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Maryland Federal District Court Grants Defendants’ Motions to Dismiss Alleged Violations of Fair Debt Collection Practices Act on Grounds that Claims were Time-Barred and Insufficient

Timothy Olson v. Midland Funding, LLC, et al.
Case No. CCB-13-1882 (December 18, 2013)

by jhanelle A. Graham
Semmes, Bowen & Semmes (

In Timothy Olson v. Midland Funding, LLC, et al., Plaintiff Timothy Olson filed an action against Midland Funding, LLC (“Midland Funding”) and Midland Credit Management, Inc. (“MCM”), (collectively, “Midland”), and Lyons, Doughty & Veldhuis, P.C. (“LDV”), alleging violations of the Fair Debt Collection Practices Act (“FDCPA”), the Maryland Consumer Debt Collection Act (“MCDCA”), and the Maryland Consumer Protection Act (“MCPA”). Both Midland and LDV have filed motions to dismiss. After reviewing the facts of the case, United States District Judge Catherine C. Blake granted the defendants’ motions.

In December 2010, Midland Funding and MCM sued Timothy Olson in Maryland District Court in St. Mary’s County, to collect an unpaid credit card debt that Midland bought from Olson’s original creditor, Chase Bank. According to the complaint, Olson was never properly served with the lawsuit—although Olson lived in St. Mary’s County when the suit was filed against him, Olson moved to Baltimore City soon after, and before he was served. Olson did, however, discover the lawsuit in December 2010, when he searched the public Maryland Judiciary Case Search. Shortly thereafter, he then began contacting LDV, throughout 2011 and early 2012, requesting that he be served at his new address, and even offering to pay Midland the principal on his account. An affidavit for service attached to Midland’s Motion to Dismiss showed that Olson was served by substitute service at his new Baltimore City address in February 2012, and on April 4, 2012, Olson filed a request to transfer venue to Baltimore City. Midland filed a consent motion, and the court transferred the case. Before the scheduled trial date, however, Olson moved again to Calvert County, and when Olson appeared in Baltimore City Circuit Court on August 22, 2012, Midland moved to strike service and to transfer venue. The court granted Midland’s motion, and the case was transferred to Calvert County.

Olson claimed that Midland and LDV violated provisions of the FDCPA, the MCDCA, and the MCPA, in seven (7) ways. First, Olson claimed Midland and LDV violated 15 U.S.C. §§ 1692e, 1692e(2)(A), 1692e(4), 1692e(5), 1692e(10), 1692f, and 1692f(1), as well as § 14-202(8) of the MCDCA and § 13-303 of the MCPA, by seeking an affidavit judgment against him in state court without the proper documentation required under Maryland law. Second, Olson alleged that Midland and LDV violated the same provisions by filing a lawsuit to collect the debt when Midland did not have legal grounds to do so and misrepresented its standing. Third, Olson claimed that Midland and LDV’s use of a “scattershot litigation strategy” designed to deceive consumers into accepting default judgments or to coerce them into settling violated the above-listed provisions. Fourth, Olson alleged that Midland and LDV violated the previously listed provisions, with the exception of § 1692f (1), by claiming that the sale in which it obtained ownership rights to Olson’s alleged debt was subject to representation or warranty as to collectibility. Fifth, Olson claimed Midland and LDV violated §§ 1692d, 1692e, 1692e(10), and 1692f of the FDCPA by sending him updated interest worksheets on the amount he owed while refusing to serve him with the collection lawsuit and moving to change venue to the county where Olson lived when he did appear in court on August 22, 2012. Sixth, Olson claimed Midland and LDV violated § 1692e(10) of the FDCPA by having no meaningful attorney involvement when it filed suit against Olson. Seventh, and finally, Olson claimed MCM violated § 1692c(a)(2) of the FDCPA by communicating with him when Midland knew Olson was represented by counsel with respect to the subject debt. Midland and LDV sought dismissal on the grounds that some of Olson’s FDCPA claims were time-barred and that he has failed to state a claim upon which relief can be granted. For reasons stated below, the Maryland district court agreed with Midland and LDV.

The district court began by stating that a private action under the FDCPA must be brought within one (1) year of the date of the alleged violation. Kouabo v. Chevy Chase Bank, F.S.B., 336 F.Supp.2d 471, 475 (D. Md. 2004) (citing 15 U.S.C. § 1692k(d)). Because Olson filed suit against Midland and LDV on May 20, 2013 and much of the conduct Olson alleged as violations of the FDCPA occurred prior to May 20, 2012, the district court ruled that many of his claims were time-barred. Specifically, the district court determined that Olson’s claims regarding the filing of updated interest worksheets, as well as Olson’s claims alleging violations of the FDCPA on the basis of Midland and LDV filing suit against him, and the contents of Midland’s complaint, were time-barred.

The court then turned its attention to Olson’s only surviving FDCPA claim against MCM, alleging that MCM violated § 1692c(a)(2) by sending him a privacy notice on May 8, 2013, when it knew Olson was represented by counsel. Section 1692c(a)(2) of the FDCPA bars debt collectors from “communicat[ing] with a consumer in connection with the collection of any debt . . . if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address.”“It is well established that ‘the threshold requirement for application of the [FDCPA] is that prohibited practices are used in an attempt to collect a debt.’” Bradshaw v. Hilco Receivables, LLC, 765 F. Supp. 2d 719, 725 (D. Md. 2011) (quoting Mabe v. G.C. Serv. Ltd. P’ship, 32 F. 3d 86, 87-88 (4th Cir. 1994)). The district court acknowledged, however, that not every communication sent by a debt collector to a debtor is subject to the FDCPA. After reviewing the facts of this case, the district court concluded that the communication at issue was not made “in connection with the collection of any debt,” and, therefore, Olson failed to allege sufficient facts to allege that MCM engaged in conduct violating §1692c.

Finally, the court addressed Olson’s contention that Midland and LDV “claim[ed], attempt[ed], or threaten[ed] to enforce a right with knowledge that the right does not exist,” in violation of the Maryland Consumer Debt Collection Act. MD. CODE ANN., COMM. LAW, § 14-202(8). “This has been held to mean that a party may not attempt to enforce a right with actual knowledge or with reckless disregard as to the falsity of the existence of the right.” Kouabo, 336 F. Supp. 2d at 475 (citing Spencer v. Hendersen-Webb, 81 F. Supp. 2d 582, 594-95 (D. Md. 1999)). Any violation of the MCDCA is a per se violation of the MCPA. See MD. CODE ANN., COMM. LAW, § 13-301(14)(iii). Here, the court observed that Olson never alleged that Midland did not own the obligation, that Olson did not owe the debt, or that the debt was time-barred. The conduct Olson claimed violated the MCDCA—filing a lawsuit with documentation insufficient to warrant a judgment on affidavit under Maryland Rule 3-306—did not undermine Midland’s right to seek repayment of debt Midland reasonably believed it legally owns. The court also stated that this conduct did not undermine LDV’s ability to bring suit on Midland’s behalf. Thus, the district court concluded that Olson had not plausibly alleged that Midland or LDV attempted to enforce any right with knowledge it did not exist, and he has not stated a claim under either Maryland statute. For the reasons stated above, the district court granted the defendants’ motions to dismiss.