{ "id": 4221633, "name": "VIRGINIA SIMMONS, Plaintiff v. KROSS LIEBERMAN & STONE, INC., Defendant", "name_abbreviation": "Simmons v. Kross Lieberman & Stone, Inc.", "decision_date": "2013-08-06", "docket_number": "No. COA13-10", "first_page": "425", "last_page": "431", "citations": [ { "type": "official", "cite": "228 N.C. App. 425" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "618 S.E.2d 201", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12633816 ], "year": 2005, "pin_cites": [ { "page": "203-04", "parenthetical": "citations and quotation marks omitted" } ], "opinion_index": 0, "case_paths": [ "/se2d/618/0201-01" ] }, { "cite": "530 S.E.2d 865", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "pin_cites": [ { "page": "868" } ], "opinion_index": 0 }, { "cite": "138 N.C. App. 292", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11079470 ], "year": 2000, "pin_cites": [ { "page": "295" } ], "opinion_index": 0, "case_paths": [ "/nc-app/138/0292-01" ] }, { "cite": "403 S.E.2d 568", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "570", "parenthetical": "recognizing that a federal court's interpretation of North Carolina law has value as persuasive authority" } ], "opinion_index": 0 }, { "cite": "102 N.C. App. 772", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525745 ], "year": 1991, "pin_cites": [ { "page": "775", "parenthetical": "recognizing that a federal court's interpretation of North Carolina law has value as persuasive authority" } ], "opinion_index": 0, "case_paths": [ "/nc-app/102/0772-01" ] }, { "cite": "546 S.E.2d 632", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2001, "pin_cites": [ { "page": "638" } ], "opinion_index": 0 }, { "cite": "143 N.C. App. 361", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11434800 ], "year": 2001, "pin_cites": [ { "page": "370" } ], "opinion_index": 0, "case_paths": [ "/nc-app/143/0361-01" ] }, { "cite": "2011 WL 1257148", "category": "reporters:specialty_west", "reporter": "WL", "year": 2011, "opinion_index": 0 }, { "cite": "2013 WL 1629090", "category": "reporters:specialty_west", "reporter": "WL", "year": 2013, "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 75-55", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 2011, "pin_cites": [ { "page": "(3)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 58:70-130", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "pin_cites": [ { "page": "(b)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 75-1.1", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 75-56", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 5, "year": 1999, "pin_cites": [ { "page": "265-66" } ], "opinion_index": 0 }, { "cite": "531 S.E.2d 231", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 2000, "pin_cites": [ { "page": "266" }, { "page": "234-35" }, { "page": "234-35" }, { "page": "234-35", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "138 N.C. App. 261", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11079342 ], "weight": 2, "year": 2000, "pin_cites": [ { "page": "266" } ], "opinion_index": 0, "case_paths": [ "/nc-app/138/0261-01" ] }, { "cite": "176 S.E.2d 161", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1970, "pin_cites": [ { "page": "163" } ], "opinion_index": 0 }, { "cite": "277 N.C. 94", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561932 ], "year": 1970, "pin_cites": [ { "page": "98" } ], "opinion_index": 0, "case_paths": [ "/nc/277/0094-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 58-70-15", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2011, "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 75-50", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 2011, "pin_cites": [ { "page": "(3)", "parenthetical": "emphasis added" }, { "page": "(2)", "parenthetical": "defining \"debt\" for purposes of the NCDCA" } ], "opinion_index": 0 }, { "cite": "359 N.C. 782", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 3795500 ], "year": 2005, "pin_cites": [ { "page": "784", "parenthetical": "citations and quotation marks omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/359/0782-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 58-70-115", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 5, "pin_cites": [ { "page": "(3)" }, { "page": "(3)" }, { "page": "(3)" }, { "page": "(3)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 58-70-130", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 15, "year": 2011, "pin_cites": [ { "page": "(a)" }, { "page": "(b)" }, { "page": "(a)" }, { "page": "(a)" }, { "page": "(b)" }, { "page": "(b)" }, { "page": "(c)" }, { "page": "(c)" }, { "page": "(c)" }, { "page": "(b)" }, { "page": "(b)" }, { "page": "(a)" }, { "page": "(b)" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 680, "char_count": 16446, "ocr_confidence": 0.727, "pagerank": { "raw": 4.309311792351655e-08, "percentile": 0.2714998055871211 }, "sha256": "9af51b9db0bb5f236e430c55651f79bc9fdd0ec783bd6ef3473294002397533f", "simhash": "1:8978394218fb44d5", "word_count": 2592 }, "last_updated": "2023-07-14T22:18:27.138557+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges ELMORE and GEER concur." ], "parties": [ "VIRGINIA SIMMONS, Plaintiff v. KROSS LIEBERMAN & STONE, INC., Defendant" ], "opinions": [ { "text": "DILLON, Judge.\nVirginia Simmons (Plaintiff) appeals from the trial court\u2019s order dismissing her claim for unfair debt collection practices against Kross Lieberman & Stone, Inc. (Defendant) for failure to state a claim upon which relief may be granted. We affirm in part and reverse in part.\nI. Factual & Procedural Background\nPlaintiff, a consumer, filed this action against Defendant, a debt collection agency, to recover both actual damages and civil penalties pursuant to N.C. Gen. Stat. \u00a7 58-70-130 (2011).\nIn 2010, Plaintiff contracted with Home Design Studio, LLC (Home Design) to perform certain renovations on her home in Durham County. When the renovations had been completed, Plaintiff refused to pay Home Design the amount reflected in the final invoice for the project. As a result, Home Design engaged Defendant to collect this amount from Plaintiff. Plaintiff engaged an attorney to represent her in the matter.\nSubsequently, Plaintiff and Home Design became involved in a lawsuit concerning the final invoice and other matters pertaining to their contract. Plaintiff and Home Design ultimately reached a settlement through mediation and voluntarily dismissed all of their claims and counterclaims with prejudice on 3 June 2011.\nOn 12 September 2011, Plaintiff commenced the present action against Defendant, alleging in her complaint that Defendant had engaged in \u201cunfair practices\u201d in violation of N.C. Gen. Stat. \u00a7 58-70-115(3) by contacting Plaintiff on Home Design\u2019s behalf after being informed that Plaintiff was represented by counsel. The complaint alleges, inter alia, the following:\n7. On November 23, 2010 plaintiff\u2019s attorney notified defendant that he represented plaintiff and requested that any further communication regarding the debt be made through her attorney. ...\n8. On January 24, 2011, ignoring plaintiff\u2019s attorney\u2019s previous letter, defendant sent plaintiff another demand for payment. . . . Defendant\u2019s conduct violates the provisions of N.C.G-.S. 58-70-115(3).\n9. As a proximate result of defendant\u2019s unfair practice, plaintiff is informed and believes that her actual damages will exceed $1,000.00. Plaintiff will file at a later date a statement of monetary relief sought in this action....\n10. As a proximate result of defendant\u2019s unfair practice, plaintiff is entitled to recover a civil penalty of at least $500.00 from defendant.\nOn 14 November 2011, Defendant filed a Rule 12(b)(6) motion to dismiss Plaintiff\u2019s complaint for failure to state a claim upon which relief may be granted. The matter came on for hearing in Durham County Superior Court on 11 July 2012. On 16 August 2012, the trial court entered an order granting Defendant\u2019s motion to dismiss. From this order, Plaintiff appeals.\nII. Analysis\nThe following standard governs our review of the trial court\u2019s order dismissing Plaintiff\u2019s complaint:\nA motion to dismiss under N.C. R. Civ. P. 12(b)(6) is the usual and proper method of testing the legal sufficiency of the complaint. In reviewing a trial court\u2019s Rule 12(b) (6) dismissal, the appellate court must inquire whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory. Rule 12(b)(6) generally precludes dismissal except in those instances where the face of the complaint discloses some insurmountable bar to recovery. Dismissal is proper, however, when one of the following three conditions is satisfied: (1) the complaint on its face reveals that no law supports the plaintiff\u2019s claim; (2) the complaint on its face reveals the absence of facts sufficienttomake agoodclaim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff\u2019s claim.