Hartley v. 21st Mortgage Corporation

IN THE UNITED STATES DISTRICT COURT FOR

THE SOUTHERN DISTRICT OF WEST VIRGINIA

HUNTINGTON DIVISION

JEFF HARTLEY,

Plaintiff,

v. CIVIL ACTION NO. 3:17-0619

21ST MORTGAGE CORPORATION,

Defendant.

MEMORANDUM OPINION AND ORDER

Pending before the Court are three motions: (1) Defendant 21st Mortgage

Corporation’s Motion to Dismiss (ECF No. 16); (2) Defendant 21st Mortgage Corporation’s

Motion to Stay (ECF No. 31); and (3) Plaintiff’s Motion to Compel Deposition and Extend the

Deadlines. ECF No. 35. For the following reasons, the Court GRANTS, in part, and DENIES,

in part, the Motion to Dismiss, DENIES WITHOUT PREJUDICE Defendant’s Motion to Stay,

and DENIES AS MOOT Plaintiff’s Motion to Compel Depositions and Extend the Deadlines.

I.

FACTUAL AND

PROCEDURAL HISTORY

This action originally was filed in the Circuit Court of Putnam County, West

Virginia on February 25, 2016, alleging violations of various state laws regarding the collection

of a debt. On January 11, 2017, Plaintiff filed an Amended Complaint, which added a federal claim

under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, and a violation of a

bankruptcy stay and discharge. Thereafter, Defendant timely removed the action to this Court

based upon federal question jurisdiction. 28 U.S.C. § 1331.

On February 6, 2017, Plaintiff filed a Second Amended Complaint. In his Second

Amended Complaint, Plaintiff states that he fell behind on payments on a loan that originated as a

mortgage loan with Chase Mortgage. On April 19, 2001, Plaintiff filed for Chapter 7 bankruptcy,

and his personal liability for the debt was discharged on August 10, 2001.1 Plaintiff alleges that

three or four years after the discharge, the loan was transferred from Chase Mortgage to Defendant

21st Mortgage Corporation. Thereafter, Plaintiff and his wife divorced, and she received the house

and the accompanying mortgage as part of a property settlement agreement. Plaintiff states that,

although he told Defendant he no longer resided in the house and his debt was discharged,

Defendant began a relentless campaign of calling him. Plaintiff asserts he withdrew his consent

for Defendant to contact him.

In May 2015, Plaintiff states he began receiving written communications

attempting to collect the debt. Thereafter, Plaintiff asserts he mailed Defendant a letter stating he

retained an attorney, and he provided Defendant with his attorney’s contact information.

According to Plaintiff, Defendant continued to call him and left messages demanding payments

without disclosing its name. These telephone calls included unauthorized calls to his cellphone.

Plaintiff alleges he was called multiple times a day from what he believes was an “Automatic

Telephone Dialing System.” Plaintiff alleges Defendant called him in excess of 300 times.2 Sec.

Am. Compl., at ¶ 45.

1Plaintiff’s bankruptcy case closed on September 28, 2001.

2In his Response to Defendant’s Motion to Dismiss, Plaintiff states he received more than

350 calls from Defendant after his obligation on the debt was discharged.

Based upon these allegations, Plaintiff alleges seven claims against Defendant: (1)

Violations of the West Virginia Consumer Credit and Protection (WVCCPA) (Count 1); (2)

Violation of the West Virginia Consumer Computer Crime and Abuse Act (WVCCAA) (Count

II); (3) Violation of the Telephone Harassment Statute (Count III); (4) Negligence (Count IV); (5)

Invasion of Privacy (Count V); (6) Violation of the Automatic Stay and Discharge (Count VI); and

(7) Violations of the TCPA (Count VII). In its motion, Defendant argues that all Plaintiff’s claims,

other than the TCPA claim, should be dismissed.

II.

