Gaisser v. Portfolio Recovery Associates, LLC

• Decision Date: 05 August 2008
• Docket Number: Case No. 08-60177-CIV.
• Citation: 571 F.Supp.2d 1273
• Parties: Matthew K. GAISSER, Plaintiff, v. PORTFOLIO RECOVERY ASSOCIATES, LLC, et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

571 F.Supp.2d 1273

Matthew K. GAISSER, Plaintiff, v. PORTFOLIO RECOVERY ASSOCIATES, LLC, et al., Defendants.

Case No. 08-60177-CIV.

United States District Court, S.D. Florida, Miami Division.

August 5, 2008.

Craig M. Shapiro, Horwitz Horwitz & Associates, Chicago, IL, Donald A. Yarbrough, Fort Lauderdale, FL, for Plaintiff.

David Palmer Hartnett, Monica Theresa Cronin, Hinshaw & Culbertson, Robert Jay Orovitz, Hayt Hayt & Landau, Miami, FL, Craig S. Hudson, Marshall Dennehey Warner Coleman Goggin, Fort Lauderdale, FL, for Defendants.

ORDER

CECILIA M. ALTONAGA, District Judge.

THIS CAUSE came before the Court upon Defendants, Robert J. Orovitz and Robert J. Orovitz, P.A.'s Motion to Dismiss Amended Complaint [D.E. 56], filed on June 13, 2008; and Defendant, Portfolio Recovery Associates, LLC's Motion to Dismiss First Amended Class Action Complaint [D.E. 59], filed on June 16, 2008. The Court has carefully considered the parties' written submissions, the record, and applicable law.

I. BACKGROUND

On June 5, 2008, Plaintiff, Matthew K. Gaisser filed an Amended Class Action Complaint [D.E. 53] alleging violations of the federal Fair Debt Collection Practices Act ("FDCPA") and the Florida Consumer Collections Practices Act ("FCCPA") against Defendants, Robert J. Orovitz individually and Robert J. Orovitz, P.A. (collectively "Orovitz"), and Portfolio Recovery Associates, LLC ("PRA"). Plaintiff at all times relevant to this action has been a resident of Broward County, Florida. (See Am. Compl. at ¶ 3).

Plaintiff obtained a consumer credit card from Providian National Bank, and due to financial difficulties, he allowed the account to fall into arrears. (See id. at ¶¶ 8, 10). The last payment Plaintiff made on the Providian account occurred on April 10, 2003. (See id. at ¶ 11). PRA obtained the debt from Providian after the debt had fallen into default and subsequently retained Orovitz to collect on the account. (See id. at ¶¶ 12-13). Orovitz, in turn, filed an action on behalf of PRA against Plaintiff on February 8, 2007, in the Broward County Court. (See PRA Compl. [D.E. 53-2]).

Plaintiff alleges the terms of the Providian account are governed by the laws of New Hampshire. (See Am. Compl. at ¶ 18; Providian Account Terms [D.E. 53-4] at 2). Plaintiff further alleges the action instituted against him in state court was barred by the three-year New Hampshire statute of limitations, and it "is the standard practice and policy of Defendants to file and serve state court lawsuits to collect debts governed by New Hampshire law three or more years after the last payment thereon." (Am. Compl. at ¶ 20). Plaintiff also takes issue with a provision of PRA's complaint in the state court action, stating, "`[i]n the event this matter is resolved by way of default a reasonable attorney's fee would be $750.00,'" (Id. at ¶ 16) (quoting PRA Compl. at ¶ 3), and an Affidavit of Attorney's Fees filed by Robert J. Orovitz in the state court suit in which he states $500.00 would be a reasonable fee. (See id. at ¶ 17). Plaintiff alleges this conduct constitutes a "standard practice and policy of Defendants to state reasonable attorneys fees as a sum certain without supporting documentation and to seek attorney fees when none had [sic] been incurred." (Id. at ¶ 21).

Plaintiff alleges Defendants' practice of attempting to collect on debts after expiration of the applicable statute of limitations and Defendants' practice regarding attorney's fees runs afoul of the FDCPA. Specifically, Plaintiff alleges "Defendants used false or misleading representations to collect or attempt to collect a debt in violation of 15 U.S.C. § 1692e," and "used unfair or unconscionable means to collect or attempt to collect a debt in violation of 15 U.S.C. § 1692f." (Id. at ¶¶ 35-36). Plaintiff alleges filing the untimely state suit also violated the FCCPA, because Defendants asserted "the existence of some other legal right when [they knew] the right [did] not exist, in violation of Fla. Stat. § 559.72(9)." (Id. at ¶ 38).

