Chaille Dubois v. Atlas Acquisitions LLC

Mary just It It worked. killed Edmond. did with for it grant instructions Lambert’s Antonio Lambert it to what wanted do. He petition require the Commonwealth managed Why? shoot her. Because she retry either to release him or him within a give up poeketbook. didn’t her She resisted specified and reasonable period. time exactly it. And that’s Garcia what Mr. said

in his statement.” The Commonwealth that

says argument procedurally this not explic-

defaulted because Lambert did

itly these reference other remarks state However, weigh

court. need not be-

cause, for the explained reasons we have

above, we conclude that the error would DUBOIS, IN RE: Eric Debtor. not have been prose- harmless even Dubois, Gaines, Chaille Chaille f/k/a

cutor had not made these other comments. DuBois, Candace Candace f/k/a f/k/a Ultimately, given significance Gaines, Gaines, Candi Can f/k/a f/k/a Garcia’s confession to the Commonwealth’s DuBois; Adkins, Kimberly di Plain case, potential Cheatham’s unreliability, tiffs-Appellants, identify- and the absence of other evidence shooter, ing Lambert as the we believe prosecutor’s unmasking that the of him as Acquisitions LLC, Defendant- guy” other “the had a “substantial and Appellee, injurious effect” and that relief therefore Bond, (internal warranted. at 276 omitted).

quotation marks Timothy Branigan; Nancy Spencer P. Grisby, Trustees. VI. Conclusion expect that No. 15-1945 We this case will be the exception rather than po- the.norm. The United States Court of Appeals, tential constitutional could error have Fourth Circuit. mitigated granting been the outset motion to sever the After trials. set- Argued: May joint trial, tling on the Commonwealth August Decided: have, during arguments, could closing guarded more carefully against special posed

risks redacted confessions. Hav- so, failed to do

ing it nonetheless could avoided a

have mistrial had mistake the variety Frazier says

been of can through

be cured limiting instructions.

And even after missing these first three valves,

safety the Commonwealth could escaped

have this result the error had

been harmless.

Here, however, prosecutor’s com-

ments created Bruton violation was

not harmless. We therefore reverse the

order the District Court and remand Fisher, Morgan William

ARGUED: OF LAW OFFICES MORGAN FISHER LLC, Annapolis, Maryland, for Appellants. Maurice, Jr., Donald S. MAURICE WUTSCHER, LLP, Flemington, Jer- New Appellee. sey, Courtney for ON BRIEF: Weiner, L. LAW MOR- OFFICES OF LLC, D.C., Washington, GAN FISHER Hochheiser, Alan Appellants. C. KING, Cleveland, Ohio, LPA, BUCKLEY Appellee. DIAZ, FLOYD, THACKER, Before and Judges. Circuit originated with lender Judge payday loan that by published opinion. Affirmed pur- Atlas Impact Cash USA majority opinion, in wrote'the FLOYD Enterprise chased from Elite on Novem- joined. Judge Judge THACKER which 2014. identified ber dissenting opinion. DIAZ wrote last transaction date on that account as FLOYD, Judge: Circuit It is September undisputed three- beyond Maryland’s debts were both Kimberly Appellants Adkins pur- statute of limitations year when separate Chapter Dubois filed Chaille attempted chased and to assert the debts in the petitions bankruptcy in Adkins’s case. Md. Code See Maryland. Appel for the District Court Ann., Proc. Cts. Jud. 5-101. Adkins & (Atlas) Acquisitions LLC lee Atlas listed debts on neither her claim in their cases proofs of nor bankruptcy schedules sent a notice of Mary by on debts that were barred based Atlas. to issue on statute of limitations.1 The land’s Chapter bankruptcy Dubois for 13 Fair Atlas violated the appeal is whether 6, Atlas of proof on December 2014. filed a (FDCPA) by Act Practices Debt Collection for based on a loan that claim $135.00 of on time-barred filing proofs claim based originated payday with lender Iadvance Atlas’s does We hold that conduct debts. Elite En- purchased and that Atlas from FDCPA, the violate the and affirm not 5, proof on 2015. of terprise January The bankruptcy Appellants’ court’s dismissal of last date claim identified the transaction law claim. claims and related state FDCPA 18, It is on the account as October 2008. beyond undisputed that this debt was also I. Maryland’s of when At- statute limitations Appellants’ facts of cases are simi- The purchased attempted to assert the las bankrupt- Chapter 13 lar. Adkins filed Dubois bankruptcy debt in Dubois’s case. 29, August bankruptcy 2014. filed two cy on Atlas not list the debt on her did nor proof claim first did she send a notice proofs of in her case. The schedules (cid:127) bankruptcy Atlas. Atlas claim indicated that Adkins owed originated based on a loan that $184.62 adver- separate Adkins and Dubois filed N payday lender Check Go and with object- sary complaints against Atlas. Both Elite purchased Enterprise from Atlas as time-barred being ed to Atlas’s claims (Elite Services, Enterprise) Sep- LLC on alleged and further that Atlas violated identi- proof tember 2014.2The claim on stale filing proofs FDCPA the ac- the last transaction date on Appellants sought fied debts. disallowance May 19, 2009. second attor- damages, count as Atlas’s Atlas’s claims well as as fees, ney’s a under the FDCPA.3 of claim based on and costs proof was $390.00 Accordingly, we find day.” credi See 140. "A of claim is a form filed J.A. proceeding bankruptcy alleged. in a that states sufficiently tor fact See Goines this Valley Cmty. Bd., amount the debtor owes the creditor 164- Servs. F.3d debt.” v. LVNV the reason for the Funding, LLC, Covert (4th Cir.2016) (explaining motion that on (4th Cir. 244 n.1 dismiss, may documents consider courts 2015). exhibits). complaint attached to allegation to strike 2. Atlas asks the Court alleged violat- additionally that Atlas 3.Dubois appeal originated loans with that the in this Maryland Collection Consumer Debt However, ed payday of claim lenders. Ann., (MCDCA). Com. Law Act Md. Code complaints indicate Appellants' attached to seq. 14-201, analyze parties "pay- § et designated Atlas do itself the debts . Atlas conceded that its claims were file with the court a list of creditors, based on time-barred debts and stipulated a schedule of assets and liabili- However, ties, to their disallowance. and statement of the debtor’s finan- 521(a)(1). Appellants’ § moved to dismiss cial affairs. U.S.C. “[B]eing claims under Federal Rule of Civil Proce all-inclusive on the schedules is consistent 12(b)(6) with principle dure for failure to the Code’s state a claim of honest and full Vaughn, upon which disclosure.” In re granted. relief could be 536 B.R. See (Bankr. 2015). 7012(b) Fed. R. Bankr. P. D.S.C. (incorporating Scheduling a 12(b)(6) debt Rule notifies the adversary proceedings). bankrupt- into creditor of the cy and of the hearing arguments, opportunity After consolidated oral creditor’s to file a proof of claim asserting right pay- court concluded that against ment of claim does not the debtor’s estate. id. at constitute debt See 679; 501(a). § activity collection within the U.S.C. meaning of granted FDCPA and Atlas’s motion to The bankruptcy court “allow” or 158(d)(2), dismiss. Pursuant 28 U.S.C. “disallow” sharing claims from in the dis- permitted Appellants to appeal the bank tribution of the bankruptcy estate. 11 ruptcy directly court’s decision to this Chapter U.S.C. 502. In proceedings, Court. We review the court’s allowed claims dre typically paid, either Appellants’ dismissal of claims under Rule part, whole or in out of the debtor’s future 12(b)(6) See, e.g., Mwangi, de novo. In re earnings pursuant repayment to a plan (9th 1168, 2014); 764 F.3d 1173 In Cir. re proposed by the debtor and confirmed McKenzie, (6th 404, 716 F.3d 412 Cir. the bankruptcy 1322(a)(1); § court. See id. 2013). ¶ Bankruptcy (Col- 4-501 Collier on 501.01 lier). Upon completion of all payments un- II. der plan, the the bankruptcy court addressing Before the substance of Ap- “grant[s] the debtor a discharge of all claims, pellants’ provide a brief over- provided debts plan the or disal- view of the relevant statutes in this case: 1328(a). Thus, § lowed.” 11 U.S.C. at the (the “Code”) the Code and the end of process the the debtor receives the FDCPA. “fresh contemplated by start” the Bank- ruptcy Code. A. B. principal

