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Wynne v. I.C. System, Inc.

United States District Court, E.D. Virginia, Norfolk Division

July 23, 2015


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          For Plaintiff: Eric Leckie, Esquire, The Law Offices of Eric Leckie, PLLC, Norfolk, VA; Michael F. Cardoza, Esquire, The Cardoza Law Corporation, Francisco, CA.

         For Defendants: Alan D. Wingfield, Esquire, Harrison S. Kelly, Esquire, Troutman Sanders LLP, Richmond, VA; Andrew B. Pittman, Esquire, Ethan G. Ostroff, Esquire, Troutman Sanders LLP, Virginia Beach, VA.

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         Rebecca Beach Smith, Chief United States District Judge.

         This matter comes before the court on the Defendants' Motion for Judgment on the Pleadings and to Dismiss Plaintiff's Complaint for Lack of Subject Matter Jurisdiction (" Motion" ), ECF No. 19, and accompanying Memorandum in Support, ECF No. 20, filed on June 10, 2015. The Plaintiff filed her Response to the Motion on June 22, 2015, ECF No. 21, and the Defendants filed a Reply on June 29, 2015. ECF No. 22. The matter has been fully briefed and is ripe for review. For the reasons that follow, the Defendants' Motion is DENIED in part and GRANTED in part.


         Because this matter arises from a motion for judgment on the pleadings under Rule 12 (c) and to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the sparse facts that are alleged in the Complaint are assumed to be true and viewed in the light most favorable to the Plaintiff.[1] The Plaintiff alleges, in essence, that the Defendants harmed her by attempting to collect a debt that she was not legally obligated to pay.

         The Plaintiff, Shannon Wynne, is a resident of the Commonwealth of Virginia. Compl. ¶ 3. At some unspecified time, she incurred a debt to Branch Banking & Trust Bank (" BB& T" ) in the form of a personal checking account overdraft. Id. ¶ 6. The Plaintiff does not allege that she ever repaid the debt. BB& T attempted to collect the debt through the legal process, but the Circuit Court for the City of Virginia Beach found for the Plaintiff in " this matter on April 24, 2013. Id. ¶ 7. It is not clear from the pleadings why the debt was not collectible through judicial means.

         The Defendants are both corporations in the business of collecting debts. Id. ¶ ¶ 4-5. Defendant I.C. System, Inc. (" I.C. System" ) is a Minnesota corporation, and Defendant First Point Collection Resources, Inc. (" First Point" ) is a North Carolina corporation. Id. After BB& T failed to collect the debt from the Plaintiff judicially,

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the Defendants undertook non-judicial attempts to collect it. Id. ¶ 8. The Plaintiff has not specified what non-judicial means the Defendants used to try to collect the debt, but the Complaint alleges that the Defendants misrepresented the character, amount, or legal status of her debt, which caused her " actual and statutory damages." Id. ¶ ¶ 10, 13, 18, 23. The Plaintiff has brought claims against both Defendants under 15 U.S.C. § 1692 et seq., the federal Fair Debt Collection Practices Act (" FDCPA" ); and against Defendant First Point under N.C. Gen. Stat. § 58-70-90 et seq., the North Carolina Collection Agency Act (" NCCAA" ).[2]

         The Plaintiff filed her Complaint on March 23, 2015. ECF No. 1. Thereafter, on May 5, 2015, each Defendant served the Plaintiff with an Offer of Judgment pursuant to Federal Rule of Civil Procedure 68. Mem. Supp. at 3.[3] The two Offers of Judgment were each " for damages in the aggregate amount of $2,500," as well as costs and reasonable attorney's fees. Id. The Plaintiff declined the two Offers of Judgment. Id.

         The Defendants then filed the instant Motion, pursuant to Federal Rule of Civil Procedure 12(c), for judgment on the pleadings; and, in the alternative, under Rule 12(b)(1), to dismiss the case for lack of subject matter jurisdiction. As a threshold matter, the court must first address the Defendants' arguments under Rule 12(b)(1), because " subject-matter jurisdiction is a necessary prerequisite to any merits decision by a federal court." Constantine v. Rectors & Visitors of Geo. Mason Univ., 411 F.3d 474, 480 (4th Cir. 2005) (citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89-101, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998)). " Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause." Steel Co., 523 U.S. at 94 (quoting Ex parte McCardle, 74 U.S. 506, 7 Wall. 506, 514, 19 L.Ed. 264 (1868)). " Thus, a federal court necessarily acts ultra vires when it considers the merits of a case over which it lacks subject-matter jurisdiction." Constantine, 411 F.3d at 480 (citing Steel Co., 523 U.S. at 101).


         On a motion to dismiss pursuant to Rule 12(b) (1), the plaintiff bears the burden of proving that subject matter jurisdiction exists by a preponderance of the evidence. United States ex rel. Vuyyuru v. Jadhav, 555 F.3d 337, 347-48 (4th Cir. 2009) (citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982) (" The burden of proving subject matter jurisdiction on a motion to dismiss is on the plaintiff, the party asserting jurisdiction." )).

         There are two ways in which a defendant may present a Rule 12(b)(1) motion. First, a defendant may attack the complaint on its face, when the complaint

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" fails to allege facts upon which subject matter jurisdiction can be based." Adams, 697 F.2d at 1219. In that case, " the facts alleged in the complaint are assumed to be true and the plaintiff, in effect, is afforded the same procedural protection as he would receive under a Rule 12(b)(6) consideration." Id.

         Alternatively, a Rule 12(b)(1) motion to dismiss may challenge the existence of subject matter jurisdiction over the case, apart from the facts alleged in the pleadings. Pro-Football, Inc. v. Blackhorse, 62 F.Supp.3d 498, 502 (E.D. Va. 2014) (citing Williams v. United States50 F.3d 299, 304 (4th Cir. 1995) ; White v. CMA Constr. Co., 947 F.Supp. 231, 233 (E.D. Va. 1996)). " In such a case, the trial court's 'very power to hear the case' is at issue." Id. (citing Mortensen v. First Fed. Sav. & Loan Ass'n,549 F.2d 884, 891 (3d Cir. 1977)). The district court ...

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