Winne v. Nat'l Collegiate Student Loan Trust 2005-1, 1:16–cv–00229–JDL

• Decision Date: 11 January 2017
• Docket Number: 1:16–cv–00229–JDL
• Citation: 228 F.Supp.3d 141
• Parties: Jane C. Forrester WINNE, Plaintiff, v. NATIONAL COLLEGIATE STUDENT LOAN TRUST 2005–1, et al., Defendants.
• Court: U.S. District Court — District of Maine

228 F.Supp.3d 141

Jane C. Forrester WINNE, Plaintiff,

v.NATIONAL COLLEGIATE STUDENT LOAN TRUST 2005–1, et al., Defendants.

1:16–cv–00229–JDL

United States District Court, D. Maine.

Signed January 11, 2017

Cynthia A. Dill, William K. McKinley, Kent William McKinley, Troubh Heisler, Portland, ME, for Plaintiff.

Adam J. Shub, Michael Messerschmidt, Preti, Flaherty, Beliveau, & Pachios, LLP, John J. Aromando, Katherine S. Kayatta, Pierce Atwood LLP, David S. Sherman, Jr., Kasia S. Park, Drummond Woodsum, Christian T. Chandler, Rebecca G. Klotzle, Curtis, Thaxter, Stevens, Broder & Micoleau, Portland, ME, Brian D. Roth, Bryan C. Shartle, Kristen L. Burge, Sessions, Fishman, Nathan & Israel, Metairie, LA, Ginevra F. Ventre, Justin J. Kontul, Perry A. Napolitano, Reed Smith LLP, Pittsburgh, PA, Brenna Anatone Force, James R. Oswald, Geoffrey W. Millsom, Adler Pollock & Sheehan PC, Providence, RI, for Defendants.

ORDER ON DEFENDANTS' MOTIONS TO DISMISS

JON D. LEVY, U.S. DISTRICT JUDGE

The Plaintiff, Jane C. Forrester Winne, has filed a class action complaint seeking damages and injunctive relief, brought, she asserts, on behalf of "vulnerable Maine students who are being unlawfully pursued on alleged private student loan debts they do not owe, were fraudulently procured, or both." ECF No. 3 at 2. Her individual claims arise out of attempts by various parties to collect student debts she allegedly owes. Three of the defendants—Citizens Bank, N.A. ("Citizens"),¹ U.S. Bank National Association ("US Bank"), and PNC Bank, N.A. ("PNC")—filed motions to dismiss the claims against them pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. ECF No. 23; ECF No. 27; ECF No. 43. US Bank also seeks dismissal under Rule 12(b)(2), asserting lack of personal jurisdiction. ECF No. 27 at 1. Oral argument on the motions was held before me on November 17, 2016.

I. BACKGROUND

Winne's claims focus on two private student loans that were allegedly made to her in 2004 and 2005 by Charter One Bank (now Citizens) and PNC, respectively. Winne denies ever receiving the proceeds from these loans, and asserts that she has never made any payments on either loan. Winne alleges that Charter One sold its loan to National Collegiate Student Loan Trust 2005–1 ("NCSLT 2005–1"), and PNC sold its loan to National Collegiate Student Loan Trust 2005–3 ("NCSLT 2005–3"). The two loans allegedly then became the subject of collection efforts by various entities connected with the NCSLTs, beginning in 2014. In 2015, Winne was sued on both loans by defendant Abrahamsen Ratchford, P.C., a law firm representing the NCSLTs. The lawsuits were eventually dismissed with prejudice. Winne alleges that collection efforts on the loans have nonetheless continued, carried out by defendants Transworld Systems, Inc. ("Transworld") and Turnstile Capital Management, LLC ("Turnstile"), both acting on behalf of the NCSLTs.

Citizens is a defendant in this suit because it acquired Charter One, the bank that allegedly made the 2004 loan to Winne. Winne has asserted claims against Citizens under the Truth in Lending Act ("TILA"), 15 U.S.C.A. § 1601 et seq. (2016), and the Maine Unfair Trade Practices Act ("MUTPA"), 5 M.R.S.A. § 205–A et seq. (2016). Winne alleges that Citizens/Charter One failed to provide her with the disclosures required by TILA at the time she allegedly signed the loan agreement.

Winne's allegations against PNC, as the original lender of the 2005 loan, are identical to her allegations against Citizens. She asserts claims under TILA and MUTPA, claiming that PNC failed to provide the required disclosures at the time she allegedly signed the loan agreement for the 2005 loan.

US Bank is a defendant in this suit by virtue of its position as Indenture Trustee and Successor Special Servicer to the NCSLTs. Winne alleges that US Bank is responsible for overseeing debt collection efforts for the loans owned by the NCSLTs. Specifically, Winne alleges that US Bank hired Transworld and Turnstile, the entities that have been contacting Winne regarding the loans, to act as sub-servicers, and to collect debts on its behalf and on behalf of the NCSLTs. ECF No. 3 at 14, ¶ 99. Winne asserts claims against US Bank under MUTPA, as well as the federal Fair Debt Collection Practices Act, 15 U.S.C.A. § 1692 et seq. (2016) and the Maine Fair Debt Collection Practices Act, 32 M.R.S.A. § 11001 et seq. (2016).

