on their home, but only the wife
signed the promissory notes. 740 F.Supp.2d at 790. Some years
later, the couple divorced and the wife attempted to
re-convey her interest in the property to her now-estranged
husband, who assumed the mortgage payment. The couple later
sued the mortgage servicer, contending that the servicer
violated the WVCCPA by contacting both plaintiffs in an
attempt to collect on the debt, notwithstanding the
plaintiffs' representation by counsel. The servicer
argued that the husband lacked standing to sue under the
WVCCPA-because the husband did not execute the loan
refinance, the servicer claimed that he did not meet the
definition of a “consumer.” This Court found
otherwise, reasoning that the servicer's repeated efforts
to collect payment from the husband “suggested the
existence of an alleged obligation . . . to pay the
loans.” Id. at 797.
alleged harassment that Plaintiff experienced in this case
would seem to be factually akin to that endured by the
non-debtor husband in Croye. Credit Acceptance,
however, attempts to distinguish Croye by arguing
that its holding was based primarily on evidence that the
husband had signed the deed of trust and other loan documents
and later assumed payment of the debt. It stresses that there
are no similar allegations making Plaintiff personally liable
for the debt in this case. Credit Acceptance apparently
believes that the term “allegedly obligated”
applies only where the facts provide a basis upon which the
creditor could justifiably attribute personal liability to
the plaintiff for a debt. Because “[t]here is no
allegation . . . that Credit Acceptance represented to
Plaintiff that she owed a debt, ” Credit
Acceptance concludes that there can be no alleged obligation
to pay. (Reply at 2, ECF No. 19 (emphasis in original).)
Acceptance suffers from a myopic view of both Croye
and the facts alleged in the First Amended Complaint.
Croye's reasoning was not, as Credit Acceptance
argues, tied exclusively to the husband's participation
in the loan refinance. Rather, it was the mortgage
servicer's treatment of the husband, manifested through
repeated collection attempts, that was central to the
Court's finding on the “alleged obligation”
question. Croye, 740 F.Supp.2d at 797.
Croye cited Diaz v. K.L. Recovery Corp.,
486 F.Supp.2d 474 (E.D. Pa. 2007), a case addressing the
issue of standing in the context of a Fair Debt Collection
Practice Act (“FDCPA”) claim. In Diaz,
“the plaintiff received phone calls demanding payment
for outstanding summonses against the father of her children,
” whereby the defendants “threatened to repossess
all of her household belongings and her car if she didn't
pay.” Croye, 740 F.Supp.2d at 798-99 (citing
Diaz, 486 F.Supp.2d at 475). Though the plaintiff
did not owe the debt in question, the defendants'
attempts to hold her personally liable meant that she could
sue as a consumer “allegedly obligated' to pay a
debt. Diaz, 486 F.Supp.2d at 477. Together, these
cases establish that a creditor's actions alone are
sufficient to give rise to an “alleged
obligation” to pay a debt, so long is there is evidence
of an attempt to hold the plaintiff personally liable.
to the First Amended Complaint, the Court finds sufficient
allegations that Credit Acceptance represented to Plaintiff
that she was personally liable on a debt. During some of the
alleged phone calls, Credit Acceptance demanded to know
“whether she planned to make a payment during
the call” or if “she wanted to make a
payment.” (First Am. Compl. ¶ 24 (emphasis
added).) Other times, Credit Acceptance called to ask
Plaintiff “how much she wanted to pay on the
debt.” (Id. (emphasis added)). As alleged,
Plaintiff had every reason to think that Credit Acceptance
believed that she was indebted to it. While the
facts surrounding these claims are left murky, the Court has
no trouble finding at this stage that Plaintiff has plausibly
pled the existence of an alleged obligation to pay a debt.
Plaintiff would, then, qualify as a consumer with standing to
sue under the WVCCPA.
Failure to Plead Existence of a “Claim”
found that Plaintiff has standing to sue under the WVCCPA,
the Court turns to Credit Acceptance's alternative
argument. Credit Acceptance moves to dismiss Counts II and
III because it asserts that Plaintiff fails to alleged Credit
Acceptance attempted to collect upon a “claim” as
defined in the WVCCPA. This argument, unlike the first, is
II and III of the First Amended Complaint are brought under
West Virginia Code §§ 46A-2-127 and 125,
respectively. Section 46A-2-127 states that “[n]o debt
collector shall use any fraudulent, deceptive or misleading
representation or means to collect or attempt to collect
claims or to obtain information concerning consumers, ”
while § 46A-2-125 mandates that “[n]o debt
collector shall unreasonably oppress or abuse any person in
connection with the collection of or attempt to collect any
claim alleged to be due and owing by that person or
another.” An essential element of a cause of action
under either provision is the collection or attempted
collection of a “claim.” The WVCCPA defines a
“claim” as “any obligation or alleged
obligation of a consumer to pay money arising out of a
transaction in which the money, property, insurance or
service which is the subject of the transaction is primarily
for personal, family or household purposes, whether or not
such obligation has been reduced to judgment.” W.Va.
