Hawkins v. Kilberg

Citations: 165 F. Supp. 3d 386; 2016 WL 107182; 2016 U.S. Dist. LEXIS 2780Docket: CIVIL NO. JKB-15-3167

Court: District Court, D. Maryland; January 10, 2016; Federal District Court

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Plaintiff filed a lawsuit against Robert N. Kilberg, P.A., alleging violations of the Fair Debt Collection Practices Act (FDCPA), the Maryland Consumer Debt Collection Act (MCDCA), and the Maryland Consumer Protection Act (MCPA). The case currently involves a Motion to Dismiss Count III (MCPA claim) by the Defendant, which is under consideration by the Court. The Plaintiff contends that the Defendant, acting as a debt collector, engaged in illegal debt collection tactics related to a defaulted apartment lease, including improper communications with her workplace. The Defendant had previously initiated a debt collection lawsuit against the Plaintiff on behalf of her former landlord, resulting in a judgment against her. The Plaintiff's complaint includes three counts: violations of the FDCPA, MCDCA, and a claim under the MCPA based on the alleged MCDCA violations. The standard of review for the Motion to Dismiss requires that a complaint must present sufficient factual matter to establish a plausible claim for relief. The Court must view all allegations favorably towards the Plaintiff while ensuring that factual claims are not merely speculative or conclusory. The Defendant's Motion to Dismiss is now ready for decision.

The Maryland Consumer Debt Collection Act (MCDCA) prohibits debt collectors from disclosing information that could harm a debtor's reputation to individuals who lack a legitimate business need for it. Violations can lead to civil liability and are considered per se violations of the Maryland Consumer Protection Act (MCPA). The Plaintiff alleges the Defendant violated the MCDCA through phone calls to her workplace, thereby also breaching the MCPA. The Defendant, a law firm providing debt collection services, seeks to dismiss the MCPA claim based on an exemption for professional services, which includes lawyers. The Plaintiff contends that since lawyers can be liable under the MCDCA, they should also be liable for attorney's fees under the MCPA when the basis for liability is a MCDCA violation. She argues for a narrow interpretation of the exemption to allow for harmonization between the two statutes and cites a case supporting the idea that related statutes should be harmonized. However, the court notes that it cannot override the explicit exemption within the MCPA to integrate it with the MCDCA.

Adopting the Plaintiff's position would contradict fundamental principles of statutory construction, which dictate that when a statute's language is clear, courts must adhere to its plain meaning. The Maryland Consumer Protection Act (MCPA) explicitly exempts lawyers from its provisions when acting in their professional capacity, as stated in Md. Code Ann. Com. Law 13-104(1). A significant body of case law supports this interpretation, confirming that attorneys are not subject to MCPA liability, even in debt collection contexts. The Court noted that the Plaintiff's arguments concerning legislative history and potential loopholes in the enforcement of the Maryland Debt Collection Act (MCDCA) do not revive the MCPA claim. The exemption has been longstanding, and concerns about the implications of this exemption are best addressed by the legislature, not the courts. Consequently, the Court will dismiss Count III with prejudice, allowing the case to move forward on Counts I and II.

An order has been issued to grant the Defendant's Motion to Dismiss Count III of the complaint. Initially, the Plaintiff included Bond’s Sure Serve, Inc. (BSSI) and Edwin F. Cihlar as co-defendants, but they were dismissed on November 18, 2015, following a private settlement, leaving Kilberg as the sole defendant. The Court has referred to the facts as alleged by the Plaintiff since this is a motion to dismiss. The Fair Debt Collection Practices Act (FDCPA) defines a "debt collector," while the Maryland Consumer Debt Collection Act (MCDCA) defines a "collector." The Defendant's motion included a state docket as Exhibit 1, which the Court can consider without converting the motion into one for summary judgment, as it is a public record and cross-referenced in the Plaintiff's Complaint. The Court noted confusion regarding the Plaintiff’s references to Maryland rules, clarifying that motions to dismiss in federal court are governed by Rule 12(b)(6) of the Federal Rules of Civil Procedure due to federal question jurisdiction. Although the Defendant cited Maryland Rule 2-322, the Court treated the motion under the federal standard. While both the MCDCA and the Maryland Consumer Protection Act (MCPA) allow for actual damages, only the MCPA provides for attorney’s fees, which are also available under the FDCPA for successful claims. Thus, dismissal of the MCPA count does not preclude the Plaintiff from recovering attorney’s fees if she prevails on other claims in the case.

Plaintiff fails to engage with relevant case law, instead citing Bradshaw v. Hilco Receivables, LLC and Fontell v. Hassett, which focus on the relationship between the Maryland Consumer Debt Collection Act (MCDCA) and the Maryland Consumer Protection Act (MCPA), but are not applicable to cases involving lawyer-defendants or the exemptions outlined in Md. Code Ann. Com. Law 13-104. The Maryland Court of Appeals, in Scull v. Groover, Christie, Merritt, P.C., questioned a broad interpretation of the MCPA's exemption provisions, ruling that medical-billing practices did not qualify as "professional services." This decision was informed by legislative history and the Consumer Protection Division’s stance that MCPA applies to medical-billing practices. The court clarified that not all actions by licensed professionals constitute "professional services," emphasizing the distinction between the commercial functions of a medical practice and the direct provision of health care. While Scull involved health care practitioners, not lawyers, its reasoning aligns with the current court's analysis. Unlike medical billing, debt-collection services are central to law firms, particularly when litigation is involved, fitting clearly within the MCPA's exemption.