Venditto v. Vivint, Inc.

• Decision Date: 05 November 2014
• Docket Number: Civil Action No. 14-4357 (JLL) (JAD)
• Parties: PAULETTE VENDITTO, on behalf of herself and others similarly situated, Plaintiffs, v. VIVINT, INC., Defendants.
• Court: U.S. District Court — District of New Jersey

PAULETTE VENDITTO, on behalf of herself and others similarly situated, Plaintiffs, v. VIVINT, INC., Defendants.

Civil Action No. 14-4357 (JLL) (JAD)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

November 5, 2014

NOT FOR PUBLICATION

OPINION

LINARES, District Judge.

This matter comes before the Court by way of Defendant's motion to dismiss Plaintiff's First Amended Class Action Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) [Docket Entry No. 14]. The Court has considered the parties' submissions and decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth below, Defendant's motion is granted. Plaintiff may file a Second Amended Complaint that cures the pleading deficiencies discussed herein on or before December 12, 2014.

I. BACKGROUND¹

On June 19, 2009, Defendant's door-to-door salesman came to Plaintiff's home to sell a home alarm system and monitoring services to Plaintiff. (Am. Compl., ¶ 6). At that time, Defendant was known as APX Alarm Security Solutions, Inc. (Id., ¶ 7). After discussing the features of the system and services, and the terms and conditions of the agreement, Plaintiff agreedto purchase the alarm system and monitoring services from Defendant. (Id., ¶ 8). As such, the parties executed an Alarm System Purchase and Service Agreement (hereinafter, the "Alarm Agreement") and Defendant installed the alarm system equipment and set up the monitoring service on the very same day. (Id.).

Section 2 ("PRICE, PAYMENT, FINANCIAL DISCLOSURES AND TERMS") of the Alarm Agreement provided, in pertinent part:

a. "2.1 ACTIVATION FEE. $198.00 (Non-Refundable)." [The $198.00 is crossed out, with "99" handwritten in its place];

b. "2.2 INSTALLATION & EQUIPMENT CHARGES. $ ___0___ (See SOP)

c. "2.3 SERVICES FEE. FOR MONITORING YOU WILL PAY US AS FOLLOWS: INITIAL TERM OF CONTRACT: 39 MONTHS MONTHLY SERVICES FEE: $49.99 (plus any applicable taxes). [The $49.99 is crossed out, with "44.99" handwritten in its place.] THE TOTAL MONTHLY SERVICES FEE IS PAYABLE MONTHLY IN ADVANCE. THE FIRST MONTHLY SERVICES FEE IS DUE WHEN THE SYSTEM IS INSTALLED AND OPERATIONAL. THE TOTAL CASH PRICE YOU WILL PAY US FOR THE SERVICES PROVIDED IS $1,949.61, NOT INCLUDING APPLICABLE TAXES. THERE IS NO FINANCING CHARGE OR COST OF CREDIT (0% APR) ASSOCIATED WITH THIS AGREEMENT;

d. 2.4 TERM FOR SERVICES. THE ORIGINAL TERM OF THIS AGREEMENT STARTS ON THE DAY THIS AGREEMENT IS SIGNED AND CONTINUES FOR THIRTY-NINE (39) MONTHS, AND WILL AUTOMATICALLY CONTINUE FROM YEAR TO YEAR THEREAFTER UNLESS CANCELLED

BY EITHER OF US IN WRITING NO LATER THAN THIRTY (30) DAYS BEFORE THE END OF THE ORIGINAL TERM OR ANY RENEWAL TERM;

e. 2.6 CREDIT CHECK; LATE FEES. YOU AUTHORIZE US TO CONFIRM YOUR CREDIT RECORD AND TO REPORT YOUR PAYMENT PERFORMANCE UNDER THIS AGREEMENT TO CREDIT AGENCIES AND CREDIT REPORTING SERVICES. IF YOU FAIL TO MAKE ANY PAYMENT WHEN DUE, WE MAY, BY GIVING YOU WRITTEN NOTICE, DISCONTINUE INSTALLATION, MONITORING, REPAIR SERVICE, TERMINATE THIS AGREEMENT, AND RECOVER ALL DAMAGES TO WHICH WE ARE ENTITLED, INCLUDING THE VALUE OF THE WORK PERFORMED AND OUR LOSS OF PROFIT. IN ADDITION, WE MAY IMPOSE A LATE CHARGE ON ALL PAYMENTS MORE THAN TEN (10) DAYS PAST DUE IN THE MAXIMUM AMOUNT PERMITTED BY STATE LAW.

(Id., ¶ 12).

On or about March 5, 2012, Plaintiff received a phone call from Defendant regarding renewal of the Alarm Agreement. Defendant told Plaintiff that Defendant would extend the term of the Alarm Agreement for 42 months and that Defendant would not increase the monthly services fee during that time period. (Id., ¶ 37). Defendant failed to send a new contract for Plaintiff to sign. (Id., ¶ 38). Plaintiff never provided her written authorization for any modifications or extensions to the Alarm Agreement. (Id., ¶ 39).

On or about August 1, 2012 and September 5, 2012, Plaintiff called Defendant to cancel the Alarm Agreement at the end of the initial 39-month term, on September 19, 2012. (Id., ¶ 40).Defendant refused to cancel Plaintiff's contract, alleging that Plaintiff had previously agreed to renew the contract. (Id., ¶ 41).

