United States District Court, S.D. West Virginia, Beckley Division
MEMORANDUM OPINION AND ORDER
C. BERGER, UNITED STATES DISTRICT JUDGE SOUTHERN DISTRICT OF
Court has reviewed Defendants' Sentry Credit, Inc.
and JH Portfolio Debt Equities, LLC's Motion to Dismiss
Plaintiff's First Amended Individual and Class Action
Complaint (Document 17), Sentry Credit, Inc. and JH
Portfolio Equities, LLC's Memorandum of Law in Support of
Motion to Dismiss Plaintiff's First Amended Individual
and Class Action Complaint (Document 18), the
Plaintiff's Response in Opposition to Defendants'
Motion to Dismiss First Amended Complaint (Document 22),
and Defendants Sentry Credit, Inc.'s and JH Portfolio
Debt Equities, LLC's Reply to Plaintiff's Response to
Defendants' Motion to Dismiss (Document 24). The
Court has also reviewed the Plaintiff's Motion for
Leave to File Surreply in Opposition to Defendants'
Motion to Dismiss First Amended Complaint (Document 27),
the attached Plaintiff's Surreply in Opposition to
Defendants' Motion to Dismiss First Amended
Complaint (Document 27-1), and the Plaintiff's
First Amended Individual and Class Action Complaint
(Document 11), as well as all exhibits. For the reasons
stated herein, the Court finds that the motion to dismiss
should be granted.
Plaintiff, Eric Garretson, seeks to bring this case against
Defendants Sentry Credit, Inc. and JH Portfolio Debt
Equities, LLC (JHP) on his own behalf and on behalf of a
class of similarly situated West Virginia consumers.
Synchrony Bank sold Mr. Garretson's credit card accounts
to JHP after they were “charged off.” (Am. Compl.
at ¶ 12.) Sentry, on behalf of JHP, sent Mr. Garretson
debt collection letters offering to settle the debt for less
than the total amount due. Both letters are dated November
18, 2016. One lists an amount due of $3, 877.61, consisting
entirely of principal with no interest or other costs, and
offers to settle for a lump sum of $2, 326.57 or for three
payments of $1, 034.03 each. The other lists a balance of $1,
462.74, also consisting entirely of principal with no
interest or other costs, and offers to settle for a lump sum
of $731.37 or for three payments of $341.31. Both letters
invite the Plaintiff to “call today for flexible
repayment terms.” (Collection Letters, att'd as Ex.
A to Pl.'s Am. Compl.) (Document 11-1.)
letters contain the following language:
If, as a result of the settlement, the amount forgiven or
canceled on this debt equals or exceeds $600, the IRS may
require the creditor to report the amount forgiven or
canceled on a form 1099-C. You may receive this form for the
year in which the settlement is completed. If you would like
advice about the potential tax consequences that may result
from this settlement, my client recommends that you consult a
tax professional of your choosing. My client does not make
any representations about the tax consequences that this
settlement may have for you or any reporting requirement that
may be imposed.
(Id.) Mr. Garretson alleges that this warning was
purposely confusing and misleading because there was no
requirement that Sentry or JHP issue a 1099-C for forgiven
debt, and even if those regulations did apply, the warning
did not accurately state the requirements of the regulations.
He further alleges that he was, in fact, confused by the
1099-C warning and “felt pressure to pay the whole debt
rather than accept a settlement that may be reported to the
IRS.” (Id. at ¶ 25.)
Plaintiff's amended complaint asserts the following
causes of action: Count I - Fair Debt Collection Practices
Act (FDCPA); Count II - West Virginia Consumer Credit
Protection Act (WVCCPA); and Class Allegations. The Plaintiff
seeks statutory and actual damages, as well as attorneys'
fees and costs.
motion to dismiss filed pursuant to Federal Rule of Civil
Procedure 12(b)(6) tests the legal sufficiency of a
complaint. Francis v. Giacomelli, 588 F.3d 186, 192
(4th Cir. 2009); Giarratano v. Johnson, 521 F.3d
298, 302 (4th Cir. 2008). “[T]he legal sufficiency of a
complaint is measured by whether it meets the standard stated
in Rule 8 [of the Federal Rules of Civil Procedure]
(providing general rules of pleading) . . . and Rule 12(b)(6)
(requiring that a complaint state a claim upon which relief
can be granted.)” Id. Federal Rule of Civil
Procedure 8(a)(2) requires that a pleading must contain
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed.R.Civ.P.
reviewing a motion to dismiss under Rule 12(b)(6) for failure
to state a claim, the Court must “accept as true all of
the factual allegations contained in the complaint.”
Erikson v. Pardus, 551 U.S. 89, 93 (2007). The Court
must also “draw[ ] all reasonable factual inferences
from those facts in the plaintiff's favor.”
Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th
Cir. 1999). However, statements of bare legal conclusions
“are not entitled to the assumption of truth” and
are insufficient to state a claim. Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009). Furthermore, the Court
need not “accept as true unwarranted inferences,
unreasonable conclusions, or arguments.” E. Shore
Mkts., v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175,
180 (4th Cir. 2000). “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice… [because courts]
‘are not bound to accept as true a legal conclusion
couched as a factual allegation.'” Iqbal,
556 U.S. at 678 (quoting Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007)).
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.'”
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 570.) In other words, this “plausibility
standard requires a plaintiff to demonstrate more than
‘a sheer possibility that a defendant has acted
unlawfully.'” Francis v. Giacomelli, 588
F.3d 186, 193 (4th Cir. 2009) (quoting Twombly, 550
U.S. at 570.) In the complaint, a plaintiff must
“articulate facts, when accepted as true, that
‘show' that the plaintiff has stated a claim
entitling him to relief.” Francis, 588 F.3d at
193 (quoting Twombly, 550 U.S. at 557.)
“Determining whether a complaint states [on its face] a
plausible claim for relief [which can survive a motion to
dismiss] will ... be a context-specific task that requires
the reviewing court to draw on its judicial experience and
common sense.” Iqbal, 556 U.S. at 679.
initial matter, the brief proposed sur-reply contains
discussion of recently decided cases. The Court finds it
appropriate to consider the sur-reply, and the motion ...