\nNewberne v. Dep\u2019t of Crime Control & Pub. Safety, 359 N.C. 782, 784, 618 S.E.2d 201, 203-04 (2005) (citations and quotation marks omitted).\nAs a threshold matter, we note that the parties dispute which provisions of our General Statutes govern Plaintiff\u2019s unfair practices claim. While Plaintiff alleges that she is entitled to relief under Article 70, Chapter 58 of our General Statutes, Defendant counters that \u201cChapter 58, Article 70 of the North Carolina General Statutes is not applicable when pursuing a claim covered by the North Carolina Debt Collection Act [hereinafter, the NCDCA].\u201d We believe that Defendant\u2019s contention is incorrect.\nThe NCDCA is codified in Article 2, Chapter 75 and applies to the debt collection efforts of \u201cany person engaging, directly or indirectly, in debt collection from a consumer except those persons subject to the provisions of Article 70, Chapter 58 of the General Statutes.\" N.C. Gen. Stat. \u00a7 75-50(3) (2011) (emphasis added). Article 70, Chapter 58 specifically governs debt collection practices undertaken by any entity operating as a \u201ccollection agency\u201d as defined under N.C. Gen. Stat. \u00a7 58-70-15 (2011). Thus, the NCDCA regulates the debt collection activities of all entities except collection agencies regulated under Chapter 58. Here, Plaintiff\u2019s complaint specifically alleges that Defendant is \u201ca collection agency permitted and licensed by the N.C. Department of Insurance as requred [sic] by Chapter 58 of the N.C. General Statutes.\u201d Accordingly, we review Plaintiff\u2019s unfair practices claim under Chapter 58.\nTurning to the sufficiency of the complaint, Plaintiff alleges that Defendant engaged in unfair practices in violation of N.C. Gen. Stat. \u00a7 58-70-115(3) (2011), which defines \u201cunfair practices\u201d to include any communication by a debt collection agency \u201cwith a consumer whenever the collection agency has been notified by the consumer\u2019s attorney that he represents said consumer.\u201d Id. Specifically, the complaint alleges that Plaintiff\u2019s attorney notified Defendant by letter dated 23 November 2010 that Plaintiff was represented by counsel and \u201cthat any further communication regarding the debt be made through her attorney.\u201d The complaint further alleges that notwithstanding this notification Defendant sent Plaintiff a letter demanding payment on 24 January 2011. We conclude that these allegations are sufficient to state a claim for unfair practices under N.C. Gen. Stat. \u00a7 58-70-115(3).\nWith respect to Plaintiff\u2019s requested relief, Plaintiff\u2019s complaint seeks both actual damages under N.C. Gen. Stat. \u00a7 58-70-130(a) and a civil penalty under N.C. Gen. Stat. \u00a7 58-70-130(b). Although N.C. Gen. Stat. \u00a7 58-70-130(a) permits a claimant to recover actual damages as a result of a collection agency\u2019s violation of N.C. Gen. Stat. \u00a7 58-70-115(3), the only allegation in Plaintiff\u2019s complaint concerning actual damages is that \u201c[a]s a proximate result of defendant\u2019s unfair practice, plaintiff is informed and believes that her actual damages will exceed $1,000.00.\u201d This allegation consists of merely a legal conclusion, which we do not accept as true for purposes of reviewing a Rule 12(b)(6) dismissal. See Sutton v. Duke, 277 N.C. 94, 98, 176 S.E.2d 161, 163 (1970). Plaintiff does not allege any facts indicating how she was injured or otherwise incurred damages as a result of Defendant\u2019s conduct. This shortcoming renders Plaintiff\u2019s complaint insufficient to state a claim for actual damages under N.C. Gen. Stat. \u00a7 58-70-130(a), and we conclude that the trial court correctly dismissed this portion of Plaintiff\u2019s complaint.\nThe question remains whether .the absence of actual injury forecloses Plaintiffs ability to recover a civil penalty under N.C. Gen. Stat. \u00a7 58-70-130(b), which provides as follows:\nAny collection agency which violates Part 3 of this Article with respect to any debtor shall, in addition to actual damages sustained by the debtor as a result of the violation, also be hable to the debtor for a penalty in such amount as the court may allow, which shall not be less than five hundred dollars ($500.00) for each violation nor greater than four thousand dollars ($4,000) for each violation.\nN.C. Gen. Stat. \u00a7 58-70-130(b) (2011).