Horowitz et al v Continental Casualty Company et al, No. 8:2014cv03698 - Document 42 (D. Md. 2015)
Court Description: MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 12/28/2015. (sat, Chambers)
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Horowitz et al v Continental Casualty Company et al Doc. 42 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : ROBERT HOROWITZ, et al. : v. : Civil Action No. DKC 14-3698 : CONTINENTAL CASUALTY COMPANY, et al. : MEMORANDUM OPINION Presently pending and ready for resolution in this case are multiple motions to dismiss filed by the following defendants: Selzer Gurvitch Rabin Wertheimer Polott & Obecny, P.C. (“Selzer”) (ECF No. 11); Bregman, Berbert, Schwartz & Gilday, LLC (“Bregman”) (“Eccleston”) (ECF (ECF No. No. 12); Eccleston and 21); and Continental Wolf, Casualty P.C. Company (“Continental”) (collectively, the “Defendants”) (ECF No. 24). Also pending Plaintiffs is a Robert motion and for Cathy extension Horowitz “Horowitzes” or “Plaintiffs”). of time filed (collectively, (ECF No. 35). by the The relevant issues have been fully briefed, and the court now rules, no hearing being deemed necessary. following reasons, Defendants’ granted. Plaintiffs’ motion Local Rule 105.6. motions for to extension For the dismiss will be of will be time denied as moot. Dockets.Justia.com I. Background A. Factual Background Unless otherwise noted, the following facts are taken from the first amended complaint. (ECF No. 5). Additional facts will be discussed in the analysis section. The parties’ long and winding journey to this suit began as a contract, employment, and tort action brought in state court by Plaintiffs against the McLean School of Maryland, Inc. (the “School”) for conduct occurring in 2008. Plaintiffs were represented in this initial suit by the Zipin Law Firm, LLC (the “Zipin Firm”). In 2012, following the conclusion of the suit against the School, Plaintiffs filed a legal malpractice and breach of fiduciary duty action against the Zipin Firm in state court. The Zipin Firm, through its own attorneys, filed a counterclaim to collect unpaid legal fees Plaintiffs owed for the Zipin Continental, Firm’s as work the in Zipin their Firm’s suit against insurer, the retained School. and paid Eccleston to defend the Zipin Firm in the malpractice suit. (ECF Nos. 5 ¶ 15; 24-1, at 4). Selzer and Bregman. Plaintiffs were represented by (ECF No. 5 ¶ 23). In November 2013, following mediation, Plaintiffs and the Zipin Firm entered into a Settlement Agreement and Release (the “Settlement”). 5-2). Relevant here, the Settlement stated: 2 (ECF No. As consideration for the terms and conditions set forth in this Settlement Agreement, the PARTIES agree that ROBERT AND CATHY HOROWITZ will be paid $125,000.00 by check issued by [Continental] on behalf of THE ZIPIN LAW FIRM, LLC; and that THE ZIPIN LAW FIRM, LLC will be paid $62,500.00 by ROBERT AND CATHY HOROWITZ, said payment to be made by check not later than 15 business days following receipt and deposit of [Continental’s] $125,000.00 check by ROBERT AND CATHY HOROWITZ. (Id. ¶ 18). their As a result of the Settlement, Plaintiffs dismissed malpractice counterclaim to claim collect and a the fee. Zipin (ECF Firm No. dismissed 24-3, at the 43).1 Plaintiffs received the $125,000.00 check from Continental, but they did not provide any of the stipulated payment to the Zipin Firm. (ECF No. 5 ¶ 61). Following Horowitzes “circuit in the Settlement, the Circuit court”) to Selzer Court collect for unpaid Plaintiff’s suit against the Zipin Firm. 4). filed suit Montgomery legal against County work done the (the in (ECF Nos. 5 ¶ 55; 24- The Horowitzes filed a counterclaim against Selzer and 1 In reviewing a motion to dismiss, “a federal court may consider matters of public record such as documents from prior state court proceedings.” Walker v. Kelly, 589 F.3d 127, 139 (4th Cir. 2009). This is particularly true where, as here, Defendants seek dismissal pursuant to the doctrines of res judicata and collateral estoppel. See Brooks v. Arthur, 626 th F.3d 194, 200 (4 Cir. 2010) (“[W]hen entertaining a motion to dismiss on the ground of res judicata, a court may take judicial notice of facts from a prior judicial proceeding when the res judicata defense raises no disputed issue of fact.” (citation and internal quotation marks omitted)). 3 Bregman alleging malpractice in the suit against Zipin Firm, asserting inter alia that the Settlement was illegal. 