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Adkins v. Credit Acceptance Corp.

United States District Court, S.D. West Virginia, Charleston Division

December 28, 2016




         Before 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 fourteen days.

         I. BACKGROUND

         Plaintiff 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.)

         Plaintiff 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.[1] The motion, having been fully briefed, is ready for disposition.


         Under 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)).

         “To 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).


         Credit 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.

         A. Standing under the WVCCPA

         The 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.

         The 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).

         Both 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.[2] 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.” ...

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