United States District Court, D. Minnesota
B. Schwiebert, DBS Law LLC, Minneapolis, MN, for Plaintiffs
JaRonda Washington and Nicole Smith.
Michael P. Arthur, Stewart Zlimen Jungers, Ltd., Minneapolis,
MN, for Defendant Stewart, Zlimen, & Jungers, Ltd.
OPINION AND ORDER
C. Tostrud United States District Judge
separate cases, Plaintiffs JaRonda Washington and Nicole
Smith assert essentially identical claims under the Fair Debt
Collection Practices Act (“FDCPA”) against the
same debt collector, Stewart, Zlimen, & Jungers, Ltd.
(“SZJ”). Washington and Smith's FDCPA claims
in these cases arise out of debt-collection lawsuits that SZJ
filed against each of them in Ramsey County Conciliation
Court. Washington and Smith allege that SZJ violated the
FDCPA when, in each of those debt-collection lawsuits, it (1)
falsely represented that is was entitled to recover
“disbursements” and (2) violated a standing court
order that required it to file evidence establishing that its
client in both cases owned the sued-for debt. SZJ has moved
to dismiss both cases under Federal Rule of Civil Procedure
12(b)(6). SZJ's motion will be granted because Washington
and Smith fail to plead plausible FDCPA claims.
pursued the debt-collection lawsuits against Washington and
Smith on behalf of LVNV Funding, LLC. In December 2018, SZJ
filed suit in Ramsey County Conciliation Court on behalf of
LVNV against an individual named “Joionda Wilks.”
Washington Compl. ¶ 6 [Washington ECF No.
Washington's former surname was Wilks, and Washington
received a copy of the conciliation-court papers at her home
address. Id. ¶ 7. Although Washington had never
used the first name Joionda, id., the Parties seem
to agree that SZJ's conciliation-court suit targeted her.
In its Statement of Claim (the conciliation- court analog to
a complaint), SZJ alleged that Washington owed a debt on a
credit account she had opened with Credit One Bank in August
2008. Id. ¶ 8. Also in December 2018, SZJ filed
a debt-collection lawsuit in Ramsey County Conciliation Court
on behalf of LVNV against Smith. Smith Compl. ¶ 6 [Smith
ECF No. 1]. In its Statement of Claim in that case, SZJ
alleged that Smith owed a debt on a credit account she had
opened with WEBBANK in May 2015. Id. ¶ 7.
than the description of those details concerning the
underlying debt, the allegations in Washington and
Smith's federal-court complaints are identical. SZJ's
conciliation-court Statement of Claim alleged that both
Washington and Smith's allegedly delinquent accounts
“w[ere] sold” and that LVNV “acquired and
is now the owner of the account which is the subject matter
of this action.” Washington Compl. ¶ 10; Smith
Compl. ¶ 9. SZJ alleged in its Statement Of Claim
against Washington that Washington owed LVNV “$1,
445.44 plus filing fee of $85.00, for a total of $1, 530.44,
plus disbursements, because” of the facts alleged
surrounding the debt. Washington Schwiebert Decl. Ex. A
[Washington ECF No. 19-1]; Washington Compl. ¶ 11.
Similarly, SZJ alleged in its Statement Of Claim against
Smith that Smith owed LVNV “$497.76 plus filing fee of
$85.00, for a total of $582.76, plus disbursements,
because” of the facts alleged surrounding the debt.
Smith Schwiebert Decl. Ex. A [Smith ECF No. 21-1]; Smith
Compl. ¶ 10.
and Smith allege that SZJ's Statements of Claim violated
the FDCPA in two ways. First, they allege that the reference
to disbursements was false because “[t]here was no
possibility of SZJ incurring any additional recoverable
‘disbursements' against [either Plaintiff] in
LVNV[‘s] lawsuit against [them] over and above the
amount of the alleged debt and the filing fee, ” and
that SZJ had (and has) no intention of seeking to recover any
such disbursements. Washington Compl. ¶¶ 12-13;
Smith Compl. ¶¶ 11-12.
Washington and Smith allege that SZJ's conciliation-court
suits violated Ramsey County's Amended Standing Order,
issued September 23, 2016, which, at the time SZJ filed its
conciliation-court actions against Plaintiffs, applied to all
litigants in consumer credit cases filed in that judicial
district and required, in relevant part, that:
seeking judgment against a consumer on a consumer credit
lawsuit shall possess and present to the court:
a. a copy of the written contract between the debtor and
original creditor or, if no written contract exists, other
admissible evidence establishing the terms of the account
relationship between the debtor and the original creditor,
including the moving party's entitlement to the amounts
described in subpart d [regarding the amount allegedly owed]
. . .; and
e. admissible evidence establishing a valid and complete
chain of assignment of the debt from the original creditor to
the party requesting judgment, including documentation or a
bill of sale evidencing the assignment with evidence that the
particular debt at issue was included in the assignment
referenced in the documentation or bill of sale.
Amended Standing Order dated Sept. 23, 2016 (“2016
Standing Order”) [Washington ECF No. 8 at 20; Smith ECF
No. 12-1 at 4]; see also Washington Compl.
¶¶ 14-15; Smith Compl. ¶¶ 13-14.
or at least their counsel, appeared at hearings in the
conciliation-court cases. Washington Compl. ¶¶
16-18; Smith Compl. ¶¶ 15-17. But at those
hearings, Plaintiffs allege, it became clear not only that
SZJ had failed to comply with the procedural requirements of
the 2016 Standing Order, it could not comply with the
substance of that order either, because neither SZJ nor LVNV
possessed any documentation that could show LVNV's
“standing” to sue either Plaintiff. Washington
Compl. ¶¶ 19-22; Smith Compl. ¶¶ 18-21.
The only documentation SZJ produced to the conciliation court
in its cases against Plaintiffs was “a redacted
computer printout that was not the actual attachment to any
of the alleged bills of sale between the Original Creditor
and LVNV .” Washington Compl. ¶ 20; Smith Compl.
¶ 19. Accordingly, on February 28, 2019, the
conciliation court entered judgments in favor of both
Washington and Smith, concluding that LVNV had “failed
to provide evidence that the particular debt at issue was
included in the assignment referenced in the documentation or
bill of sale” and so had failed to establish it had
standing to pursue its actions against Washington or Smith.
Washington Compl. ¶ 23; Smith Comp. ¶ 22.
March 2019, Washington and Smith separately filed these
federal cases against SZJ, alleging that SZJ's
state-court debt-collection tactics violated various
provisions of the FDCPA. Washington Compl. ¶¶
24-30, 33-34; Smith Compl. ¶¶ 23-29, 32-33. The
dismissal of the case against Washington has since been
vacated and removed to Ramsey County District Court where it
is set for trial later this fall. See Washington SZJ
Br. at 3; see also Ramsey County No. 62-CV-19-1812.
At oral argument, SZJ's counsel represented that the
judgment in Smith's case was not appealed because she
filed for bankruptcy. At this point, those procedural
differences in the underlying ...