“The purpose of the grant Code is to a ‘fresh start’ Congress enacted the FDCPA to elimi- ” to the ‘honest but unfortunate debtor.’ nate abusive practices debt collection and Bank, 365, Marrama v. Citizens 549 U.S. to ensure that debt collectors who refrain 367, 127 1105, (2007) S.Ct. 166 L.Ed.2d 956 from practices such are competitively Grogan Garner, (quoting 279, 498 U.S. (e). disadvantaged. 1692(a), § 15 U.S.C. 286, 287, 654, 112 S.Ct. L.Ed.2d 755 The regulates FDCPA the conduct of (1991)). Through bankruptcy, the debtor’s collectors,” “debt “any defined to include assets equitable are collected for distribu person any who uses instrumentality of among tion creditors and his remaining interstate any commerce or the mails debts discharged. are See Covert v. LVNV business the principal purpose of which is Funding, LLC, (4th 242, 779 F.3d Cir. debts, the collection of any or who regular- Jahrling, 2015); In re 816 F.3d 924 ly collect, attempts collects or directly (7th 2016). A bankruptcy Cir. debtor must or indirectly, debts owed or due or assert- separately

the MCDCA cordingly, from FDCPA. Ac- neither do we. collect or attempt due another.” Id. ble means “to to collect to be owed or ed debt”). 1692a(6). Instead, things, any Atlas contends that a Among other merely collectors from us- prohibits “request debt of claim is FDCPA false, misleading or ing “any deceptive, participate bankruptcy process.” Ap- in the in connection with representation or means pellee’s Br. 20. debt,” any using and from

