Fariasantos v. Rosenberg & Assocs., LLC

• Decision Date: 10 March 2014
• Docket Number: Civil Action No. 3:13CV543.
• Citation: 2 F.Supp.3d 813
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Claudio FARIASANTOS, on behalf of himself and all others similarly situated, Plaintiff, v. ROSENBERG & ASSOCIATES, LLC, Defendant.

2 F.Supp.3d 813

Claudio FARIASANTOS, on behalf of himself and all others similarly situated, Plaintiff,

v.ROSENBERG & ASSOCIATES, LLC, Defendant.

Civil Action No. 3:13CV543.

United States District Court,

E.D. Virginia,

Richmond Division.

Signed March 10, 2014.

Dale Wood Pittman, The Law Office of Dale W. Pittman, P.C., Petersburg, VA, Andrew Joseph Guzzo, Kristi Cahoon Kelly, Kelly & Crandall PLC, John Chapman Petersen, Surovell Isaacs Petersen & Levy PLC, Fairfax, VA, Casey Shannon Nash, Janelle Mason Mikac, Matthew James Erausquin, Consumer Litgation Associates PC, Alexandria, VA, Leonard Anthony Bennett, Susan Mary Rotkis, Consumer Litigation Associates, Newport News, VA, for Plaintiff.

John C. Lynch, Maryia Yrjeuna Jones, Troutman Sanders LLP, Virginia Beach, VA, for Defendant.

MEMORANDUM OPINION

ROBERT E. PAYNE, Senior District Judge.

This matter is before the Court on defendant Rosenberg & Associates, LLC's (“Rosenberg” or “Defendant”) MOTION TO DISMISS PLAINTIFF'S CLASS ACTION COMPLAINT (Docket No. 8) (“Motion to Dismiss”). For the reasons set forth herein, the motion will be denied.

PROCEDURAL BACKGROUND

Plaintiff, Claudio Fariasantos (“Fariasantos” or “Plaintiff”), on behalf of himself and all others similarly situated, brought this action against Defendant alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“the FDCPA”). An answer and the present Motion to Dismiss were filed by Rosenberg. Fariasantos responded, Rosenberg filed a reply, and this matter is ripe.

FACTUAL ALLEGATIONS AND CLAIMS AGAINST THE DEFENDANT

At this stage, the Court, as it must, “accept[s] all well-pleaded allegations in the plaintiff's complaint as true and draw[s] all reasonable factual inferences from those facts in the plaintiff's favor.” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir.1999); see also Trulock v. Freeh, 275 F.3d 391, 399 (4th Cir.2001) (same). “The record on a motion to dismiss includes ‘documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.’ ” Pham v. Bank of N.Y., 856 F.Supp.2d 804, 812 n. 10 (E.D.Va.2012) (quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007)). With that in mind, the facts, which are derived from the Class Action Complaint (Docket No. 1) (“Class Compl.”), and Exhibit A to the Class Action Complaint, are alleged to be as set forth below.

Fariasantos alleges that Rosenberg violated the FDCPA “by using a form collection letter to make false and unintended threats to file civil actions in court in connection with the collection of home loan debt, and by compounding this misrepresentation by misdisclosing the FDCPA's cornerstone thirty day validation notice rights notice [sic] to Plaintiff and the class of consumers whom he represents by failing to make an accurate and truthful disclosure of the Act's 1692g(a)(3) provision that: ‘unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.’ (Emphasis added).” (Class Compl. ¶ 1.)

Fariasantos is a consumer within the meaning of the FDCPA, as defined at 15 U.S.C. § 1692a(3). ( Id. at ¶ 3.) Rosenberg, a law firm with the principal purpose of collecting debts, is a debt collector within the meaning of the FDCPA, as defined at 15 U.S.C. § 1692a(6). ( Id. at ¶¶ 4–5.)

On or about December 4, 2012, Rosenberg mailed Fariasantos a letter, described as a “dunning letter.” ( Id. at ¶ 12 & Ex. A.) (“Defendant's Letter”). “A ‘dunning letter’ is a letter demanding payment of a debt—i.e., a collection notice.” Bicking v. Law Offices of Rubenstein and Cogan, 783 F.Supp.2d 841, 842 n. 1 (E.D.Va.2011). ( Id. at ¶ 12, n. 3.) Defendant's Letter, which was the first written communication by Rosenberg to Fariasantos, states that “Fariasantos borrowed money from Branch Banking and Trust Company and executed a Deed of Trust and Note secured by the above referenced property,” referring to 2307 Raymond Court, Richmond, VA 23228. ( Id. at ¶ 26 & Ex. A). Defendant's Letter also states: “Branch Banking and Trust Company [“BB & T”] has referred the loan to this office for legal action based upon a default under the terms of the loan agreement.” ( Id. at Ex. A.) The Class Complaint alleges that Defendant's Letter “stated that the Defendant had been instructed to initiate foreclosure proceedings on Plaintiff's home.” ( Id. at ¶ 12.) (The Letter, in fact, did not make that precise statement.) The Class Complaint alleges that Defendant's Letter also stated: “Unless you dispute this debt or any part thereof, within 30 days after receiving this notice, the debt will be assumed as valid.” ( Id. at ¶ 28.) The Letter, in fact, did not make that precise statement but it does state: “If within thirty (30) days from receipt of this letter you fail to dispute all or part of the debt, the amount recited herein will be assumed as valid.” Defendant's Letter also states, on the second page and in the final sentence of the body of the letter: “Your failure to contest the validity of the debt under the Act may not be construed by any Court as an admission of liability.” In between the initial language about the assumption of debt and the final sentence was additional language about contesting the debt and providing written notice of a dispute.¹

