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Professional Recovery Services, Inc. v. General Electric Capital Corp.

June 16, 2009


The opinion of the court was delivered by: Simandle, District Judge


This matter is before the Court on four motions with overlapping areas of concern. Plaintiff Professional Recovery Services, Inc. ("Plaintiff" or "PRS") has moved for partial summary judgment on Plaintiff's breach of contract claim against Defendant General Electric Capital Corporation, doing business as General Electric Consumer Finance ("Defendant GE") [Docket Item 54], and Defendant GE has filed a cross-motion for summary judgment on that breach of contract claim [Docket Item 66]. Plaintiff also filed a motion for determination of choice of law on Plaintiff's defamation claims against Defendant GE and Defendant Patricia Smith ("Defendant Smith") [Docket Item 62]. Finally, Defendant GE moved for summary judgment on all claims against it [Docket Item 63]. For the reasons set forth below, the Court will grant summary judgment in favor of Defendant GE on all counts, and will apply New Jersey law to determine liability on Count I (defamation) against Defendant Smith.


A. Facts

Except with regard to the circumstances related solely to Plaintiff's breach of contract claim, the facts as recounted will be presented in the light most favorable to Plaintiff, as the non-moving party. Plaintiff is a debt collector that contracts with banks, lenders and credit issuers to collect debts due from their customers. It is a New Jersey corporation with its principal place of business in New Jersey. Defendant Smith is a former PRS employee, who was fired in June, 2005 on the grounds of poor performance. (Smith Dep., Pl. Ex. 54B*fn1 at 29.) At the time relevant to this action, Smith was a resident of Philadelphia, Pennsylvania. (Movish Dep. 2007, Pl. Ex. 54A at 18.) Defendant GE is a unit of General Electric Company, and a provider of credit services to consumers, retailers and auto dealers. GE is a Delaware corporation with its principal place of business in Connecticut. In January, 2004, Plaintiff entered into a contract with Defendant GE entitled "Collection Agreement- Agency" for the provision of debt collection services ("the Contract"). (Contract, Def. Ex. C.) As of June, 2005, among Plaintiff's other clients were the banks Wells Fargo and JP Morgan Chase. (John McCusker Dep., Def. Ex. E at 361-64.)

On June 22, 2005, Defendant Smith called Defendant GE's customer service department from her home in Philadelphia and was directed to Janine Movish, Senior Manager of Special Investigation in Law Enforcement and Fraud for Defendant GE, who was based in Ohio. (Movish Dep. 2007, Pl. Ex. 54A at 9-10, 16-17, 18, 138; Movish Dep. 2006, Def. Ex. B at 23-25; Smith Dep., Pl. Ex. 54B at 89.) During the course of that conversation, Smith told Movish she was concerned that certain PRS employees were stealing confidential PRS client information (based on conversations she overheard), which might include Defendant GE information. (Smith Dep., Pl. Ex. 54B at 93-94; Movish Dep. 2006, Def. Ex. B at 26-27.) Smith also suggested that this fraud was intended to fund the drug and alcohol habits of PRS employees. (Movish Dep. 2006, Def. Ex. B at 27-28.) Smith told Movish that she used to work for PRS but had left voluntarily. (Id. at 27.)

Later that same day, after conferring with more senior management at GE, Movish and a senior debt recovery manager at GE, Jeff Brethauer, spoke with Smith again, and Smith suggested that PRS employees were selling debtor account numbers. (Movish Dep. 2006, Def. Ex. B at 31, 33-35; Brethauer Dep., Def. Ex. K at 141-42.) Movish asked Smith to file a police report concerning her allegations against PRS employees. (Movish Dep. 2006, Def. Ex. B at 35-36, 47-49.) Before ending their conversation, Movish asked Smith to send her documentation of her allegations. (Movish Dep. 2007, Pl. Ex. 54A at 185-86.)

Immediately after speaking with Smith on June 22nd, Movish contacted her superior, Peter Costa, Enterprise Security Leader for Defendant GE's business in the Americas, who then informed numerous business managers at GE of Smith's contact. (Movish Dep. 2006, Def. Ex. B at 31, 33-35; GE Communications, Def. Ex. J at 188.)