the collection Determining whether a communi means to collect “unfair or unconscionable cation an attempt to collect constitutes Id. attempt to collect debt.” inquiry” debt is a “commonsense that eval provides §§ 1692e-1692f. The statute uates “nature of the parties’ relation that non-exhaustive list of conduct is de- ship,” “[objective] purpose and context falsely ceptive (e.g., implying or unfair ],” of the and whether the communication! is affiliated with the the debt collector pay communication includes a demand for 1692e(l)). States, §id. Debt collec- United Servicing LP, Litton ment. Gburek v. Loan are tors who violate the FDCPA liable (7th 2010); 614 F.3d see also Cir. damages, statutory damages up actual Funding, LLC, Olson v. Midland 578 Fed. $1,000, attorney’s fees costs. (4th 2014) Appx. (citing Cir. Gbu 1692k(a). See id. Here, “only approvingly). rek factors relationship parties] between [the [is] C. Olson, of a debtor and debt collector.” consistently courts have Federal Moreover, Fed.Appx. at 251. the “animat that a held debt collector violates ing fifing proof of claim is to purpose” by filing threatening a'lawsuit or payment by sharing obtain in the distribu file a lawsuit to collect a time-barred tion of the debtor’s estate. See Funding, debt. See Crawford v. LVNV Ingber PC, Grden v. Leikin & Winters LLC, 1259-60 2011); 4-501 Collier — denied, cases), (collecting cert. ¶ squarely 501.01. This fits within the Su U.S.-, 135 191 L.Ed.2d 724 S.Ct. col preme understanding Court’s of debt (2015). Appellants filing contend that a of purposes lection for the FDCPA. See in a proof of claim on a time-barred debt Jenkins, 291, 294, 115 Heintz v. 514 U.S. similarly violates bankruptcy proceeding (ex (1995) 1489, 131 L.Ed.2d 395 S.Ct. fifing Atlas counters that a FDCPA. an at plaining ordinary English, that in activity proof of claim is not debt collection attempt a debt” is an “to tempt “collect subject to the and is therefore not it, liquidation or of either payment obtain that, if argues Alas further even FDCPA. legal proceed or personal solicitation proof a of claim applies, fifing the FDCPA Dictionary ings” (quoting Black’s Law 263 on a time-barred debt does not violate its (6th 1990))). and common ed. Precedent provisions. arguments These are ad fifing proof a of claim is sense dictate that in turn. dressed a debt. The absence attempt an to collect payment for does explicit of an demand III. Gburek, conclusion, F.3d that 614 alter dispute Atlas does not that it is a bankrupt nor the fact that the does fifing that a argues debt collector but proof the claim. cy may ultimately court disallow of claim does not constitute debt collection treating proof that a argues Atlas activity regulated by the FDCPA. See collect a debt attempt claim as an § of (prohibiting deceptive 1692e or U.S.C. Bankruptcy Code’s conflict with the “in would misleading representations connection The automatic debt”); stay provision. automatic of id. with collection fifing bankruptcy peti- a stay provides that (prohibiting 1692f unfair or unconsciona- “any communications made stay” “plainly” applies as a act to “operates tion assess, by debt collector to debtor’s counsel rather collect, against recover a claim Horkey debtor); than v. J.V.D.B. & As that arose before the com- the debtor (7th socs., Inc., F.3d Cir. case.” 11 U.S.C. mencement of 2003) (finding phone that collector’s debt 362(a)(6). argues filing Atlas that a “in call to debtor’s co-worker was connec debt, an act proof of claim were to collect tion with the collection of a debt” where filing would violate the automat- then such purpose of the call was to induce debtor stay, Appellee’s “an absurd result.” Br. ic debt). a claim Although proof settle her court, it bankruptcy is filed with the is easily quandary Atlas’s re obtaining pay purpose done with the stay simply the automatic bars solved as estate. That the ment from the debtor’s actions to collect debt outside of the bank rather paid by claim is the debtor’s estate States, See, e.g., proceeding. Cent. ruptcy personally than the debtor is irrelevant Areas Pension Fund v. Basic Se. & Sw. purposes of the FDCPA. See U.S.C. Indus., Inc., Am. 1692e, §§ (prohibiting 1692f the use of de 2001) (“ ‘[Demanding’ payment from ceptive “any or unfair means to collect a other than in the debtor debt,” specifying payor). without a proceeding normally a itself is Accordingly, filing proof we find that Campbell stay”); violation of the automatic activity regulat- of claim is debt collection Countrywide Loans, Inc., Home ed the FDCPA. (explaining stay “merely suspends that the automatic IV. an action to collect the outside the filing proof We next consider whether procedural mechanisms of the beyond of claim based on debt Code”). stay helps The automatic channel applicable statute of limitations violates activity debt collection into Deciding requires this issue the FDCPA. strip activity It process. does not such process of the claims closer examination purposes its debt collection nature bankruptcy. the FDCPA. The Federal Rules of Proce- Finally, argues form, content, specify dure attempt of claim is not an to collect requirements for a valid of claim. proof debt because the of claim is directed See, e.g., prop- R. Bankr. P. 3001. A Fed. bankruptcy to the court and trustee rather erly claim facie proof prima of is However, than to the debtor. collection validity, evidence of the claim’s and the activity toward other directed someone party unless “a claim is “deemed allowed” may than the debtor still be actionable § 11 502. The objects. in interest” U.S.C. See, e.g., Sayyed v. parties under the FDCPA. bankruptcy trustee and debtor are Wolpoff Abramson, 226, Indeed, may object.4 & 485 F.3d 232-33 in interest who the (4th statutory duty that a to “examine (finding Cir. FDCPA trustee has issue, Therefore, parties proceeding. if one creditor files a 4. While the do not address the it claim, appears parties that creditors are also in in- potentially other fraudulent may object by terest to a claim filed who standing object the creditors have to to See, e.g., Sherman, another creditor. Adair v. (citation omitted)); In re Varat En- of claim.” 890, 2000) (“Par- 230 F.3d n.3 ters., Inc., 1310, 1317 n.8 debtor, only ties in interest include not the 1996) ("All parties are in creditors of debtor anyone legally protected who inter- has but interest.”). est that could be affected definition,” object “contemplates to the allow- ble the Code of claims and debtor, improper.” obligations that Id. all any legal claim is that of the no ance of 704(a)(5). contingent, § matter how remote or will be to be able with dealt the. to, objected the disallows claims If Code case,” thereby providing the debtor the time-barred debts. See id. based on “broadest H.R. possible Rep. relief.” No. 502(b)(1) (stating § that a claim shall be 95-595, (1977); 95-989, p. Rep. S. No. against if it is “unenforceable disallowed (1978). 22p. any agreement ... under the debtor law”); (stating that the applicable id. Bankruptcy “[W]hen Code bankruptcy estate has “the benefit ... it usually uses the word claim refer ... available to the debtor includ- defense ring right payment recognized to a to un limitation”). previously As ing statutes der state law.” Travelers Cas. & Sur. Co. noted, “provided that are debts Co., of Am. v. Pac. Gas & Elec. 549 U.S. may under section 502” plan or disallowed 443, 451, 127 S.Ct. 167 L.Ed.2d 178 discharged. (emphasis Id. add- be (2007) omitted). (quotation Mary Under ed). law, land the statute of limitations “does Appellants debt, contend that operate extinguish to but to [a] Ryland Grp., applied prohibit be to debt collec- should remedy.” bar the Potterton v. Inc., (1981) filing proofs tors from on time- 289 Md. 424 A.2d Higginbotham Appellants argue omitted); barred debts. that a (quotation see also Md., debt is not a “claim” within time-barred v. Pub. Serv. Comm’n of Md. (2009) (“[W]e meaning of the Code 985 A.2d have that claims on time-barred debts is regarded limitations as not denying the practice action, an because such claims abusive plaintiffs right only but the exer objected omitted)). are seldom and therefore re- right.” (quotation cise of the In payment deed, ceive from the estate may a stale debt be revived if the to the detriment of the debtor and sufficiently other acknowledges debtor the debt’s Atlas, meanwhile, Potterton, argues 764; creditors. existence. 424 A.2d at see FTC, 2013), time-barred debt is a valid “claim” and (July also Time-Barred Debts https://www.consumer.ftc.gov/articles/0117- pro- such a claim should not be only hibited because debts that are treated (“Although the [debt] time-barred-debts bankruptcy system may be dis- you collector not sue to collect [a charged. debt, you still owe it. The time-barred] you try can continue to contact collector