\nIn Reid v. Ayers, 138 N.C. App. 261, 531 S.E.2d 231 (2000), upon which Defendant relies, we held that a plaintiff\u2019s claim for relief under the NCDCA will not survive absent proof of actual injury. Id. at 266, 531 S.E.2d at 234-35. Whether this same principle applies to a claim brought against a collection agency under Chapter 58, however, appears to be a question of first impression for this Court. The Reid court concluded that our General Assembly intended for NCDCA claims - brought under Article 2, Chapter 75 - to be subject to the same general requirements that apply to unfair and deceptive trade practices (UDTP) claims brought under Article 1, Chapter 75. Reid, 138 N.C. App. at 266, 531 S.E.2d at 234-35. In so holding, we reasoned as follows:\nAlthough our legislature does not specifically state that [NCDCA claims are] subject to the more generalized requirements of section 75-1.1, we conclude that was their intent. The final section [of the NCDCA] states:\nThe specific and general provisions of this Article [(the NCDCA)] shall exclusively constitute the unfair or deceptive acts or practices proscribed by G.S. 75-1.1 in the area of commerce regulated by this Article. Notwithstanding the provisions of G.S. 75-15.2 and G.S. 75-16, in private actions or actions instituted by the Attorney General, civil penalties in excess of two thousand dollars ($2,000) shall not be imposed, nor shall damages be trebled for any violation under this Article.\nN.C. Gen. Stat. \u00a7 75-56 (1999). By specifically referencing [in section 75-56] the generalized proscription in section 75-1.1, we conclude the legislature intended that Article 2 be limited by the same requirements applicable to those proscriptions. Furthermore, had our legislature not intended for Article 2 to be governed by the generalized provisions of Article 1, it would not have needed to refer to Article l\u2019s allowance for treble damages when limiting the remedy for Article 2 violations to $2000. Thus, we conclude that once the three threshold requirements in section 75-50 are satisfied, a claim for unfair debt collection practices must then meet the three generalized requirements found in section 75-1.1:(1) an unfair act (2) in or affecting commerce (3) proximately causing injury.\nId. at 265-66, 531 S.E.2d at 234-35 (emphasis added) (citation omitted). N.C. Gen. Stat. \u00a7 58-70-130, the provision under which Plaintiff seeks a civil penalty in the instant case, includes the following language:\nThe specific and general provisions of Part 3 of this Article shall constitute unfair or deceptive acts or practices proscribed herein or by G.S. 75-1.1 in the area of commerce regulated thereby; provided, however, that, notwithstanding the provisions of G.S. 75-16, the civil penalties provided in this section shall not be trebled. Civil penalties in excess of four thousand dollars ($4,000) for each violation shall not be imposed.\nN.C. Gen. Stat. \u00a7 58-70-130(c) (2011). We recognize the similarities between the language in this provision and that set forth in N.C. Gen. Stat. \u00a7 75-56, which served as the basis for our holding in Reid. There are, however, two key distinctions: First, N.C. Gen. Stat. \u00a7 75-56 provides that the provisions of Chapter 75, Article 2 \u201cshall exclusively constitute the unfair or deceptive acts or practices proscribed by G.S. 75-1.1 in the area of commerce regulated by this Article[,]\u201d while N.C. Gen. Stat. \u00a7 58-70-130(c) omits the word \u201cexclusively.\u201d Second, N.C. Gen. Stat. \u00a7 58-70-130(c) provides that violations of Article 70, Chapter 58 \u201cshall constitute unfair or deceptive acts or practices proscribed herein or by G.S. 75-1.1 . . . [,]\u201d while N.C. Gen. Stat. \u00a7 75-56 provides that a violation of the NCDCA shall \u201cexclusively\u201d constitute a violation of N.C. Gen. Stat. \u00a7 75-1.1. Thus, we do not believe that our General Assembly intended that a claimant be required to prove the prerequisites for a UDTP claim under Article 1, Chapter 75 - including actual injury - to recover the civil penalty described under N.C. Gen. Stat. \u00a7 58-70-130(b). This distinction, we believe, is indicative of our General Assembly\u2019s intent to hold debt collection agencies regulated under Chapter 58 to a higher standard in undertaking their debt collection practices than the standard to which other entities engaged in debt collection are held under the NCDCA. Accordingly, we hold that Plaintiff\u2019s failure to allege actual injury does not preclude her from recovering a civil penalty under N.C. Gen. Stat. \u00a7 58-70-130(b), and, therefore, that the trial court erred in dismissing this portion of Plaintiff\u2019s complaint.