STANDARD OF REVIEW

In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the United States Supreme

Court disavowed the “no set of facts” language found in Conley v. Gibson, 355 U.S. 41 (1957),

which was long used to evaluate complaints subject to 12(b)(6) motions. 550 U.S. at 563. In its

place, courts must now look for “plausibility” in the complaint. This standard requires a plaintiff

to set forth the “grounds” for an “entitle[ment] to relief” that is more than mere “labels and

conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555

(internal quotation marks and citations omitted). Accepting the factual allegations in the complaint

as true (even when doubtful), the allegations “must be enough to raise a right to relief above the

speculative level . . . .” Id. (citations omitted). If the allegations in the complaint, assuming their

truth, do “not raise a claim of entitlement to relief, this basic deficiency should . . . be exposed at

the point of minimum expenditure of time and money by the parties and the court.” Id. at 558

(internal quotation marks and citations omitted).

In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court explained the

requirements of Rule 8 and the “plausibility standard” in more detail. In Iqbal, the Supreme Court

reiterated that Rule 8 does not demand “detailed factual allegations[.]” 556 U.S. at 678 (internal

quotation marks and citations omitted). However, a mere “unadorned, the-defendant-unlawfully-

harmed-me accusation” is insufficient. Id. “To survive a motion to dismiss, a complaint must

contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its

face.’” Id. (quoting Twombly, 550 U.S. at 570). Facial plausibility exists when a claim contains

“factual content that allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged.” Id. (citation omitted). The Supreme Court continued by explaining

that, although factual allegations in a complaint must be accepted as true for purposes of a motion

to dismiss, this tenet does not apply to legal conclusions. Id. “Threadbare recitals of the elements

of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citation

omitted). Whether a plausible claim is stated in a complaint requires a court to conduct a context-

specific analysis, drawing upon the court’s own judicial experience and common sense. Id. at 679.

If the court finds from its analysis that “the well-pleaded facts do not permit the court to infer more

than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]’-‘that

the pleader is entitled to relief.’” Id. (quoting, in part, Fed. R. Civ. P. 8(a)(2)). The Supreme Court

further articulated that “a court considering a motion to dismiss can choose to begin by identifying

pleadings that, because they are no more than conclusions, are not entitled to the assumption of

truth. While legal conclusions can provide the framework of a complaint, they must be supported

by factual allegations.” Id.

III.

DISCUSSION

A.

Whether Plaintiff qualifies as

a consumer under the WVCCPA?

Defendant first argues that Plaintiff’s claim under the WVCCPA must be dismissed

because Plaintiff no longer qualifies as a “consumer” under the Act and, therefore, lacks standing

to bring a claim.3 The WVCCPA defines a “consumer” as “any natural person obligated or

allegedly obligated to pay any debt.” W. Va. Code § 46A-2-122(a). Defendant argues that,

although the debt still exists, Plaintiff is no longer obligated to pay because his personal liability

was discharged in bankruptcy. Thus, Defendant insists Plaintiff does not meet the definition of a

“consumer.” In support, Defendant cites Fabian v. Home Loan Center, Inc., No. 5:14-CV-42, 2014

WL 1648289 (N.D. W. Va. Apr. 24, 2014).

As here, the lender in Fabian argued that the plaintiffs could not bring a claim of

unconscionability under the WVCCPA because their personal obligation to pay a debt was

discharged in bankruptcy. 2014 WL 1648289, at *5. The plaintiffs argued they qualified as

“consumers” under the Act because they remained “allegedly obligated” to pay the debt to avoid

foreclosure on their house. However, the court disagreed and held that the plaintiffs’ choice to

make payments so they could retain their house “does not give rise to an ‘alleged obligation.’” Id.

(citation omitted). In making this holding, the court distinguished the facts before it from Croye v.

GreenPoint Mortgage Funding, Inc., 740 F. Supp. 2d 788 (S.D. W. Va. 2010).

In Croye, the plaintiffs alleged, inter alia, violations of the WVCCPA by the

servicer of mortgage loans obtained by Cheryl Croye. The servicer sought summary judgment

against William Croye because he did not execute the loans and, therefore, the servicer argued he

3The WVCCPA grants a private cause of action to a “consumer” against a creditor who

violates the act. W. Va. Code § 46A-5-101(1).

did not qualify as a “consumer” as he had no obligation to pay the debts. 740 F. Supp. 2d at 796.4

In rejecting this argument, the court cited Mr. Croye’s claim that the servicer telephoned him more

than thirty times to collect on the mortgages. Id. at 797. The court held that the servicer’s “repeated

efforts to collect payment from him suggest the existence of an alleged obligation of Mr. Croye to

pay the loans.” Id.

