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Carney v. Unifund CCR, LLC

United States District Court, D. Minnesota

December 6, 2016

Jeffrey A. Carney, Plaintiff,
v.
Unifund CCR, LLC, and Gurstel Chargo, P.A., Defendants.

          Darren B. Schwiebert, Esq., DBS Law LLC, Minneapolis, MN, on behalf of Plaintiff.

          Patrick D. Newman, Esq., Moss & Barnett, PA, Minneapolis, MN, on behalf of Defendants.

          MEMORANDUM OPINION AND ORDER

          ANN D. MONTGOMERY U.S. DISTRICT JUDGE

         I. INTRODUCTION

         On October 26, 2016, the undersigned United States District Judge heard oral argument on Defendants Unifund CCR, LLC and Gurstel Chargo, P.A.'s (“Defendants”) Motion to Dismiss [Docket No. 35]. Plaintiff Jeffrey A. Carney (“Carney”) opposes the motion. For the reasons set forth below, Defendants' Motion is granted.

         II. BACKGROUND[1]

         This action, arising under the Fair Debt Collections Practices Act (“FDCPA”), 15 U.S.C. § 1692, has its roots in state court. In the 2000s, Carney incurred credit card debt with Citibank, N.A. (“Citibank”). Am. Compl. [Docket No. 28] ¶ 7. Gurstel Chargo, P.A. (“Gurstel”), representing Unifund CCR, LLC as successor in interest to Citibank, sued Carney over the debt in Minnesota state court. Id. ¶ 8. On November 7, 2014, Gurstel obtained default judgment after Carney failed to respond to the lawsuit. Id. ¶ 9.

         On March 30, 2015, Defendants served a garnishment summons on U.S. Bank, resulting in $11, 714.67 of Carney's funds being frozen. Id. ¶ 10. Carney filed an exemption to the garnishment, claiming that his funds were exempt because they were earnings and because he was the recipient of need-based assistance.[2] Id. ¶ 11. Defendants had six days, until April 15, 2015, to object to Carney's exemption. Id. ¶ 12. On the seventh day, April 16, 2015, Defendants filed an objection. Id. ¶ 14.

         After a hearing, the state court ordered the funds released, concluding the merits of the objection could not be reached because the objection was untimely. Id. ¶ 18. The court, however, declined to conclude that Defendants acted in bad faith, stating that the record lacked evidence that Defendants purposefully attempted to deceive the court or Carney and that a calculation error does not rise to the level of bad faith. Id. ¶ 20. Carney claims that Defendants' actions resulted in his bank account being frozen for almost eight weeks. Id. ¶ 21.

         Since the state court's ruling, Defendants have made four separate attempts to garnish Carney's funds. Id. ¶ 22. Carney claims Defendants attempted these later garnishment efforts with the knowledge that Carney's funds were exempt. Id. While Carney maintains that his funds are exempt, he concedes that no judicial determination of his exemption has been made. Id. ¶ 19.

         Carney alleges three FDCPA violations resulting from Defendants' objection. First, Carney avers that Defendants' objection falsely represented that Carney was self-employed and, therefore, his funds were not exempt.[3] Id. ¶ 15. Second, Carney alleges that Defendants falsely represented to the state court judge that its objection was timely filed on April 15, 2015. Id. ¶ 16. Finally, Carney claims that Defendants falsely represented that its objection was timely filed because the deadline for filing the objection was April 16, 2015, not April 15. Id. ¶ 17. Carney also alleges that Defendants' efforts to collect the debt after the state court action constitute FDCPA violations. Carney complains that Defendants' conduct violated §§ 1692e(5), 1692e(10), 1692f, and 1692f(1) of the FDCPA. Id. ¶¶ 27, 28. Defendants are moving to dismiss the Amended Complaint in its entirety.

         III. DISCUSSION

         A. Motion to Dismiss Standard

         Under Rule 8(a) of the Federal Rules of Civil Procedure, pleadings “shall contain a short and plain statement of the claim showing that the pleader is entitled to relief.” A pleading must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Determining whether a complaint states a plausible claim for relief is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. “But where the well-pleaded facts do not permit ...


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