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Tagayun v. Citibank

June 9, 2006


The opinion of the court was delivered by: William J. Martini Judge

Dear Litigants:

This matter comes before the Court on Defendant Citibank, N.A.'s Rule 12(b)(6) motion to dismiss for claim preclusion, challenging Plaintiff Mandell's standing to bring suit, and seeking attorney's fees. Also before the Court is Defendants David A. Faloni & Assocs., David A. Faloni, Sr. and David A. Faloni, Jr.'s(jointly "Faloni") separate 12(b)(6) motion to dismiss for lack of subject matter jurisdiction; Faloni's motion also incorporates and asserts Citibank's 12(b)(6) brief in full. As described below, these motions will be converted into Rule 56 motions for summary judgment. The motions are opposed and the Court adjudicates this matter on the papers. Fed. R. Civ. P. 78. For the reasons stated below, Defendants' motions are both GRANTED IN PART and DENIED IN PART and Plaintiffs' Complaint is DISMISSED IN ITS ENTIRETY as to all Defendants.


Pro-se Plaintiffs Tagayun and Mandell are a married couple. In a letter dated August 8, 2004, Citibank's attorney, Faloni, advised Tagayun that it had been retained in reference to outstanding debts on Tagayun's Citibank account and that legal action may be forthcoming. In documents dated May 27, 2004 and September 8, 2004, Tagayun appointed Mandell with a limited durable power of attorney to deal with claims related to her Citibank account.*fn1

In a complaint dated August 27, 2004, Citibank commenced, through its attorney Faloni, an action in the Superior Court of New Jersey for the unpaid debts due on Tagayun's Citibank account and seeking a total of $11,710.88 including amounts due, attorney's fees, interest and other costs. On behalf of Tagayun, and citing his authority under the limited durable powers of attorney, Mandell notified Faloni by letters dated August 30, 2004, September 7, 2004 and September 8, 2004 that Tagayun had previously demanded both proof substantiating the debt and that Citibank must cease attempting collection of the debt pursuant to the debt validation procedures outlined in the Fair Debt Collections Practices Act ("FDCPA");*fn2 Mandell further asserted that Faloni was violating the FDCPA by proceeding with their complaint. Mandell also referenced similar July 1, 2004 and July 4, 2004 notification demands made upon the GC Services collection agency in reference to the same matter. In her October 4, 2004 answer to the New Jersey complaint, Tagayun denied owing the debt and asserted as a defense that both Citibank and Faloni were in violation of the FDCPA. The New Jersey case was called for trial on January 14, 2005, Tagayun failed to appear, and default was entered against her. Tagayun moved to vacate default claiming she was ill on the day of trial; her February 11, 2005 certification in support of her motion outlined her defense that the New Jersey action was in violation of the FDCPA and that she intended to pursue the FDCPA violation. Default was vacated on February 25, 2005. On March 31, 2005, Citibank, through Faloni, moved for summary judgment and to enforce a prior settlement (Citibank contended that Tagayun agreed to default before the January 14, 2005 trial). On April 8, 2005, Tagayun filed a statement opposing the motion for summary judgment asserting, among others, her FDCPA arguments.

On April 11, 2005, the New Jersey case was called to trial for the second time, and for the second time, Tagayun failed to appear; default judgment was entered against Tagayun on the same day. On April 22, 2005, Tagayun moved to vacate this second default claiming she was unable to attend because she was the physician for seriously ill patients and that Mandell had previously solicited Faloni's agreement to the adjournment. Superior Court Judge Anthony J. Graziano heard oral arguments on the motion to vacate on May 27, 2005, during which Tagayun again raised her FDCPA defenses. At arguments, Judge Graziano orally denied her motion to vacate; the Court is in receipt of Judge Graziano's January 5, 2006 written order denying Tagayun's motion and thereby allowing the default judgment to stand.

On April 25, 2005, Mandell and Tagayun entered into an "Affidavit of Joint Liability" by which Mandell assumed joint liability and responsibility for those of Tagayun's Citibank debts on which the Superior Court action was based; he also filed a UCC statement to the same effect. Tagayun and Mandell, as joint Plaintiffs, filed their Complaint with this Court on September 1, 2005 alleging that Defendants Citibank and Faloni violated the FDCPA by continuing collection efforts, including filing and maintaining their New Jersey action, after a proof of debt request was made. Plaintiffs seek $1,000,000 for Tagayun's unsubstantiated "loss of professional work time" and emotional trauma. Mandell, asserting surety status under the Joint Liability affidavit pleads in at risk capacity with Tagayun.

Defendant Citibank filed its 12(b)(6) motion to dismiss on October 3, 2005 claiming that the New Jersey Superior Court decision is res judicata upon this Court. Citibank's motion also asserts that Mandell lacks standing as a plaintiff in this matter in addition to seeking fees.

Defendant Faloni filed its motion to dismiss on October 27, 2005, both adopting and reasserting all of Citibank's arguments and also independently claiming lack of subject matter jurisdiction due to Plaintiffs' failure to meet the jurisdictional threshold.*fn3


I. Standard for Summary Judgment Pursuant to Rule 56

Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. See Fed. R. Civ. P. 56. Rule 56(e) requires that when a motion for summary judgment is made, the nonmoving party must set forth specific facts showing that there is a genuine issue for trial. See id.; see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Only disputes over facts that might affect the outcome of the lawsuit under governing law will preclude the entry of summary judgment. See Anderson, 477 U.S. at 247-48. If the evidence is such that a reasonable fact-finder could find in favor of the nonmoving party, summary judgment should not be granted. See id.; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

II. Defendants' Motions to Dismiss are Converted to Motions for Summary Judgment

The rule in evaluating a motion to dismiss is that if matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56 and all parties shall be given a reasonable opportunity to present all material made pertinent to such a motion by Rule 56. Fed. R. Civ. P. 12(b); accord Rose v. Bartle, 871 F.2d 331, 340-42 (3d Cir. 1989). The Third Circuit has cautioned that express notice should generally be given before the Court converts a motion to dismiss into one for summary judgment. See, e.g. In re Rockefeller Ctr. Prop., Inc. Secs Litig., 184 F.3d 280, 288 (3d Cir. 1999). However when the parties are on sufficient notice of potential conversion and the opposing party is not prejudiced by such conversion, such express notice by the Court is not necessary. See Carver v. Plyer, 115 Fed. Appx. 532, 536-37 (3d Cir. 2004); Hilferty v. Shipman, 91 F.3d 573, 578-79 (3d ...

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