Eades v. Kennedy, PC Law Offices

• Decision Date: 04 June 2015
• Docket Number: Docket No. 14–104–cv.
• Parties: Joni EADES and Levere C. Pike, Jr., Plaintiffs–Appellants, v. KENNEDY, PC LAW OFFICES, Defendant–Appellee.
• Court: U.S. Court of Appeals — Second Circuit

799 F.3d 161

Joni EADES and Levere C. Pike, Jr., Plaintiffs–Appellants

v.KENNEDY, PC LAW OFFICES, Defendant–Appellee.^*

Docket No. 14–104–cv.

United States Court of Appeals, Second Circuit.

Argued: Dec. 4, 2014.

Decided: June 4, 2015.

Brian L. Bromberg, Bromberg Law Office, P.C., New York, N.Y. (Jonathan R. Miller, Bromberg Law Office, P.C., New York, NY; Kenneth R. Hiller, Seth J. Andrews, Law Offices of Kenneth Hiller, PLLC, Amherst, NY, on the brief), for Plaintiffs–Appellants.

S. Dwight Stephens (John H. Somoza, on the brief), Melito & Adolfsen P.C., New York, NY, for Defendant–Appellee.

Before SACK, LYNCH, and LOHIER, Circuit Judges.

Opinion

LOHIER, Circuit Judge:

Plaintiffs Joni Eades and Levere C. Pike, Jr. sued Defendant Kennedy, PC Law Offices (“Kennedy”), alleging that Kennedy's attempts to collect a debt from the Plaintiffs violated the Fair Debt Collection Practices Act (FDCPA). The United States District Court for the Western District of New York (Larimer, J.) dismissed the Plaintiffs' amended complaint, holding primarily that the court lacked personal jurisdiction over Kennedy. In the alternative it also concluded that the payment allegedly owed to Kennedy's client, a Pennsylvania nursing home, was not a “debt” under the FDCPA and that the amended complaint failed to state a claim upon which relief could be granted. We affirm in part and vacate in part and remand.

BACKGROUND

We draw the following facts from the allegations in the Plaintiffs' amended complaint and documents attached thereto or incorporated by reference therein.See Nat'l Org. for Marriage, Inc. v. Walsh, 714 F.3d 682, 685 n. 2 (2d Cir.2013). In October 2010 Doris Pike was admitted to Corry Manor, a Pennsylvania nursing home. Two months later Corry Manor required Ms. Pike's husband, Levere C. Pike, Jr., to sign an admission agreement in order to keep his wife at the nursing home. Under the admission agreement, Mr. Pike promised to use Ms. Pike's assets to pay for the nursing care provided to her. The agreement also required Mr. Pike to “assert[ ] that [he] has legal access to [Ms. Pike's] income, assets or resources.”

When Ms. Pike passed away in January 2011, Corry Manor claimed an outstanding balance of approximately $8,000 for its nursing care services. Corry Manor retained Kennedy, a debt collector, to collect that balance. In July 2011 Kennedy mailed a debt collection letter to Mr. and Ms. Pike's daughter, Joni Eades, at her home in New York. The letter stated, “[Y]ou may be held personally liable for the cost of your mother's care” pursuant to Pennsylvania's indigent support statute, 23 Pa. Cons.Stat. § 4603, and quoted portions of that statute and Pennsylvania's Uniform Fraudulent Transfer Act, 12 Pa. Cons.Stat. §§ 5101 –5110. It also stated that Kennedy would assume the debt was valid unless Eades notified it of a dispute within 30 days. During a subsequent telephone conversation with Eades, a Kennedy employee stated that if the debt was not paid Kennedy would put a lien on Mr. Pike's home and garnish Eades's wages. When Eades disclaimed responsibility for her mother's medical bills, the Kennedy employee replied, “[S]ervices were provided, the bill needs to be paid and you are responsible.”

In December 2011 Kennedy filed a complaint against the Plaintiffs on behalf of Corry Manor in Pennsylvania state court. The complaint alleged that Mr. Pike had breached the admission agreement by failing to use Ms. Pike's resources to pay the balance owed to Corry Manor. The complaint also alleged that by not paying the debt, the Plaintiffs had violated Pennsylvania's indigent support and fraudulent transfer statutes. Kennedy mailed the summons and complaint to the Plaintiffs' homes in New York.