PRA moves under Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss the claims against it for failure to state a claim, arguing that even if New Hampshire law applies to the debt, the state suit was not filed outside the applicable three-year statute of limitations, because that period was tolled under New Hampshire law. Orovitz also moves to dismiss pursuant to Rule 12(b)(6). Orovitz asserts Plaintiff's FCCPA claim against it is barred by the Florida litigation privilege. Orovitz contends both the FCCPA and the FDCPA claims should be dismissed, because even assuming the debt is governed by New Hampshire law, as the forum state, the Florida five-year statute of limitations applied to the state action. In the alternative, Orovitz joins PRA's argument that the three-year New Hampshire statute of limitations was tolled. Orovitz also argues Plaintiff's allegations regarding the attorney's fees provision in the state case fail to state a claim and the claim should be dismissed.

II. LEGAL STANDARD

A motion to dismiss a complaint for failure to state a claim requires that a court accept the facts pleaded as true and construe them in the light most favorable to the plaintiff. See Quality Foods de Centro America, S.A. v. Latin American Agribusiness Dev. Corp., S.A., 711 F.2d 989, 994-95 (11th Cir.1983). "Federal Rule of Civil Procedure 8(a)(2) requires only `a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to `give the defendant fair notice of what the ... claim is and the grounds upon which it rests....'" Bell Atlantic Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Nevertheless, "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations ... a plaintiff's obligation to provide the `grounds' of his `entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do...." Id. at 1964-65 (citations omitted). "[A] complaint's `[f]actual allegations must be enough to raise a right to relief above the speculative level.'" Davis v. Coca-Cola Bottling Co. Consol., 516 F.3d 955, 974 (11th Cir.2008) (quoting Twombly, 127 S.Ct. at 1965). "When the allegations contained in a complaint are wholly conclusory ... and fail to set forth facts which, if proved, would warrant the relief sought, it is proper to dismiss for failure to state a claim." Davidson v. Georgia, 622 F.2d 895, 897 (5th Cir.1980) (citations omitted).

III. ANALYSIS

A. Statute of Limitations

Assuming, as the parties do for purposes of their Motions, that New Hampshire law applies to the debt, the Court must first address the question of whether the New Hampshire statute of limitations also applies to the debt. The parties appear to agree the relevant date for purposes of accrual of the state cause of action is April 10, 2003, the date of Plaintiff's last payment on the Providian account. As stated, the state suit was filed on February 8, 2007, nearly four years later. If the New Hampshire three-year limitations period applies, and the period was not tolled, Plaintiff has stated a claim with respect to Defendants' untimely filing of the state suit.¹ Conversely, if Florida's five-year statute of limitations applies or the New Hampshire statute applies and was tolled until February 8, 2007, or later, the state case was timely and Plaintiff has failed to state a claim.

Orovitz appears to make two arguments with respect to the applicable statute of limitations. First, Orovitz suggests statutes of limitations are generally considered to be procedural rather than substantive law, and choice of law provisions of contracts incorporate only the substantive law of the chosen forum rather than the procedural law. (See Orovitz Motion at 5). Under this logic, because Florida was the forum state, its five-year statute of limitations should apply to PRA's state suit, and therefore, the suit was not untimely filed.

While there is authority supporting the proposition that a choice of law provision of a contract must explicitly incorporate the statute of limitations of the chosen forum in order for that forum's statute to apply,² such authority is not controlling or binding here. In Florida, a choice of law provision of a contract is presumptively valid unless the party seeking to avoid it shows that application of the chosen law "contravenes [a] strong public policy" of Florida. Mazzoni Farms, Inc. v. E.I. Du-Pont De Nemours and Co., 761 So.2d 306, 311 (Fla.2000) (citing Punzi v. Shaker Adver. Agency, Inc., 601 So.2d 599 (Fla. 2d DCA 1992)). Contrary to Orovitz's suggestion, Florida courts consider the statute of limitations to be substantive, and therefore the statute of limitations of the parties' chosen forum will apply where there exists a contractual choice of laws provision. See Western Group Nurseries, Inc. v. Ergas, 211 F.Supp.2d 1362, 1366 (S.D.Fla.2002) (citing Fulton County Adm'r v. Sullivan, 753 So.2d 549, 553 (Fla. 1999); Merkle v. Robinson, 737 So.2d 540 (Fla.1999)) ("Under Florida rules, statutes of limitations are considered substantive in nature."); Pescatrice, 539 F.Supp.2d at 1379 (In an analogous case, "Defendants did research the issue, and several Miami-Dade circuit judges have ruled that under similar facts, the five-year Virginia statute applies."); Stewart v. Hooters of America, Inc., Case No. 04-cv-40, 2007 WL 3528685, at *10 (M.D.Fla. Nov. 15, 2007) (citation omitted). Orovitz has not shown the application of the New Hampshire statute of limitations contravenes Florida public policy, and therefore, the New Hampshire statute of limitations applies to the state action.

Orovitz also contends Florida's statute of limitations applies because New Hampshire choice of law rules require...