Plaintiff called Defendant to cancel the Alarm Agreement on or about February 21, 2013, and again on May 6, 2013. Defendant refused to cancel the Alarm Agreement each time. Plaintiff continued to make monthly payments via electronic fund transfer ("EFT") from her checking account up to and including February 18, 2014. (Id., ¶¶ 42, 43).

On February 20, 2014, Plaintiff sent Defendant a cancellation letter via certified mail, return receipt requested. The return postcard indicates that Defendant received the cancellation letter on February 24, 2014. (Id., ¶ 44).

Defendant sent Plaintiff a letter dated March 21, 2014 informing her that it was unable to withdraw the March 2014 monthly service fee from Plaintiff's checking account and assessed a $15 processing fee and a $3 late fee to her Vivint account. (Id., ¶ 45).

Defendant continued to refuse to cancel Plaintiff's contract, and instead sent Plaintiff an invoice dated April 15, 2014. The invoice covers the service period from April 15, 2014 to May 14, 2014 and includes a past due amount of $66.14. Copies of the March 21, 2014 letter and the April 15, 2014 invoice are attached as Exhibit D. Plaintiff continues to receive monthly invoices from Defendant. (Id., ¶¶ 46, 47).

In light of the foregoing, Plaintiff commenced this action on July 10, 2014 on behalf of herself and "all persons who, at any time on or after June 6, 2008, entered into an Alarm System Purchase and Services Agreement ("Alarm Agreement") with Defendant in New Jersey with terms the same as or substantially similar to the Alarm Agreement signed by Plaintiff." (Id., ¶ 48). Plaintiff filed an Amended Complaint on September 2, 2014, alleging the following claims on behalf of the purported class: (1) violation of the Retail Installment Sales Act ("RISA"), N.J.S.A.17:16C-1, et seq., and the New Jersey Consumer Fraud Act ("NJCFA"), N.J.S.A. 56:8-1 et seq.; (2) violation of the Door-to-Door Retail Installment Sales Act ("DDRISA"), N.J.S.A. 17:16C-61.5; (3) violation of the Home Improvement Practices Regulations, N.J.A.C. 13:45A-16.1 et seq.; and (4) violation of the Truth-in-Consumer Contract, Warranty and Notice Act ("TCCWNA"), N.J.S.A. 56:12-14 - 18. In addition, the Amended Complaint asserts a claim for violation of the NJCFA on behalf of the named Plaintiff, alone. This Court's jurisdiction over this matter is premised on 28 U.S.C. § 1332(d).

Currently before the Court is Defendant's motion to dismiss Plaintiff's Amended Complaint pursuant to Rule 12(b)(6).

II. LEGAL STANDARD

For a complaint to survive dismissal, it "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. 62, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In determining the sufficiency of a complaint, the Court must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in favor of the non-moving party. See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008). Additionally, in evaluating a plaintiff's claims, generally "a court looks only to the facts alleged in the complaint and its attachments without reference to other parts of the record." Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994).

III. DISCUSSION

A. Count One - Violation of RISA and NJCFA

Count One alleges that the Alarm Agreement is a "retail installment agreement" as defined by RISA and that Defendant's actions in charging an Activation Fee constitutes a violation of RISA inasmuch as said charge is not authorized by any provision of RISA. Defendant moves to dismiss Count One on the basis that the Alarm Agreement is not a "retail installment contract" within the meaning of RISA. In particular, Defendant maintains that the Alarm Agreement is a contract for the provision of an ongoing service and not for the timed sale of goods; as such, it is not a "retail installment contract" within the meaning of RISA.

RISA prohibits:

[Any] seller, sales finance company, or holder [from] charg[ing], contract [ing] for, collect[ing] or receiv[ing] from any retail buyer, directly or indirectly, any further or other amounts for costs, charges, insurance premiums, examination, appraisal service, brokerage, commission, expense, interest, discount, fees, fines, penalties or other things of value in connection with retail installment contracts or retail charge accounts other than the charges permitted by this act, except court costs, attorney fees and the expenses of retaking and storing repossessed goods which are authorized by law.

N.J.S.A. § 17:16C-50. Count One alleges that Defendant's RISA violation constitutes a violation of, inter alia, the New Jersey Consumer Fraud Act.² In particular, Plaintiff alleges that "Defendant's violations of RISA constitute unconscionable commercial practices, deception, fraud, false pretense, false promises and/or misrepresentations in violation of the CFA." Plaintifffurther alleges that she and members of the purported class suffered an ascertainable loss in the amount of $99.00—the amount they were charged for the Activation Fee.

As a preliminary matter, it is unclear whether Count One asserts two separate claims (violation of RISA and violation of NJCFA) or a single claim of violation of the NJCFA (by virtue of Defendant's alleged violations of RISA). For purposes of this motion, the Court construes Count One as alleging a violation of the NJCFA premised on Defendant's actions in charging fees that are not permitted under RISA—namely, the Activation Fee. See generally Korrow v. Aaron's, Inc., 2011 WL 3794231, at * 2 (D.N.J. Aug. 25, 2011) (concluding that there is no private right of action under RISA, but noting that the Supreme Court of New Jersey has allowed RISA claims to be asserted...