\nHI. Conclusion\nFor the foregoing reasons, we hold that Plaintiff has failed to state a claim for actual damages under N.C. Gen. Stat. \u00a7 58-70-130(a), and we affirm the trial court\u2019s dismissal of that portion of Plaintiff\u2019s complaint. We further hold, however, that Plaintiff has sufficiently stated a claim for a civil penalty under N.C. Gen. Stat. \u00a7 58:70-130(b), and we accordingly reverse the trial court\u2019s dismissal of that portion of Plaintiff\u2019s complaint.\nAFFIRMED IN PART; REVERSED IN PART.\nJudges ELMORE and GEER concur.\n. We note Defendant\u2019s contention that this communication was a permissible form of contact under N.C. Gen. Stat. \u00a7 75-55(3) (2011), a provision of the NCDCA which authorizes a creditor to communicate with a consumer - even after receiving notice that the consumer is represented by counsel - if the communication qualifies as a \u201cstatement of account used in the normal course of business.\u201d Id. As previously discussed, however, the NCDCA does not govern Plaintiff\u2019s unfair practices claim, and Article 70, Chapter 58 provides no such exception for debt collection agencies.\n. We note that Plaintiff\u2019s complaint also provides that \u201cPlaintiff will file at a later date a statement of monetary relief in this action.\u201d Based upon the record before us, however, there is no indication that such a statement was ever filed.\n. We note that federal courts addressing this precise issue have allowed for recovery of statutory damages under N.C. Gen. Stat. \u00a7 58-70-130(b) notwithstanding the claimant\u2019s failure to prove actual damages. See, e.g., Barnett v. Creditors Specialty Serv., Inc., 2013 WL 1629090 (W.D.N.C. Apr. 16, 2013); In re Baie, 2011 WL 1257148 (Bankr. E.D.N.C. Mar. 30, 2011). We recognize that although these decisions are not binding on this Court, Soderlund v. Kuch, 143 N.C. App. 361, 370, 546 S.E.2d 632, 638 (2001), they have persuasive value for purposes of our analysis in the present case. See Huggard v. Wake County Hosp. Sys., Inc., 102 N.C. App. 772, 775, 403 S.E.2d 568, 570 (1991) (recognizing that a federal court\u2019s interpretation of North Carolina law has value as persuasive authority).\n. We note Defendant\u2019s contention that the settlement between Plaintiff and Home Design precluded Plaintiff from bringing this action because there was no longer a valid \u201cdebt\u201d as required in order to seek relief under the NCDCA. Davis Lake Cmty. Ass\u2019n, Inc. v. Feldmann, 138 N.C. App. 292, 295, 530 S.E.2d 865, 868 (2000); see also N.C. Gen. Stat. \u00a7 75-50(2) (2011) (defining \u201cdebt\u201d for purposes of the NCDCA). As previously discussed, however, the NCDCA does not apply to Plaintiff\u2019s claim against Defendant, and we reject this contention as meritless.", "type": "majority", "author": "DILLON, Judge." } ], "attorneys": [ "Law Office of Robert B. Jervis, EC., by Robert B. Jervis, for Plaintiff", "Hans H. Huang, PLLC, by Hans H. Huang, for Defendant." ], "corrections": "", "head_matter": "VIRGINIA SIMMONS, Plaintiff v. KROSS LIEBERMAN & STONE, INC., Defendant\nNo. COA13-10\nFiled 6 August 2013\n1. Unfair Trade Practices \u2014 unfair debt collection \u2014 collection agency\nPlaintiff consumer\u2019s unfair debt collection practices claim was reviewed under Chapter 58 because it specifically alleged that defendant was a collection agency permitted and licensed by the N.C. Department of Insurance.\n2. Unfair Trade Practices \u2014 unfair debt collection \u2014 actual damages \u2014 civil penalty\nPlaintiff consumer failed to state a claim for actual damages under N.C.G.S. \u00a7 58-70-130(a) in an unfair debt collection practices case, and the trial court properly dismissed that portion of plaintiff\u2019s complaint. However, plaintiff sufficiently stated a claim for a civil penalty under N.C.G.S. \u00a7 58-70-130(b), and the trial court\u2019s dismissal of that portion of plaintiff\u2019s complaint was reversed.\nAppeal by Plaintiff from order entered 16 August 2012 by Judge Orlando Hudson in Durham County Superior Court. Heard in the Court of Appeals 25 April 2013.\nLaw Office of Robert B. Jervis, EC., by Robert B. Jervis, for Plaintiff\nHans H. Huang, PLLC, by Hans H. Huang, for Defendant." }, "file_name": "0425-01", "first_page_order": 435, "last_page_order": 441 }