A. states, you to collect.... some [and] [i]n pay any amount on a time-barred debt or Code defines promise pay, the debt is ‘re- even broadly a “right term “claim” to mean vived.’”) (saved attach- opinion as ECF payment, right whether or not such ment). law, Thus, Maryland a time- under judgment, liquidated, unliqui reduced to fixed, matured, “right debt still constitutes a to dated, barred contingent, unma tured, payment” and therefore a “claim” that the disputed, undisputed, legal, equita ble, secured, or holder file under the unsecured.” U.S.C. 101(5)(A). § By using possi- the “broadest Code.5 intent, Appellants suggest "by filing proofs Regardless Atlas's

5. that 4. of whether this is debt, filing a trying it difficult to see how a creditor's claim on time-barred Atlas is acknowledge- unwittingly reviving claim would trick debtors into the constitute debtor, particularly Appellants’ Reply by statute Br. ment of the debt the [of limitations].’’ scope the ing time-barred debts from note that a debt must Appellants claim, “claims,” citing excluding to constitute and thus be enforceable that Supreme “[t]he the Court’s statement would bankruptcy process, them from the plain meaning ‘right payment’ of a “intended effect to frustrate the Code’s than an nothing more nor less enforceable scope of the term ‘claim’ as define the Dep’t Pub. v. obligation.” Pa. Welfare broadly possible,” 2-101 Collier Davenport, 552, 559, 110 495 U.S. S.Ct. ¶ 101.05, thereby the debtor provide (1990). However, we 109 L.Ed.2d 588 Accordingly, possible relief. the broadest state Supreme read the Court’s do not of limi- conclude that when the statute enforce to mean that a debt must be ment debts, a time- extinguish tations does not Indeed, the in court to be a claim. able the barred debt falls within that treats debts are Bankruptcy Code definition of a claim. Code’s broad or “unmatured” as claims “contingent” are not notwithstanding that such debts B. in court. 11 U.S.C. presently enforceable Next, filing a we consider whether Davenport, 101(5)(A). Furthermore, in debt vio proof of claim on a time-barred found restitution or Supreme Court notwithstanding that the lates the FDCPA though “neither the to be claims even ders permits filing. such As Bankruptcy Code Department nor the victim can Probation above, inter noted the FDCPA has been obligations pro in civil enforce restitution filing a on a preted prohibit lawsuit ceedings.” 495 U.S. at 110 S.Ct. The rationale has been time-barred debt. Instead, are enforced obligations such explained as follows: threat of revocation of the “substantial sued on a stale As with defendant and incarceration.” Id. probation claim, only dulls passage of time that while the Bank- It is also notable memory of the circum- the consumer’s provides that time-barred ruptcy Code debt, validity of the but stances and see, e.g., disallowed, are to be debts that she will heightens probability suggests the Code nowhere U.S.C records detail- longer personal no have are not to be filed that such debts Indeed, of the debt. ing the status Indeed, Bankruptcy Rules place. first particular- unfairness of such conduct is recently amended to facilitate the were ly context where clear the consumer timeliness re- assessment of a claim’s imposed heightened stan- courts have that claims such as the ones quiring protect care—that sufficient to dard of a state- appeal issue in this be filed with Be- sophisticated the least consumer. setting forth the last transaction ment consumers unsophisticated cause few date, date, charge-off payment last that a of limita- would be aware statute R. Bankr. P. date on the account. Fed. against defend tions could be used to 3001, advisory committee notes to 2012 debts, stale such con- lawsuits based on require- (discussing filing Amendments unwittingly acquiesce sumers would open-end on ments for claims based And, even the consumer such lawsuits. revolving agreements). consumer credit time as a de- realizes that she can use contemplates suggests This Rule the Code fense, likely give than still she will more untimely will be filed as claims debts the lawsuit because Lastly, fight exclud- in rather than ultimately but disallowed. Biggs Mays, e.g., 697-98 persuasive authority when there is Povill, (2d 1942); 105 F.2d 160 by Cir. In re debtor does not revive a time-barred debt See, 1939). listing bankruptcy schedules. Cir. it in his

