United States District Court, S.D. Illinois
MEMORANDUM AND ORDER
NANCY J. ROSENSTENGEL, District Judge.
Plaintiff, Scott McDermott, filed this action against Defendant, Dennis J. Barton, III, under the Fair Debt Collection Practices Act ("FDCPA"), with supplemental state law claims for abuse of process and conversion. McDermott is challenging actions taken by Barton in collecting a debt that McDermott allegedly owed for medical services that he received at St. Anthony's Medical Center ("St. Anthony's"). On November 24, 2014, the Court held a hearing on Barton's motion to dismiss the amended complaint (Doc. 17). For the reasons set forth below and those stated on the record, the motion to dismiss is granted in part and denied in part.
The following factual synopsis is taken from the allegations contained in the amended complaint (Doc. 14), which the Court must accept as true for the purpose of the motion to dismiss. Plaintiff Scott McDermott's alleged debt arises out of medical services that he received from St. Anthony's. Following receipt of the services, McDermott received a bill even though he was "fully insured" at the time services were rendered. McDermott disputed the bill with St. Anthony's, and according to him, he never heard from St. Anthony's again, so he believed that his insurance was properly billed and that all charges were paid.
McDermott was apparently mistaken, however, and St. Anthony's assigned the debt to CACi, a debt collection business, "for valuable consideration." Dennis J. Barton, III-an attorney whose practice focuses on debt collection-filed suit against McDermott in the Circuit Court of St. Louis County, Missouri ("St Louis County Court") on December 6, 2012, to collect the debt. St. Anthony's was named as the plaintiff in the suit, and Barton identified himself as "attorney for plaintiff." Default judgment was entered against McDermott on February 27, 2013, in the amount of $763.57, which included $111.57 in "illicit interest charges."
McDermott alleges that this lawsuit was improper because (1) it was filed in St. Anthony's name, who was no longer a real party in interest (because it had assigned the debt to CACi); (2) it did not disclose CACi's status as the real party in interest; (2) St. Anthony's did not hire Barton, and at all relevant times Barton actually represented CACi; and (4) the default judgment contained an "illicit" interest charge because it was based on a false demand date and because McDermott's agreement with St. Anthony's did not allow for interest and penalty charges.
In May 2013, Barton commenced a garnishment proceeding in the Circuit Court of Madison County, Illinois ("Madison County Court") ( see Doc. 21-3). On January 2, 2014, the Madison County Court entered a Wage Deduction Order against McDermott's employer and imposed a lien on his wages in the amount of $1, 121.62. McDermott asserts that the garnishment proceedings were improper because (1) he does not live or work in Madison County, Illinois (he lives and works in Waterloo, which is in Monroe County); (2) Barton improperly purported to be collecting a debt on behalf of St. Anthony's; and (3) Barton falsely and fraudulently increased the balance McDermott allegedly owed.
McDermott filed this three-count federal lawsuit on June 14, 2014, asserting claims for violations of the FDCPA (Count 1), abuse of process (Count 2), and conversion (Count 3) (Doc. 2). Barton filed a motion to dismiss the original complaint (Doc. 10), and rather than respond to the motion, McDermott filed an amended complaint as a matter of right under Federal Rule of Civil Procedure 15 (Doc. 14). The amended complaint asserts the same three counts as the original complaint. Barton then filed a motion to dismiss the amended complaint and a supporting memorandum (Docs. 17, 18). McDermott filed a brief in opposition to the motion to dismiss (Doc. 21), and Barton filed a supplemental brief and attached an order from the Eastern District of Missouri, which granted his motion to dismiss in a substantially similar case (Doc. 25).
A. Dismissal under Rule 12(b)(1)
Barton first argues that Count 1 for violations of the FDCPA should be dismissed under Federal Rule of Civil Procedure 12(b)(1) because the Court lacks subject matter jurisdiction over the claim based on the Rooker-Feldman doctrine (Doc. 18). The Court disagrees.
A Rule 12(b)(1) motion to dismiss requires a court to dismiss any action for which it lacks subject matter jurisdiction. FED. R. CIV. P. 12(b)(1). The Rooker-Feldman doctrine provides that lower federal courts do not have jurisdiction over claims seeking review of state court judgments in civil matters. Kelley v. Med-1 Solutions, LLC, 548 F.3d 600, 603 (7th Cir. 2008) (citing Brokaw v. Weaver, 305 F.3d 660, 664 (7th Cir. 2002)). The doctrine prevents "state-court losers" from suing in federal court for "injuries caused by state-court judgments" and "inviting district court review and rejection of those judgments." Lance v. Dennis, 546 U.S. 459, 464 (2006) (citing Exxon Mobil v. Saudi Basic Industries, 544 U.S. 280, 284 (2005)); Kelley, 548 F.3d at 603. However, "[t]he doctrine will not prevent a losing litigant from presenting an independent claim to a district court." Kelley, 548 F.3d at 603 (citing Exxon Mobil, 544 U.S. at 293).
Here, it is undisputed that McDermott was the loser in state court, and a default judgment was entered against him. In his federal lawsuit, however, McDermott is not attacking the validity of the default judgment or alleging an injury caused by the judgment. Instead, he is contesting the method and manner in which Barton obtained and enforced the judgment. Specifically, McDermott alleges that Barton made false representations and used deceptive means to obtain and enforce the default judgment, which violated McDermott's right under the FDCPA to be free from the unscrupulous antics of debt collectors (Doc. 14). The Rooker-Feldman doctrine "does not bar a federal suit that seeks damages for a fraud that resulted in a judgment adverse to the plaintiff." Johnson v. Pushpin Holdings, LLC, 748 F.3d 769, 773 (7th Cir. 2014).
Furthermore, the fact that McDermott's pursuit of his claims could ultimately show that the state court default judgment was erroneous does not render Rooker-Feldman applicable. Long v. Shorebank Dev. Corp., 182 F.3d 548, 555-56 (7th Cir. 1999). A plaintiff can deny the correctness of the state court judgment in pursuing the FDCPA claims without changing his claim into an improper request for direct review of the state court judgment. Id.
Accordingly, Barton's motion to dismiss the amended complaint for lack of subject matter jurisdiction is denied.
B. Dismissal under Rule 12(b)(6)
Barton next moves to dismiss Count 1, which is based on a number of separate alleged violations of the FDCPA arising out of the debt collection lawsuit in St. Louis County Court and the garnishment proceeding in Madison County Court, under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim (Doc. 18). Barton also moves to dismiss McDermott's state law claims in Counts 2 ...