ORDER AND REASONS
Before the Court is the defendants’ motion to dismiss. For the reasons that follow, the motion is DENIED in part and GRANTED in part.
Background
This putative class action lawsuit arises out of alleged unlawful collection actions engaged in by the defendants in their efforts to collect on a bail bond obligation after the bond forfeiture judgment had been set aside.
On September 30, 2007 Camilla Barlow paid AAA Bail Services, Inc. $475.00 for a
I UNDERSTAND THAT I AM COSIGNING WITH AAA BAIL SERVICES, INC. ON THE BAIL BOND THAT IS BEING POSTED WITH THE COURT. I ALSO UNDERSTAND THAT I WILL BE FINANCIALLY LIABLE FOR ANY LOSSES, EXPENCES [sic], OR ADDITIONAL CHARGES THAT OCCUR AS A RESULT OF THE DEFENDANT NOT MEETING ALL OF THE OBLIGATIONS UNDER THE BAIL BOND CONTRACT. I ALSO UNDERSTAND THAT I AM RESPONSIBLE FOR BRINGING THE DEFENDANT BACK TO THE BAIL BOND OFFICE SO THAT THE PAPER WORK CAN BE COMPLETED, SIGNED AND A PICTURE OF THE DEFENDANT CAN BE TAKEN.
The application also included this indemnity provision:
To indemnify the Company against all liability, loss, damages, attorney fees and expenses whatsoever, including, but not limited to returning prisoner costs, which the Company may sustain or incur in making such bond, prosecuting or defending any action brought in connection therewith, and enforcing any of the agreements herein contained, and specifically enforcing any collateral or indemnifying agreement as well as any expense in locating Defendant and producing him in Court. If upon failure of the parties to comply with any of the terms or conditions of this agreement and should it be necessary for the Company to refer the agreement to an Attorney for collection, the Parties agree to pay an attorney fee of 33-1/3% whether or not such action proceeds to judgment.
Similarly, the Bail Bond Indemnitor’s Promises contract provided:
Indemnification: I, the undersigned hereby agree to save and hold the surety and its agents and/or assigns from any loss whatsoever resulting from the failure of the above named defendant to appear in court as ordered. I, the undersigned hereby agree to pay all cost (500.00 minimum charge) associated with the failure of the above named defendant to appear in Court as ordered, in U.S. currency to surety, its agents and/or assigns upon the failure of the above named defendant to appear in Court as ordered. A copy of a judgment of bond forfeiture naming the above named defendant shall be prima facie evidence of loss sustained by surety and against agents and/or assigns.
On February 1, 2008 Dougherty failed to appear for his arraignment; the court issued a bench warrant and an order of bond forfeiture. One week later, on February 8, the court executed a judgment in favor of the State of Louisiana and against Eric Dougherty, as principal, and Safety National Casualty Corporation, as surety, for $3,500.00. On March 4, 2008 Eric Dougherty appeared in court through counsel, at which time the bench warrant was recalled and the bond forfeiture judgment was set aside.
Re: Judgment of Bond Forfeiture $3,500.00....
Dear CAMILLA BARLOW,
This account has been listed with our office for collection.
You are contractually obligated to pay this account because a judgment of bond forfeiture has been filed against SAFETY NATIONAL CASUALTY CORP. You may have an opportunity to reduce this debt by obtaining a cancellation of the bond forfeiture judgment. We advise you to seek independent legal advice to inform you of your rights and responsibilities. If you are unable to cancel this judgment of bond forfeiture or refuse to do so, we shall be left with no alternative but to seek the collection of the entire debt.
This communication is from a debt collector. This is an attempt to collect a debt----
Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid....
And on July 7, 2010 Safety National Casualty Corporation sued Barlow in Baton Rouge city court for breach of contract based on the indemnity agreement; the lawsuit was drafted by Singletary & Associates. Six days later, the Baton Rouge city court returned the petition because of “improper cumulation of defendants”; the court invited counsel for Safety National to re-file its petition for damages for breach of contract to indemnify a commercial surety, but Safety National has yet to refile.
On December 14, 2010 Barlow, on behalf of a putative class, sued Safety National Casualty Corporation, Singletary & Associates, A.P.L.C., Financial Recovery Agency, Inc., and Commercial Surety Consultants, Inc. in the U.S. District Court for the Middle District of Louisiana, alleging three violations of the Fair Debt Collection Practices Act and a claim for abuse of process under Louisiana law. In response to Barlow’s contentions that the defendants’ pursuit of Safety National’s indemnity rights constituted improper collection efforts, the defendants responded with a motion to dismiss. Almost one week before her opposition papers were due, on March 22, 2011, Barlow filed a notice of dismissal, and the lawsuit was dismissed without prejudice.