531 however, Appellants re- expend energy complain, must still and that trus- she tees often lack the time and resources to subject herself to the em- sources and proof object examine each of claim and to going pres- of into court to barrassment those that are on based time-barred debts. defense; particularly this is true ent the Appellants’ (explaining See Br. 17-18 attorneys today. of light in of the costs Maryland only has Chapter three 13 trus- Corp., Fin. F.Supp. Kimber v. Fed. 668 5,000 manage approximately tees to cases (M.D. 1987); 1480, 1487 Ala. see also Craw per year, with .approximately proofs of ford, Phillips 1260; at v. Asset 758 F.3d case). in claim filed each Debt collectors Acceptance, LLC, (7th 736 F.3d purportedly like Atlas advantage take 2013).6 Cir. by this filing hopes claims on stale debts in go that the claims will unnoticed and re- unique note at the outset a consider- We ceive some payment bankruptcy from the ation in the context: if a bank- successful, estate. When these debt collec- ruptcy proceeds contemplated by as money tors reduce the amount of available Code, a claim based on a time-barred debt legitimate may to creditors and sometimes trustee, objected will be to disal- pay cause debtors to Chap- more into their lowed, ultimately discharged, thereby and plans. ter stopping engaging the creditor from in activity.7 appreciate further collection If the We the harm that can debt is be filed, wrought if go and no of claim is time-barred claims unno- unscheduled solution, view, ticed. However the our and debt continues exist the debt impose liability not to under the FDCPA lawfully may pursue collector collection ac- that would categorically filing bar the tivity apart from a lawsuit. This is claims, improve such but to the Code’s detrimental to the debtor and undermines administration it operates such that as system’s interest “the may accomplished, written.8 This be of all a collective treatment debtor’s example, allocating additional resources at time.” 1 creditors one Bankr. L. Norton through to trustees or action of the United then, Clearly, & Prac. 3:9. 3d when Trustee, appoints supervis- States who opti- time-barred debt is not scheduled the Chapter es all 13 trustees. 28 U.S.C. 586. mal scenario is for a claim to be filed and operate for the Code Another consideration that counsels that, against finding liability written. Funding, LLC, 14-cv-02083, only 6.The Eleventh Circuit in Crawford is the No 2015 WL (S.D. appeal 2015), appeals Apr. court of to hold that Ind. docketed, Chapter May claim on a time-barred debt in a No. 15-2044 Cir. Acceptance, LLC, 2015); proceeding the FDCPA. Torres v. Asset violates 758 F.3d appeal (E.D. 2015), Eighth F.Supp.3d "rejected] Pa. dock- 1256-57. Circuit has eted, (3d 13, 2015). extending May Cir. the FDCPA No. 15-2132 to time-barred claim,” Mgmt., Inc., Nelson v. Midland Credit 15-2984, contrast, 749, 752, By raising No. 828 F.3d 2016 WL 7. a statute of limitations 11, 2016), July at *2 defense defeat a lawsuit to collect time- extinguish broadly barred debt but would not the debt the Second Circuit has held that "fil- (even activity. necessarily prevent ing proof collection of claim in court invalid) one that is somehow cannot consti- Indeed, prac- Appellants tute the sort of abusive are correct that trus- debt collection proscribed by failing statutory duty tice the FDCPA.” tees are to fulfill their Simmons Roundup Funding, LLC, (2d claims, object improper examine and this is 2010). presently surely producing consequences Other circuits are con- adverse be- See, e.g., sidering yond Owens v. LVNV the context of time-barred debts. issue. by coun- debtors, by a trustee and often they protected amount Chapter most is unaf- bankruptcy plans objecting their to pay responsible into sel who are unsecured claims by the number of if, fected Appellants ar- claims even as improper typically Chapter 13 debtors that are filed. always do so. they currently do not gue, repayment percent into 100 do not enter Third, unwillingly unlike a debtor who is thus, creditors re- their unsecured plans; sued, voluntarily initi- Chapter debtor a claims, payment of their only partial ceive case, diminishing con- ates the being discharged. remainder See with the embarrassment the debtor cerns about the ¶ clearly (“Congress Collier 1328.02 8-1328 In objecting in to a stale claim. may feel little chapter plans paying contemplated sum, it “unfair” and why the reasons is ”). As unsecured debts.... nothing on a time-barred debt “misleading” to sue on filed, unsecured cred- claims are additional in the bank- considerably are diminished a smaller share of available itors receive context, has addi- where the debtor ruptcy by the paid total amount funds but the potentially benefits protections tional Thus, from the unchanged. debtor remains in having the debt treated the bank- from debtors, it Chapter of most perspective ruptcy process. a time-barred may preferable in fact be objected if it not filed even is claim to be that a debt Lastly, Appellants concede to, likely pay the same as the debtor will would not violate the FDCPA collector creditors and the debt can total amount to proof of claim on a time-barred filing a Gatewood, In discharged. See re be and did debt that the debtor had scheduled (explain- Cir. BAP B.R. designate “disputed.” Appellants as ex- not in have less at stake ing that “debtors scheduling undisputed that a debt as plain they than would when claims allowance it participate” an “invitation to because is judg- of an adverse- facing enforcement “ that ‘notice to a creditor its debt provides action” because the ment in a collection with the paid will be ... accordance of additional claims would allowance claim, objection pro- claims amount the debtor would affect the total ” cess, bankruptcy provisions.’ and other pay).9 Vaughn, (quoting Br. n.14 Appellants’ differ- other considerations also Various 678). However, notice is 536 B.R. at such of claim on a time- entiate disputed a scheduled debt is sent whether to collect debt from lawsuit barred Moreover, a time-barred debt or not. First, Rules such debt. likely inadvertently disputed is is less to be by Atlas claims like the ones filed require Thus, no reason to attach allowed. we see accurately the last transaction and to state liability to a claim filed on time- account, making charge-off date on the disputed. barred debt that is scheduled untimely claims easier to detect and reliev- and col- Finally, discharge the interests producing ing debtors from the burden of claims discussed above lective treatment that the claim is time- evidence show liability should Second, convince us that FDCPA debtor barred.10 above, allegation inac- There no that Atlas filed the FDCPA was enacted in 9. As noted scrupulous part protect debt collectors A debt collector who curate of claim. However, bankrupt- competition. from unfair supplies a claim’s stale- false dates obscure sophisticated cy However, creditors are entities the FDCPA. ness well violate Thus, may object improper claims. we will that issue we have no occasion to consider solely the FDCPA on their behalf not invoke today. above, when, as discussed there are reasons do so on behalf of debtors. not to fails to schedule uses the garner not attach where debtor court a time-barred debt. payoff view, on unenforceable In my debts. sharp practice misleading this and unfair filing proof conclude that of claim We creditors, to debtors and other and it gives based on a Chapter in a rise to a cause of action under the FDCPA. debt that is time-barred does not violate FDCPA when the statute of limitations the Moreover, I would hold that the Bank- extinguish not the debt.11 does ruptcy impliedly repeal Code does not the preempt FDCPA or the MCDCA. Accord- V. ingly, I would vacate opinion the of the reasons, foregoing the affirm For the district court and pro- remand for further of Appellants’ district court’s dismissal ceedings. and MCDCA claims. FDCPA I. AFFIRMED The FDCPA aims to “protect[ consum- ] DIAZ, Judge, dissenting: Circuit ers from abusive and deceptive practices join I III majority opinion, Part of the collectors, by debt and ... non-abusive concludes that of claim which debt collectors from competitive disadvan- activity regulated by is debt-collection the Servs., tage.” United States v. Nat’l Fin. n Fair Debt Practices Act Collection Inc., 1996). 98 F.3d seq. (FDCPA), § 15 U.S.C. 1692 et prohibits variety statute a wide of collec- agree And while I that Atlas’s time- tactics, false, including “any tion the use of claim a “claim” Bank- barred under the deceptive, misleading or representation or (as ruptcy majority Code the concludes in collection, means” of debt 15 U.S.C. PV.A), I agree Part cannot that Atlas’s 1692e, § and “unfair or unconscionable alleged conduct is consistent with the or attempt any means to collect to collect (or Maryland the Consumer Debt debt,” § 1692f. (MCDCA), Ann., Collection Act Md. Code Although spe- the FDCPA enumerates seq.).1 § buys Com. Law 14-201 et Atlas cific examples prohibitions, of these broad people the time-barred debt of in bank- “[wjithout limiting it gener- does so [their] ruptcy by filing proofs and tries to collect application.” example, al Id. For “[t]he in bankruptcy proceedings. of claim their character, representation false of ... the concedes, As Atlas these claims should amount, legal or status of debt” is a fail—the debt is in unenforceable court. specific general violation of the ban on But, objection, absent the false, deceptive, misleading representa- automatically properly Code allows all 1692e(2)(A). Congress tions. But chose plays claims. U.S.C. 502. So Atlas general prohibitions, not to limit the odds, representing to part itself as entitled courts, appropriate, “enable where of the debtors’ estates. If someone notices proscribe improper other conduct which is here, objects, happened the claims and as specifically not addressed.” Stratton v. grins sheepishly caught Atlas —“You Recovery Assocs., LLC, Portfolio me!”—and admits that is merit- Rep. slips through, (quoting less. But the claim S. decision, light join majority analyzing the FDCPA In we do not reach 1. I this argument Atlas’s that the Code together, parties and MCDCA claims as the precludes preempts the FDCPA and do. applying MCDCAfrom to the of a of claim. reprinted per- (1977), statute-of-limitations defense No. 95-382 and — 1695,1698). legal significance haps appreciating U.S.C.C.A.N. accurately listed last-transaction of even ap court-imposed proscription One such may nevertheless charge-off dates — lawsuits to collect time-barred plies to “acquiesce” to the claims. Funding, LLC, v. LVNV debt. Crawford (11th 1254, n.6 Cir. 1259-60 & 758 F.3d found the role some courts have While cases). 