Code § 46A-2-122(b).
Acceptance argues that Counts II and III must be dismissed
because Plaintiff fails to allege that the debt at issue was
incurred “primarily for personal, family or household
purposes.” Plaintiff does not respond to this
particular argument. And Credit Acceptance is correct-there
is no allegation in the First Amended Complaint indicating
whether the debt at issue was a “claim” within
the WVCCPA's ambit. Although Plaintiff alleges that she
did not owe a debt to Credit Acceptance, presumably someone
did, and there is no way of telling whether that debt was
incurred “primarily for personal, family, or household
purposes, ” and thus covered by the statute, or
primarily for commercial purposes, which would not be
covered. Morris v. Marshall, 305 S.E.2d 581, 584 (
W.Va. 1983) (“[B]ecause the loans were made for
commercial purposes, the financing of an automobile
dealership, they are not ‘consumer loans' within
the purview of the [WVCCPA].”). Plaintiff's failure
to allege facts sufficient to state this element is fatal.
See SD3, LLC, 801 F.3d at 441 (citation omitted).
point, case law interpreting the FDCPA is instructive. The
FDCPA also requires that an obligation giving rise to
challenged collection efforts be “primarily for
personal, family, or household purposes.” 15 U.S.C.
§ 1692a(5). In that setting, courts typically require
consumers to plead the nature of the debt in his or her
pleading. Scarola Malone v. Zubatov LLP v. McCarthyu,
Burgess & Wolff, 638 Fed. App'x 100, 103 (2d
Cir. 2016) (“Scarola did not include any factual
allegations in his Complaint to support the inference that
the amount in dispute arose from a consumer transaction, and,
accordingly, he failed to state a claim upon which relief
could be granted.”); Cederstrand v. Landberg,
933 F.Supp. 804, 806 (D. Minn. 1996) (“[Plaintiff] does
not allege in his complaint that any transaction involving an
offer or extension of credit was undertaken “primarily
for personal, family, or household purposes” . . .
Plaintiff has therefore failed to state a claim upon which
relief may be granted.”). The Supreme Court of Appeals
of West Virginia has looked to federal interpretation of the
FDCPA for guidance in construing the WVCCPA, see Fleet v.
Webber Springs Owners Assoc., Inc., 772 S.E.2d 369, 379
( W.Va. 2015), and the Court will do the same here.
Accordingly, the Court finds that in bringing claims under
§§ 46A-2-125 and 127, the consumer must allege
facts sufficient to give rise to an inference that the debt
at issue comes within the purview of the statute.
is no factual material in the First Amended Complaint from
which the Court can draw such an inference. Plaintiff has
failed to plead the threshold requirement that Credit
Acceptance attempted to collect a “claim” as
defined by the WVCCPA, and Counts II and III are subject to
dismissal. The next question is whether the claims should be
dismissed with prejudice, as Credit Acceptance requests.
Under Federal Rule of Civil Procedure 41(b), dismissal for
failure to state a claim operates as an adjudication on the
merits unless the court determines otherwise. Fed.R.Civ.P.
41(b) (“Unless the dismissal order states otherwise, a
dismissal under this subdivision (b) and any dismissal not
under this rule-except one for lack of jurisdiction, improper
venue, or failure to join a party under Rule 19-operates as
an adjudication on the merits.”). The district court
maintains the discretion to determine whether dismissal under
Rule 12(b)(6) is with or without prejudice. Payne ex rel.
Estate of Calzada v. Brake, 439 F.3d 198, 204 (4th Cir.
2006). Rule 15, which requires that a court give leave to
amend a pleading “when justice so requires, ”
guides the determination. Fed.R.Civ.P. 15(a)(2).
the Court suspects that Plaintiff can readily amend her
pleading to clarify that Credit Acceptance attempted to
collect upon a “claim” as defined by the WVCCPA.
The Court also finds that because discovery proceedings in
this action are temporarily stayed at Credit Acceptance's
request, any prejudice caused by an amendment will be
minimal. The Court therefore grants Plaintiff leave to amend
these reasons, the Partial Motion to Dismiss, (ECF No. 12),
is GRANTED, and Counts II and III of the First Amended
Complaint are hereby DISMISSED. Plaintiff may file an amended
pleading within fourteen days of the issuance of this opinion
clarifying whether the debt “allegedly owed” was
primarily for personal, family, or household purposes.
Court DIRECTS the Clerk to send a copy of this Order to
counsel of record and any unrepresented party.
 The TCPA claim is not implicated by
the motion to dismiss.
 It is unclear whether the conveyance
of the wife's property interest to the husband was
successful. Croye, 740 F.Supp.2d at 792 n.
 Like the WVCCPA, the FDCPA defines a
consumer as “any natural person obligated or allegedly
obligated to pay any debt.” 15 U.S.C. §