24-4, at 6; 24-5). (ECF Nos. At a hearing on October 29, 2014, Judge Michael D. Mason granted summary judgment in favor of Selzer and Bregman and entered judgment against the Horowitzes. 24-4, at 18-19; 24-6, at 57-70). (ECF Nos. The Horowitzes filed a motion to alter or amend the judgment, which the court denied. Horowitzes’ appeal is currently pending before the Court The of Special Appeals and was scheduled for argument on December 9, 2015. On July 30, 2014, while the suit was ongoing in circuit court, the Horowitzes filed a complaint against Continental with the Maryland Insurance Administration (the “MIA”) challenging the legality statutes. Settlement of (ECF did the No. not Settlement 24-7). violate under The MIA “Maryland’s laws,” and Plaintiffs requested a hearing. 10). Maryland determined insurance insurance that the regulatory (ECF Nos. 24-9; 24- To date, it appears that no hearing has taken place. On November 14, 2014, Selzer filed a request for a writ of execution of the Horowitzes’ personal property to execute on the judgment entered by the circuit court. at 23). (ECF Nos. 5 ¶ 111; 11-4, The circuit court issued a writ of execution, and Plaintiffs assert that, over the next few weeks, deputies from the Montgomery County Sheriff’s Office attempted to execute the 4 writ through allegedly threatening and deceptive means. (ECF No. 5 ¶¶ 112-120). B. Procedural History On November 25, 2014, Plaintiffs commenced this action by filing a complaint, which was subsequently amended. 5). (ECF No. The first amended complaint asserts that all Defendants: violated the Fair Debt Collection Practices Act (“FDCPA”) (Count I); violated the Maryland Consumer Debt Collection Act (the “MCDCA”) (Count III); violated the Maryland Consumer Protection Act (the “MCPA”) (Count V). (Count IV); and committed civil conspiracy The complaint also seeks declaratory judgment (Count II) and alleges that Selzer violated 42 U.S.C. § 1983 (Count VI). In April 2015, Defendants motions to dismiss. filed responses in separately filed the (ECF Nos. 11; 12; 21; 24). opposition (ECF Nos. 27; Defendants replied (ECF Nos. 30; 31; 38; 39). pending Plaintiffs 34; 36), and Plaintiffs have also filed multiple motions for extension of time, including one which is still pending. II. (ECF No. 35). Standard of Review The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of the complaint. Charlottesville, 464 F.3d 480, 483 (4th Presley v. City of Cir. 2006). A plaintiff’s complaint need only satisfy the standard of Rule 5 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” 8(a)(2). Fed.R.Civ.P. “Rule 8(a)(2) still requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief.” v. Twombly, 550 U.S. 544, 556 n.3 (2007). Bell Atl. Corp. That showing must consist of more than “a formulaic recitation of the elements of a cause of action” or “naked assertion[s] devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations and internal quotation marks omitted). At this stage, all well-pleaded allegations in a complaint must be considered as true, Albright v. Oliver, 510 U.S. 266, 268 (1994), and all factual allegations must be construed in the light most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). In evaluating the complaint, unsupported legal allegations not need be accepted. Revene Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989). v. Charles Cnty. Legal conclusions couched as factual allegations are insufficient, Iqbal, 556 U.S. at 678, as are conclusory factual allegations devoid of any reference to actual events. 604 F.2d 844, 847 (4th United Black Firefighters v. Hirst, Cir. 1979); see also Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009). Francis v. “[W]here the well-pleaded facts do not permit the court to infer more than 6 the mere possibility of misconduct, the complaint has alleged— but it has not relief.’” ‘show[n]’—‘that Iqbal, 8(a)(2)). 556 U.S. the at pleader 679 is entitled (quoting to Fed.R.Civ.P. Thus, “[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing experience and common sense.” court to draw on its judicial Id. III. Analysis A. Res Judicata Defendants Selzer and Bregman argue that all of Plaintiffs’ claims against them in Counts I through V are barred by the doctrine of res judicata or claim preclusion. Claim preclusion “bars the relitigation of a claim if there is a final judgment in a previous litigation where the parties, the subject matter and causes of action are identical or substantially identical as to issues actually litigated and as to those which could have or should have been raised in the previous litigation.” v. Andrulonis, 193 Md.App. 601, internal quotation marks omitted). 