2014) raise (citing Such lawsuits weeding bankruptcy trustee in out of the in the consumer con major concerns two distinguish- critical in time-barred claims First, con sophisticated the “least text. context from civil law- ing bankruptcy vantage point we whose sumer”—from Nelson, see, e.g., 751-52, suits, at 828 F.3d communications, Russell see view FDCPA *2,1 3672073, persuad- at am not 2016 WL Servs., Inc., 763 v. Absolute Collection best, a collector who files such ed. At debt (4th 385, 2014) may Cir. be F.3d 394 — worst, At wastes the trustee’s time. claim of a statute-of- unaware of the existence the trustee the debt collector catches “un may defense and therefore limitations the switch and collects on an asleep at lawsuits,” Kim to such wittingly acquiesce claim to the detriment other invalid Corp., 1480, F.Supp. Fed. Fin. 668 ber v. and, cases, many the debtor. creditors (M.D. 1987). Second, pas “the Ala. case, In the debt collector mislead- either only the consumer’s sage of time not dulls that it is ingly represents to debtor validity memory the circumstances and through to collect entitled debt, probability heightens of the but not. when it is longer will no have consumer] that [the Moreover, there is reason to doubt detailing the status of the personal records efficacy vigilant the trustee as a steward Acceptance, LLC, Phillips v. Asset debt.” See, e.g., In estate. re of the debtor’s 2013) 1076, (quot Edwards, (Bankr. B.R. N.D. Kimber, 1487). ing F.Supp. 2015) in this (“Chapter Ill. 13 trustees support These same considerations object proofs of claim district do not liability recognizing FDCPA of limitations defenses. based on statute unscheduled debts time-barred claims on surprising objecting because This is not Crawford, 758 F.3d at bankruptcy.2 affirmative defenses would claims based on But see Nelson v. Midland Credit 1260-61. trustees to the details of require examine Mgmt., Inc., 15-2984, No. claim, every proof of virtually unsecured July at *2 2016 WL Indeed, if simply impracticable.”). which opinion) (refusing to (published flawlessly, performed their duties trustees time-barred the FDCPA to “extend[ ] engage Atlas would have little incentive of claim” because the proofs in its scheme. against harassment “protections Code’s on time-barred Like a lawsuit deception satisfy the relevant concerns debt, activi- alleged debt-collection Atlas’s FDCPA”). Here, proofs where the of the the sort of ty precisely in this case is enough information to provide misleading practice that Con- unfair and barred, the debt is time the first determine as a recognize the courts to gress intended particular importance. is of consideration entered bank- violation. After the debtors reviewing unsophisticated An debtor debts, rather, bought their ruptcy, of the proof of claim be unaware concede, to file a might an invitation to a creditor their case be seen as 2. As the debtors they debts with different had scheduled these claim. court, might be an action that said, “charged-off Ideally, as the bill of sales re- debts. debtors would remember all 58, 132, All ceivables.” J.A. of these debts, their old they realize were time charged-off debts were more than five- barred, schedule them disputed, and see old, years Maryland’s well outside three- they were disallowed. But the FDCPA Nevertheless, year statute of limitations. sophisticated asks what the least consumer Atlas filed of claim to recover the do, would not the ideal one. Atlas’s conduct unenforceable debts in games the bankruptcy process; it does not court. The relevance of the limi- statute of ensure integrity. its Atlas, tations was not lost on which includ- Accordingly, I would hold that Atlas’s following ed the notice on two of the three conduct proof-of-claim forms it filed: constitutes a violation “This of the being claim is pursuant USC FDCPA. a holding Such would impose 501(a) 502(b) 101(5), Secs. and as said great burden on debt collectors. “[A] claim be outside of the statute of debt collector is not in liable an action 502(b) 55, limitations.” J.A. 140. Section brought under the if can [FDCPA] [it] to, explains objected that if a claim is the show ‘the violation was not intentional and claim court will the “except allow to the resulted from a bona fide error notwith- extent that ... such claim is unenforceable standing the procedures maintenance of against the property debtor and the of the reasonably adapted to avoid such er- debtor, any agreement under ” applicable Carlisle, McNellie, Rini, ror.’ Jerman v. 502(b)(1). short, law.” In Atlas knew ex- LPA, 573, 576, Kramer & Ulrich 559 U.S. actly what it was doing exploiting a — 1605, (2010) 130 S.Ct. 176 L.Ed.2d 519 in bankruptcy system weakness the and 1692k(c)). (quoting 15 U.S.C. Atlas and preying potential on error to collect on other debt collectors can avoid FDCPA debts where it practice should not. The liability by putting place a reasonable subverts a purpose core of bankruptcy procedure unscheduled, to screen time- diverting estate assets from the creditors barred claims—if already has such a entitled to receive them. procedure, prove it can it in the district Atlas rather stunningly argues that it is court. doing public service: for “[B]ut Atlas’ filing claim, its those debts H. subject

