Critten v. Quantum3 Group, LLC (In re Critten)

528 B.R. 835, 73 Collier Bankr. Cas. 2d 846, 2015 Bankr. LEXIS 1249
CourtUnited States Bankruptcy Court, M.D. Alabama
DecidedApril 10, 2015
DocketCase No. 14-10944-WRS; Adv. Pro. No. 14-1050-WRS
StatusPublished
Cited by6 cases

This text of 528 B.R. 835 (Critten v. Quantum3 Group, LLC (In re Critten)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Critten v. Quantum3 Group, LLC (In re Critten), 528 B.R. 835, 73 Collier Bankr. Cas. 2d 846, 2015 Bankr. LEXIS 1249 (Ala. 2015).

Opinion

MEMORANDUM DECISION

William R. Sawyer, United States Bankruptcy Judge

This Adversary Proceeding is before the Court on the Motion for Judgment on the Pleadings filed by Defendant Quantum3 Group, LLC. (Doc. 27). The motion is fully briefed. (Docs.27, 32, 33). For the reasons set forth below, the motion is GRANTED and the complaint of Plaintiff Pamela G. Critten is DISMISSED WITH PREJUDICE.

I. FACTS

Plaintiff Pamela G. Critten filed a petition in bankruptcy pursuant to Chapter 13 of the Bankruptcy Code on May 21, 2014. (Case No. 14-10944, Doc. 1). Defendant Quantum3 Group, LLC, filed a timely proof of claim on July 7, 2014. (Case No. 14-10944, Claim No. 3). The underlying claim is for an indebtedness on a credit card. It appears that Critteris indebtedness was assigned several times and that it is now owned by Galaxy Portfolios, LLC. Quantum is an agent for Galaxy and it filed Claim No. 3 on behalf of Galaxy. The claim is unsecured in the amount of $2,558.33.

On July 8, 2014, Critten filed an objection to the claim contending that it was barred by the statute of limitations. (Case No. 14-10944, Doc. 17). Under this Court’s local rules, Quantum’s response was due in 30 days. LBR 3001-1. As Quantum did not file a timely response, the Court sustained Critten’s objection by default by its order dated August 13, 2014. (Case No. 14-10944, Doc. 27). On October 15, 2014, Quantum moved for reconsideration of the order sustaining Critten’s objection to its claim. (Case No. 14-10944, Doc. 45). The Court denied the motion by its order of November 25, 2014. (Case No. 14-10944, Does. 50, 51).

In the meantime, on July 18, 2014, Crit-ten filed a complaint initiating this Adversary Proceeding. (Doc. 1). Critten amended her complaint on October 5, 2014.1 (Doc. 14). Quantum promptly answered the Amended Complaint (Doc. 15) and then doubled back and moved for judgment on the pleading. (Doc. 27).

II. JURISDICTION AND PROCEDURAL SETTING

A. Jurisdiction

This Court has jurisdiction to hear this matter pursuant to 28 U.S.C. § 1334(b). This is a core proceeding within the mean[837]*837ing of 28 U.S.C. § 157(b)(2)(B). This is a final order.

B. Procedural Setting

This Adversary Proceeding is before the Court on a Motion for Judgment on the Pleadings. Both parties assert that the Court is to use the same standard as it would on ruling on a motion to dismiss for failure to state a claim. Robert v. Abbett, Case No. 3:08-CV-329-WKW, 2009 WL 902488 (M.D.Ala. Mar. 31, 2009) That standard is as follows:

A pleading must contain a short and plain statement of the claim showing that the pleader is entitled to relief ... The pleading standard Rule 8 announces does not require detailed factual allegations but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation ... A pleading that offers labels and conclusion or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.
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. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.

Ashcroft v. Iqbal, 556 U.S. 662, 677-79, 129 S.Ct. 1937, 1949-50, 173 L.Ed.2d 868 (2009) (internal citations omitted).

C. Class Action Suit

The Plaintiff in this case seeks standing to proceed as a class pursuant to Rule 23, Fed. R. Civ. P., incorporated by Rule 7023, Fed. R. Bankr. P. Because the Court finds that the Plaintiff has failed to state a claim for which relief may be granted, the Court need not reach the question as to whether a class should be certified here.

III. APPLICATION OF THE LAW TO THIS CASE

Having set out the appropriate legal standard, the Court will consider Quantum’s motion on the merits. As Critten’s Amended Complaint contains three counts, the Court will analyze each count separately-

A. Count I of Critten’s Amended Complaint is dismissed because: (1) it is moot; (2) she fails to state sufficient facts to show that Quantum has violated Rule 3001.

In Count I of her Amended Complaint (Doc. 14), Critten seeks the disallowance of Quantum’s claim on the grounds that it failed to comply with the requirements of Bankruptcy Rule 3001.2 Count I is deficient for two reasons. First, in light of this Court’s Order of August 13, 2014, sustaining Critten’s Objection to Claim, thereby disallowing Quantum’s claim, Count I should be denied as moot. Second, as Critten does not allege any facts in her Amended Complaint in support of her contention that Quantum’s Proof of Claim violates Bankruptcy Rule 3001; she fails to state a claim. Third, even if Critten were to allege sufficient facts to show a Rule 3001 violation, it does not follow that a bankruptcy claim should be disallowed [838]*838merely because a creditor failed to observe the rule.

1. Count I is moot.

Critten’s request, in Count I of her Amended Complaint, is to disallow Quantum’s claim in her bankruptcy case. As that has already been done, it need not be done again. The mootness doctrine arises out of the requirement that there must be a live case or controversy for a Federal Court to take jurisdiction over a proceeding. BankWest, Inc. v. Baker, 446 F.3d 1358, 1363-64 (11th Cir.2006) (holding that case which becomes moot must be dismissed for want of a case or controversy); ITT Rayonier Inc. v. U.S., 651 F.2d 343, 345 (5th Cir.1981); Florida Board of Bus. Reg. v. NLRB, 605 F.2d 916, 918-19 (5th Cir.1979) (holding that an action becomes moot when “the issues presented are no longer ‘live’ ”).

In response to Quantum’s mootness argument, Critten cites the case of McBride v. CitiMortgage (In re McBride), Civ. No. 10 MC 3498-MHT, 2010 WL 1688017 (M.D.Ala. 4/23/2010). (Doc. 32, p. 3). In McBride, the District Court denied Defendant CitiMortgage’s motion to withdraw the .reference. The underlying claim in McBride was that CitiMortgage used false affidavits to obtain relief from the automatic stay and ultimately to wrongfully foreclose on the Debtor’s home. McBride does not in any way, shape, or form address the issue as to whether Count I of Critten’s complaint, which seeks disallowance of a claim, is moot. For this reason, Count I should be dismissed with prejudice.

2. Count I fails to plead sufficient facts to show a violation of Rule 3001

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Bluebook (online)
528 B.R. 835, 73 Collier Bankr. Cas. 2d 846, 2015 Bankr. LEXIS 1249, Counsel Stack Legal Research, https://law.counselstack.com/opinion/critten-v-quantum3-group-llc-in-re-critten-almb-2015.