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Maryland Federal District Court Declines to Dismiss Plaintiff’s Claims Upon Finding Personal Jurisdiction Over Maryland Non-Resident and Holding Contract Ambiguous

Andrew Chartier v. M. Richard Epps, P.C., et al.
Case No. ELH-14-1071 (Sept. 23, 2014)

by Jhanelle A. Graham, Associate
Semmes, Bowen & Semmes (

Available at:

In Andrew Chartier v. M. Richard Epps, P.C., et al., the United States District Court for the District of Maryland was asked to determine a breach of contract action, filed by Plaintiff, Andrew Chartier (“Mr. Chartier”) against M. Richard Epps, P.C. (“Epps, P.C.”); Equifax Information Services, LLC (“Equifax”); TransUnion, LLC (“TransUnion”); Cohn, Goldberg & Deutsch, LLC (“Cohn”); and Green Tree Servicing, LLC (“Green Tree”). Mr. Chartier also alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) and the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”). After a review of the relevant facts and case law, Judge Ellen Lipton Hollander declined to dismiss Mr. Chartier’s claims against the defendants.

This case arose from a dispute concerning the interpretation of a settlement agreement. On an unspecified date, Mr. Chartier defaulted on his obligations under a promissory note, which was held by Green Tree, a servicing agent for RBS Citizens, N.A. When the debt became delinquent, Green Tree assigned it to Epps, P.C. for collection. On September 21, 2011, plaintiff entered into a Settlement Agreement and Release with Green Tree, which was negotiated by Mr. Epps. At the time of default, Chartier owed $42,273.17, with interest at an annual rate of eight percent. Under the Agreement, Mr. Chartier promised to pay $21,136.00, without interest (the “Settlement Amount”), in full satisfaction for the money owed on the promissory note. The Agreement specified that plaintiff was to pay an initial installment of $2,500 by September 30, 2011, and then “$18,636.00 payable in equal monthly installments of $328.26 commencing on October 15, 2011 and continuing on the same day of each month thereafter until September 15, 2015 at which time the last such monthly installment of the settlement amount shall be due and payable.” The Agreement stipulated that Mr. Chartier could pre-pay the Settlement Amount, in whole or in part, “without penalty,” and also provided that “so long as the installment payments provided herein are received as provided herein the Lender will take no legal action to collect the promissory note.” With respect to default, Mr. Epps was appointed as agent of Chartier to, “without further notice to Borrower, confess judgment on behalf of the Borrower for the unpaid balance . . . .”

By the end of July 2013, Mr. Chartier had paid the initial installment of $2,500.00 and made forty-eight payments of $328.26. Almost two (2) years after execution of the Agreement, on July 29, 2013, Mr. Epps sent an email to Mr. Chartier, stating that there was a typographical error in the Agreement and the monthly installment amount should have read $388.26 instead of $328.26—a difference of $60.00 per month. Mr. Epps acknowledged the receipt from Mr. Chartier of forty-eight (48) payments of $328.26 each, plus the initial installment, but advised Mr. Chartier that these payments only totaled $18,256.48. Id. In addition, Mr. Epps asserted that Mr. Chartier still owed a remaining balance of $2,869.52, pursuant to the Agreement. On February 9, 2014, Mr. Chartier wrote an email to Epps to advise him of his current Maryland address. On February 10, 2014, Mr. Epps responded to Chartier’s email as follows: “Please advise if you intend to pay the remaining due under the settlement. If so fine. If not I will advise my client to send the file to its Maryland attorney. My recommendation will be to pursue the entire balance remaining due, not just what remains of the settlement.” Below this message, the email advised: “THE UNDERSIGNED IS A DEBT COLLECTOR. THIS IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.” At some point thereafter, Mr. Epps forwarded the account to Cohn to collect a debt in the amount of $25,001.46.

