Gissendaner v. Credit Corp

• Decision Date: 13 February 2019
• Docket Number: 6:18-CV-06313-EAW
• Citation: 358 F.Supp.3d 213
• Parties: Andrew GISSENDANER, individually and on behalf of others similarly situated, Plaintiff, v. CREDIT CORP SOLUTIONS, INC. d/b/a Tasman Credit, Defendant.
• Court: U.S. District Court — Western District of New York

358 F.Supp.3d 213

Andrew GISSENDANER, individually and on behalf of others similarly situated, Plaintiff,

v.CREDIT CORP SOLUTIONS, INC. d/b/a Tasman Credit, Defendant.

6:18-CV-06313-EAW

United States District Court, W.D. New York.

Signed February 13, 2019

Alexander Jerome Douglas, Douglas Firm, P.C., Rochester, NY, for Plaintiff

Hilary F. Korman, Scott Evan Wortman, Blank Rome LLP, New York, NY, for Defendant

DECISION AND ORDER

ELIZABETH A. WOLFORD, United States District Judge

INTRODUCTION

Plaintiff Andrew Gissendaner¹ ("Plaintiff") commenced this putative class action, on behalf of himself and others similarly situated, on April 23, 2018, alleging that defendant Credit Corp Solutions, Inc. d/b/a Tasman Credit ("Defendant") sought to collect a debt from Plaintiff and others in violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"). (Dkt. 1). Plaintiff claims that because his credit card account had accrued interest at a rate exceeding that permitted by New York's usury statutes while his balance was pending with the original creditor, Defendant unlawfully attempted to take or receive interest in violation of New York law by seeking to collect the principal due after the account had been charged off. (See Dkt. 1 at 5-6; Dkt. 12 at 10-16).

Presently before the Court are Defendant's motion to dismiss for failure to state a claim and request for sanctions (Dkt. 10), and Plaintiff's cross-motion for sanctions (Dkt. 12). For the following reasons, Defendant's motion to dismiss is granted, Plaintiff's Complaint is dismissed, and Defendant's and Plaintiff's respective motions for sanctions and costs are denied.

BACKGROUND

The following facts are drawn from Plaintiff's Complaint unless otherwise indicated and are assumed true for purposes of this motion. (Dkt. 1). On January 30, 2018, Defendant mailed a letter to Plaintiff seeking to collect an alleged debt "relating to a credit card issued by Synchrony Bank" (the "Letter"). (Id. at ¶¶ 10-11; see Dkt. 1-1). The Letter informed Plaintiff that Defendant had purchased the debt from Synchrony Bank on December 20, 2017. (Dkt. 1 at ¶ 33). By the time Defendant acquired the debt, Plaintiff had already defaulted on his account balance. (Id. at ¶ 14). Plaintiff alleges that, "[u]pon information and belief, Defendant attempted to collect interest at a rate which exceeds New York's maximum rate under its criminal usury statute."² (Id. at ¶ 34).

As a result, Plaintiff claims that he, and the other members of the putative class, were harmed by Defendant's misrepresentation of the "character, legal status, or amount of the debt" as well as its ability to collect interest above the rate set by New York's criminal usury statute, and by Defendant's threat "to collect interest which could not legally be collected" and its collection of interest in "an amount which was not permitted by New York law," all in violation of 15 U.S.C. §§ 1692e, (2)(A), (5), and 1692f(1). (Id. at ¶¶ 35-38). Plaintiff seeks statutory and actual damages on behalf of himself and the members of the putative class as well as recoupment of reasonable attorneys' fees and costs. (Id. at 7-8).

PROCEDURAL HISTORY

On April 23, 2018, Plaintiff commenced this putative class action against Defendant, alleging that Defendant violated the FDCPA by attempting "to collect interest at a rate which exceeds New York's maximum rate under its criminal usury statute." (Id. at ¶ 34; see id. at ¶¶ 35-38). On June 12, 2018, Defendant filed a motion to dismiss Plaintiff's Complaint, which also includes a request for court-ordered sanctions and costs. (Dkt. 10). Plaintiff opposes Defendant's motion and requests the Court award him attorneys' fees as a counter-sanction for Defendant's own request for sanctions. (Dkt. 12).

DISCUSSION

I. Defendant's Motion to Dismiss is Granted

A. Legal Standard

"In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint." DiFolco v. MSNBC Cable L.L.C. , 622 F.3d 104, 111 (2d Cir. 2010). A court should consider the motion by "accepting all factual allegations as true and drawing all reasonable inferences in favor of the plaintiff." Trs. of Upstate N.Y. Eng'rs Pension Fund v. Ivy Asset Mgmt. , 843 F.3d 561, 566 (2d Cir. 2016), cert. denied, ––– U.S. ––––, 137 S.Ct. 2279, 198 L.Ed.2d 703 (2017). To withstand dismissal, a plaintiff must set forth "enough facts to state a claim to relief that is plausible on its face." 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." Turkmen v. Ashcroft, 589 F.3d 542, 546 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ).