II. DISCUSSION

The claims against Citizens and PNC are identical, and the arguments raised in their respective motions to dismiss are substantially the same. See ECF No. 3; ECF No. 23; ECF No. 43. For that reason, I address their motions together. The claims against US Bank are distinct, and will be addressed separately.

A. Citizens' and PNC's Motions to Dismiss

Citizens and PNC both move to dismiss the claims against them under Rule 12(b)(6) for failure to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6). To survive a motion to dismiss, the complaint "must contain sufficient factual matter to state a claim to relief that is plausible on its face." Rodríguez–Reyes v. Molina–Rodríguez , 711 F.3d 49, 53 (1st Cir. 2013) (internal quotation omitted). The court should accept all well-pleaded facts as true and draw all reasonable inferences in the plaintiff's favor. Id. at 52–53. Determining the plausibility of a claim is a context-specific task that requires the court "to draw on its judicial experience and common sense." Id. at 53 (quoting Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ).

Winne initially asserted claims against Citizens and PNC under both TILA and the MUTPA, claiming that the banks failed to provide her with the required disclosures at the time she signed the loan agreements for the alleged private loans. In her reply brief, however, Winne acknowledged that financial institutions doing business in Maine such as Citizens and PNC are exempt from liability under MUTPA. ECF No. 57 at 11; see also Shapiro v. Haenn , 190 F.Supp.2d 64, 69 (D. Me. 2002). Accordingly, Winne's MUTPA claims against Citizens and PNC will be dismissed.

Turning to Winne's TILA claims, the banks argue that the claims are barred by the statute of limitations, and are also substantively meritless. ECF No. 23 at 5–12; ECF No. 43 at 5–15. Actions involving private education loans under TILA are subject to a one–year statute of limitations. 15 U.S.C.A. § 1640(e) (2016). At the time of the alleged violations, TILA provided that the limitations period ran "from the date of the occurrence of the violation."² 15 U.S.C.A. § 1640(e) (2005). Winne concedes that this version of the one-year statute of limitations is applicable to the instant case. ECF No. 57 at 6. The parties also informed the court at oral argument that Winne is relying solely on her argument that the statute of limitations should be equitably tolled, and she is not pressing the additional arguments raised in her briefs that the limitations period either has not yet begun to run, or has not yet expired.

Under federal law, a statute of limitations may be equitably tolled to prevent unjust results or to maintain the integrity of a statute. Salois v. Dime Sav. Bank of New York, FSB , 128 F.3d 20, 25 (1st Cir. 1997). Tolling is only appropriate "when the circumstances that cause a plaintiff to miss a filing deadline are out of his hands." Id. (internal quotation omitted). The plaintiff must show due diligence in attempting to discover the cause of action before the limitations period ran out. See Gonzalez v. United States , 284 F.3d 281, 291 (1st Cir. 2002). Winne contends that equitable tolling is appropriate in this case due to the alleged "fraudulent activity" of the defendants. ECF No. 32 at 4; ECF No. 57 at 8. She asserts that she could not have discovered this alleged fraudulent activity, which presumably includes the alleged underlying TILA violation, until she was sued on the loans in 2015. ECF No. 32 at 4; ECF No. 57 at 8–9.

To the extent Winne claims that the statute of limitations should be equitably tolled under the doctrine of fraudulent concealment, she must demonstrate that she has exercised "reasonable diligence in discovering that she has been the victim of fraud." Philibotte v. Nisource Corp. Serv. Co. , 793 F.3d 159, 164 (1st Cir. 2015) (quoting Salois , 128 F.3d at 26 ) (alterations omitted). As multiple courts have pointed out, the alleged fraud must also consist of conduct beyond the nondisclosure itself that underlies the TILA claim; otherwise the statute of limitations would be tolled in every suit and would be a nullity. See Cardiello v. The Money Store, Inc. , 2001 WL 604007, at *5 (S.D.N.Y. June 1, 2001) (collecting cases).

Winne has not pled any fraudulent conduct by either Citizens or PNC that served to conceal the alleged TILA violation within the one-year statute of limitations period, beyond the alleged TILA violation itself. There are no specific allegations in the complaint that Citizens or PNC took any steps to prevent Winne from discovering the alleged TILA violation within the statutory period. See ECF No. 3. Nor has she pled due diligence on her part to discover the violation. Winne argues instead that her due diligence is illustrated by her response to the state court lawsuit and her action in bringing the instant suit. ECF No. 57 at 9. But to satisfy the equitable tolling standard, she must demonstrate due diligence during the statutory period, i.e. within one year of the occurrence of the violation. See Gonzalez , 284 F.3d at 291. She has failed to do so here. The loan agreement that Winne signed with each bank informed her that she would receive additional documentation if her loan application were approved. ECF No. 3–1 at 2; ECF No. 3–2 at 3. She has failed to plead any basis for concluding that she exercised due diligence in trying to discover that the required TILA disclosures were not made, or for concluding that Citizens or PNC fraudulently...