Chandler v. NCB Mgmt. Servs., Inc.
| Decision Date | 23 March 2021 |
| Docket Number | 20-CV-3587 (PKC) (PK) |
| Citation | 528 F.Supp.3d 92 |
| Parties | Cody CHANDLER, Plaintiffs, v. NCB MANAGEMENT SERVICES, INC. and John Does 1–25, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Simon Goldenberg, Law Office of Simon Goldenberg PLLC, Brooklyn, NY, Alla Gulchina, Price Law Group APC, Hoboken, NJ, Francis Greene, Greene Consumer Law, Highland Park, IL, for Plaintiffs.
Peter G. Siachos, Gordon & Rees LLP, Florham Park, NJ, for Defendant NCB Management Services Inc.
Plaintiff Cody Chandler brings this action on behalf of himself and a putative class against Defendants NCB Management Services, Inc. ("NCB"), and John Does 1–25, alleging violations of the Fair Debt Collection Practices Act (the "FDCPA"). Before the Court is Defendant NCB's motion to dismiss, which the Court denies for the reasons set forth below.
Plaintiff alleges that he owed a debt (the "Debt") on a charged-off credit card account with Bank of America, N.A. ("BOA"), which he failed to pay starting in December 2018. (Amended Complaint ("Am. Compl."), Dkt. 8, ¶¶ 25, 38.) The Debt was placed with Defendant NCB for collection. (Id. ¶¶ 18–20, 29.) On or about October 8, 2019, November 11, 2019, and December 12, 2019, Defendant NCB sent Plaintiff letters notifying Plaintiff that he owed the Debt (the "Letters"). (Id. ¶¶ 22, 24–25, 30–31, 33–34, 36.) The Letters contained the following language on the first page:
For New York City Residents: WE ARE REQUIRED BY LAW TO GIVE YOU THE FOLLOWING INFORMATION ABOUT THIS DEBT. The legal time limit (statute of limitations) for suing you to collect this debt has expired. However, if somebody sues you anyway to try to make you pay this debt, court rules REQUIRE YOU to tell the court that the statute of limitations has expired to prevent the creditor from obtaining a judgment. Even though the statute of limitations has expired, you may CHOOSE to make payments. However, BE AWARE: if you make a payment, the creditor's right to sue you to make you pay the entire debt may START AGAIN.
The second page of the Letters contained the following text:
We are required by regulation of the New York State Department of Financial Services to notify you of the following information. This information is NOT legal advice: Your creditor or debt collector believes that the legal time limit (statute of limitations) for suing you to collect this debt may have expired (emphasis added).
Plaintiff's BOA credit card account was governed by North Carolina law. (Am. Compl., Dkt. 8, ¶ 28.) The New York statute of limitations to collect on credit card accounts is six years, and the North Carolina statute of limitations is three years. (Id. ¶¶ 40–41); see also N.Y. C.P.L.R. 213(2) ; N.C. Gen. Stat. Ann. § 1-52(1). Neither statute of limitations had expired when Defendant NCB sent Plaintiff the Letters. (Am. Compl., Dkt. 8, ¶¶ 42–43.) Plaintiff claims that the first paragraph cited above led him to believe that he did not have to worry about the Debt, while the second cited paragraph confused him as to whether he could be sued based on the Debt. (Id. ¶¶ 46, 52.)
Plaintiff filed the instant action on July 10, 2020, in the Supreme Court of New York, Kings County. (See Dkt. 1-1.) On August 10, 2020, Defendant NCB removed the action to federal court under 28 U.S.C. § 1441(a) based on the Court's original jurisdiction over Plaintiff's FDCPA claims under 28 U.S.C. § 1331. (Notice of Removal, Dkt. 1.) Plaintiff filed an Amended Complaint on August 25, 2020. (Am. Compl., Dkt. 8.) On September 8, 2020, Defendant NCB filed a request for a pre-motion conference in advance of a motion to dismiss. (Pre-Motion Conference Request ("Def.’s Mot."), Dkt. 10.) The Court construed the request as a motion to dismiss and ordered additional briefing, which was completed on November 13, 2020. (10/2/20 Docket Order; Dkts. 11, 13, 15.)