In Fabian, the court considered Croye and concluded that “[t]he phrase ‘alleged

obligation’ extends the reach of the Act to certain collection activities conducted without regard

to whether the debt is actually owed—as in Croye, where the lender repeatedly asserted that the

debtor was required to pay the debt although the debtor had no personal obligation[.]” 2014 WL

1648289, at *6 (italics original; agreeing with the analysis in Ballard v. Bank of America, N.A.,

No. 2:12-2496, 2013 WL 5963068 (S.D. W. Va. Nov. 7. 2013)). However, the Fabian court found

this fact made Croye inapposite to the circumstances before it because the plaintiffs in Fabian

never alleged that the defendants represented to them that they remained personally liable to pay

the debt. Thus, the Fabian court found the plaintiffs were not “consumers” under the Act. Id; see

also Hanshaw v. Wells Fargo Bank, N.A., No. 2:14-cv-28042, 2015 WL 5345439, at *14-15 (S.D.

W. Va. Sept. 11, 2015) (finding the plaintiffs lacked standing as a “consumer” under the WVCCPA

where their obligation on the debt was discharged in bankruptcy and the complaint was devoid of

allegations that the defendants attempted to recover the debt following the bankruptcy or that the

defendants indicated to the plaintiffs they were personally obliged to repay the debt).

4Cheryl and William Croye were married when the loans were obtained, but later divorced

and Ms. Croye moved out of the house. Id. at 791-92.

In this case, Defendant insists, as in Fabian, Plaintiff lacks standing under the

WVCCPA because his debt was discharged and Plaintiff has not alleged in the Second Amended

Complaint that Defendant indicated to Plaintiff that he remained “personally” liable to pay the

loan after the discharge. On the other hand, Plaintiff argues this case is similar to Croye.

Specifically, Plaintiff points to the fact that the court in Croye stated that the servicer’s more than

thirty phone calls attempting to collect on the debt “suggest[s] the existence of an alleged

obligation of Mr. Croye to pay the loans.” 740 F. Supp. 2d at 797. Upon review, the Court agrees

with Plaintiff.

Here, Plaintiff alleges he received over 300 phone calls, which is many more times

than that alleged in Croye. Sec. Am. Compl., at ¶45. In addition, Plaintiff asserts that Defendant

called him “at his home, work and cell phone . . . [and] Plaintiff explained that he had discharged

the debt and withdrew his consent to be contacted.” Id., at ¶12. He also claims that “[u]pon

information and belief Defendant left messages for Plaintiff with demands for payment without

clearly disclosing the name of the Defendant.” Id. at ¶18. He further states that, after his bankruptcy

discharge, he received written communications to collect on the debt. Id. at ¶13. Considering all

these allegations in the light most favorable to Plaintiff and drawing any reasonable inferences to

be drawn therefrom, the Court has no difficulty finding Plaintiff has stated a plausible claim he is

a “consumer” under the WVCCPA because Defendant’s alleged collection actions may suggest

the existence of a personal obligation to pay the debt. See Adkins v. Credit Acceptance Corp., No.

2:16-cv-03343, 2016 WL 7451619, at *3 (S.D. W. Va. Dec. 28, 2016) (finding, although the

plaintiff owed no debt to the defendant, she pled a plausible WVCCPA claim because case law

“establish[es] that a creditor’s actions alone are sufficient to give rise to an ‘alleged obligation’ to

pay a debt, so long [as] there is evidence of an attempt to hold the plaintiff personally liable”).

Whether or not Plaintiff ultimately can prove Defendant’s actions created an “alleged obligation”

is a matter best reserved to decide following discovery. Therefore, the Court DENIES Defendant’s

motion to dismiss Count I.

B.

