Cohen ex rel. Situated v. Ltd.
| Decision Date | 14 July 2016 |
| Docket Number | Civil Action No.: 15-7422 (FLW) |
| Parties | ALEXIS COHEN, on behalf of Herself and all others similarly situated, Plaintiff, v. LTD FINANCIAL SERVICES, LP And JOHN DOES 1-15, Defendants. |
| Court | U.S. District Court — District of New Jersey |
*NOT FOR PUBLICATION*
This putative class action, brought by Plaintiff Alexis Cohen ("Plaintiff" or Cohen") pursuant to the Fair Debt Collection Practices Act ("FDCPA"), challenges Defendant LTD Financial Services, LP's ("Defendant" or "LTD") business practice with regard to its debt collection letters. Under Plaintiff's theory of liability, Defendant failed to inform consumers that by accepting and making monthly installment payments on a debt, which had been barred from suit under the applicable statute of limitations, would, under New Jersey law, revive the statute of limitations. Such a failure, Plaintiff claims, violates FDCPA under §§ 1692e, 1692e(10) and 1692(f). Presently, Defendant moves for judgment on the pleadings on those causes of action. For the reasons set forth below, Defendant's motion is GRANTED.
The following facts are derived from the Amended Complaint and taken as true. Prior to August 2015, Plaintiff allegedly incurred a personal debt to her creditor, Citibank. Am. Compl., ¶¶ 14-15. That debt was then assigned to, or purchased by, Advantage Assets II, Inc. ("ASII debt"). Id. at ¶ 19. On or about August 4, 2015, LTD sent Plaintiff a collection letter in an attempt to collect the ASII debt ("Debt-Collection letter").1 Id. at ¶ 22.
The letter makes clear that it was sent from "LTD Financial Services, L.P., a debt collector[,]" and it is "an attempt to collect a debt" in the amount of $2,439.59. See Debt-Collection Letter dated August 4, 2015. The letter provides two different compromised payment plans upon which Plaintiff may choose to repay the debt:
Id. The letter further states that "[a]cceptance of this settlement offer [by] selecting a repayment option and payment by the due date will satisfy this debt with the current creditor." Id. Importantly, under the payment plan options, the following language appears: Id.
Based on the information set forth in the Debt-Collection letter, Plaintiff alleges that Defendant engaged in deceptive and unfair practices in violation ofFDCPA by failing to inform Plaintiff that by choosing Payment Plan 2 would restart the statute of limitations. Am. Compl., ¶ 27. In fact, Plaintiff alleges that Defendant regularly collects or attempts to collect outdated debt, but fails to disclose to consumers "the fact that monthly payments will reset the debt." Id. at ¶ 31. With those allegations, Plaintiff asserts two causes of action under the FDCPA: 1) violation of § 1692e(10) for using false or deceptive means to collect a debt; and 2) violation of § 1692f for using unfair or unconscionable means to collect a debt.
Presently, Defendant moves for judgment on the pleadings of the Amended Complaint.
Rule 12(c) of the Federal Rules of Civil Procedure allows a party to move for judgment on the pleadings "after the pleadings are closed but within such time as not to delay trial." Fed. R. Civ. P. 12(c). The applicable standard on a motion for judgment on the pleadings is similar to that applied on a motion to dismiss pursuant to Rule 12(b)(6). Spruill v. Gillis, 372 F.3d 218, 223 n. 2 (3d Cir. 2004). When reviewing a motion made pursuant to Rule 12(c), a court must take all allegations in the relevant pleading as true, viewed in the light most favorable to the non-moving party. Gomez v. Toledo, 446 U.S. 635, 636 n.3 (1980); Mele v. Fed. Reserve Bank of N.Y., 359 F.3d 251, 253 (3d Cir. 2004). All reasonable inferences must be made in the non-moving party's favor. See In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 314 (3d Cir. 2010). "The motionshould not be granted 'unless the moving party has established that there is no material issue of fact to resolve, and that it is entitled to judgment in its favor as a matter of law'." Mele, 359 F.3d at 253 (quoting Leamer v. Fauver, 288 F.3d 532, 535 (3d Cir. 2002)). Accordingly, in order to survive a motion for judgment on the pleadings, the non-moving party's pleading must provide "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. This standard, like a motion to dismiss, requires the non-moving party to show "more than a sheer possibility that a defendant has acted unlawfully," but does not create as high of a standard as to be a "probability requirement." Ashcroft, 556 U.S. at 678.