Just two weeks later, on April 8, 2011, Barlow re-filed her complaint, again invoking the U.S. Middle District court’s federal question jurisdiction under the Fair Debt Collection Practices Act, and asserting the same claims and factual allegations. The plaintiff seeks to represent a class defined as:
All persons who were required to execute an indemnity promise in connection with a Safety National Casualty Corporation bail bond obligation and who were subject to unlawful collection actions by the defendants even though any underlying bench warrant(s) had been recalled and any previously rendered Bond Forfeiture judgment(s) had been set aside.
Barlow contends that each of the defendants were acting as agents of Safety National Casualty Corporation in the capacity as “debt collectors.”
This putative class action was reassigned to this Court from the Middle District of Louisiana on August 29, 2011. On January 6, 2012 Barlow, with leave of Court, filed a first amended class action complaint, in which she added Commercial Surety Consultants, LLC as a defendant.
The defendants now urge the Court to dismiss the plaintiffs amended complaint; they contend that the plaintiffs claims fall outside the scope of the Fair Debt Collection Practices Act and that, even if the Act applies, the plaintiff fails to state a claim for relief under both the Act and state law principles of abuse of process.
I.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a party to seek dismissal of a complaint for failure to state a claim upon which relief may be granted. Such a motion is rarely granted because it is viewed with disfavor. See Lowrey v. Tex. A & M Univ. Sys.,
“ ‘To 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.’ ” Gonzalez v. Kay,
In deciding a motion to dismiss, the Court may consider documents that are essentially “part of the pleadings” — that is, any documents attached to or incorporated in the plaintiffs’ complaint that are central to the plaintiffs claim for relief. Causey v. Sewell Cadillac-Chevrolet, Inc.,
The defendants point out that the complaint refers to contracts entered into by Barlow, demands for payment, and filed state court pleadings; because these documents are central to Barlow’s claims and are referred to in the complaint, the defendants contend that consideration of them does not operate to convert their motion to dismiss into one for summary judgment. The Court agrees.
II.
The defendants seek dismissal of the plaintiffs complaint on the grounds that (1) the pursuit of indemnity does not qualify as a “debt” under the Fair Debt Collection Practices Act and, therefore, her claims invoking the consumer protection statute fail as a matter of law; (2) even if Barlow’s indemnity obligation meets the definition of a “debt” and falls within the scope of the Act, the plaintiff fails to state a plausible claim that the defendants’ collection efforts were improper; and (3) the state law abuse of process claim fails as a matter of law in that Safety National never sought improper relief in state court.
A.
As a threshold matter, the Court must consider the scope of this consumer protection law, the Fair Debt Collection Practices Act, and determine whether it applies to the practice of bail bonding.
The Fair Debt Collection Practices Act makes it unlawful for “debt collectors” to use abusive tactics while collecting a “debt” for others. Perry v. Stewart Title Co.,
It is the purpose of this subchapter to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.
15 U.S.C. § 1692(e).
To state a claim under the FDCPA, a plaintiffs allegations must establish that the money being collected qualifies as a “debt.” See 15 U.S.C. § 1692a(5). The mere obligation to pay does not constitute a debt; rather, a “debt” is “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” 15 U.S.C. § 1692a(5).
Here, the defendants challenge the existence of a “debt”; they contend that the pursuit of indemnity does not meet the
In Hartel, the district court determined that promissory notes used to pay for a portion of an investor’s partnership interest in a tax-shelter limited partnership were not a “debt” within the meaning of the FDCPA.
Cook, likewise, has no persuasive force here.
Barlow contends that her obligation to pay clearly constitutes a “debt” under the FDCPA: she claims that the money sought to be collected constitutes a “debt” because the underlying transaction involved securing a bond to bail her son out of jail. Although it is a close call because these facts hardly constitute the quintessential consumer debt, the Court agrees.
The U.S. Court of Appeals for the Fifth Circuit has interpreted “debt” broadly, observing that “Congress ... has legislatively expressed a strong public policy disfavoring dishonest, abusive, and unfair
The plaintiff here invokes Hamilton, and says that her obligation to pay falls within the scope of the Act’s definition of “debt”; she characterizes her obligation to pay: “The purchase of bail bond insurance by a mother for the benefit of her son was an insurance transaction primarily for personal/family purposes____ The attempted collection of an indemnity promise by the Defendants arising from bail bond insurance is an obligation which arose from the transaction and meets the ... definition.” Acknowledging that these facts would seem to fall within the outermost parameters of the scope of a “debt” under the FDCPA, the Court cannot say that the threshold definition of “debt” has not been met by these facts. Cf. Buckman v. American Bankers Ins. Co. of Florida,
As the Eleventh Circuit has succinctly noted, the FDCPA applies to payment obligations of a (1) consumer arising out of a (2) transaction in which the money, property, insurance, or services at issue are (3) primarily for personal, family, or household purposes. See Oppenheim v. I.C. System,
B.
