Opinion ID: 2772279
Heading Depth: 1
Heading Rank: 3

Heading: FDCPA and AFDCPA

Text: The FDCPA was enacted “to eliminate abusive debt collection practices,” and imposes civil liability on debt collectors for certain prohibited debt-collection practices. Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010). McMullen asserts that McHughes violated the following prohibitions set forth in 15 U.S.C. § 1692d, 1692e and 1692e(10), and 1692f: 7 Cite as 2015 Ark. 15 § 1692d. Harassment or abuse A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. ... § 1692e. False or misleading representations A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section: (2) The false representation of (A) the character, amount, or legal status of any debt; or (B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt. (10) The use of any false representation or deceptive means to collect or attempt to collect any debt. .... § 1692f. Unfair practices A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. McMullen’s § 1692 claims are all based upon the same conduct, namely, McHughes’s drafting and filing in state court a complaint against her alleging that she owed a debt to its client. At the outset, we note that although McMullen has cited to the AFDCPA, she makes no arguments concerning the application or interpretation of that statute. On appeal, she contends that the AFDCPA is largely modeled on the FDCPA and should be interpreted similarly. Because McMullen does not make any separate arguments concerning the AFDCPA, and she concedes that it should be interpreted similarly to the FDCPA, we will apply only the FDCPA.3 We will not develop an issue for a party at the appellate level. Alexander v. McEwen, 367 Ark. 241, 248, 239 S.W.3d 519, 524 (2006). 3 That is not to say that we adopt McMullen’s proposition that the AFDCPA and the FDCPA should always be interpreted similarly. Rather, we simply leave the question of whether the AFDCPA differs from the FDCPA for another day because neither party presents any argument on that point. 8 Cite as 2015 Ark. 15 Turning to McMullen’s FDCPA claims, we note that the FDCPA applies to “attorneys who ‘regularly’ engage in consumer-debt-collection activity, even when that activity consists of litigation.” Born, 2010 Ark. 292, at 15, 372 S.W.3d at 334 (citing Heintz v. Jenkins, 514 U.S. 291 (1995)). McHughes does not dispute that it is a debt-collection law firm and is authorized to conduct business as a debt collector in Arkansas. Thus, McHughes does not enjoy any blanket immunity for its litigation activities as a debt collector and is subject to the provisions of the FDCPA. Despite the fact that McHughes does not enjoy any blanket immunity for its litigation practice as a debt collector in this context, that does not relieve McMullen of her factpleading obligation. For instance, McMullen contends that McHughes violated §§ 1692f, 1692e(2), and 1692e(10) by attempting to collect a debt in an improper amount. However, her second amended complaint, which did not incorporate her previously filed complaint, does not state any facts concerning the amount McHughes attempted to collect, nor does it state any facts supporting her assertion that the amount was improper—aside from her blanket contention that she owed no debt at all. Likewise, McMullen failed to allege any facts to support her claim that McHughes attempted to collect on a debt that was barred by the statute of limitations. McMullen failed to set out any facts regarding when she contended that statute expired. On this point, the only fact McMullen alleged in her second amended complaint was that McHughes filed a lawsuit on November 16, 2012. Further, McMullen claimed that McHughes acted unfairly and unconscionably in violation of the FDCPA by “making a demand for an improper amount, and filing a lawsuit 9 Cite as 2015 Ark. 15 as coercion to collect a debt.” Again, McMullen fails to allege any specific facts regarding why the amount claimed by McHughes was improper, other than her assertion that she did not owe a debt. She also fails to provide any facts to support her contention that McHughes filed the lawsuit as coercion to collect a debt. She makes a conclusory statement that McHughes filed the lawsuit “at a time when [she] was most vulnerable to coercion and financial intimidation . . . in order to extort the maximum financial settlement.” However she offers no facts to support her contention that she was “vulnerable to coercion and financial intimidation.” We now turn to McMullen’s two remaining claims under the FDCPA: (1) that McHughes violated §§ 1692e(2) and (10) by attempting to collect a debt not owed, and (2) that McHughes violated §§ 1692f and 1692e(2) and (10) by filing a lawsuit without probable cause. In her second amended complaint, McMullen alleged the following facts: 6. At the time of the incident described herein, [McHughes] was a debt collection law firm in Little Rock, Arkansas attempting to collect a “debt” . . . and was authorized to conduct business in the State of Arkansas as a “debt collector/debt buyer . . . .” ... 