Thomas v. Midland Credit Mgmt., Inc.
| Decision Date | 27 November 2017 |
| Docket Number | 2:17-cv-00523 (ADS)(ARL) |
| Court | U.S. District Court — Eastern District of New York |
| Parties | NIEASHA THOMAS, individually and on behalf of all others similarly situated, Plaintiff, v. MIDLAND CREDIT MANAGEMENT, INC., Defendants. |
APPEARANCES:
Barshay Sanders, PLLC
Attorneys for the Plaintiff
Craig B. Sanders, Esq., Of Counsel
Hinshaw & Culbertson LLP
Attorneys for the Defendant
Han Sheng Beh, Esq., Of Counsel
The Plaintiff, Nieasha Thomas (the "Plaintiff") commenced this action against the Defendant Midland Credit Management, Inc. ("MCM" or the "Defendant), alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.
Presently before the Court is a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure ("FED. R. CIV. P." or "Rule") 12(b)(6), or in the alternative, to compel arbitration pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq.. For the following reasons, the Defendant's motion is granted in part, and denied in part.
The Plaintiff, who is a New York resident, incurred a personal debt to Credit One Bank, N.A., who is not a party to this action. The Plaintiff fell behind on her debt payments. At some point, the debt was transferred to the Defendant.
On January 29, 2016, in an effort to collect the debt, the Defendant sent a letter to the Plaintiff. The letter gives the following relevant details:
Original Creditor: Credit One Bank, N.A. Date of Letter: 01-29-2016 Original Account Number [redacted] Charge-Off Date: 11-06-2015 Charge-Off Amount: $633.56 Last Payment Date: 03-27-2015 Post Charge-Off Interest Accrued: $0.00 Current Owner: MIDLAND FUNDING LLC Post Charge-Off Fees Accrued: $0.00 Current Servicer: Midland Credit Management, Inc. (Less) Payments and Credits: $0.00 MCM Account Number: [redacted]9808 Current Balance: $633.56
Enclose $633.56 in the envelope provided or
call (855) 977-1969 to resolve this account.
Dear Niesha,
On 12-18-2015, your Credit One Bank, N.A. account was sold to MIDLAND FUNDING LLC, which is now the sole owner of this debt.
Midland Credit Management, Inc. ("MCM"), a debt collection company, will be collecting on, and servicing your account, on behalf of MIDLAND FUNDING LLC. Your current balance is $633.56.
This account may still be reported on your credit report as unpaid.
. . .
The records associated with the CREDIT ONE BANK, N.A. account purchased by MIDLAND FUNDING LLC, reflect that you are obligated on this account, which is in default. As the owner of this account, but subject to the rights described below, MIDLAND FUNDING LLC is entitled to payment of this account. All communication regarding this account should be addressed to MCM and not the previous owner.
Unless you notify MCM within thirty (30) days after receiving this notice that you dispute the validity of the debt, or any portion thereof, MCM will assume this debt to be valid.
If you notify MCM, in writing, within thirty (30) days after receiving this notice that the debt, or any portion thereof, is disputed, MCM will obtain verification of the debt or a copy of a judgment (if there is a judgment) and MCM will mail you a copy of such verification or judgment. Write to: 2365 Northside Drive, Suite 300, San Diego, CA 92108; Attn: Consumer Support Services.
If you request, in writing, within thirty (30) days after receiving this notice, MCM will provide you with the name and address of the original creditor. Write to: 2365 Northside Drive, Suite 3001 San Diego, CA 92108; Attn: Consumer Support Services.
If an attorney represents you with regard to this debt, please refer this letter to your attorney. Likewise, if you are involved in an active bankruptcy case, or if this debt has been discharged in a bankruptcy case, please refer this letter to your bankruptcy attorney so that we may be notified.
Please remember, even if you make a payment within thirty (30) days after receiving this notice, you still have the remainder of the thirty (30) days to exercise the rights described above.
You are hereby notified that a negative credit report reflecting on your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your credit obligations.
(Pl.'s Ex. 1 to the Am. Compl.).
At the bottom of the front of the letter, the Defendant's phone number, website, and address are listed. The online and mailing options state that the Plaintiff can pay through those avenues.
On January 30, 2017, the Plaintiff commenced this action by filing a complaint.
On April 13, 2017, before filing an answer, the Defendant filed a motion to dismiss pursuant to Rule 12(b)(6).
On April 24, 2017, the Plaintiff, as a matter of right, filed an amended complaint. See FED. R. CIV. P. 15(a)(1)(B) (). The amended complaint alleges that this is a putative class action.
The amended complaint alleges four claims: claims for violations of 15 U.S.C. § 1692e and 15 U.S.C. § 1692g for failure to adequately convey the amount of the debt—specifically, a failure to convey that interest was accruing; and claims for violations of 15 U.S.C. § 1692e and 15 U.S.C. 1692g(a)(3) based on the letter's alleged misleading language related to disputing the debt.
On April 26, 2017, the Defendant withdrew its initial motion to dismiss.
On June 7, 2017, the Defendant filed the instant motion to dismiss.
In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the Plaintiff. See Walker v. Schult, 717 F.3d 119, 124 (2d Cir. 2013); Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006); Bold Elec., Inc. v. City of N.Y., 53 F.3d 465, 469 (2d Cir. 1995); Reed v. Garden City Union Free School Dist., 987 F. Supp. 2d 260, 263 (E.D.N.Y. 2013).
Under the now well-established Twombly standard, a complaint should be dismissed only if it does not contain enough allegations of fact to state a claim for relief that is "plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929 (2007). The Second Circuit has explained that, after Twombly, the Court's inquiry under Rule 12(b)(6) is guided by two principles:
First, although a court must accept as true all of the allegations contained in a complaint, that tenet is inapplicable to legal conclusions, and [t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss and [d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.
Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 664, 129 S. Ct. 1937, 1940, 173 L. Ed. 2d 868 (2009)).
Thus, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and . . . determine whether they plausibly give rise to an entitlement of relief." Iqbal, 556 U.S. at 679.
In 1977, 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." 15 U.S.C. § 1692(e).
To that end, 15 U.S.C. § 1692e ("Section 1692e") states that "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." Section 1692e then provides a list of sixteen non-exclusive examples that constitute violations of the above-prohibition, including as relevant here, "[t]he false representation of . . . the character, amount, or legal status of any debt . . . ," Section 1692e(2)(A); and "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer," Section 1692e(10).
15 U.S.C. § 1692g ("Section 1692g") requires notices of debt to contain certain details. If those details are not included in the initial communication, they must be communicated within five days of the initial communication. Among the details required by Section 1692g, the debt collector must send a written notice containing "the amount of the debt," id. at § 1692g(a)(1), and a statement that the debt will be assumed to be valid by the debt collector unless the consumer disputes the validity of the debt within thirty days of receipt of the communication, id. at § 1692g(a)(3). As discussed below, a debtor's dispute need not be in writing pursuant to Section 1692g(a)(3), but if a debtor does dispute the debt in writing, it triggers more rights under Section 1692g.
Reading these provisions together, to establish a violation of the FDCPA, "(1) the plaintiff must be a 'consumer' who allegedly owes the debt or a person who has been the object of effortsto collect a consumer debt, and (2) the defendant collecting the debt is considered a 'debt collector,' and (3) the defendant has engaged in any act or omission in violation of FDCPA requirements." Polanco v. NCO Portfolio Mgmt., Inc., 132 F. Supp. 3d 567, 578 (S.D.N.Y. 2015) (quoting Plummer v. Atl. Credit & Fin., Inc., 66 F. Supp. 3d...
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