West Virginia’s Computer Crime

and Abuse Act

Defendant next argues that Plaintiff’s claim that it violated the West Virginia

Computer Crimes and Abuse Act (WVCCAA), W. Va. Code § 61-3C-14a, should be dismissed

because Plaintiff has failed to allege a violation of the Act. The WVCCAA provides, in part, that

“[i]t is unlawful for any person, with the intent to harass or abuse another person, to use a computer,

mobile phone, personal digital assistant or other electronic communication device to . . . [m]ake

contact with a person after being requested by the person to desist from contacting them[.]” W. Va.

Code § 61-3C-14a(a)(2), in part.5 An “electronic communication device” is defined under the

statute as

a telephone, wireless phone, computer, pager or any other electronic

or wireless device which is capable of transmitting a document,

image, voice, e-mail or text message using such device in an

electronic, digital or analog form from one person or location so it

may be viewed or received by another person or persons at other

locations.

W. Va. Code § 61-3C-14a(b)(1). In addition, the statute provides that the “[u]se of a computer,

mobile phone, personal digital assistant or other electronic communication device” as:

includ[ing], but not limited to, the transmission of text messages,

electronic mail, photographs, videos, images or other nonvoice data

by means of an electronic communication system, and includes the

5The proviso to subsection (2) states “[t]hat a communication made by a lender or debt

collector to a consumer, regarding an overdue debt of the consumer that does not violate chapter

forty-six-a of this code, does not violate this subsection[.]” Id.

transmission of such data, documents, messages and images to

another’s computer, e-mail account, mobile phone, personal digital

assistant or other electronic communication device.

W. Va. Code § 61-3C-14a(b)(2).

Defendant argues the phrase “or other nonvoice data” establishes that this statute

only applies to “nonvoice” communications and Plaintiff has failed to allege that Defendant

attempted to contact him using an electronic device transmitting “nonvoice data.” However, not

only does Defendant fail to cite a single case in support of its position, it completely ignores the

“includ[ing], but not limited to” language in the statute. When this significant qualifier is read as

part of the statute, Defendant’s “plain language” argument falls short. In fact, as an “electronic

communication device” is defined, inter alia, as a “telephone . . . which is capable of transmitting

. . . voice . . . using such device in an electronic, digital or analog form from one person . . . so it

may be . . . received by another person or persons,” W. Va. Code § 61-3C-14a(b)(1), it appears

clear to the Court that a telephone call may meet the definition of the WVCCPA. Otherwise, the

use of the word “telephone,” which is listed in addition to “wireless phone,” becomes meaningless

because a standard, non-wireless telephone, generally does not send “text messages, electronic

mail, photographs, videos, images or other nonvoice data.” W. Va. Code § 61-3C-14a(b)(2). See

PSINet, Inc. v. Chapman, 362 F.3d 227, 232 (4th Cir. 2004) (“General principles of statutory

construction require a court to construe all parts to have meaning and to reject constructions that

render a term redundant.” (citations omitted)). Accordingly, the Court DENIES Defendant’s

motion to dismiss Plaintiff’s WVCCAA claim.

C.

No private cause of action

for violations of the West Virginia

Telephone Harassment Statute

Defendant next argues that there is no private cause of action for violations of the

West Virginia Telephone Harassment Statute so Plaintiff’s claim must be dismissed. The statute

makes it “unlawful for a person with the intent to harass or abuse another by means of telephone

to . . . [m]ake or cause the telephone of another repeatedly or continuously to ring, with intent to

harass any person at the called number.” W. Va. Code § 61-8-16(a)(3). However, as this Court

stated in Carroll v. USAA Savings Bank, No. 3:16-11120, 2017 WL 811491 (S.D. W. Va. Mar. 1,

2017), “[t]he case law is clear that a plaintiff has no private civil right of action under the Telephone

Harassment Statute, a criminal statute, because the state legislature created the WVCCPA to

account for civil litigation.” 2017 WL 811491, at *2 (citations omitted). As in Carroll, Plaintiff

here argues that it is premature to rule on the motion because Defendant has not admitted it is a

“debt collector” or that Plaintiff is a “consumer” to make the WVCCPA applicable. In Carroll, the

Court rejected this argument as irrelevant, stating

[w]hether Plaintiff has a successful WVCCPA claim against

Defendant does not change the inapplicability of the Telephone

Harassment Statute to a civil case. The West Virginia legislature

intentionally created a separate civil mechanism for plaintiffs to

bring suit against defendants issuing harassing phone calls. A claim

asserting a violation of this criminal statute that punishes the same

conduct fails as a matter of law.

