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Edwards v. Financial Recovery Services FRS Inc.

United States District Court, D. Minnesota

January 31, 2019

STEPHEN S. EDWARDS, Plaintiff,
v.
FINANCIAL RECOVERY SERVICES FRS INC.; BARCLAYS BANK INC., et al.; JOHN DOE'S x 10; and JANE DOE'S x 10, Defendants.

          Stephen S. Edwards, Pro Se Plaintiff

          Brandt Erwin, Esq., Madigan, Dahl & Harlan, P.A., for Defendant Barclays; Michael Poncin, Esq., Moss & Barnett, PA, for Defendant Financial Recovery Services, Inc.

          REPORT AND RECOMMENDATION

          DAVID T. SCHULTZ UNITED STATES MAGISTRATE JUDGE

         Stephen S. Edwards brought a lawsuit against Barclays Bank Delaware[1] and Financial Recovery Services, Inc. (FRS) asserting three causes of action under federal and state consumer protection statutes. He contends that Barclays and FRS violated the statutes in the course of their efforts to collect a disputed credit card debt owed to Barclays. Barclays brought a motion to dismiss Edwards' claims against it for failure to state a claim. Edwards then brought a motion for judgment on the pleadings against Barclays. For the reasons stated below, the Court recommends that Barclays' motion to dismiss be granted and Edwards' motion for judgment on the pleadings be denied.

         FINDINGS OF FACT

         Edwards had an American Airlines credit card issued by Barclays. Complaint ¶ 14, Docket No. 1. On some unspecified date Edwards reported to Barclays that unauthorized or fraudulent charges had been made on his credit card account. Id. ¶¶ 15-16. He alleges that Barclays either failed to investigate or did an inadequate investigation, wrongly concluded the charges were authorized, and continued to send him statements for payment of the disputed principal amount plus interest. Id. ¶¶ 17-20. Barclays then hired FRS, a debt collection agency, to collect the unpaid amount from Edwards. Id. ¶¶ 4, 21.

         Edwards brought this lawsuit against Barclays and FRS, as well as various John and Jane Does, alleging that their actions to collect the disputed amount violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. (Count One); the Minnesota Fair Debt Collection Practices Act (known as the Minnesota Collection Agencies Act (MCAA)), Minn. Stat. §§ 332.31-.44 (Count Two); and the Minnesota Consumer Fraud Act (MCFA), Minn. Stat. § 325.69 (Count Three). Id. ¶¶ 6, 10, 14 and Counts One, Two and Three at ¶¶ 28-34. He alleges that FRS is a debt collection agency and Barclays is the financial institution that issued the credit card and sought to collect the unpaid amount charged to that card. Id. ¶¶ 3-4, 8-9. Edwards' complaint also mentions the Fair Credit Reporting Act (FCRA), the Arizona Deceptive and Unfair Trade Practices Act, the Arizona Consumer Collection Practices Act, theft, and fraud, but does not include any counts or causes of action under those statutes or theories. Id.

         FRS answered Edwards' complaint [Docket No. 5], and Barclays brought a motion to dismiss the claims against it under Rule 12(b)(6) of the Federal Rules of Civil Procedure [Docket No. 27]. Edwards then brought a Rule 12(c) motion for judgment on the pleadings against Barclays. Docket No. 36.

         CONCLUSIONS OF LAW

         I. Barclays' Rule 12(b)(6) Motion to Dismiss

         To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead sufficient facts, accepted as true, to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp v. Twombly, 550 U.S. 544, 570 (2007). To determine whether a plaintiff has stated a plausible claim, the Court considers only the materials that are “necessarily embraced by the pleadings and exhibits attached to the complaint.” Cox v. Mortgage Elect. Registration Sys., Inc., 685 F.3d 663, 668 (8th Cir. 2012); see also Kushner v. Beverly Enterprises, Inc., 317 F.3d 820, 831 (8th Cir. 2003) (“When deciding a motion to dismiss, a court may consider the complaint and documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading.”). Here, the undisputed facts establish that Edwards cannot state a claim against Barclays under the FDCPA, MFDCPA/MCAA, or MCFA. Therefore, Barclays' motion to dismiss should be granted.

         Count One of Edwards' complaint alleges a violation of the FDCPA. This consumer protection statute was created in response to abusive, deceptive, and unfair debt collection practices. See Schmitt v. FMA Alliance, 398 F.3d 995, 997 (8th Cir. 2005) (per curiam). The FDCPA makes a fundamental distinction between “creditors” and “debt collectors” and does not regulate the activities of creditors “at all.” Id. at 998.

         The FDCPA defines a “debt collector” as

any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, ...

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