Having determined that the plaintiffs claims arising out of the FDCPA do not fail, as a matter of law, because she alleges a “debt” within the meaning of the Act, the Court turns to the defendants’s challenge to the sufficiency of the plaintiffs allegations concerning the specific FDCPA violations and her state law abuse of process claim.
1.
Barlow asserts three claims under the FDCPA. The defendants contend that there is no discussion of the manner in which the defendants violated each of the mentioned sections of the FDCPA such that the defendants can determine the factual grounds for each such claim and that, therefore, the Court should dismiss the plaintiffs FDCPA claims for failure to state a claim. The Court agrees.
As “Claim 1” in her complaint, the plaintiff contends that the defendants violated the following subsections of the FDCPA when she complains:
(A) The defendants’ actions abridged the FDCPA, 15 U.S.C. § 1692e in the following particulars:
(2) The false representation of—
(a) The character, amount, or legal status of any debt;
(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.
And FDCPA 15 U.S.C. § 1692f(l)
The Collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless amount is expressly authorized by the agreement creating the debt or permitted by law.
These allegations, without more, fail to state a claim for relief under the federal pleading requirements. “[A] plaintiffs obligation to provide the ‘grounds’ of his ‘entitlefment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly,
2.
Finally, the defendants seek to dismiss the plaintiffs state law abuse of process claim. In her complaint, the plaintiff asserts as Claim II:
The filing of a lawsuit against the Petitioner by defendants, Safety National Casualty Corporation and Singletary &Associates, A.P.L.C. for a debt not owed was abuse of process, in that the indemnity contract was incomplete and the judgment had been satisfied by the subsequent appearance of the bonded defendant. The defendant’s [sic] were attempting to obtain a result against plaintiff not proper under the law.
The defendants contend that this allegation fails to state a claim because the mere fact that suit was filed does not constitute an abuse of process. The defendants insist that their pursuit of indemnity was proper, invoking Louisiana Code of Criminal Procedure article 329: “A contract to indemnify a surety against loss on a bail bond is valid and enforceable.”
The elements for a cause of action for abuse of process, a compensable tort recognized under La.Civ.Code art. 2314, are (1) the existence of an ulterior purpose; and (2) a willful act in the use of the process not in the regular prosecution of the proceeding. Hebert v. La. Licensed Prof'l Vocational Rehab. Counselors,
Accordingly, the defendants’ motion to dismiss is DENIED in part (insofar as the defendants contended that the FDCPA claims failed as a matter of law because the pursuit of indemnity did not constitute a debt; and insofar as the plaintiff stated a claim for abuse of process) and GRANTED in part (insofar as the plaintiff failed to state a claim for violations of the FDCPA). In the event that the plaintiffs pleading deficiencies might be curable, the Court will permit the plaintiff to seek leave to amend her complaint; any such leave to amend must be filed within seven days of this Order and Reasons.
Notes
. According to the defendants, Safety National was not provided notice, nor was it entitled
. Most of Hartel's $100,000 investment in a limited" partnership formed to purchase and operate hotels and motels was paid for by promissory notes that were then negotiated to a bank to secure a working capital loan. Hartel,
. Cook involved an underlying suit on behalf of a landlord to evict a noisy tenant in county court; in the eviction complaint, the landlord requested attorney's fees.
. Buckman is the most factually similar case. In Buckman, a mother who executed a contingent note and mortgage as part of a bail bond on her daughter’s behalf sued the bail bondsman and its insurer, asserting claims under the Truth in Lending Act and the FDCPA. Id. at 893. The U.S. Court of Appeals for the Eleventh Circuit considered whether a bail bondsman’s attempt to collect on a promissory note (as part of a bail bond transaction in which the plaintiff executed an indemnity agreement for surety bail bond to bail her daughter out of jail) is subject to the FDCPA. Id. It appears that the appellate court assumed without deciding that the bail bond transaction constituted a consumer debt because the court decided the motion to dismiss the FDCPA issue on other grounds, considering the scope of another defined term of the FDCPA: "debt collector”. Instead of holding that the bail bondsman was a "debt collector” under the Act, the Eleventh Circuit held that the bail bond company defendant was covered by the originator exception (15 U.S.C. § 1692a(6)(F)(ii)) because the bail bondsman played a significant role in originating the bail bonds transaction, including the indemnification agreement and contingent note. Id. at 895.
. While the defendants would have this Court define what it means to be a consumer in a more limited fashion, such as one who consumes produced goods, as the political significance of the generic label might suggest, the Court notes that the Act removes any guesswork by broadly defining the term "consumer” as "any natural person obligated or alleg
. In deciding whether dismissal is warranted, the Court will not accept conclusory allegations in the complaint as true. Avondale Shipyards,