Alana Marie Karnes v. Midland Credit Management, d/b/a Encore Capital Group

CourtDistrict Court, W.D. Virginia
DecidedApril 23, 2026
Docket7:24-cv-00335
StatusUnknown

This text of Alana Marie Karnes v. Midland Credit Management, d/b/a Encore Capital Group (Alana Marie Karnes v. Midland Credit Management, d/b/a Encore Capital Group) is published on Counsel Stack Legal Research, covering District Court, W.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alana Marie Karnes v. Midland Credit Management, d/b/a Encore Capital Group, (W.D. Va. 2026).

Opinion

FILED April, 23, 2026 LAURA A. AUSTIN, CLERK FOR THE WESTERN DISTRICT OF VIRGINIA, °Y2ELLY ROANOKE DIVISION ALANA MARIE KARNES, ) Plaintiff, V. Civil Action No.: 7:24-cv-00335 MIDLAND CREDIT MANAGEMENT, d/b/a ENCORE CAPITAL GROUP, ) Defendant. MEMORANDUM OPINION This matter comes before the Court on Defendant Midland Credit Management’s Motion to Dismiss Plaintiff's Amended Complaint, Dkt. 26. Plaintiff Alana Marie Karnes, proceeding pro se, filed the Amended Complaint after I dismissed her original complaint for failure to state a claim. Defendant’s motion is GRANTED. All claims in the Amended Complaint are DISMISSED WITH PREJUDICE. FACTUAL BACKGROUND Midland employed Karnes until her termination on May 25, 2022. During this time, Karnes participated in Midland’s ERISA-governed employee benefit plan. Although Midland served as the plan administrator, it delegated disability claims administration to Prudential Insurance Company, which handled all claim evaluations and appeals. Dkt. 1 at 2; Dkt. 24 at 3. On May 5, 2021, Karmes was diagnosed with a disability and was approved for medical leave beginning in July 2021. See Dkt. 24 at 4. In October 2021, Karnes “attempted a return to work . . . under accommodations.” /d. However, “[a]fter encountering barriers and further health issues,” she initiated a new disability claim in November 2021. /d. Karnes received short-term

disability (“STD”) benefits until Prudential determined that no benefits were payable beyond January 2, 2022, due to insufficient medical documentation. See Dkt. 1-3 at 3. Karnes submitted additional medical information between February and May 2022 in support of her claim, but Prudential found that the information received did not change its decision to deny her claim for

further STD benefits. Prudential advised Karnes of her right to appeal the claims denial. See id. at 2–4. Karnes returned to “full-time, in office work” on May 9, 2022. Dkt. 1 at 3. On May 10, 2022, Midland informed Karnes that, “[p]er our conversation on 4/21/2022,” she had until May 17, 2022 to provide documentation supporting all absence dates denied by Prudential or face termination. Dkt. 30-1 at 1; see also Dkt. 24 at 4. Karnes was out of work with COVID-19 from May 17 to May 24, 2022, and she was terminated the next day. Dkt. 24 at 4. Following Karnes’s termination, on June 10, 2022, Prudential reversed its prior decision and paid Karnes full benefits under the STD policy for the period of January 3 to May 8, 2022. Dkt. 1 at 2; Dkt. 1-3 at 4. After receiving STD benefits, Karnes filed a claim for long-term

disability (“LTD”) benefits under her plan. While Prudential initially denied Karnes’s application, Karnes appealed the decision, and Prudential granted her appeal. Dkt. 1 at 2–3. Karnes received all LTD benefits to which she could be entitled under her plan on March 26, 2024. Id. Documents submitted by Karnes indicate that she remained disabled and unable to work through at least February 19, 2024. See Dkt. 1-3 at 7–8; Dkt. 22 at 8. PROCEDURAL HISTORY Karnes initially filed suit on May 24, 2024, asserting claims for breach of contract, disability discrimination under the Americans with Disabilities Act (“ADA”), and interference under the Family and Medical Leave Act (“FMLA”). She also sought interest on delayed benefits under ERISA § 502(a)(1)(B). See Dkt. 1. I granted Midland’s motion to dismiss the complaint, dismissing Karnes’s ADA discrimination claim with prejudice and her remaining claims without prejudice with leave to amend. Dkt. 22. On April 24, 2025, Karnes filed an Amended Complaint, Dkt. 24. In addition to

reasserting her dismissed claims, the Amended Complaint asserts several new claims, including retaliation under the ADA, FMLA, and ERISA § 510; breach of fiduciary duty under ERISA §§ 502(a)(3) and 404; and state law claims for forgery, wrongful discharge, and defamation. Midland moves to dismiss the Amended Complaint. Dkt. 26. STANDARD OF REVIEW To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In considering a Rule 12(b)(6) motion, a court must accept all factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Erickson v. Pardus, 551 U.S. 89, 94 (2007). Legal conclusions in the guise

of factual allegations, however, are not entitled to a presumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Twombly, 550 U.S. at 555 (requiring a complaint to contain facts sufficient “to raise a right to relief above the speculative level”). While courts must liberally construe pro se complaints, such liberal construction is not without limits, and a pro se plaintiff still must allege facts that state a cause of action. Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985). ANALYSIS I. Claims Previously Dismissed by the Court

Karnes’s Amended Complaint reasserts four claims that were addressed in the Court’s March 25, 2025 Opinion: (1) disability discrimination under the ADA; (2) interference under the FMLA; (3) breach of the Virginia common law duty of good faith and fair dealing; and (4) claims for benefits under ERISA § 502(a)(1)(B). I address each in turn. A. ADA Discrimination I previously dismissed Karnes’s ADA discrimination claim with prejudice, finding that she has not alleged that she was able to perform her job at the time she was fired and therefore is not a “qualified individual” under the ADA. See Dkt. 22 at 8. The doctrine of res judicata prohibits relitigation of claims dismissed with prejudice arising from the same cause of action. See Davison v. Rose, 19 F.4th 626, 633–34 (4th Cir. 2021); Barnwell v. Ark Land, LLC, 547 F.

Supp. 3d 526, 534 (W.D. Va. 2021). Further, even if the Court were to construe the amended complaint as a motion to reconsider or amend the judgment, amendment would be futile. Karnes remained disabled long after her termination and does not allege that she was able to return to work. Because an ADA discrimination claim requires that the plaintiff be a “qualified individual” capable of performing the essential functions of the job with or without reasonable accommodation, Karnes still fails to state a plausible claim. Karnes’s ADA discrimination claim is therefore DISMISSED WITH PREJUDICE. B. FMLA Interference

To establish unlawful interference under the FMLA, an employee must show prejudice. Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81, 89 (2002) (finding that the FMLA “provides no relief unless the employee has been prejudiced by the violation”); Downs v. Winchester Med. Ctr., 21 F. Supp. 3d 615, 617 (W.D. Va. 2014) (citations omitted). I previously dismissed Karnes’s FMLA interference claim because she could not show prejudice from her termination. See Dkt. 22 at 10. Since Karnes was unable to work until at least February 2024, she would not have been able to resume her job until long after she exhausted her FMLA leave. At that point, Midland “would not have been obligated to reinstate her to her position or an equivalent one.” Lundberg v. Delta Response Team, LLC, No. 3:23-CV-00042, 2025 WL 364452, at *15 (W.D. Va. Jan. 31, 2025) (citing Donahoo v. Master Data Ctr., 282 F. Supp. 2d

540, 556 (E.D.

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Alana Marie Karnes v. Midland Credit Management, d/b/a Encore Capital Group, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alana-marie-karnes-v-midland-credit-management-dba-encore-capital-group-vawd-2026.