617 (2010) Andrulonis (citations and Thus, under Maryland law, claim preclusion “embodies three elements: (1) the parties in the present litigation are the same or in privity with the parties to the earlier litigation; (2) the claim presented in the current action is identical to that determined or that which could have been raised and determined in the prior litigation; 7 and (3) there was a final judgment on the merits in the prior litigation.” Comptroller of Treasury v. Sci. Applications Int’l Corp., 405 Md. 185, 195-96 (2008) (quoting R&D 2001, LLC v. Rice, 402 Md. 648, 663 (2008)). The doctrine is meant to “restrain[] a party from litigating the same claim repeatedly and ensure[] that courts do not waste time adjudicating matters which have been decided or could have been decided fully and fairly.” Anne Arundel Cnty. Bd. of Educ. v. Norville, 390 Md. 93, 107 (2005). Obviously, Selzer and Bregman were parties in the state court suit. Further, there was a final judgment on the merits in their favor.2 apply where, counterclaims. as Plaintiffs argue that claim preclusion does not here, (See ECF the No. earlier 27, at claims 3). were permissive Under Maryland’s permissive counterclaim rule, [W]here a defendant could have brought a counterclaim in the first action but failed to do so, he is not precluded from bringing that claim in a subsequent action unless “successful prosecution of the second action would nullify the initial judgment or would impair rights established in the initial action.” 2 Plaintiffs do not argue to the contrary even though they note there is an appeal pending before the Court of Special Appeals. In Maryland, “the pendency of an appeal does not affect the finality of a judgment for res judicata [or collateral estoppel] purposes.” Campbell v. Lake Hallowell Homeowners Ass’n, 157 Md.App. 504, 525 (2004). 8 Hawkins v. Citicorp Credit Servs., Inc., 665 F.Supp.2d 518, 525 (D.Md. 2009) (emphasis added) (quoting Sheahy v. Primus Auto. Fin. Serv. Inc., 284 F.Supp.2d 278, 280 (D.Md. Plaintiffs’ argument is unpersuasive for two reasons. 2003)). First, in instances when courts have found that claim preclusion did not apply, the judgment party in Acceptance did the not initial Corp., 376 actually suit. Md. bring See 558, 567 a counterclaim Moore (2003) v. Nissan (noting to Motor that the defendant “neither sought nor received any affirmative relief” in the initial action); Rowland v. Harrison, 320 Md. 223 (1990) (counterclaim action). Selzer was Here, and dismissed Plaintiffs Bregman in without did state bring court, judgment against the Horowitzes. prejudice a in counterclaim and the court initial against entered (ECF No. 24-4, at 19-20). Moreover, this action is a second suit that would nullify the initial judgment or impair rights established in the earlier suit. See Hawkins, current suit, circuit court’s if 665 F.Supp.2d successful, judgment. at would Much 525-26. directly like in Plaintiffs’ contradict Hawkins, the Plaintiffs “implicitly seek[] to nullify a portion of the prior judgment by asserting that [their] liability . . . was contrary to law and seeking damages for the efforts to collect.” claim preclusion is applicable counterclaim rule. 9 despite Id. at 526. Maryland’s Thus, permissive Plaintiffs also argue that claim preclusion does not apply because they are bringing “different claims” than were raised in the state court proceeding. (See ECF No. 27, at 11-13). When determining if claim preclusion applies, Maryland courts use the transactional approach articulated in the Restatement (Second) of Judgments § 24. “Under the transactional approach, if the two claims or theories are based upon the same set of facts and one would expect them to be tried together ordinarily, then a party must bring them simultaneously.” of Educ., 390 Md. at 108. “broad, inclusive test.” 601 F.Supp.2d 634, 641 Anne Arundel Cnty. Bd. The approach has been termed a W. Md. Wireless Connection v. Zini, (D.Md. 2009). Maryland courts have indicated that claims involve the same “transaction” when they are “related Arundel Cnty. in time, Bd. of space, Educ., origin, 390 Md. internal quotation marks omitted). or motivation.” at 109 (citations Anne and Here, although Plaintiffs present some slightly different legal theories than were raised in the state court action, the claims all arise from the same transaction: Selzer and Bregman’s representation of Plaintiffs in their suit against the Zipin Firm. See Gonsalves v. Bingel, 194 Md.App. 695, 711 (2010) (quoting Restatement (Second) of Judgments § 24 cmt. a) (“The present trend is to see claim in factual terms and to make it coterminous with the transaction regardless of the number of substantive theories, or variant 10 forms of relief flowing from those available to the plaintiff.”). theories, that may be Accordingly, all claims against Selzer and Bregman in Counts I through V will be dismissed. B. Collateral Estoppel All Defendants bringing some argue claims by that the Plaintiffs related are precluded doctrine of from collateral estoppel, also known as issue preclusion, because the circuit court ruled on the issues presented and entered judgment against Plaintiffs. Specifically, Defendants assert that the circuit court held that the Settlement was legal and that Plaintiffs waived any objection to it by accepting the $125,000 payment. (ECF No. 24-6, at 60-65). “When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination determination Crane, Inc. omitted). is v. is conclusive Puller, 169 essential in a to the subsequent Md.App. 1, 26 judgment, action.” (2006) the John (citations Collateral estoppel is rooted in common law, and its scope is determined by the appropriate state law. Housley v. Holquist, No. 10-1881, 2012 WL 3239887, at *3 (D.Md. Aug. 3, 2012) (citing Janes v. State, 350 Md. 284 (1984)). “[A] federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.” Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). 11 In Maryland, the defense of collateral estoppel depends on the answers to four questions: “(1) Was the issue decided in the prior adjudication identical with the one presented in the action in question? (2) Was there a final judgment on the merits? (3) Was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication? (4) Was the party against whom the plea is asserted given a fair opportunity to be heard on the issue?” Bryan v. State Farm Mut. Auto. Ins. Co., 205 Md.App. 587, 592 (2012) (quoting Colandrea v. Wilde Lake Cmty. Ass’n, 361 Md. 371 (2000)). As an affirmative defense, Defendants bear the burden of proof to demonstrate that these elements are met. Plaintiffs do not dispute that the second and third elements are met. Plaintiffs argue that the first element is not met because the issue decided in the state court proceeding was not the same as the issues presented here. They contend that the first amended complaint asserts legal theories that were not raised in the state court proceeding. Collateral estoppel requires that the issue was “actually litigated and determined” in the prior proceeding. Janes, 350 Md. at 295. An issue may be collaterally estopped even if a plaintiff did not raise that particular legal theory in the prior proceeding because “the concern of collateral estoppel law is with the preclusion of duplicative fact-finding.” Puller, 12 169 Md.App. at 27-28 (citations and internal quotation marks omitted). In adjudicating the cross-motions for summary judgment, the circuit court ruled payment that under the Plaintiffs’ acceptance of Settlement constituted a argument that the Settlement was illegal. 60). the $125,000.00 waiver of their (ECF No. 24-6, at 59- Further, the circuit court held that the Settlement was not a violation of Maryland insurance laws. (Id. at 60-65). Plaintiffs had extensive opportunity to litigate these issues as evidenced by the extensive state court docket transcript from the hearing before Judge Mason. 24-6). and detailed (ECF Nos. 24-4; Accordingly, the first element of collateral estoppel has been met as to the issues of Plaintiffs’ waiver of their illegality argument and the Settlement’s legality under Maryland insurance law. Plaintiffs also contend that they were not given a full and fair opportunity to be heard in the circuit court. argument is unpersuasive. Plaintiffs’ Plaintiffs filed a motion for summary judgment on their counterclaim and presented their arguments at a hearing. and The Circuit Court’s ruling was thorough, detailed, extensively discussed relevant precedent. Moreover, Plaintiffs filed a motion to alter and amend the circuit court’s judgment, which was fully briefed and denied. 