Court Opinion

ID: 3205147
Source: CourtListenerOpinion
Date Created: 2016-05-19 19:01:01.662792+00
Date Added: 2024-06-11T14:45:45.796193
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                              No. 15-2171

ABDUL CONTEH; DADAY CONTEH,

                Plaintiffs - Appellants,

          v.

SHAMROCK COMMUNITY ASSOCIATION, INC.; NAGLE & ZALLER, P.C.,

                Defendants - Appellees.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.     Beth P. Gesner, Magistrate Judge.
(1:14-cv-00794-BPG)

Submitted:   April 29, 2016                 Decided:   May 19, 2016

Before KEENAN, WYNN, and THACKER, Circuit Judges.

Affirmed in part, vacated in part, and remanded by unpublished
per curiam opinion.

E. David Hoskins, Steven B. Isbister, THE LAW OFFICES OF E.
DAVID HOSKINS, LLC, Baltimore, Maryland, for Appellants. Craig
B. Zaller, Brian R. Fellner, NAGLE & ZALLER, P.C., Columbia,
Maryland, for Appellees.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

       Abdul       and   Daday    Conteh     (Conteh)          appeal    the    magistrate

judge’s order dismissing their complaint that featured claims

under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.

§§ 1692-1692p (2012), the Maryland Consumer Debt Collection Act,

Md.    Code    Ann.,     Com.    Law    §§ 14-201         to    -204    (2013),      and   the

Maryland Consumer Protection Act (MCPA), Md. Code Ann., Com. Law

§§ 13-101 to -501 (2013).                Conteh’s claims stem from Nagle &

Zaller, P.C. (“Nagle”) filing a writ of execution to satisfy a

judgment in favor of Shamrock Community Association (“Shamrock”)

for condominium homeowner payments that Conteh failed to timely

pay.    Conteh’s complaint alleged that the judgment principal and

amount owed on the judgment as listed in the writ of execution

exceeded the actual judgment principal and amount owed on the

judgment.          The   parties       consented         to    the    resolution     of    the

complaint by a magistrate judge.                        Pursuant to Fed. R. Civ. P.

12(b)(6), the magistrate judge dismissed Conteh’s complaint in

its entirety.

       We     review     de    novo    the   district          court’s    dismissal        for

failure to state a claim under Fed. R. Civ. P. 12(b)(6).                               Sec’y

of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700,

705 (4th Cir. 2007).             “[W]hen ruling on a defendant’s motion to

dismiss,       a    judge     must    accept       as    true    all    of     the   factual

allegations contained in the complaint.”                             Erickson v. Pardus,

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551 U.S. 89, 94 (2007). “While a complaint attacked by a Rule

12(b)(6)       motion    to    dismiss        does       not    need    detailed         factual

allegations, . . . a formulaic recitation of the elements of a

cause of action will not do” and the complaint must contain

“enough facts to state a claim to relief that is plausible on

its face.”        Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570

(2007).     Having reviewed the record and the relevant case law,

we affirm the magistrate judge’s order in part, vacate in part,

and remand for further proceedings.

                                              I.

     Conteh’s          complaint       alleged           that     Nagle          violated     two

provisions       of    the    FDCPA    by   filing        a    writ    of    execution        that

listed    an    inflated      judgment      principal           and   amount       due   on   the

judgment.        Turning to Conteh’s first claim under the FDCPA, a

debt collector is prohibited from using “any false, deceptive,

or misleading representation or means in connection with the

collection       of    any    debt.”        15     U.S.C.       § 1692e.           “Whether     a

communication is false, misleading, or deceptive in violation of

§ 1692e     is        determined       from        the     vantage          of     the   ‘least

sophisticated consumer.’”               Powell v. Palisades Acquisition XVI,

LLC, 782 F.3d 119, 126 (4th Cir. 2014) (internal quotation marks

omitted).        When viewing a misstatement from the perspective of

the “least sophisticated consumer,” we “consider how a naive

consumer would interpret the statement.”                          Elyazidi v. SunTrust

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Bank,   780 F.3d 227,    234        (4th    Cir.    2015)    (internal       quotation

marks omitted).         A misstatement must be material to sustain a

claim under 15 U.S.C. §1692e; that is, the misstatement must

have    the    potential       to    “frustrate          [the     least    sophisticated]

consumer’s ability to intelligently choose his or her response,”

id. (internal quotation marks omitted), or must be the type of

misstatement that “would have been important to the consumer in

deciding how to respond to efforts to collect the debt,” Powell,
782 F.3d at 127.