"While 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." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal quotations and citations omitted). "To state a plausible claim, the complaint's ‘[f]actual allegations must be enough to raise a right to relief above the speculative level.’ " Nielsen v. AECOM Tech. Corp. , 762 F.3d 214, 218 (2d Cir. 2014) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ).

B. Plaintiff's Complaint Fails to State a Claim Under the FDCPA

1. General Principles

"The Second Circuit has established two principles to assist courts in applying the [FDCPA]. First, ‘because the FDCPA is primarily a consumer protection statute,’ its terms must be construed liberally to achieve its congressional purpose." Derosa v. CAC Fin. Corp. , 278 F.Supp.3d 555, 559 (E.D.N.Y. 2017) (quoting Avila v. Riexinger & Assocs., LLC, 817 F.3d 72, 75 (2d Cir. 2016) ), aff'd, 740 Fed.Appx. 742 (2d Cir. 2018). "Congress enacted the FDCPA to ‘eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.’ " Arias v. Gutman, Mintz, Baker & Sonnenfeldt LLP, 875 F.3d 128, 134 (2d Cir. 2017) (quoting 15 U.S.C. § 1692(e) ). "The second principle is that, in considering whether a collection notice violates Section 1692e, [courts in this Circuit] apply the ‘least sophisticated consumer’ standard." Avila, 817 F.3d at 75 ; see Jacobson v. Healthcare Fin. Servs., Inc. , 516 F.3d 85, 90 (2d Cir. 2008) ("In this Circuit, the question of whether a communication complies with the FDCPA is determined from the perspective of the ‘least sophisticated consumer.’ " (quoting Clomon v. Jackson , 988 F.2d 1314, 1318 (2d Cir. 1993) ) ); Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002) (stating that the "least-sophisticated-consumer standard" is used to "effectuate" the FDCPA's laudable purpose of "protect[ing] consumers from deceptive or harassing actions taken by debt collectors").

"This hypothetical consumer is a ‘naïve’ and ‘credulous’ person," Ceban v. Capital Mgmt. Servs., L.P. , No. 17-CV-4554 (ARR) (CLP), 2018 WL 451637, at *2 (E.D.N.Y. Jan. 17, 2018) (quoting Altman v. J.C. Christensen & Assocs., Inc. , 786 F.3d 191, 193 (2d Cir. 2015) ), who is absent "the astuteness of a ‘Philadelphia lawyer’ or even the sophistication of the average, everyday, common consumer," Avila, 817 F.3d at 75 (quoting Russell v. Equifax A.R.S. , 74 F.3d 30, 34 (2d Cir. 1996) ). "However, she is ‘neither irrational nor a dolt.’ " Ceban, 2018 WL 451637, at *2 (quoting Ellis v. Solomon & Solomon, P.C. , 591 F.3d 130, 135 (2d Cir. 2010) ). As the Seventh Circuit has aptly explained, "[t]he ‘unsophisticated consumer’ isn't a dimwit. She may be uninformed, naive, [and] trusting, but she has rudimentary knowledge about the financial world and is capable of making basic logical deductions and inferences." Wahl v. Midland Credit Mgmt., Inc. , 556 F.3d 643, 645 (7th Cir. 2009) (quotations and citations omitted); accord Greco v. Trauner, Cohen & Thomas, L.L.P. , 412 F.3d 360, 363 (2d Cir. 2005) ("We have observed ... that in crafting a norm that protects the naive and the credulous the courts have carefully preserved the concept of reasonableness, and that some courts have held that even the least sophisticated consumer can be presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care." (quotations and citations omitted) ).

This Court has recently issued a decision addressing the core legal issue underlying the parties' dispute in this case. See Cole v. Stephen Einstein & Assoc., P.C. , No. 6:18-cv-06230 EAW, 2019 WL 453366 (W.D.N.Y. Feb. 5, 2019). The Cole action involved the very same law firms that appear on behalf of Plaintiff and Defendant in the instant matter, and the motion papers in that case were, in many ways, substantially similar to those filed here. For this reason, the Court will dive right into the heart of the matter at hand.

Defendant argues that there is "simply no legal support" for the proposition that a debt collector "is unable to collect the principal amount owed at charge-off, which may have incorporated interest and other charges levied by the original creditor." (Dkt. 10-4 at 13). In fact, while Plaintiff contends, "[u]pon information and belief," that he was "paying interest at a rate of 29.99%" while his debt was still owned by Synchrony Bank,³ Plaintiff has not pursued a claim against Synchrony Bank for the imposition of that interest rate.

As in Cole, ...