Mr. Chartier also alleged that, in or around December 2013, he became aware that Green Tree was reporting the debt to one (1) or more of the three (3) national consumer reporting agencies. On or about January 11, 2014, Mr. Chartier sent a letter to Equifax and TransUnion, asserting that the debt had been paid in full pursuant to a settlement with Green Tree. Nevertheless, Mr. Chartier asserts, Equifax and TransUnion continued to report the debt as having a current balance due and payable. Mr. Chartier filed a Complaint in Maryland federal district court, alleging breach of contract, as well as violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) and the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”). Pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure, Mr. Epps filed a motion to dismiss, supported by a memorandum (collectively, the “Epps Motion”), seeking dismissal of the Amended Complaint based on lack of personal jurisdiction and for failure to state a claim. Green Tree also filed a motion to dismiss and a supporting memorandum (collectively, the “Green Tree Motion”), urging dismissal pursuant to Rule 12(b)(6). Mr. Chartier opposed both motions.

First, the Maryland district court articulated that a motion to dismiss for lack of personal jurisdiction arises under Fed. R. Civ. P. 12(b)(2). “When a court’s personal jurisdiction is properly challenged by a Rule 12(b)(2) motion, the jurisdictional question thus raised is one for the judge, with the burden on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). Second, a defendant may test the adequacy of a complaint by way of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010). To survive a Rule 12(b)(6) motion, a complaint must satisfy the pleading standard articulated in Fed. R. Civ. P. 8(a)(2), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Further, the district court stated that Rule 4(k)(1)(A) of the Federal Rules of Civil Procedure authorizes a federal district court to exercise personal jurisdiction over a defendant in accordance with the law of the state where the district court is located. Carefirst, supra, 334 F.3d at 396. Maryland’s long-arm statute, codified at Md. Code (2013 Repl. Vol., 2013 Supp.), § 6-103(b) of the Courts & Judicial Proceedings Article, allows personal jurisdiction over a person who has minimum contacts with Maryland.

After a thorough review of general and specific jurisdiction, the district court noted that Epps submitted an affidavit averring that M. Richard Epps, P.C. never conducted any business in the state of Maryland, derived an income from business conducted in Maryland, or owned any real property in the state of Maryland. According to Epps, the Agreement was executed in Virginia Beach, Virginia, and Mr. Chartier was a resident of Virginia Beach, Virginia at the time. To support his position that specific jurisdiction over Mr. Epps existed, Mr. Chartier pointed to the February 2014 email exchange between Mr. Epps and Mr. Chartier as evidence that Mr. Epps purposefully availed himself of the privilege of conducting activities in Maryland when Mr. Epps attempted to collect a debt from Mr. Chartier—whom Mr. Epps knew to be a Maryland resident. The district court agreed with Mr. Chartier, stating that Mr. Epps purposefully availed himself of the privilege of conducting activities in the forum by directing debt collection activities at a Maryland resident. Mr. Epps’s contention that the email of February 10, 2014, merely indicated that Mr. Epps would be transferring collection responsibilities to a Maryland attorney was a mischaracterization of its content. Rather, in the email, Mr. Epps asked Mr. Chartier to advise whether he intended to pay the debt that purportedly remained due under the Agreement, and threatened that, in the event Mr. Chartier did not pay the debt, he would recommend that Green Tree pursue recovery of the entire amount remaining due under the loan, rather than the smaller sum that purportedly remained due pursuant the Agreement. Moreover, the court determined that the email suggested that it was Mr. Epps’s advice that compelled Green Tree thereafter to attempt to collect the entire amount remaining due under the loan, rather than the amount that purportedly remained due pursuant the Agreement.

Finding that an exercise of personal jurisdiction over Mr. Epps was reasonable, the district court was “satisfied that [Mr. Chartier] made the requisite prima facie showing of personal jurisdiction over Epps,” and denied the motion to dismiss for lack of personal jurisdiction, without prejudice. With respect to the FDCP and FCRA claims, the district court deferred resolving the choice of law issue until after the parties engaged in discovery. Finally, the district court concluded that the Agreement contained a clear typographical or mathematical error, where the total settlement amount was incongruent with the amount of the “initial installment” and the monthly payments recited the Agreement. Conceding that extrinsic evidence might establish the proper interpretation of the Agreement, the court held that construction of an ambiguous contract provision was not susceptible to resolution on a motion to dismiss for failure to state a claim. In light of the ambiguity in the Agreement and surrounding factual issues, Judge Ellen Lipton Hollander declined to dismiss Mr. Chartier’s claims against Epps, P.C. and Green Tree.