       Although       the      magistrate            judge      stated       the      “least

sophisticated       consumer”        test,       the     magistrate       judge    erred    by

relying on how Conteh actually acted when determining whether

Nagle’s misstatement regarding the judgment principal and amount

owed    on    the   judgment        was    material.         Instead,       as    stated    in

Powell, the proper analysis requires consideration of the degree

to which the amount due on the debt was overstated and whether

the extent of the overstatement would have been material to the

least sophisticated consumer.                    Id. at 126-27 (noting that “mere

technical falsehoods” are not actionable and that a de minimis

misstatement might not be actionable but that an overstatement

of 50% “easily satisf[ied]” the materiality requirement).                             Here,

the writ of execution identified $1,748.98 as the amount Conteh

owed while Conteh’s amended complaint alleged that the amount

due    on    the    judgment    at        the     time    the     writ    was     filed    was

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$1,583.96.           Accordingly,       the    writ        allegedly       overstated          the

amount owed by $165.02, or by 10.4%.                           While the degree of the

alleged overstatement is not as significant as the overstatement

in   Powell,      we   conclude      that      an        overstatement          of    10.4%    is

sufficient      to     be   important         to    how     the    least        sophisticated

consumer responds by causing confusion and a potential challenge

by the consumer to the writ.                       In so concluding, we note the

increased      potential     for     confusion            where    the     writ       allegedly

identified a judgment principal from a prejudgment demand letter

even though the state court judgment awarded Shamrock a lesser

judgment    principal       than     demanded.            Therefore,        we       vacate    the

magistrate      judge’s     dismissal         of        Conteh’s     15    U.S.C.       § 1692e

claim.

      Turning to Conteh’s second claim under the FDCPA, a debt

collector    is      prohibited      from      “engag[ing]         in     any    conduct       the

natural consequence of which is to harass, oppress, or abuse any

person in connection with the collection of a debt.”                                  15 U.S.C.

§ 1692d.       Other circuits have concluded that the filing of a

debt collection action, or the threat of such action, does not

constitute     harassment       or   abuse         of    the    debtor     where       the    debt

collector relies on valid state court proceedings.                                   See Harvey

v. Great Seneca Fin. Corp., 453 F.3d 324, 330-31 (6th Cir. 2006)

(holding     that      filing      of    debt           collection        action       did    not

constitute harassment or abuse even when debt collector lacked

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means to establish debt at time of filing action); Jeter v.

Credit   Bureau   Inc.,       760 F.2d 1168,   1179     (11th      Cir.   1985)

(holding that threat of legal action if debt not paid does not

harass   or   abuse     the   debtor).          In    the   context    of    15    U.S.C.

§ 1692f, we have found that a debt collector’s “enforce[ment]

[of] their contractual rights in compliance with state court

procedure”     cannot     plausibly         be       construed    as     “unfair      or

unconscionable” conduct.            Elyazidi, 780 F.3d at 235.                We apply

our holding in Elyazidi and adopt the position stated in Harvey

to conclude that a debt collector’s initiation of a state court

proceeding cannot legally constitute harassment, oppression, or

abuse of the debtor. 1          Accordingly, we affirm the magistrate

judge’s dismissal of Conteh’s claim under 15 U.S.C. § 1692d.

                                         II.

     With     respect    to    the    MCDCA,         Conteh’s    amended      complaint

alleged that the filing of and the misstatement in the writ of

execution violated Md. Code Ann., Com. Law §§ 14-202(6), (8).

