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Mills v. Capital One Bank

August 26, 2009


The opinion of the court was delivered by: Katharine S. Hayden, U.S.D.J.


This action is brought by pro se plaintiff Scott Mills against Capital One Bank ("Capital One"), as well as the law firm Pressler & Pressler LLP ("Pressler"), and several individual lawyers of the that firm, Thomas M. Brogan, Ralph Gulko, Sheldon H. Pressler, Lori R. Cetani, Lawrence J. McDermott, Jr., and Gerard J. Felt (collectively, the "Pressler defendants"). Before the Court are separate motions to dismiss filed by Capital One (D.E. 27) and the Pressler defendants (D.E. 28).

I. Claims Asserted and Procedural Posture

Capital One moves to dismiss for lack of subject matter jurisdiction (Fed. R. Civ. P. 12(b)(1)), and for failure to state a claim (Fed. R. Civ. P. 12(b)(6)), principally on the basis of the Rooker-Feldman doctrine and principles of collateral estoppel and res judicata. The basis for the legal arguments is an earlier action in the Special Civil Part, Bergen County (the "state court action") in which summary judgment was granted against Mills for a consumer debt owed to Capital One in the amount of $1,756.39 . The Pressler defendants move for dismissal on additional grounds, principally arguing that Mills‟s claims under the Fair Debt Collection Act ("FDCA") have no basis in law or fact; that the Fair Credit Reporting Act ("FCRA") is inapplicable to them because they are not furnishers of credit information; that Mills fails to plead any of the required elements of the federal and state versions of the Racketeer Influenced and Corrupt Organizations Act ("RICO"); and that Mills‟s claims against individual attorneys are frivolous and not based in law or fact.

Mills‟s pleadings assert 17 separate claims for relief. Because it is central to Capital One‟s Rooker-Feldman argument that the Court determine whether the footprint of this case is entirely within the footprint of the state court action, an examination of the 17 claims is in order.

Mills first alleges that the Pressler defendants, acting on behalf of Capital One, violated the FDCPA and FCRA in that they "fail[ed] to provide verification . . . of the alleged debts," "inferr[ed] that Plaintiff has no rights by alleging that Plaintiff is/was responsible and liable for the alleged Account(s) in question," and "claim[ed] that Plaintiff has no "valid defense‟ to the alleged debts inferring that Plaintiff has no rights." As a second claim against them, Mills alleges that the Pressler defendants violated the New Jersey State Uniform Commercial Code in that Capital One and the Pressler firm were "not . . . holder[s] in due course and thus, ha[ve] no standing to pursue or attempt to collect alleged debts"; also that their acts were "done intentionally with the purpose of coercing and deceiving Plaintiff to pay the allege debts on at least one occasion."

As his third claim for relief, Mills asserts a violation of the federal and state RICO statutes in that "Plaintiff suspects [the Pressler defendants] illegally pursue and collect alleged debts in the State of New Jersey and beyond," for the "suspected use of a fictitious and/or unlicensed and/or [u]n[b]onded collections business name of [Pressler] on at least one occasion," and for "coercing/extorting and deceiving Plaintiff to pay the alleged debts for Defendant[s] unjust enrichment."

Mills asserts "legal fraud" as his fourth claim for relief, alleging that Capital One and the Pressler defendants "in the State Court Case through various submissions to the Bergen County Special Civil Part, falsely and fraudulently swore by numerous affidavits, certifications and submissions that Plaintiff was liable for disputed [Capital One] Accounts without true [e]videntiary [f]act"; the Pressler defendants made misrepresentation in the state court action; and that Capital One and the Pressler defendants filed claims in the state court action even through they knew they were "not permitted" by N.J.S.A. § 45:18-1 to do so. Mills asserts intentional infliction of emotional distress as his fifth claim for relief, alleging that Capital One and the Pressler defendants engaged in a "pattern of conduct deliberately designed to harass, humiliate, bully and oppress unsophisticated consumers to induce them to forgo professional legal representation in litigation and to induce unsophisticated consumers to make payment of debts they did not incur," and that defendants "conspire[d] to defraud and oppress numerous unsophisticated consumers."

Mills‟s sixth claim is for abuse of process on grounds that defendants "filed a motion for sanctions in the State Court against Plaintiff," which Mills avers was retaliation for his contributions to a website critical of Pressler and other New Jersey-based debt collectors. Mills alleges that Capital One and the Pressler defendants jointly conspired to, and did, abuse the legal process and harass Mills in the state court action. As his seventh claim for relief, Mills asserts "equitable fraud," alleging defendants submitted false sworn documents in the state court action with the intent to defraud and deceive Mills, and acted with "willfulness, oppression, fraud, and malice."

As his eighth claim, Mills asserts Pressler is liable under a theory of respondeat superior for the individual Pressler defendants named in the action. For his ninth claim, Mills asserts respondeat superior liability on Sheldon Pressler‟s part as principal of the Pressler law firm for the acts of the individual law firm employees. As his tenth claim for relief, Mills asserts that Capital One is liable under respondeat superior for the acts of the Pressler defendants.

In his eleventh claim, Mills asserts a separate and supplemental claim for abuse of process because defendants "jointly filed on two separate occasions on May 30, 2008 and June 3, 2008 the Specified documents attached hereto with the Bergen County, New Jersey Superior Court with complete and utter lack of regard for the Judicial Process by not notifying Plaintiff "SM‟ of the filing of these Documents."