20-22). (ECF No. 24-4, at Plaintiffs were afforded a full opportunity to present arguments before the circuit court on the issues they raised in 13 their counterclaim. The requirements of collateral estoppel have been satisfied, and Plaintiffs cannot relitigate the issue of whether they waived their illegality argument by accepting the $125,000 payment under the Settlement. Thus, Plaintiffs cannot now argue that the Settlement was illegal. Plaintiffs are correct, however, that the first amended complaint contains some claims that Settlement. do not depend on any claim Accordingly, the illegality that the on relies of the illegality of the Settlement will be dismissed. C. Plaintiffs’ Failure to State a Claim Defendants also argue that Plaintiffs’ complaint should be dismissed for failure to state a claim, particularly because Plaintiffs are collaterally Settlement was illegal. estoppel warrants estopped Defendants dismissal of all from arguing that contend that counts because the collateral all of Plaintiffs’ allegations are grounded in the illegality of the Settlement. Defendants are correct that many of the allegations in the first amended complaint are based on the illegality of the Settlement, and thus are precluded. However, the first amended complaint contains several claims that do not rely on the Settlement’s illegality and considerations under Rule 12(b)(6). that warrant further The following analysis for Counts I through V will be limited to Defendants Continental and Eccleston because Plaintiffs’ claims 14 in these counts against Defendants Selzer and Bregman are fully judicata and are therefore dismissed. precluded by res Plaintiffs’ § 1983 claims against Selzer in Count VI will also be considered below. 1. Statutory Violations (Counts I, III, IV) Plaintiffs’ Continental complaint and Eccleston includes violated many various allegations provisions that of the FDCPA, MCDCA, MCPA, the Maryland Collection Agency Licensing Act (“MCALA”), and the Maryland Unfair Insurance Practices Act. Plaintiffs assert that Continental and Eccleston’s “liability to plaintiff[s] is grounded on their using unlawful practices as third party debt collectors to collect on [the Zipin Firm’s] consumer debt with the Horowitzes.” 8). Most of Plaintiffs’ (ECF Nos. 34, at 8; 36, at statutory claims depend Settlement’s illegality and therefore are precluded. on the The first amended complaint makes the following allegations, which are not precluded: Neither Continental nor required license a as Eccleston debt obtained collector under the the Maryland Collection Agency Licensing Act (ECF No. 5 ¶¶ 12, 18); Each defendant failed to identify itself “as a debt collector that was making efforts to collect a consumer debt” in violation of the FDCPA (Id. ¶ 43); and 15 Eccleston sought “sanctions, beyond the debt amount, against [Plaintiffs] for not paying the Zipin [Firm] consumer debt, a direct violation of the FDCPA at 15 U.S.C. § 1692f(1)” (Id. ¶ 65). “To succeed on a FDCPA claim a plaintiff must demonstrate that ‘(1) the plaintiff has been the object of collection activity arising from consumer debt, (2) the defendant is a debt [] collector as defined by the FDCPA, and (3) the defendant has engaged in an act or omission prohibited by the FDCPA.’” Stewart v. Bierman, 859 F.Supp.2d 754, 759 (D.Md. 2012) (quoting Dikun v. Streich, 369 F.Supp.2d 781, 784-85 (E.D.Va. 2005)). “debt collector” is “any person . . . in any business A the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). Plaintiffs do not plead facts showing that Eccleston and Continental were debt collectors under the FDCPA. Continental provided insurance coverage for the Zipin Firm, and Eccleston defended the Zipin Firm in Plaintiffs’ malpractice suit. A law firm can be a debt collector under the FDCPA if it is in the business activity. (applying of regularly See the Heintz FDCPA engaging v. “to Jenkins, attorneys 16 in consumer-debt-collection 514 U.S. 291, who ‘regularly’ 299 (1995) engage in consumer-debt-collection activity” (emphasis 859 (applying the F.Supp.2d at 761 initiating foreclosure suits); added)); FDCPA to a Stewart, law firm Bradshaw v. Hilco Receivables, LLC, 765 F.Supp.2d 719, 724-25 (D.Md. 2011) (applying the FDCPA to a law firm that was in the business of buying consumer debt and initiating suits to collect). Plaintiffs fail plead facts showing that Continental and Eccleston engage in debt collection activities