I. Federal Rule of Civil Procedure 12(b)(6)
To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "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." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). The plausibility standard "is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (citation omitted). Determining whether a complaint states a plausible claim for relief is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679, 129 S.Ct. 1937 (citation omitted). "In addressing the sufficiency of a complaint[, the Court] accept[s] as true all factual allegations and draw[s] from them all reasonable inferences; but [the Court is] not required to credit conclusory allegations or legal conclusions couched as factual allegations." Rothstein v. UBS AG , 708 F.3d 82, 94 (2d Cir. 2013).
Plaintiff brings a single claim against Defendant NCB for violating 15 U.S.C. §§ 1692e and 1692f of the FDCPA. (Am. Compl., Dkt. 8, ¶ 73.) "FDCPA § 1692e prohibits the use of ‘any false, deceptive, or misleading representation or means in connection with the collection of any debt,’ while § 1692f prohibits the use of ‘unfair or unconscionable means to collect or attempt to collect any debt.’ " Brake v. Slochowsky & Slochowsky, LLP , 504 F.Supp.3d 103, 113, No. 19-CV-280 (ENV) (JO), (E.D.N.Y. Dec. 3, 2020) (quoting 15 U.S.C. §§ 1692e and 1692f ).
"In this Circuit, the question of whether a communication complies with the FDCPA is determined from the perspective of the ‘least sophisticated consumer.’ " Jacobson v. Healthcare Fin. Servs., Inc. , 516 F.3d 85, 90 (2d Cir. 2008) (quoting Clomon v. Jackson , 988 F.2d 1314, 1318 (2d Cir. 1993) ); see also Taylor v. Fin. Recovery Servs., Inc. , 886 F.3d 212, 213–14 (2d Cir. 2018) (). "Under this standard, a collection notice can be misleading if it is ‘open to more than one reasonable interpretation, at least one of which is inaccurate.’ " Avila v. Riexinger & Assocs., LLC , 817 F.3d 72, 75 (2d Cir. 2016) (quoting Clomon , 988 F.2d at 1319 ). The least sophisticated consumer test is an objective one that "pays no attention to the circumstances of the particular debtor in question." Easterling v. Collecto, Inc. , 692 F.3d 229, 234 (2d Cir. 2012) (per curiam). However, even the least sophisticated consumer is "presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care." Kolbasyuk v. Cap. Mgmt. Servs., LP , 918 F.3d 236, 239 (2d Cir. 2019) (internal quotation and citation omitted).
The Second Circuit reads a materiality requirement into the FDCPA's prohibition of false, deceptive, or misleading practices in the collection of a debt. See Cohen v. Rosicki, Rosicki & Assocs., P.C. , 897 F.3d 75, 85 (2d Cir. 2018). The materiality requirement functions as "a corollary to the well-established proposition that if a statement would not mislead the unsophisticated consumer, it does not violate the FDCPA—even if it is false in some technical sense." Id. at 85 (internal quotation, alterations, and citation omitted). "The materiality inquiry focuses on whether the false statement would frustrate a consumer's ability to intelligently choose his or her response." Id. at 86 (internal quotation and citation omitted).
Defendant NCB contends that Plaintiff fails to state a claim because the alleged errors that Plaintiff claims are FDCPA violations—namely, that the Letters falsely described Plaintiff's account as outside of the statute of limitations for suit, and the Letters’ own internal inconsistency as to this point—do not constitute "material" violations of the FDCPA because they encouraged Plaintiff "not to make payments" on his debt. (Defendant's Supplemental Letter ("Def.’s Supp."), Dkt. 13, at 2, 5 (emphasis in original); see also Def.’s Mot., Dkt. 10, at 2–3.) Defendant NCB further argues that Plaintiff cannot meet the materiality requirement because he has not alleged that he "actually was sued on the Debt" or that he "suffered any other adverse effect such as interest or late fees accruing on the Debt." (Def.’s Mot., Dkt. 10, at 2–3.) Defendant NCB does not, however, dispute that the representation regarding the statute of limitations was technically false. (See Def's Mot., Dkt. 10; Def's Supp., Dkt. 13.)
The Court does not find Defendant NCB's arguments persuasive. While it is true that Plaintiff does not "cite any case law stating that a debt collector inducing a Plaintiff not to pay his or her debt violates the FDCPA" (Def.’s Supp., Dkt. 13, at 5), that framing of the issue misstates the standard. The FDCPA penalizes false statements that "ha[ve] the potential to affect the decision-making process of the least sophisticated consumer." Cohen , 897 F.3d at 85 (internal quotation,...
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