Mills‟s twelfth claim is for unjust enrichment in that Capital One and the Pressler defendants "jointly have pursued a Claim against this Plaintiff for their own benefit, profit and enrichment through unjust means." As a thirteenth claim Mills alleges that Capital One and the Pressler defendants violated the New Jersey Consumer Fraud Statute ("NJCFA") on grounds they "induced the Plaintiff . . . to engage Declaratory Judicial Tolerance and Defenses which constitutes deceptive trade practices in violation of the [NJCFA]." In his fourteenth claim, Mills asserts that defendants committed common law fraud in making false sworn statements and submissions in the previous state court action.

As his fifteenth cause of action, Mills asserts personal liability against the individual Pressler defendants acting under the authority of Pressler in that they allegedly owed an obligation to the general public under the FDCPA to "provide verifiable and accurate information regarding the alleged debt . . . and failed . . . to do so," failed to verify or validate the alleged debt while acting in their personal capacities, furnished deceptive forms while acting in their personal capacities, and "continued their frivolous [c]laim in the state court . . . using only hearsay testimony and unauthenticated documentation and statements." Mills further alleges that they acted in their personal capacities "to harass, embarrass, cause anguish, embarrass, and bully the Plaintiff [Mills] in to paying an unsubstantiated alleged debt." As his sixteenth cause of action, Mills seeks personal liability against individual named and unnamed defendants for performing the allegedly wrongful acts under the authority of Capital One. As his seventeenth cause of action, Mills seeks redress against Capital One and the Pressler defendants for "reckless behavior" in "act[ing] in disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow at all times."

Mills seeks money damages, costs, and fees. Mills also seeks declaratory judgment that defendants‟ actions violated the FDCPA, and injunctive relief, including dissolution of purportedly corrupt enterprises allegedly in violation of RICO statute.

II. Factual Background

In his complaint, Mills references the prior state court action:

Although this Plaintiff filed a cross motion to dismiss with numerous federal questions stated, the State Court entered a Summary Judgment Award in favor of "COB" and John Doe #6-10 on December 7, 2007 in the amount of $1,756.39 plus costs without any [l]egal [m]erit or [f]actual and [e]videntiary [b]asis whatsoever. The action is referred to as Capital One Bank v. Scott J. Mills, Bergen County Special Civil Part, Docket No: DC-017497-07. (D.E. 1, ¶ 17.) The record shows Capital One, represented by the Pressler defendants, sued Mills for a consumer debt totaling $1,756.39 , and that Mills filed an answer on September 7, 2007 and defended the suit on the merits acting as his own attorney. (Defs.‟ Exh. B (summons and complaint), Exh. C (answer).) According to Capital One‟s brief on its motion, the underlying grounds are as follows:

On April 30, 2002, Scott J. Mills applied for and opened a Kmart Mastercard ® credit card account with Capital One . . . . All monthly statements on the [a]ccount were sent to Scott J. Mills at 56 Oak Street, Rochelle Park, New Jersey 07662-4210. Mr. Mills, or someone on his behalf, made the monthly payments on the [a]ccount until May 2003. The payments were sent to Capital One, F.S.B., and included the payment coupon detached from the monthly [a]ccount statement and a check made payable to Capital One. All of the checks were drawn on an account maintained by William A. Provost and Rosemary Provost. The checks list the address of William A. Provost and Rosemary Provost as 56 Oak Street, Rochelle Park, NJ 07662, the same address as Mr. Mills. (Defs.‟ Br. Mot. Dismiss 2-3.) The record shows that Mills moved for dismissal of the state court action on September 24, 2007, arguing, in part, that no proper contract or documentation making him liable to Capital One existed, that the debt was not properly "verif[ied]" as being owned by Capital One, and that Capital One violated the "Fair Debt Collections Act." (Defs.‟ Exh. G (brief in support of motion to dismiss).) Capital One subsequently moved for summary judgment against Mills, and the Special Civil Part heard oral argument on all pending motions on December 7, 2007.

One of the individual Pressler defendants in this action, Thomas M. Brogan, argued the December 7, 2007 motions before Judge Joseph Rosa, J.S.C., on behalf of then-plaintiff Capital One.

MR. BROGAN: Yes, Your Honor, there are three motions before the Court today. Your Honor, on plaintiff‟s motion for summary judgment the plaintiff is asking for summary judgment on the basis of a review of all the evidential material supplied by both sides.

It‟s plaintiff‟s contention that the large and accurate extent of the evidential material it has with regard to this matter are the complete absence of any competent, evidential materials referenced by the defendant warrants that summary judgment be granted under the Brill standard.

With that having been said let‟s examine plaintiff‟s proffer. The first thing I bring to your attention is the Capital One Bank card member agreement. It is much like any other credit card member agreement, specifically it says -- and I‟m paraphrasing to some extent, that if you or someone other than you uses the account to make purchases you will be required to reimburse us, that finance charges will continue to accrue on any unpaid balance until the unpaid balance is satisfied in its entirety. Card member agreement also details the condition for a default, what a default is and what the obligations and responsibility of the cardholder are should a default occur, specifically that -- the cardholder would be responsible for collection costs as well as attorney‟s fees.

Plaintiff has the second proffer -- second exhibit in its proffer. These are the Capital One credit card statements. The statements --

THE COURT: Do you have the credit card?

MR. MILLS: I never -- I never got this credit card, Your Honor.

THE COURT: Did you sign that thing?

MR. MILLS: No, there‟s no sign -- there‟s no signed anything, they ...

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