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Griffith v. Educap Inc.

United States District Court, District of Columbia

September 10, 2018

EDUCAP INC., et al., Defendants.



         The plaintiff, Natasha Griffith, asserts several claims against EduCap Inc., Weinstock, Friedman & Friedman, P.A., and HSBC Bank U.S.A., N.A. Before the Court is EduCap and Weinstock's Motion to Dismiss the Complaint and HSBC's Motion for Judgment on the Pleadings. For the reasons discussed below, the Court grants in part and denies in part EduCap and Weinstock's Motion to Dismiss and grants HSBC's Motion for Judgment on the Pleadings.

         I. BACKGROUND

         On February 13, 2007, a $19, 152 student loan was disbursed to Robert Blocker. See Compl. ¶ 25, Dkt. 23. Griffith co-signed the loan. See id. The note disclosure statement identifies the lender as HSBC Bank USA, N.A. See id. ¶ 26. Blocker defaulted on the loan by failing to make the monthly payments. See Id. ¶28. When Blocker defaulted, Weinstock, Friedman & Friedman, P.A. filed a debt collection lawsuit against Griffith in the District of Columbia Superior Court on behalf of EduCap. On May 26, 2015, the trial court granted summary judgment in favor of EduCap. See Compl. ¶ 34, Dkt. 23. On February 24, 2016, the D.C. Court of Appeals reversed the trial court's grant of summary judgment because “EduCap was not a proper party to enforce the note.” Id. ¶ 35.

         On July 28, 2016, Griffith filed a Complaint in this Court against EduCap and Weinstock. Griffith amended that complaint twice. After EduCap and Weinstock filed a motion to dismiss, Griffith submitted a Third Amended Complaint that included HSBC as a defendant. Griffith's complaint now alleges that EduCap and Weinstock violated the Fair Debt Collection Practices Act. Griffith also alleges that all three defendants violated D.C.'s Debt Collection statute and asserts common law claims for abuse of process and malicious prosecution against all three defendants.


         A motion to dismiss and a motion for judgment on the pleadings are “functionally equivalent” and the two are “governed by the same standard.” Philadelphia Indem. Ins. Co. v. Lend Lease (U.S.) Construction, Inc., 170 F.Supp.3d 190, 192 (D.D.C. 2016). In evaluating both motions, the Court must treat the complaint's “factual allegations as true and must grant the plaintiff the benefit of all inferences that can be derived from the facts alleged.” Ctr. for Responsible Sci. v. Gottlieb, 311 F.Supp.3d 5, 8 (D.D.C. 2018) (internal quotation marks and alterations omitted). “The Court need not accept as true, however, a legal conclusion couched as a factual allegation, nor an inference unsupported by the facts set forth in the Complaint.” Id. (internal quotation marks omitted).

         To survive the defendants' motions, Griffith's complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (internal citation omitted). That standard does not amount to a specific probability requirement, but it does require “more than a sheer possibility that a defendant has acted unlawfully.” Id. A complaint need not contain “detailed factual allegations, ” but alleging facts that are “merely consistent with a defendant's liability . . . stops short of the line between possibility and plausibility.” Id. (internal quotation marks omitted). Ultimately, “[d]etermining whether a complaint states a plausible claim for relief [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

         III. ANALYSIS

         A. Fair Debt Collection Practices Act Claim

         EduCap and Weinstock first argue that Griffith has failed to state a claim upon which relief can be granted under the FDCPA.[1] The FDCPA governs the behavior of third-party debt collectors who attempt to collect debts on behalf of another entity. The Act requires actions to enforce liability under the Act to be brought “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). Generally, when the alleged misrepresentation occurs in the filing of a debt collection action, the statute of limitations begins to run when the debtor is served with the complaint. See Quick v. EduCap, Inc., No. 17-cv-1242, 2018 WL 3419164, at *13 (D.D.C. July 12, 2018). Here, filing and service took place in May 2014. Griffith did not file her complaint until July 2016. Because Griffith did not file this action within one year of service, her claim is time-barred.

         Griffith argues that her FDCPA claims were tolled because the defendants fraudulently concealed EduCap's lack of capacity to sue Griffith or, in the alternative, because the FDCPA's statute of limitations is subject to the discovery rule. Fraudulent concealment is an “equitable doctrine” that “is read into every federal statute of limitation.” Holmberg v. Armbrecht, 327 U.S. 392, 397 (1946). To “prove fraudulent concealment, plaintiffs must show (1) that defendants engaged in a course of conduct designed to conceal evidence of their alleged wrong-doing and that (2) the plaintiffs were not on actual or constructive notice of that evidence, despite (3) their exercise of diligence.” Firestone v. Firestone, 76 F.3d 1205, 1210 (D.C. Cir. 1996) (internal quotation marks and alterations omitted). “Generally, fraudulent concealment requires that the defendant make an affirmative misrepresentation tending to prevent discovery of the wrongdoing.” Id. Under the discovery rule, a cause of action accrues when one knows or should have known “(1) of the injury, (2) its cause in fact and (3) of some evidence of wrongdoing.” Bussineau v. President and Dirs. of Georgetown Coll., 518 A.2d 423, 425 (D.C. 1986).

         Because Griffith should have known that EduCap lacked the capacity to sue Griffith at the time of the original lawsuit, Griffith has failed to show that either the doctrine of fraudulent concealment or the discovery rule tolled the statute of limitations. Griffith argues that EduCap and Weinstock intentionally suppressed EduCap's lack of capacity to sue Griffith by falsely claiming that EduCap sued Griffith on behalf of HSBC. But as Griffith acknowledges, the loan documentation identifies the lender as HSBC Bank USA, N.A. Compl. ¶¶ 26, 27, Dkt. 23. Moreover, as Griffith argues in her complaint, “EduCap only appears peripherally in the loan documents.” Compl. ¶ 7, Dkt. 23. There was more than enough information available to Griffith, through the loan documents, to alert Griffith that EduCap did not issue the now-defaulted loans. See Quick, 2018 WL 3419164, at *14. Therefore, Griffith has not shown that she was “not on actual or constructive notice of that evidence, ” Firestone, 76 F.3d at 1210, so her FDCPA claim is time-barred.

         B.D.C.'s Debt ...

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