8. [McHughes] . . . caused to be filed an illegal, frivolous and meritless lawsuit against [McMullen] on November 16, 2012 in the District court of Pulaski County, ArkansasSherwood Division, asserting a consumer debt that lawfully owed, due, and payable; ... 10. After many months of contentious legal arguments . . . Judge Timothy D. Fox signed and entered an Order on August 28, 2013 dismissing the original lawsuit brought by [McHughes] on behalf of Precision to recover an alleged consumer debt, in [McMullen]’s favor. 11. [McMullen]’s ex-husband Owen McMullen, incurred a financial obligation . . . sometime before 1983. Said account was being used for personal, family, or household purchases during the time of his marriage to [McMullen] on July 2, 1983, and at all times after their divorce . . . on December 17, 1987. [McMullen] denied ever having jointly held, owned, used or made any charges on any credit card account issued to her ex-spouse at anytime; 10 Cite as 2015 Ark. 15 ... 13. [McHughes] filed a lawsuit against [McMullen] on November 16, 2012, as a means of collecting a debt without verification of, or conducting an adequate investigation into the facts and circumstances surrounding the validity, correct ownership or correct and proper amount alleged due and payable as a consumer debt. Arkansas’s Rules of Civil Procedure make it clear that a pleading which sets forth a claim for relief “shall contain . . . a statement in ordinary and concise language of facts showing that the . . . pleader is entitled to relief[.]” Ark. R. Civ. P. 8(a). Rule 12(b)(6) provides for the dismissal of a complaint for “failure to state facts upon which relief can be granted.” These two rules must be read together in testing the sufficiency of the complaint; we have stated with equal frequency that facts, not mere conclusions, must be alleged. Arkansas Dep’t of Envtl. Quality v. Brighton Corp., 352 Ark. 396, 403, 102 S.W.3d 458, 462–63 (2003). Additionally, an amended complaint, unless it adopts and incorporates the original complaint, supersedes the original complaint. Farmers Union Mut. Ins. Co. v. Robertson, 2010 Ark. 241, at 5, 370 S.W.3d 179, 183. Here, McMullen’s second amended complaint contained no language incorporating the original complaint. Moreover, her second amended complaint did not include the claims that McHughes violated the FDCPA by (1) refusing to validate the amount of the debt allegedly owed; (2) failing to provide copies of the original contract as requested; (3) failing to provide the address of the original creditor and information for disputing the validity of the alleged debt, and failing to include a “consumer warning” required by the FDCPA; and (4) sending written communications directly to McMullen despite knowing that she was represented by counsel. McMullen’s second amended 11 Cite as 2015 Ark. 15 complaint did not include her state law claims for negligence or abuse of process that were pleaded in her original complaint. Based on the lack of incorporation language and the significant differences in causes of action alleged in the original complaint and the second amended complaint, we conclude that McMullen’s second amended complaint superseded her original complaint. Here, McMullen’s second amended complaint contains only conclusory allegations that McHughes violated the FDCPA by attempting to collect a debt in an improper amount, by attempting to collect a debt that was barred by the statute of limitations, or by committing an unfair and unconscionable act by making demand for an improper amount and filing a lawsuit as coercion to collect a debt. Even assuming that a cause of action exists under the FDCPA, we must affirm the circuit court’s dismissal of McMullen’s complaint for failure to offer sufficient proof of a cause of action under the FDCPA.4