at all, let alone as a regular course of business. Moreover, “[i]t 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, 765 F.Supp.2d at 725 (quoting Mabe v. G.C. Servs. Ltd. P’ship, 32 F.3d 86, 87-88 (4th Cir. 1994)). Plaintiffs assert that Eccleston represented the Zipin Firm in its action to recover unpaid fees, but Mr. Zipin and other lawyers at the Zipin Firm represented themselves in the fee-recovery portion. ECF No. 21-7, at 8). (See, e.g., Plaintiffs have not alleged facts, beyond conclusory accusations, that Continental and Eccleston undertook any debt collection activities. Rather, Plaintiffs argue that Continental and Eccleston’s actions were covered by the FDCPA because they attempted to enforce the Settlement, but such an argument F.Supp.2d is unavailing. 150, “enforcement of 153-54 a See Fleet (D.Mass. Settlement 17 Nat. 2003) rather Bank v. (noting than a Baker, 263 that the generic debt collection action compels the finding that the FDCPA does not apply”). Plaintiffs cannot invoke the FDCPA by baldly labeling Defendants as debt collectors engaging in debt collection activities. The only other statutory violation Plaintiffs allege, which is not barred by issue preclusion, is that Continental and Eccleston failed to obtain a license as a debt collector in violation of the MCALA. license whenever the Under the MCALA, “a person must have a person agency” within Maryland. discussed above, does business as a collection Md. Code., Bus. Reg. § 7-301. Plaintiffs do not plead facts showing As that Continental or Eccleston were doing business as a collection agency. Rather, they were defending the Zipin Firm in their malpractice suit and attempting to enforce the Settlement. Accordingly, Counts I, III, and IV will be dismissed. 2. Declaratory Judgment (Count II) Plaintiffs seek declaratory judgment on multiple issues. (ECF No. 5 ¶¶ 76-95). 2201, authorizes a The Declaratory Judgment Act, 28 U.S.C. § district court to, in its discretion, “declare the rights and other legal relations of any interested party seeking such declaration.” Plaintiffs’ request declaratory judgment is deficient for multiple reasons. for First, inasmuch as the complaint seeks declaratory judgment for the alleged statutory violations, “declaratory and injunctive relief 18 is not available under the FDCPA, MCDCA, or the Bradshaw, 765 F.Supp.2d at 733 (citation omitted). the aforementioned principles of claim and MCPA.” Furthermore, issue preclusion apply regarding the allegations of the Settlement’s illegality. In their opposition, Plaintiffs assert that declaratory judgment is appropriate because the Settlement “is so legally specious that rights existing under that Settlement will have to be clarified in the Count 2 Declaratory Judgment.” (ECF No. 34, at 13). Plaintiffs This is the exact argument collaterally estopped from making. relying are Plaintiffs cannot request declaratory judgment Settlement. Accordingly, Count II will be dismissed. 3. by that on the illegality of the Civil Conspiracy (Count V) Plaintiffs allege that Defendants engaged in a civil conspiracy “to coerce, induce, and require plaintiffs to enter into and perform under the unlawful, unfair, and unconscionable November 2013 Settlement” and to violate Plaintiffs’ “legal rights set forth in the FDCPA; the [MCPA]; the [MCDCA]; and the Unfair Trade Practices Insurance Act.” (ECF No. 5 ¶¶ 105-106). In Maryland, civil conspiracy is “a combination of two or more persons by an agreement or understanding to accomplish an unlawful act or to use unlawful means to accomplish an act not in itself illegal, with the further requirement that the act or the means employed must result in damages to the plaintiff.” 19 Hoffman v. Stamper, 385 Md. 1, 24 (2005) (citations and internal quotation marks omitted). In addition, the plaintiff must “prove the commission of an overt act, in furtherance of the agreement, that caused the plaintiff to suffer actual injury.” Id. at 25. In Maryland, conspiracy is not a distinct tort that can sustain an award of damages in the absence of an underlying action. Alexander & Alexander, Inc. v. B. Dixon Evander & Assocs., 336 Md. 635, 645 (1994) (“[A] conspiracy cannot be made the subject of a civil action unless something is done which, without the conspiracy, would give a right of action.”). Because Plaintiffs cannot sustain a conspiracy claim independent of the underlying claims, which will be dismissed, they have failed to allege sufficiently that Defendants conspired against them. 4. 