On June 23, 2005, in response to Movish's request, Smith faxed to Defendant GE and Movish: (1) a letter setting forth her allegations of theft, along with several unrelated allegations, (2) a PRS employee list, (3) a memorandum on PRS letterhead outlining the "PRS Call Out Policy" (company policy regarding absence and lateness), (4) a memorandum regarding Target Financial accounts, (5) a flyer describing the PRS "Check-by-Phone Contest" (an employee incentive contest) within the department handling GE accounts, along with contest results, (6) a memorandum from the GE department managers at PRS to collectors regarding documentation to be sent to debtors, (7) three letters on PRS letterhead signed by Defendant Smith and directed towards Defendant GE's debtors, (8) one letter from a law firm regarding a debtor and directed towards Plaintiff, and (9) a series of hand-written letters from a debtor to Smith. (Smith Fax, Pl. Ex. 54E.) Of the documents sent by Smith to Movish, all were acquired by Smith during her employment at PRS and Smith has admitted that she kept the information subsequent to her termination, a fact of which Movish was aware. (Smith Dep., Pl. Ex. 54B at 151-53; Movish Dep. 2007, Pl. Ex. 54A at 144, 186.) Smith's letter to Movish includes the following attacks against Plaintiff:

* "[D]uring our breaks and lunch away from our desk several employees left important documents from your clients on there [sic] desk unattended for anyone to retrieve, and take with them and steal identity [sic]."

* "I observed during my breaks and lunch times, conversations going on with co-workers about taking down account numbers and selling them to people, these are employees who are known to do drugs and are alcoholics and drink and do drugs during working hours."

* A more senior PRS employee cursed at Smith and "said he was going to kick my F---en A---" and her supervisor did nothing. When Smith threatened her supervisor with a lawsuit, the supervisor put a note in her file and said it was inappropriate to threaten him with a lawsuit. Smith concluded that her supervisor was "an older southern man" who thought that a "woman is always wrong until proven otherwise."

* The owner of PRS enjoys various "perks" for being a female business owner, drives an expensive car, and stayed in her office.

* "The daily use of foul language, the fighting on the floor, [sic] one incident that was reported was a male collector . . . taking a female employee and pushing her into a desk & put his hand around her neck and choking her, where she ran for her safety to the roof of the building, and a police report was filed and he was arrested and taken out in handcuffs."

(Id.) Defendant Smith concluded:

I'm hoping that during your investigating [sic] this matter you find that this companies [sic] policies are not what collections is all about working in the field for several years and working for some of the best companies I found this one to be the worst, not regulated by the owners and the staff they hire, there [sic] methods are very unconstitutional and not very friendly, most of all breaking all or most of the FDCPA law and regulation, which protect your clients from harassment, verbal abuse and down right unlawful tactics of how they collect. (Id.) Finally, in a post script, Smith wrote:

FDCPA - Violations

#806 Harassment or Abuse #807 False or misleading representations Mini-Miranda not read on every call Smith also filed a police report with the Voorhees, New Jersey police department, as requested. (Smith Dep., Def. Ex. D at 92-93; Police Report, Def. Ex. L.) The report reads:

[Smith] had reported that employees of Professional Recovery Service are possibly stealing and using SS#s from the company. Mrs. Smith stated she had no proof but may have heard other employees talking about selling SS#s to drug dealers etc. She had no proof but wished to file this report for future reference. I advised her that the companies (Wells Fargo & Bank One) have their own security and the victims will file a complaint. Right now there are no victims or complaints. (Police Report, Def. Ex. L.)

That same day, June 23, 2005, Defendant GE recalled all of its accounts from PRS. (Brethauer Dep., Def. Ex. K at 61, 149; Def. Ex. O.) On June 27, 2005, Movish contacted Wells Fargo in Des Moines, Iowa, and Chase in Wilmington, Delaware, about Smith's allegations. (GE Communications, Def. Ex. J at 3; Movish Dep. 2007, Pl. Ex. 54A at 25-29.)

On June 29, 2005, Defendant GE contacted the United States Secret Service to discuss Smith's allegations. (Movish Dep. 2006, Def. Ex. B at 84-87.) At that point, Defendant GE and Movish knew that the Voorhees police department had decided not to investigate the matter because there was insufficient evidence. (Id. at 75.)

Later that same day, Movish spoke with Karen Trimmer, Vice President of Investigations for Credit at Chase, who returned her call. (Movish Dep. 2006, ...

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