Id. The same reasoning applies in this case. Therefore, the Court GRANTS Defendant’s motion

to dismiss Plaintiff’s claim under the Telephone Harassment Statute.

D.

Negligence

In Count IV, Plaintiff alleges that Defendant was negligent because it “failed to

train, supervise, monitor or otherwise control its employees to ensure that its employees did not

violate the seclusion of Plaintiff’s home.” Sec. Am. Compl., at ¶40. As a result, Plaintiff claims

that he was “annoyed, inconvenienced, harassed, bothered, upset, angered, harangued and

otherwise was caused indignation and distress.” Id. at ¶41. Defendant argues this claim must be

dismissed.

In Carroll, this Court explained that “West Virginia does not recognize a claim for

negligent training or supervision without an underlying claim for employee negligence. If a

complaint fails to identify an employee's negligent act, the claim for negligent training or

supervision should be dismissed as a matter of law.” 2017 WL 811491, at *3 (citations omitted).

In Carroll, the plaintiff alleged the defendant bank failed to supervise and train its employees to

prevent violations of the WVCCPA. However, the plaintiff failed to make separate allegations that

employees were negligent, and this Court rejected the plaintiff’s argument that employee

negligence existed because he continued to be called after it was known he was represented by

counsel. Id. Upon review of the plaintiff’s Third Amended Complaint, this Court found there was

no underlying employee negligence claims. Instead, the plaintiff’s allegations of harassment and

annoyance involved intentional conduct. Therefore, the Court found the plaintiff’s negligent

supervision claim failed as a matter of law. Id.

As in Carroll, Plaintiff in this case has not alleged any employee was negligent.

Rather, Plaintiff alleges intentional conduct on the part of Defendant by harassing him to collect a

debt that was discharged in bankruptcy. Without an underlying claim for employee negligence,

however, Plaintiff’s claim of negligent training and supervision cannot survive as a matter of law.

Thus, the Court GRANTS Defendant’s motion to dismiss Plaintiff’s claim for negligence.

E.

Invasion of Privacy

Next, Plaintiff alleges that Defendant has violated his right to privacy by calling

him over 300 times and causing him, inter alia, emotional distress, annoyance, and inconvenience.

West Virginia recognizes an invasion of privacy for “an unreasonable intrusion upon the seclusion

of another[.]” Crump v. Beckley Newspapers, Inc., 320 S.E.2d 70, 85 (W. Va. 1983). An

“[u]nreasonable intrusion upon another’s seclusion occurs when ‘[o]ne . . . intentionally intrudes,

physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns,

. . . if the intrusion would be highly offensive to a reasonable person.’” Harbolt v. Steel of W. Va.,

Inc., 640 F. Supp. 2d 803, 817 (S.D. W. Va. 2009) (quoting Rest. (Second) of Torts § 652B (1977)).

Defendant argues, however, that Plaintiff’s claim is facially deficient because Plaintiff does not

allege the telephone calls would be highly offensive to a reasonable person and his claim rests on

the same allegation made for his WVCCPA claim.

In considering these arguments, the Court first finds that Plaintiff’s allegation

Defendant telephoned him over 300 times is sufficient to state a plausible claim that the conduct

would be considered highly offense to a reasonable person. Second, in Baldwin v. Wells Fargo

Financial National Bank, No. 3:16-4841, 2017 WL 63026 (S.D. W. Va. Jan. 5, 2017), this Court

recently denied a similar motion to dismiss where the plaintiffs alleged that the defendant made a

large number of phone calls to them after learning they were represented by counsel. As a result

of the calls, the plaintiffs asserted they suffered emotional distress and felt threatened and harassed.