42 U.S.C. § 1983 Claim Against Selzer (Count VI) Plaintiffs execution, and allege the violated § 1983. that sheriff’s Selzer’s request deputies’ for subsequent a writ of execution, To state a claim under § 1983, a plaintiff must allege that a right secured by the Constitution or laws of the United States was violated, and that the alleged violation was committed by a person acting under the color of state law. See West v. Atkins, 487 U.S. 42, 48 (1988). Selzer asserts that Plaintiffs fail to state a claim because Selzer’s actions were 20 not taken under the color of state law and because Plaintiffs did not adequately plead the constitutionally protected rights upon which Selzer allegedly infringed. 18).3 (ECF No. 11-1, at 17- Plaintiffs aver that Selzer “jointly engaged with state officials” and therefore acted under color of law. at 21 (quoting (1982))). Lugar v. Edmonson Oil, 457 (ECF No. 27, U.S. 922, 941 Selzer contends that Plaintiffs misread the Supreme Court’s holding in Lugar. “Lugar involved (ECF No. 30, at 8). a § 1983 claim alleging the unconstitutional deprivation of property under Virginia’s prejudgment attachment statute. In Lugar, the Supreme Court held that that unlawful application of the pre-judgment attachment statute did not constitute successful § 1983 claim.” (4th 1011 Cir. 1990) the state action required for a Jones v. Poindexter, 903 F.2d 1006, (citing Lugar, 457 U.S. at 940). The Supreme Court held that the plaintiff “did present a valid cause of action under constitutionality § of 1983 the insofar Virginia as he statute[, challenged but] he did the not insofar as he alleged only misuse or abuse of the statute.” Lugar, 457 U.S. at 942 (emphasis added); see also Wyatt v. Cole, 3 Selzer’s motion to dismiss also asserts that the court should abstain from deciding Plaintiffs’ § 1983 claim because it was the subject of a pending counterclaim in the circuit court. (ECF No. 11-1, at 15-17). Plaintiffs since have withdrawn voluntarily the relevant counterclaim, and Selzer concedes that its abstention argument is moot. (ECF No. 30, at 8 n.2). 21 504 U.S. 158, 161-62 (1992) (noting that Lugar allowed § 1983 liability for constitutionally affirmed the private parties infirm). district In “if the Poindexter, court’s dismissal statute the of Fourth a § was Circuit 1983 action against a private party who attempted to collect on a state court judgment. 903 F.2d at 1011. The Fourth Circuit held that there was no viable § 1983 claim against the defendant because the plaintiff alleged that the private party defendant illegally and improperly used state statutes and processes. The Fourth Circuit also noted that a private party’s “use of state process to attempt to enforce judgment” does not “rise to the level of action under color of law.” Here, Plaintiffs assert that Selzer violated their rights through the alleged improper use of a writ of execution. Plaintiffs do not contend that the Maryland laws or procedures themselves federal multiple are law. unconstitutional Rather, allegations the that or first Selzer constitute amended and the 123-127, 132, 134). A violation of complaint contains sheriff’s deputies violated applicable state statutes and rules. 118-119, a private (See ECF No. 5 ¶¶ party’s alleged “unlawful invocation of statutory procedures does not constitute action under color of state law as required for a § 1983 claim.” Keystone Builders, Inc. v. Floor Fashions of Va., Inc., 829 F.Supp. 181, 182 (W.D.Va. 1993) (citing Poindexter, 903 F.2d at 22 1011); see also Martin v. Sessoms & Rogers, P.A., No. 5:09-CV480-D, 2010 WL 3200015, at *5 (E.D.N.C. Aug. 12, 2010) (citing Lugar, 457 U.S. at 941-42; Poindexter, 903 F.2d at 1011) (dismissing a § 1983 claim against a private party because the complaint “has done no more than allege that [the defendant] ‘misused or execution abused’ against North real Carolina’s property”). statutory The procedure Fourth for Circuit’s interpretation of Lugar is directly applicable to the analysis here. Accordingly, Plaintiffs’ § 1983 claims against Selzer will be dismissed. IV. Conclusion For the foregoing reasons, Defendants’ motions to dismiss will be granted. be denied as moot. Plaintiffs’ motion for extension of time will A separate order will follow. /s/ DEBORAH K. CHASANOW United States District Judge 23
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