Torrance v. Qualified Emergency Specialist Inc et al

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In Re
TORRANCE SMITH
Debtor
SAINT TORRANCE
Plaintiff
vs.
QUALIFIED EMERGENCY
SPECIALIST, INC.
and
FFCC-COLUMBUS, INC.
Defendants
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
:
Case No. 02-16796
Chapter 7
Judge Hopkins
Adversary Case No. 06-1279
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: April 03, 2007
____________________________________________________________
Case 1:06-ap-01279 Doc 10 Filed 04/03/07 Entered 04/04/07 15:57:50 Desc Main
Document Page 1 of 5

Case No. 02-16796
Adv. Case No. 06-1279
2
MEMORANDUM OF DECISION
ON ORDER GRANTING MOTIONS TO DISMISS
Presently before the Court are two motions to dismiss pursuant to Fed. R. Civ.
P. 12(b)(6) for failure to state a claim upon which relief can be granted, filed by
FFCC-Columbus, Inc. (“FFCC”) and Qualified Emergency Specialists, Inc. (“QESI”).
See Docs. 4 and 6. 	Torrence Smith’s (aka Saint Torrence) (“Plaintiff”) complaint
seeks relief for alleged violations of the discharge injunction set forth in 11 U.S.C.
§524.
I. 	STANDARD OF REVIEW
Fed. R. Bankr. P. 7012(b) incorporates Fed. R. Civ. P. 12(b)(6). 	A Rule
12(b)(6) motion to dismiss should be denied “unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim which would entitle him to
relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The Court must take all well
plead facts as true and construe those facts liberally in favor of the plaintiff when any
ambiguity arises. Pik-Coal Co. v. Big Rivers Elec. Corp., 200 F.3d 884, 886 fn. 2 (6 th
Cir. 2005). However, conclusory allegations cloaked as factual conclusions will not
defeat a motion to dismiss. Meziboy v. Allen, 411 F.3d 712, 716 (6th Cir. 2005). This
Court must only look to the complaint and the facts alleged therein. 	Hammond v.
Baldwin, 866 F.2d 172, 175 (6th Cir. 1989).
II. ANALYSIS
On October 17, 2006, Plaintiff, a pro se litigant, commenced this adversary
proceeding seeking injunctive relief, compensatory damages and punitive damages for
violation of the discharge injunction. Plaintiff states the following in support of this
action.
Defendant (QESI) Qualified Emergency Specialist, Inc. had hire FFCC-
Columbus, In which is a collection agency and is still trying to collect on
this debt of $115.00 from Mr. Smith ever since made aware on my credit
report this debt is still trying to be obtain and still being report as a
current debt which is effecting me purchasing a house and a vehicle in
my name causing my credit to be not worthy after bankruptcy discharge.
Case 1:06-ap-01279 Doc 10 Filed 04/03/07 Entered 04/04/07 15:57:50 Desc Main
Document Page 2 of 5

Case No. 02-16796
Adv. Case No. 06-1279
1 The Irby case can be distinguished from the present case in that it dealt with a motion for default judgment.
However, much like Mr. Torrence, the plaintiff in Irby filed other adversary proceedings similar to the one cited above.
In a subsequent decision the same court that decided Irby ruled on a 12(b)(6) motion to dismiss. Irby v. Preferred Credit
(In re Irby), Adv. No. 06-3536 2007 Bankr. LEXIS 297 (Bankr. N.D. Ohio. Jan. 30, 2007). The plaintiff and the
allegations were identical to that of the first Irby case. 	Id. at 3-4. 	The court concluded that the facts were
indistinguishable from those of the first Irby case and that in light of the ruling in the first Irby case the motion to dismiss
should be granted. Id. at 9.
3
(Doc. 1 at 2.) Plaintiff further states the following:
Plaintiff had notified this Collection Agency as well as (QESI) to remove
this bill from my credit report still that have not remove this bill which
should have never been on my report ever since my discharge on January
8, 2003.
Id. The Plaintiff does not allege any other act or action by the Defendants in support
of his complaint. 	The Plaintiff therefore alleges that the Defendants violated the
discharge injunction by reporting a discharged debt and refusing to remove the debt
from the Plaintiff’s credit history.
There are two issues to be determined in this case. First, what is the effect of a
discharge on a debt? 	Second, is the report of a discharged debt and the failure to
remove the debt from a debtor’s credit history a violation of the discharge injunction?
These very issues were presented in In re Irby, 337 B.R. 293 (Bankr. N.D. Ohio.
2005). The Court finds Irby to be well reasoned and concludes that the mere reporting
of and failure to remove a debt from a debtor’s credit report is not a violation of the
discharge injunction.
a. What is the effect of discharge?
The Plaintiff mistakenly believes the effect of discharge on his debt is to
completely extinguish it. That, however, is simply not the case. This is a common
misconception of the effect of a discharge. 	Id. at 295. 	Section 524 does not
extinguish the debt. 	Discharge is simply an injunction on any further collection
efforts by the creditor.
The facts and allegations of Irby are indistinguishable from those alleged in the
present case.1 In Irby, the debtors alleged a violation of the discharge injunction based
on the continued reporting of debt and refusal to remove reported debt from their
credit report. Id. at 294. 	The debtors did not allege any other act by the creditor to
Case 1:06-ap-01279 Doc 10 Filed 04/03/07 Entered 04/04/07 15:57:50 Desc Main
Document Page 3 of 5