The Fair Debt Collection Practices Act "is a consumer protection statute that prohibits certain abusive, deceptive, and unfair debt collection practices." Marx v. Gen. Revenue Corp., ___ U.S. ___, 133 S. Ct. 1166, 1171 n.1 (2013) (citing 15 U.S.C. § 1692). By its terms, the purpose of the FDCPA is to "eliminate abusive debt collection practices by debt collectors" while insuring that "debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged." 15 U.S.C. § 1692.
The statute creates a private right of action against debt collectors who fail to comply with its provisions. 15 U.S.C. § 1692k; Marx, 133 S.Ct. at 1171 n. 1; Brown v. Card Serv. Ctr., 464 F.3d 450, 453 (3rd Cir. 2006). To state a claim under the FDCPA, a plaintiff must establish that "(1) he or she is a 'consumer' who is harmed by violations of the FDCPA; (2) the 'debt' arises out of atransaction entered into primarily for personal, family, or household purposes; (3) the defendant collecting the debt is a 'debt collector'; and (4) the defendant has violated, by act or omission, a provision of the FDCPA." Grant v. JPMorgan Chase Bank, No. 12-6248, 2013 U.S. Dist. LEXIS 51551at *2 (D.N.J. Apr. 10, 2013) (quoting Berk v. J.P.Morgan Chase Bank, N.A., No. 11-2715, 2011 U.S. Dist. LEXIS 109626, at *3 (E.D. Pa. Sept. 26, 2011) (citing 15 U.S.C. §§ 1692a-o)). Additionally, "[a] threshold requirement for application of the FDCPA is that the prohibited practices are used in an attempt to collect a 'debt'." Zimmerman v. HBO Affiliate Grp., 834 F.2d 1163, 1167 (3rd Cir. 1987). Here, for the purposes of this motion, Defendant does not challenge the first three factors needed to state a claim; Rather, Defendant argues that Plaintiff has failed to allege the fourth factor - that § 1692e or § 1692f of the FDCPA have been violated by Defendant's Debt-Collection letter.
In assessing debt communications, the Court bears in mind that the FDCPA is a remedial statute, and its language must be construed broadly to protect consumers. Brown, 464 F.3d at 453. For this reason, the Third Circuit has stated that "certain communications from lenders to debtors should be analyzed from the perspective of the 'least sophisticated debtor'." Id. This standard "requires more than simply examining whether particular language would deceive or mislead a reasonable debtor because a communication that would not deceive or mislead a reasonable debtor might still deceive or mislead the least sophisticated debtor." Id. at 454. The least sophisticated debtor standard is intended to "protect[] naive consumers, [but] it also prevents liabilityfor bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness and presuming a basic level of understanding and willingness to read with care." Wilson v. Quadramed Corp., 225 F.3d 350, 354-55 (3d Cir. 2000); Safdieh v. P & B Capital Grp., LLC, No. 14-3947(FLW), 2015 U.S. Dist. LEXIS 61680, at *6 .
Section 1692e of United States Code Title 15 prohibits the use of "any false, deceptive, or misleading representation or means in connection with the collection of any debt." The statute includes a non-exhaustive list of conduct which constitutes a violation of the section, including "(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." Under § 1692e, "[a] debt collection letter is deceptive where it can be reasonably read to have two or more different meanings, one of which is inaccurate." Brown, 464 F.3d at 455.
Here, with regard to Plaintiff's alleged ASII debt, the Debt-Collection letter made clear that the debt was time barred by the applicable statute of limitations. See Debt-Collection letter ("Because of the age of this account, you will not be sued for the debt."). In that respect, Plaintiff alleges that Defendant violated § 1692e(10) by failing to disclose to the consumer that a monthly payment option of $71.61 would reset the statute of limitations, "thereby giving the Defendant the option of commencing legal action, which otherwise would be barred by same." Am. Compl., ¶ 40.
Defendant seeks to dismiss Count I on two separate bases. First,Defendant argues that it is not a violation of the FDCPA to attempt to collect a time-barred debt. Defendant then goes on to support its position by citing to well-settled case law. Indeed, the Third Circuit has held that it is not a violation of the FDCA when a debt collector attempts to collect upon a "false debt" so long as it "does not initiate or threaten legal action in connection with its debt collection efforts." See Huertas v. Galaxy Asset Management, 641 F.3d 28, (3d Cir. 2011). Critically, however, Defendant's argument, in this regard, misconstrues Plaintiff's factual basis underlying Count I. Plaintiff does not seek liability under the Act for Defendant's attempt to collect an...
To continue reading
Request your trial