Virginia is a “nonjudicial foreclosure state,” and thus, “foreclosure in Virginia does not require judicial intervention.” ( Id. at ¶ 16.) BB & T did not refer plaintiff's loan to Rosenberg for Rosenberg to file a lawsuit against plaintiff, and Rosenberg did not intend to file a lawsuit against plaintiff. ( Id. at ¶¶ 18–19.)

Counts I, II, and III reflect federal claims brought for alleged violations of the FDCPA. Count I alleges:

By threatening to file civil actions in court in connection with the collection of home loan debt when it had no intent to file civil actions in court in connection with the collection of home loan debt, Defendant made the threat to take action that was not intended to be taken, and in so doing violated 15 U.S.C. § 1692e(5).

( Id. at ¶ 48.) Count II alleges:

By threatening to file civil actions in court in connection with the collection of home loan debt when it had no intent to file civil actions in court in connection with the collection of home loan debt, Defendant used false representation or deceptive means to collect or attempt to collect home loan debt, and in so doing violated 15 U.S.C. § 1692e(10).

( Id. at ¶ 51.) Count III alleges:

By failing to include “by the debt collector” or similar language in the required § 1692g(3) component of the thirty day validation notice disclosure, Defendant failed to proved [sic] the required Validation Notice and it [sic] so doing violated 15 U.S.C. § 1692g.

( Id. at ¶ 54.)

The motion is ripe for review. The Court finds that the facts and legal contentions are adequately presented in the materials before the Court and that oral argument would not aid the decisional process.

LEGAL STANDARD

The purpose of a motion made pursuant to Fed.R.Civ.P. 12(b)(6) is “to test the legal sufficiency of the complaint.” Randall v. United States, 30 F.3d 518, 522 (4th Cir.1994). “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.’ ” 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)).

Courts should assume the veracity of all well-pleaded allegations in a complaint, and should deny a motion to dismiss where those well-pleaded allegations state a plausible claim for relief. Id. at 679, 129 S.Ct. 1937. A claim is “plausible” when the plaintiff pleads facts sufficient to allow the court to draw the reasonable inference that the defendant is liable for the alleged misconduct. Twombly, 550 U.S. at 556, 127 S.Ct. 1955. A court should grant a motion to dismiss, however, where the allegations are nothing more than legal conclusions, or where they permit a court to infer no more than a possibility of misconduct. See Iqbal, 556 U.S. at 678–79, 129 S.Ct. 1937.

“To prevail on an FDCPA claim, a plaintiff must allege that: (1) he or she was the object of collection activity arising from a consumer debt as defined by the FDCPA; (2) the defendant is a debt collector as defined by the FDCPA; and (3) the defendant engaged in an act or omission prohibited by the FDCPA, such as using a false, deceptive, or misleading representation or means in connection with the collection of any debt.” Goodrow v. Friedman & MacFadyen, P.A., No. 3:11cv020, 2013 WL 3894842, at *6 (E.D.Va. July 26, 2013) (internal citations omitted).

The Fourth Circuit recently confirmed that, as to the third element of an FDCPA claim, in order “to plead a claim of false representation under the FDCPA, the partymust show that the representations are material.” Lembach v. Bierman, 528 Fed.Appx. 297, 303 (4th Cir.2013). In Lembach, the United States Court of Appeals for the Fourth Circuit examined decisions from other circuits and concluded that if a statement would not mislead the unsophisticated consumer, then it does not violate the FDCPA—even if it is false in some technical sense. In other words, a statement cannot mislead unless it is material. 528 Fed.Appx. at 302–04. The fraudulent signatures in the Lembach case were determined not to be material “because they have no connection to the debt at issue.” Id. at 303.

In 2012, this Court explained materiality as follows:

[I]n order for a false statement to violate the FDCPA, it must affect a consumer's ability to make intelligent decisions with respect to the alleged debt. This is an appropriate requirement not only because materiality is “an ordinary element of any federal claim based...