Case No. 02-16796
Adv. Case No. 06-1279
2 In an exhibit attached to the complaint the Plaintiff has provided an Experian credit report indicating that the
debt in question was first reported prior to the bankruptcy filing. See Doc. 1 at Ex. 4.
4
collect on the debt. Id. The court held that “it is only a debtor’s personal obligation
to pay the debt that is effectively extinguished; the debt itself remains.” 	Id at 295.
Therefore, despite the discharge, the debt still exists and the discharge simply stays
the creditor from further collection proceedings. 	See also In re Vogt, 257 B.R. 65
(Bankr. D. Colo. 2000) (discharge serves to eliminate the debtor’s personal
responsibility to pay the debt, and reporting of the debt is not a violation of the
discharge unless done to extract payment).
b. Does the report of a discharged debt and failure to remove the debt
from the debtor’s credit report constitute a violation of the discharge
injunction?
Understandably, the Plaintiff wishes to remove the debt from his credit report
and desires a clean start without any reference to his prior debts, including those
reported by the Defendants. He argues:
Defendants, Knowingly disregarded the law and the order of my
discharge and still attempting to collet this debt which causing a lot of
blockage to a house, car and freedom to be just like another citizen after
bankruptcy to have a fresh start for my future and not be reminded of my
debt which has been forgiven.
(Doc. 1 at 3.) The fresh start afforded by bankruptcy relief does not necessarily equate
with giving a debtor a head start. See Caldwell v. Continental American Ins. Co. (In
re Caldwell), 350 B.R. 182, 200 (Bankr. E.D. Pa. 2006). Much like the debtors in
Irby, Mr. Torrence simply alleges that the Defendants reported the debt and failed to
remove the debt after discharge. However, the court in Irby concluded that the mere
act of reporting the debt by itself does not constitute an affirmative act to collect on
the debt. 	Irby, 337 B.R. 293 at 297. 	Moreover, because the debt was reported on
Plaintiff's credit history well before the bankruptcy petition was even filed, Plaintiff's
allegation that this constituted an improper collection activity attenuates.2 See In re
Bruno, 356 B.R. 89 (Bankr. W.D. New York 2006). Accordingly, no violation of the
discharge injunction occurred in this case. See Vogt, 257 B.R. 65 at 70 (If a creditor
continues to report a debt, this action alone is not an act to effect collection of a debt.);
Bruno, 356 B.R. 89 (same).
Case 1:06-ap-01279 Doc 10 Filed 04/03/07 Entered 04/04/07 15:57:50 Desc Main
Document Page 4 of 5

Case No. 02-16796
Adv. Case No. 06-1279
5
III. 	CONCLUSION
Based on the foregoing, the complaint filed in this case fails to state a claim
upon which relief can be granted. The motions to dismiss will be granted by separate
order filed in this case.
Copies to:
Torrance Smith
2766 W. North Bend Road
Apartment 2
Cincinnati, OH 45239
Gregory R. Wilson, Esq.
wilson1010@aol.com
Jeffrey S. Rosenstiel, Esq.
jrosenstiel@fbtlaw.com
U.S. Trustee
ustpregion09.ci.ecf@usdoj.gov
###
Case 1:06-ap-01279 Doc 10 Filed 04/03/07 Entered 04/04/07 15:57:50 Desc Main
Document Page 5 of 5