This Court denied dismissing the plaintiffs’ invasion of privacy claim finding that, “[a]lthough

Plaintiffs’ complaint tracks some of the language of the . . . [WVCCPA], the factual allegations

state a plausible claim for invasion of privacy on its own.” 2017 WL 63026, at *4. Relying upon

Baldwin, this Court in Carroll also denied a motion to dismiss an invasion of privacy claim where

there was an allegation that the defendant called the plaintiff at least forty-one times after being

notified the plaintiff had counsel. 2017 WL 811491, at *4. As the allegations in this case are similar

to both Baldwin and Carroll, the Court finds no reason to deviate from these holdings. Therefore,

the Court DENIES Defendant’ s motion to dismiss Plaintiff’s invasion of privacy claim. See also

Huffman v. Branch Banking & Trust Co., No. 3:16-8637, 2017 WL 2177351, *7 (S.D. W. Va. May

17, 2017) (stating “[t]his Court has recognized that a plaintiff can successfully plead a plausible

claim for invasion of privacy when experiencing harassing phone calls” (citing Carroll, 2017 WL

811491, at *4)).

F.

Bankruptcy

In Count VI, Plaintiff alleges that Defendant’s actions violated the automatic

bankruptcy stay, 11 U.S.C. § 362, and the subsequent discharge. See 11 U.S.C. § 524(a)(2)

(providing, that the discharge “operates as an injunction against the commencement or

continuation of an action, the employment of process, or an act, to collect, recover or offset any

such debt as a personal liability of the debtor, whether or not discharge of such debt is waived”).

Initially, the Court finds Defendant’s actions could not have violated the automatic stay because

Plaintiff states his debt was discharged before the loan was transferred to Defendant. See 11 U.S.C.

362(c)(2) (providing “the stay of any other act under subsection (a) of this section continues until

the earliest of--(A) the time the case is closed; (B) the time the case is dismissed; or (C) if the case

is a case under chapter 7 of this title concerning an individual . . . the time a discharge is granted”).

Thus, the stay ended prior to any actions taken by Defendant. However, Defendant’s actions did

occur after Plaintiff’s personal obligation to pay on the loan was extinguished. In the Second

Amended Complaint, Plaintiff specifically requests that Defendant “be held in contempt by this

Court” for failing to abide by the discharge. Sec. Am. Compl., at ¶52. In its motion, Defendant

argues Plaintiff’s claim must be dismissed because there is no private right of action for violating

a discharge order.

As the bankruptcy court recently said in In re Adkins, 555 B.R. 541 (Bankr. S.D.

W. Va. 2016), many courts have “conclude[d] that no private right of action exists under [11

U.S.C.] § 524.” 555 B.R. at 546 (citations omitted); see also In re Johnston, 362 B.R. 730, 739

(Bankr. N.D. W. Va. 2007) (“The recognition of a private right of action requires affirmative

evidence of Congressional intent in the statute, or in its legislative history. No evidence is present

in § 524's legislative history to indicate the Congress intended to provide debtors with a private

right of action.” (citation omitted)). This Court agrees with that position. Nevertheless, a court may

find a defendant that violates a discharge injunction made pursuant to § 524 in contempt under its

inherent authority under § 105.6 ZiLOG, Inc. v. Corning (In re ZiLOG, Inc.), 450 F.3d 996, 1007

(9th Cir. 2005) (“A party who knowingly violates the discharge injunction can be held in contempt

under section 105(a) of the bankruptcy code.” (citations omitted)); In re Flint, 557 B.R. 461, 465

(Bankr. N.D. W. Va. 2016) (stating “a violation of the discharge injunction is punished by

contempt of court” (citations omitted)); In re Burch, No. ADV 11-80030-DD, 2011 WL 3207083,

at *3 (Bankr. D.S.C. July 26, 2011) (“While there is no private right of action for a violation of the

discharge injunction, a court may hold a violating creditor in contempt of court and award

sanctions against the creditor in order to compensate the debtor for the creditor's conduct.”

(citations omitted)).

6Section 105(a) provides, in part, that “[t]he court may issue any order, process, or

judgment that is necessary or appropriate to carry out the provisions of this title.” 11 U.S.C.

§ 105(a), in part.