The Plaintiffs responded by suing Kennedy in the United States District Court for the Western District of New York. Their amended complaint alleged that Kennedy violated various provisions of the FDCPA, 15 U.S.C. §§ 1692 –1692p, in connection with the filing of the Pennsylvania lawsuit and the letter and telephone call to Eades. The Plaintiffs also alleged that Kennedy's suit for breach of the admission agreement violated the FDCPA, because the financial obligations imposed by the admission agreement were unlawful under the Nursing Home Reform Act, 42 U.S.C. §§ 1395i–3, 1396r (NHRA). They did not, however, assert a separate claim for a violation of the NHRA. When Kennedy moved to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(2), 12(b)(3), and 12(b)(6), the Plaintiffs responded, among other things, that Kennedy's lawsuit in Pennsylvania violated the FDCPA because the NHRA preempted Pennsylvania's indigent support statute.

The District Court granted Kennedy's motion, holding that it lacked personal jurisdiction over Kennedy and that, in any event, the Plaintiffs' alleged obligation to pay Corry Manor did not constitute a “debt” as defined by the FDCPA, the NHRA did not preempt Pennsylvania's indigent support statute, and the complaint failed adequately to allege that Kennedy's collection efforts violated the FDCPA or to state a cause of action under the NHRA.

This appeal followed.

DISCUSSION

1. Personal Jurisdiction

As an initial matter, we address whether the Plaintiffs' factual allegations support the exercise of personal jurisdiction over Kennedy. “In order to survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists.” Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 167 (2d Cir.2013) (quotation marks omitted). “To determine personal jurisdiction over a non-domiciliary in a case involving a federal question,” we first “apply the forum state's long-arm statute.” Chloé v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir.2010). If the long-arm statute permits personal jurisdiction, we analyze whether personal jurisdiction comports with due process protections established under the Constitution. Id. at 164.

The Plaintiffs assert that jurisdiction lies under § 302(a)(1) of New York's Civil Practice Law, which provides in relevant part that “a court may exercise personal jurisdiction over any non-domiciliary ... who in person or through an agent ... transacts any business within the state.” N.Y. C.P.L.R. § 302(a)(1). “To establish personal jurisdiction under section 302(a)(1), two requirements must be met: (1) The defendant must have transacted business within the state; and (2) the claim asserted must arise from that business activity.” Licci, 732 F.3d at 168 (quotation marks omitted). “[P]roof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted.” Chloé, 616 F.3d at 170 (quoting Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 522 N.E.2d 40 (1988) ) (quotation marks omitted). “Purposeful activities are those with which a defendant, through volitional acts, avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Fischbarg v. Doucet, 9 N.Y.3d 375, 380, 849 N.Y.S.2d 501, 880 N.E.2d 22 (2007) (quotation marks omitted).

Kennedy's activities in New York—mailing one debt collection notice to Eades, engaging in one debt collection phone call with Eades, and mailing a summons and complaint to both Plaintiffs—are enough to establish personal jurisdiction under § 302(a)(1). On this record, it appears that negotiating debt collections constituted “a major aspect of [Kennedy's] mission—part of its principal reason for being.” Deutsche Bank Sec., Inc. v. Mont. Bd. of Invs., 7 N.Y.3d 65, 72, 818 N.Y.S.2d 164, 850 N.E.2d 1140 (2006) (quotation marks omitted). And Kennedy initiated its debt collection efforts in an active (rather than responsive) attempt to collect money from two New York residents. Cf. Paterno v. Laser Spine Inst., 24 N.Y.3d 370, 377–78, 998 N.Y.S.2d 720 (2014). Moreover, the Plaintiffs' FDCPA claims arise directly from Kennedy's business communications into New York. See Bates v. C & S Adjusters, Inc., 980 F.2d 865, 868 (2d Cir.1992) (“[R]eceipt of a collection notice is a substantial part of the events giving rise to a claim under the [FDCPA].”).

We turn then to whether the exercise of personal jurisdiction comports with the Constitution's due process protections. It does. As an initial matter, we note that “despite the fact that section 302(a)(1) of New York's long-arm statute and constitutional due process are not coextensive, and that personal jurisdiction permitted under the long-arm statute may theoretically be prohibited under due process analysis, we would expect such cases to be rare.”Licci, 732 F.3d at 170. “To establish personal jurisdiction over a defendant, due process requires a plaintiff to allege (1) that a defendant has ‘certain minimum contacts' with the relevant forum, and (2) that the exercise of jurisdiction is reasonable in the circumstances.” In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659, 673 (2d Cir.2013) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). As to the first requirement, “we evaluate the quality and nature of the defendant's contacts with the forum state under a totality of the circumstances test.” Licci, 732 F.3d at 170 (quotation marks omitted). Where, as here, specific jurisdiction is asserted, “minimum contacts necessary to support such jurisdiction exist where the defendant purposefully availed itself of the privilege of doing business in the forum and could foresee being haled into court there.” Id. (quotation marks and alterations omitted). “ ‘[T]he commission of some single or occasional acts of the corporate agent in a state’ may sometimes be enough.” Daimler AG v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 754, 187 L.Ed.2d 624 (2014) (q...