The magistrate judge concluded that Nagle and Shamrock did not

     1 On appeal, Conteh contends that the filing of the writ of
execution constituted harassment because Nagle knew there was no
equity in the condominium unit in seeking to force its sale to
satisfy the judgment in favor of Shamrock.     We find no legal
authority supporting Conteh’s argument and decline to adopt the
argument, given that the alleged lack of equity in the
condominium at the time the writ was filed did not necessarily
foreclose Nagle from recovering all or part of the judgment owed
through the sale of the condominium.

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violate § 14-202(6) because the filing of a writ of execution is

not a communication with the debtor and that no violation of

§ 14-202(8) occurred because, although the writ of execution may

have sought an amount in excess of the amount owed, the writ was

filed in an effort to recover a valid debt.

     Under       Md.    Code       Ann.,    Com.        Law    § 14-202(6),          a    debt

collector, in collecting or attempting to collect an alleged

debt, may not “[c]ommunicate with the debtor or a person related

to him with the frequency, at the unusual hours, or in any other

manner as reasonably can be expected to abuse or harass the

debtor.”     As with Conteh’s claim under 15 U.S.C. § 1692d, we

conclude     that       a     debt   collector’s         resort         to   state       court

proceedings and the filing of a writ of execution cannot legally

constitute a communication that harasses or abuses the debtor.

Accordingly, we decline to address whether the filing of a writ

of execution constitutes a type of communication sufficient to

trigger    the   protections         afforded      by    Md.     Code    Ann.,   Com.      Law

§ 14-202(6); instead, we affirm the magistrate judge’s dismissal

on this alternative ground.                  Cf. Toll Bros., Inc. v. Dryvit

Sys.,   Inc.,     432 F.3d 564,    572   (4th     Cir.    2005)      (noting      that

appellate court may affirm a grant of summary judgment “on any

ground appearing in the record”).

     Pursuant to Md. Code Ann., Com. Law § 14-202(8), a debt

collector may not “[c]laim, attempt, or threaten to enforce a

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right with knowledge that the right does not exist.”                      A debt

collector    violates    this   provision     by   placing    a    lien   on   the

debtor’s property for an amount in excess of the amount to which

the debt collector is rightfully entitled if the amount sought

exceeds the amount owed as a result of the debt collector’s

inclusion of an unauthorized type of charge.                See Allstate Lien

& Recovery Corp. v. Stansbury, 101 A.3d 520, 529-30 (Md. Ct.

Spec. App. 2014) (holding that debt collector’s inclusion of

unauthorized $1,000 processing fee in filing of lien constituted

seeking right that did not exist for purposes of § 14-202(8)

even though lien was filed on valid debt).                Although the writ of

execution allegedly sought an amount in excess of what Conteh

owed, because the magistrate judge dismissed the case prior to

discovery,    it   is    not   apparent     from   the    record   whether     the

alleged misstatement of the amount owed was the result of a

typographical or mathematical error by Nagle or whether it was

the result of Nagle and Shamrock including a type of charge not

authorized    by   the   underlying     judgment     on    which   they   sought

satisfaction.       Therefore,     we     vacate   the     magistrate     judge’s

dismissal of Conteh’s claim under Md. Code Ann., Com. Law § 14-

202(8) and remand for further proceedings. 2

     2 Because we vacate the dismissal of one of Conteh’s claims
under the MCDCA, we also vacate the magistrate judge’s dismissal
of Conteh’s claim under the MCPA.   See Md. Code Ann., Com. Law
(Continued)
                                        8
     Accordingly, we affirm the magistrate judge’s order with

respect    to   the    dismissal     of    Conteh’s    claims      under   15    U.S.C.

§ 1692d and Md. Code Ann., Com. Law § 14-202(6), but vacate the

order with respect to the dismissal of Conteh’s claims under 15

U.S.C.    §1692e      and   Md.   Code    Ann.,   Com.     Law    § 14-202(8).      We

remand for further proceedings consistent with this opinion.                        We

dispense    with       oral   argument      because        the    facts    and   legal

contentions     are     adequately       presented    in    the   materials      before

this court and argument would not aid the decisional process.

                                                                  AFFIRMED IN PART,
                                                                   VACATED IN PART,
                                                                       AND REMANDED

§ 13-301(14)(iii) (providing that plaintiff makes out viable
claim for violation of MCPA by pleading viable MCDCA violation).

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