would not be discharge and at Appellants’ conclusion of chapter 13 majority Because the determines that cases, Atlas could restart activity collection the FDCPA does not reach Atlas’s con- respect with long thereto so as it does not duct, it question does not address the otherwise violate the Appellee’s FDCPA.” whether —if the FDCPA on its own terms Really? Br. at 40. While the statement apply would to the filing of time-barred true, (unintended) literally possibility Bankruptcy claims—the Code nevertheless the time-barred debts will be disal- precludes such an action. To determine lowed and discharged hardly justifies At- whether two federal compati- statutes are Moreover, las’s tactics. the debtors ble, employ ordinary statutory inter- did not schedule the debts is some evi- pretation principles. See POM Wonderful dence that collection stopped. efforts have —Co., U.S.-, LLC v. Coca-Cola had; itAnd would not be surprising they 2228, 2236, (2014). S.Ct. 189 L.Ed.2d 141 the time for passed, enforcement has and split Because the circuits are on issue the combination this of the statute of limita- arguments tions and the FDCPA and the have been seriously limits what made exten- a debt collector sides, can do to sively explain briefly my recover old on both I (2007) L.Ed.2d the two statutes do not con- S.Ct.

position that (“While flict in statute ... can this instance. a later enacted to amend or re- operate sometimes even and Ninth Circuits have Second ..., statutory provision an peal earlier pre- that the Code concluded ‘repeals are not and by implication favored’ suits. v. cludes certain FDCPA Simmons will not unless the ‘intention presumed be Roundup Funding, LLC, 95- repeal of the clear and legislature [is] (2d 2010) (rejecting an FDCPA ” (third in original) manifest.’ alteration brought during pendency claim Alaska, 259, 267, (quoting v. 451 U.S. Watt of an bankruptcy proceedings (1981))). 101 S.Ct. 68 L.Ed.2d 80 claim); inflated Walls Wells Fargo Bank, N.A., 510-11 Third, I would with the view of the side an (barring FDCPA Seventh, Circuits, Eleventh at least on post-bankruptcy debt collection vio- does argue the facts of this case. Atlas order). discharge rely lation Both on of the expressly that the Bankruptcy Code bars comprehensive provisions protec- Instead, it FDCPA remedies. contends the tions of the Code to hold that statutes are irreconcilable: “[W]hat [the it no room for FDCPA claims. Sim- leaves prohibited by allege debtors] mons, Walls, 96; F.3d at 276 F.3d at (the of a claim with debt) is respect expressly per- to a ‘stale’ Third, Seventh, and Eleventh Cir- by mitted Code.” Bankruptcy Appel- rejected cuits the notion that have FDCPA argument easily lee’s Br. But this at 34. brought actions not be the context Bankruptcy answered: Because the Code v. bankruptcy. Johnson Midland Fund- obligate does not a creditor to file ing LLC, (11th 1334, F.3d 1341-42 claim, a debt collector such Atlas can Cir.2016) (published opinion) (holding that by comply with statutes not both Bankruptcy impliedly Code does not unscheduled, proofs claim. time-barred repeal actions for filing proofs FDCPA Johnson, 1341-42; at See 823 F.3d Ran- debt); claim v. FIA on time-barred Simon dolph, 368 at 730.3 F.3d Servs., N.A., (3d Card 732 F.3d This our conclusion is buttressed an (permitting Cir. FDCPA claim for holding, different posture, in a somewhat Bankruptcy the violation of the Code’s may be brought that an FDCPA Randolph subpoena requirements); v. during bankruptcy proceedings. Covert IMBS, Inc., 730-31 Funding, LLC, LVNV 779 F.3d 246- 2004) (comparing the FDCPA and Bank- 2015). Covert, In debtors filed ruptcy concluding they are com- Code suit under the FDCPA and after MCDCA courts, patible). In the view of these completion bankruptcies, alleg of their expressly statutes do contradict one ing unlawfully a creditor had another, they in nor are “irreconcilable claim without debt-collection “any conflict” because debt collector ean license. at 245. We found the claims Id. comply simultaneously.” Ran- with both judicata barred res because the debtors dolph, Johnson, 730; at 368 F.3d accord Simon, during the bankruptcy. failed raise them 1340-42; at 823 F.3d at judicata 273-74; applies Id. at Because res Nat’l Ass’n 247-48. see also of Home Wildlife, they only Defs. of claims “could have Builders v. 551 U.S. unraised reasons, 3. For I would MCDCA. similar hold that the preempt Code does not action,” adjudicated in an been earlier id. necessarily determined that the brought

debtors “could ... have their af

firmative claims for damages [under during

FDCPA and the bank MCDCA]

ruptcy process under Federal Rule of 7001(1), pro Procedure which ‘a proceeding

vides that money recover property may

or be brought as an adver action,”

sary Similarly, id. at 248. I would

hold that the Bankruptcy Code does not

preclude preempt the filing of the MCDCA claims in this case.

III. I

Because believe the debtors state a (and MCDCA),

claim under the FDCPA I

would reverse and remand for pro- further

ceedings.

HDRE BUSINESS PARTNERS GROUP, L.L.C.,

LIMITED

Plaintiff-Appellant

RARE HOSPITALITY INTERNATION-

AL, INCORPORATED, doing business Longhorn Steakhouse, Defendant-

Appellee.

No. 15-30487

United States Appeals, Court of

Fifth Circuit.

August

Case Details

Case Name: Chaille Dubois v. Atlas Acquisitions LLC

Court Name: Court of Appeals for the Fourth Circuit

Date Published: Aug 25, 2016

Citation: 834 F.3d 522

Docket Number: 15-1945

Court Abbreviation: 4th Cir.