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Crawford v. Senex Law, P.C.

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

November 7, 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 United States District Judge

         This action under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (the "FDCPA"), is currently before the court on defendant's motion for judgment on the pleadings. For the reasons stated below, the motion will be denied.


         The following facts are taken from the plaintiffs' amended complaint and were previously set forth in the court's memorandum opinion denying the defendant's motion to dismiss. See Crawford v. Senex Law. P.C.. No. 3:16-CV-00073, 2017 WL 1743880, at *1 (W.D. Va. May 3, 2017). Where appropriate, this summary of the facts also includes allegations from the defendant's verified answer.

         The defendant, Senex Law, P.C. ("Senex"), is a law firm in Hampton, Virginia, that assists landlords with collecting overdue rent from tenants. Am. Compl. ¶¶ 10, 13. Senex advertises itself to landlords as a "one stop shop" that both prepares and sends Notices of Noncompliance ("Notice" or "Notices") to tenants who owe rent and late fees and represents the landlords in lawsuits against tenants. Id. ¶ 15.

         Each of the named plaintiffs lived in a property managed by a landlord who had retained Senex to issue Notices to tenants who had failed to pay rent when due. Id. ¶ 9. Each named plaintiff received a Notice printed on his or her landlord's letterhead and affixed with the landlord's electronic signature. Id. ¶ 19. The Notice advised the tenant of the amount owed to the landlord, including at least $27 in attorney's fees, and stated that the landlord had "retained Senex Law, PC and they have already drafted this notice and provided legal advice due to your noncompliance." Id. ¶¶ 18, 21; Am.'Compl. Ex. A. The Notice directed the tenant to send payment to the landlord and provided the landlord's address and telephone number at the top of the Notice. Am. Compl. Ex. A. The Notice warned that, if the tenant's landlord did not receive payment of the rent and late fee within five days of the date the Notice was received, "an Unlawful Detainer or other lawsuit may be filed against you and you will be at risk of losing possession of your property and/or having a judgment entered against you . . . ." Id. The return address on the envelope listed the landlord's name, but Senex's address in Hampton, Virginia. See, e.g.. Am. Compl. ¶¶ 19, 39. Several of the tenants received their Notices in envelopes stamped with a postal notation indicating delivery from Hampton, Virginia. See id ¶ 19. If the tenant did not pay the landlord within about one month after receiving the Notice, then Senex would initiate an unlawful detainer action against the tenant. See, e.g., id. ¶ 76.

         Based on the named plaintiffs' experiences, the complaint alleges that Senex uses the following process to send Notices: (1) a landlord sends Senex a list of accounts with allegedly overdue rent; (2) Senex prepares Notices on the landlord's letterhead; (3) Senex affixes the landlord's electronic signature to each Notice; and (4) Senex prints and sends the Notices directly to the tenants. Id. ¶ 17. Plaintiffs contend that this process establishes that Senex operates as a debt collector when it sends the Notices, and therefore, that Senex must identify itself as a debt collector and disclose in the Notices certain information required by the FDCPA. Id. ¶¶ 18, 168. Plaintiffs assert that Senex intentionally fails to include the required disclosures when it sends the Notices. Id. ¶ 173.

         In its verified answer, the defendant elaborates on the four-step process identified in the amended complaint. The defendant asserts that Senex collaborates with each landlord to prepare a Notice template. Verified Answer ¶ 17. When a landlord requests that Senex issue a Notice, Senex asserts that it analyzes the lease and the relevant law to generate a tenant-specific Notice. Id. Each letter includes a charge for legal services Senex provides to the landlord. Id.¶21. A landlord representative then electronically signs the Notice, thereby swearing under penalty of perjury that the Notice contains true and correct facts and that the landlord possesses the necessary documents to substantiate the facts in the Notice. Id. ¶ 19. Finally, Senex prints and mails the Notices at the direction of the landlords. Id. ¶ 17.

         Defendant maintains that "the creation and approval of each individual Notice of Noncompliance is a long, collaborative process between Senex Law and landlords where landlords make every decision and Senex Law's involvement consists solely of providing legal advice regarding compliance with applicable law and the ministerial tasks of printing, folding, and mailing the Notices." IcL ¶ 20. The defendant concedes that "long" usually means "a few hours." Id. According to the defendant, its advertising indicating Senex prepares the Notices provides only "a general statement of available services, " and each landlord signs a detailed engagement letter that outlines the actual services to be rendered. Id. ¶ 15.

         Procedural History

         On October 5, 2016, plaintiffs filed a one-count complaint against Senex, alleging that Senex operates as a debt collector but fails to make certain statutorily-required disclosures in violation of the following provisions of the FDCPA: (1) § 1692d, prohibiting harassment or abuse in the collection of debt; (2) § 1692e, prohibiting the use of false or misleading representations; and (3) § 1692g, requiring certain information about the validity of the debt to be included in debt collection communications. The five named plaintiffs also requested certification of a class of present and former tenants of residential properties located in Virginia whose landlords have engaged Senex to facilitate the collection of overdue rent.

         On December 21, 2016, the defendant moved to dismiss the original complaint for failure to state a claim upon which relief may be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The court denied the motion, ruling that the plaintiffs had plausibly alleged that Senex is a debt collector when issuing Notices, and therefore, that the absence of certain disclosures in the Notices violates the FDCPA.

         On May 8, 2017, plaintiffs filed an amended complaint, which is identical to the original complaint with the exception of the ad damnum clause. In response, on June 28, 2017, defendant filed its verified answer.

         On July 27, 2017, the defendant moved for judgment on the pleadings and for a stay of discovery. The plaintiffs then moved to compel certain discovery. After a hearing on the discovery motions, the court stayed discovery in part and granted the motion to compel ...

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