Defendant argues, in part, that Plaintiff’s claim for contempt should be dismissed

as inadequately pled because he does not ask for contempt in his final request for relief. The Court

rejects this argument. Plaintiff specifically requests that Defendant “be held in contempt by this

Court” in Count VI. Such allegation is clearly sufficient. If the claim survives, Defendant further

asserts it is more properly before the bankruptcy court, rather than this Court, because the

bankruptcy court issued the discharge order. Upon consideration, the Court agrees.

Although the parties have not cited any Fourth Circuit decisions directly addressing

the issue, and this Court has not found any, the Court agrees with those courts concluding that

claims alleging violations of a discharge order should be brought before the bankruptcy court that

issued the order. As the Honorable Richard Posner stated in Cox v. Zale Delaware, Inc., 239 F.3d

910 (7th Cir. 2001), “affirmative relief can be sought only in the bankruptcy court that issued the

discharge. In such a case the proper procedure would indeed be to reopen the bankruptcy

proceeding, since the debtor would be seeking to enforce the order of discharge issued in that

proceeding.” 239 F.3d at 917. Judge Posner explained that “[a] court retains jurisdiction to enforce

its injunctions” and the issuing court is better able to decide “the alleged violation, assess its

gravity, and on the basis of that assessment formulate a proper remedy.” 239 F.3d at 916-17. See

also Jones v. CitiMortgage, Inc., 666 F. App'x 766, 774 (11th Cir. 2016) (per curiam) (stating “[a]

debtor who believes that the discharge injunction has been violated may file a contempt action

with the bankruptcy court that issued the discharge injunction, not with another court”); but see

Bessette v. Avco Fin. Servs., Inc., 230 F.3d 439, 446 (1st Cir. 2000), amended on denial of reh'g

(Dec. 15, 2000) (holding “a district court sitting in bankruptcy is similarly authorized to invoke its

equitable powers under § 105 when necessary to carry out the provisions of the Bankruptcy Code”

(citations omitted)).

As the Court finds that Plaintiff’s claim for contempt of the bankruptcy discharge

order is best resolved by the bankruptcy court that issued the order, the Court exercises its power

under 28 U.S.C. § 1577 and REFERS this entire action to the Bankruptcy Court for the Southern

District of West Virginia for further proceedings.8 In light of this decision, the Court also DENIES

AS MOOT Plaintiff’s Motion to Compel Deposition and Extend the Deadlines (ECF No. 35), as

the bankruptcy court will issue its own scheduling order, and the Court DENIES WITHOUT

PREJUDICE Defendant 21st Mortgage Corporation’s Motion to Stay pending a decision by the

D.C. Circuit Court of Appeals in ACA International v. FCC, No. 15-1211 (D.C. Cir. July 10, 2015).

ECF No. 31. If Defendant seeks to stay this matter in light of this Memorandum Opinion and

Order, it should file a motion to stay in the bankruptcy court.

IV.

CONCLUSION

Accordingly, the Court GRANTS, in part, and DENIES, in part, Defendant 21st

Mortgage Corporation’s Motion to Dismiss (ECF No. 16); DENIES AS MOOT Plaintiff’s

Motion to Compel Deposition and Extend the Deadlines (ECF No. 35); DENIES WITHOUT

PREJUDICE Defendant 21st Mortgage Corporation’s Motion to Stay (ECF No. 31); and

7Section 157(a) provides “[e]ach district court may provide that any or all cases under title

11 and any or all proceedings arising under title 11 or arising in or related to a case under title 11

shall be referred to the bankruptcy judges for the district.”

8To be clear, the Court refers the entire action to the Bankruptcy Court for this District. As

the parties have not raised any arguments as to whether any of Plaintiff’s non-bankruptcy claims

are preempted by the bankruptcy code, this Court makes no decision with respect to preemption.

REFERS this matter to the Bankruptcy Court of the Southern District of West Virginia for further

proceedings.’

The Court DIRECTS the Clerk to send a copy of this Order to counsel of record

and any unrepresented parties.

ENTER: September 28, 2017

ie

4. ee

ROBERT C. CHAMBERS

UNITED STATES DISTRICT JUDGE

*Plaintiff’s bankruptcy case number is 3:01-bk-30266.

-17-