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Crawford v. Senex Law, P.C.

United States District Court, W.D. Virginia, Charlottesville Division

May 3, 2017

TERI CRAWFORD, GARRY BROWN, LYDIA GREEN, LORETTA PENNINGTON, and PATRICIA SAUNDERS, individually and on behalf of all similarly situated individuals, Plaintiffs,
SENEX LAW, P.C., Defendant.


          Hon. Glen E. Conrad Chief United States District Judge

         Plaintiffs bring this action pursuant to the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (the "FDCPA"). The matter is currently before the court on defendant's motion to dismiss. For the reasons stated, the motion will be denied.


         The following summary of the facts, taken from the plaintiffs' complaint, is accepted as true for purposes of the defendant's motion to dismiss. See Erickson v. Pardus, 551 U.S. 89, 94 (2007). The defendant, Senex Law, P.C. ("Senex"), is a law firm located in Hampton, Virginia. Senex specializes in assisting apartment complexes in Virginia collect past due rent payments. Each of the named plaintiffs has been a tenant at a residential property in which the landlord engaged Senex to facilitate overdue rent collection.

         Within five to seven days after being late on his or her rent payment, each named plaintiff received a written "Notice of Noncompliance" (hereinafter "Notice" or "Notices"). The Notice appears to be sent from the landlord, as it is on the landlord's letterhead and contains an electronic signature from the landlord. The Notice instructs the tenant to send payments to the landlord, and provides the landlord's address. Each Notice lists the amount owed, including late fees and at least $27 in attorney's fees for generating the Notice. The letter specifically states that the landlord has "retained Senex Law, PC and they have already drafted this notice and provided legal advice due to your noncompliance." Compl. Ex. A. The envelope in which the letter is sent notes the name of the relevant apartment complex. However, the return address is from Hampton, Virginia, where Senex is located. The envelope also bears a postal notation indicating that the Notice was sent from Hampton, Virginia. If the amount due is not paid in a timely manner, Senex initiates an unlawful detainer action, often approximately one month after a tenant receives a Notice of Noncompliance.

         Plaintiffs allege that, by sending the Notices, Senex is acting as a debt collector, imposing certain disclosure requirements on Senex. The gravamen of the plaintiffs' complaint is that Senex sends dunning letters to plaintiffs without identifying itself as a debt collector and without certain statutorily-required disclosures, in violation of the FDCPA. Specifically, plaintiffs contend that Senex uses the following process to send the Notices to residents who are late on rent payments: (1) the landlord sends Senex a list of accounts for which a debt is allegedly past due; (2) Senex prepares the Notice of Noncompliance on landlord letterhead; (3) Senex affixes the landlord's electronic signature; and (4) Senex then prints and sends the Notice directly to the tenant. Plaintiffs assert that Senex intentionally fails to include the required disclosures when it sends the Notices.

         Plaintiffs' complaint alleges one count for violations of the FDCPA. Plaintiffs assert that Senex has violated §§ 1692d, prohibiting harassment or abuse in the collection of debt; 1692e, prohibiting the use of false or misleading representations; and 1692g, requiring certain information about the validity of the debt to be included in the debt collection communications. The five named plaintiffs also seek to certify a class of present and former tenants of residential properties located in Virginia whose landlords engaged Senex to facilitate overdue rent collection. Plaintiffs seek statutory damages for each class member, compensatory damages, and attorney's fees and costs. The parties have been fully heard on the issues, and the matter is ripe for review.

         Standard of Review

         Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. To survive dismissal for failure to state a claim, a plaintiff must establish "facial plausibility" by pleading "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal. 556 U.S. 662, 678 (2009). In ruling on a 12(b)(6) motion, all well-pleaded allegations in the complaint are taken as true and all reasonable factual inferences are drawn in the plaintiffs favor. Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). However, "[a]t bottom, a plaintiff must 'nudge [her] claims across the line from conceivable to plausible' to resist dismissal." Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 364-65 (4th Cir. 2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The complaint must contain sufficient facts "to raise a right to relief above the speculative level" and "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 555, 570. In considering a Rule 12(b)(6) motion, the court may consider exhibits attached to or referred to in the complaint. See Phillips v. LCI Int'l, Inc., 190 F.3d 609, 618 (4th Cir. 1999).


         "The FDCPA protects consumers from abusive and deceptive practices by debt collectors, and protects non-abusive debt collectors from competitive disadvantage." Yarney v. Ocwen Loan Serv., LLC, 929 F.Supp.2d 569, 575 (W.D. Va. 2013) (Moon, J.) (citing United States v. Nat'l Fin. Servs., Inc.. 98 F.3d 131, 135 (4th Cir. 1996)). A plaintiff must plead the following to establish a violation of the FDCPA: (1) that the plaintiff is a "consumer" as defined by the FDCPA; (2) that the defendant is a "debt collector" as defined by the FDCPA; and (3) that the defendant engaged in any act or omission in violation of the FDCPA. Id. (citing Withers v. Eveland, 988 F.Supp. 942, 945 (E.D. Va. 1997)).

         In the instant case, there is no dispute that plaintiffs are consumers within the meaning of the FDCPA. However, Senex makes two arguments in support of its motion to dismiss. First, Senex asserts that when it sends out the Notices, it is not a debt collector. Instead, it is performing a ministerial function for the landlords, who are the creditors and not subject to the FDCPA. Second, Senex argues that plaintiffs are subject to a heightened pleading standard, which they have not met.

         I. Debt Collector

         The FDCPA applies to "debt collectors, " which is statutorily defined 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, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). The FDCPA "generally does not regulate creditors when they collect debt on their own account." Henson v. Santander Consumer USA. Inc., 817 F.3d 131, 134 (4th Cir. 2016). The plain language of the statutory definition of debt collector establishes two alternative tests for considering whether a defendant is a debt collector: (1) the principal purpose test and (2) the regularly collects test. Goldstein v. Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti, 374 F.3d 56, 61 (2d Cir. 2004). "Thus, the overall structure of ยง 1692a(6) makes clear that when assessing whether a ...

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